Krungsri Research has raised its forecast for Thailand’s 2026 economic growth from 1.9% to 2.1%, supported by stronger private investment, the global artificial intelligence capital expenditure cycle and government stability.
The upgrade comes despite year-on-year GDP growth slowing from 2.8% in the first quarter to 1.9% in the second quarter. Full-year momentum is nevertheless stronger than previously anticipated, with investment-supporting policies and short-term measures addressing the energy crisis providing support. Tourism assumptions remain broadly unchanged.
The largest revision was to private investment, with projected growth raised from 3.5% to 8.6%. This aligns with KSS’ view that Thailand is entering a new investment-led growth cycle.
Supporting factors include U.S.-China trade tensions, accelerating global AI investment and government stability that enables policy implementation. Efforts to attract foreign investment in advanced industries and ease investment barriers are also contributing to the outlook.
Export growth is now forecast at 14%, up from 9.8%, reflecting continued AI-related capital expenditure. The brokerage cited growth in component and equipment exports during the first eight months of 2026.
Import growth, however, was raised to 23.5% from 15%, partially offsetting the contribution from net exports to GDP. Higher imports early in an investment cycle may also reflect purchases of capital goods, machinery and intermediate goods needed for subsequent investment and capacity expansion.
Private consumption growth was upgraded to 2.4% from 2%, supported by a domestic tourism stimulus measure running from mid-year through the end of 2026.
Foreign tourist arrivals remain projected at 32.5 million, while government consumption and public investment growth forecasts are unchanged at 1% and 2.7%, respectively.
Near-term upside could come from faster-than-expected private investment and foreign direct investment translating into actual capital expenditure through the Thailand FastPass programs.
Other potential drivers include requirements for foreign data center businesses in Thailand to use more than 50% local content, the PDP2026 power development plan, and changes to automotive industry tax rules.
Exports could also outperform, with the AI CAPEX cycle offering further upside relative to market expectations and showing potential for continued acceleration.
Over the medium to long term, the securities firm highlighted emerging government budget policies that could ease constraints on public investment stemming from the high share of recurrent spending.
Meanwhile, inflation below earlier assumptions is supporting purchasing power and domestic consumption. KSS views investment developments across multiple areas, alongside signs of expansion into a broader range of industries, as a key support for the Thai stock market and Thailand’s transition toward investment-led growth.
