Methas Rattanasorn, Head of Economics Analyst at TISCO Economic Strategy Unit (TISCO ESU), disclosed that TISCO ESU has revised its Thai economic growth (GDP) forecast for 2026 up to 1.8% from the previous 1.2%.
The upgrade followed better-than-expected first-quarter economic figures and the government’s implementation of consumption stimulus measures through the “Thai Chuay Thai Plus” scheme. However, TISCO ESU revised its 2027 GDP forecast down to 1.7% from 2.4% due to a high base effect and the cessation of temporary government economic stimulus measures.
Although the first-quarter economic figures appear strong, a deeper analysis reveals signs of fragility and uneven recovery, especially in the export sector. While the electronics segment related to AI and data centers showed outstanding growth, Thailand’s trade balance in 1Q26 turned negative for the first time in 14 quarters, reflecting that many exports are transshipment or assembly-for-hire, rather than adding domestic value.
TISCO ESU also indicated that semiconductor parts and digital data processing units have had a high correlation between imports and exports over the past 10 years. These categories also show the highest levels of suspicion, while also ranked the highest in Re-routing index among AI-related goods, suggesting that today’s robust export expansion may not truly spread income or broadly benefit the overall economy.
On the investment front, overall investment grew by 9.9% year-on-year, and private investment reached its highest level in three and a half years, boosted by foreign capital and the AI trend. However, the number of factory closures has exceeded new openings for the first time in 10 quarters, particularly among small factories that have been severely affected. In contrast, medium and large factories continue expanding, indicating that growth is still concentrated in high-tech businesses and big-cap groups.
Regarding the “Thai Chuay Thai Plus” scheme, TISCO ESU estimated that it will help increase GDP by about 0.3%. The measure is seen as a short-term economic support rather than a sustainable stimulus, as the fiscal multiplier remains low.
At the same time, new risks from the prolonged conflict in the Middle East may push oil prices up by another 40-50%, impacting costs for energy, fertilizers, plastic pellets, and food prices. There is also a risk that some businesses may run out of raw materials and have to cease production, as consumers start reducing spending and the unemployment rate trends upward.
Methas also added that TISCO ESU expects the Monetary Policy Committee (MPC) to maintain the policy interest rate at 1.00% throughout this year, as a rate cut may not address supply-side issues. He added that there is a risk that interest rates could trend upward next year following global inflation trends and Federal Reserve policy.
In addition, the baht is expected to depreciate to 34 per US dollar within the next three months, pressured by US inflation, Thailand’s current account deficit risk, and rising Thai bond yields due to government borrowing plans. If global oil prices continue to surge from the prolonged war, the baht may weaken even further than currently projected.
