The Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce (UTCC) has upgraded its projection for Thai GDP growth this year from 2% to 2.5%, attributed to exports and the artificial intelligence cycle.
The centre predicts exports measured in US dollar terms to grow by 17.8%, up from its previous projection of 8.8% in May.
Imports are expected to expand by 28.7%, rising from a prior estimate of 15.3%, while household debt is projected at 84.2% of GDP in 2026.
The global technology cycle is in an expansionary phase according to the IMF’s World Economic Outlook for July, and Thailand is benefiting from growth in global electronics exports, cushioning the impact of the energy crisis.
K-SHAPED GROWTH
The think tank anticipates Thailand’s economic recovery will follow a K-shaped model, with growth concentrated in high-tech industries and large companies.
Small and medium-sized enterprises (SMEs), households and traditional industries are expected to continue contracting.
Traditional industries such as automotive, petroleum and construction materials are facing pressure from imported products and weak purchasing power in domestic markets.
SME production is contracting, while farm incomes remain at risk of declining due to high agricultural input costs, particularly fertiliser prices.
Moreover, rainfall is forecast to be lower than usual as a result of the El Niño phenomenon. The centre identified these challenges as structural problems rather than short-term cyclical weakness.
High household debt and concerns over loan quality are prompting financial institutions to remain cautious about lending.
An ageing society and geopolitical tensions also remain key factors weighing on Thailand’s economic outlook.
Thanavath Phonvichai, president of the UTCC, said the 2.5% GDP growth forecast is based on several assumptions: ongoing investment by cloud and data centre providers, 32.5 million foreign tourist arrivals in 2026, the resolution of Middle East conflicts by October this year, and the US Section 301 trade probe not reaching a conclusion this year.
In another scenario, GDP growth could decrease by 0.12 percentage points if foreign tourist arrivals reached only 32 million this year.
If the conflict in the Middle East persists throughout the year, GDP growth may decline by a further 0.2 percentage points.
The preliminary forecast puts Thai GDP growth in a range of 2-3%, with headline inflation at 0.8-1.4%.
The centre plans to issue an updated economic forecast in December.