Kasikorn Research Center has maintained its forecast for Thailand's economic growth in 2026 at 2.0%, assessing that the economy is likely to slow in the second half compared with the first half, weighed down by weaker purchasing power, softer exports after a strong surge in the first half, and imports growing faster than exports, which is pressuring the trade balance and the current account to a record high this year. Supporting factors still come from private investment and electronics exports, which are being boosted by the AI and data center cycle, as well as tourism, which is gradually recovering thanks to global events in the fourth quarter of 2026. Risks remain the conflict in the Middle East, El Nino conditions, and US trade measures. Thai inflation is expected to average 1.8% in 2026 and accelerate in the fourth quarter of 2026, while the Monetary Policy Committee is likely to keep the policy rate at 1.0% throughout the year. Dr. Kanchana Chokpaisarnsilp said Kasikorn Research Center is keeping its forecast for overall loan growth in 2026 at 0.5% from a year earlier, with large corporate loans expected to sustain momentum above 5.0%, while the non-performing loan ratio of the commercial banking system could edge up slightly from 2.76% of total loans at the end of the second quarter of 2026 toward a range of 2.80% to 3.00% by the end of 2026. The baht is expected to end the year at 33.80 per dollar. Dr. Rujiphan Assarat said Thailand's automotive industry is facing a major turning point, with domestic vehicle production likely to decline against continued growth in imports, especially battery electric vehicles, which accounted for as much as 72% of the total value of Thailand's vehicle imports in the first seven months of 2026. The government is considering measures using the excise tax mechanism to encourage operators to shift from imports to production using more local parts, and if this can be achieved as targeted, it is expected to help Thai vehicle production return to growth in 2027 after an estimated contraction of about 1.8% in 2026.
Kasikorn expects the policy rate held at 1.0% all year and the baht to end 2026 at 33.80/USD, a monetary/FX-policy signal for the pair.
