K-Research predicts 2027 Thai GDP growth of 2%

The Thai economy is projected to expand at a slower pace in 2027 than this year’s estimates of more than 2%, as global geopolitical conflicts intensify and high public debt in several economies weigh on global growth, says Kasikorn Research Center (K-Research).

Nattaporn Triratanasirikul, deputy managing director of K-Research, said the think tank anticipates GDP growth of 2% next year, slowed by geopolitical tensions and public debt, notably in the US.

“Fiscal pressures remain an important external risk for Thailand. Political divisions in the US could also constrain fiscal policy and government spending, depending on the balance of power in Congress,” she told the Bangkok Post.

K-Research is preparing to upgrade its 2026 GDP growth estimate from 2%, following similar moves by the Bank of Thailand and the National Economic and Social Development Council (NESDC).

The revision is expected after the NESDC releases the actual third-quarter GDP on Nov 16, said Ms Nattaporn.

The central bank on Wednesday lifted its growth forecast for this year to 2.4% from 2.3%, while for 2027 the upgrade was to 2.1% from 1.8%.

The Monetary Policy Committee kept the policy interest rate at 1.00% for a fourth consecutive meeting to support the country’s economic recovery.

“I’m concerned more about 2027 prospects than this year,” noted Ms Nattaporn, adding Thailand’s economic recovery will remain uneven next year as household purchasing power is fragile.

Investments have emerged as a key growth driver as applications for investment promotion from the Board of Investment indicate opportunities related to artificial intelligence (AI), particularly in electronics and industries linked to AI infrastructure and supply chains.

“However, the benefits are likely to remain concentrated in certain sectors, while weak household purchasing power continues to constrain the broader economy,” she noted.

Higher energy costs could add to inflationary pressures, making the trajectory of oil prices an important factor in the economic outlook, said Ms Nattaporn.

SCB Economic Intelligence Center (SCB EIC) anticipates the central bank will keep the policy rate at 1% for the rest of this year and throughout next year as households remain vulnerable to structural problems, including high debt, while small and medium-size enterprises (SMEs) lack competitiveness.

Inflation is driven primarily by supply-side factors and is expected to ease rapidly next year, said Nond Prueksiri, senior economist at SCB EIC.

“Weak domestic demand is limiting businesses’ ability to pass on higher costs, leaving global oil prices and El Niño as the main sources of inflationary pressure going forward,” he said.

Targeted financial measures will play a greater role as the policy rate becomes a less effective tool for addressing the needs of vulnerable groups, said Mr Nond.

Measures to improve access to credit for SMEs and retail borrowers will be key to supporting the economy going forward, he said.