BANGKOK, Thailand – SCB Economic Intelligence Center (SCB EIC) expects the global economy to expand by 2.5% in 2026, supported by continued investment in artificial intelligence (AI) infrastructure and strong demand for electronics, while warning that Thailand’s recovery remains fragile and uneven. Speaking at SCB WEALTH’s Wealth Community event, held under the theme “Thailand Half-Year Outlook 2026: How Will the Thai Economy Continue to Recover When Growth Remains Uneven?”, SCB EIC economists outlined the outlook for the global and Thai economies during the second half of the year.
Dr. Punyawat Srisingh, Senior Economist at SCB EIC, Siam Commercial Bank, said geopolitical risks, including military conflicts and trade tensions, remain key factors to watch during the remainder of 2026, as they could affect energy prices, production costs, supply chains and global financial markets.
SCB EIC expects the global economy to grow 2.5% this year, slightly accelerating to 2.6% in 2027, compared with 2.8% growth in 2025. Investment related to AI and continued demand for electronic products are expected to remain key growth drivers, helping support the global economy amid geopolitical conflicts and tight financial conditions. However, SCB EIC warned that geopolitical risks, including military conflicts and trade tensions, remain important factors to monitor because they could affect energy prices, production costs, supply chains and global financial markets.
The situation in the Middle East remains highly uncertain. Crude oil shipments through the Strait of Hormuz and other regional routes have yet to recover to even half of their pre-war levels, indicating that the recovery in regional transport remains slow. Although global oil prices are expected to gradually decline during the third and fourth quarters, SCB EIC expects the decline to be gradual and does not anticipate prices returning to their pre-war average levels in the near term. Higher energy and transportation costs could therefore continue to put pressure on businesses and the broader economy.
Trade tensions also remain a source of uncertainty, although their impact on global trade so far has been less severe than previously expected. Trade within Asia continues to expand, supported by the region’s role as a major production base for technology products and AI-related supply chains.
While Chinese exports to the United States have contracted, China has maintained export growth by expanding into other markets and directing more products toward Southeast Asia.
For global monetary policy, SCB EIC expects the U.S. Federal Reserve to keep its policy rate at 3.50%-3.75% throughout 2026, provided inflation does not accelerate significantly.
The European Central Bank is expected to raise interest rates once more, to 2.50%, at its September meeting, despite easing inflation remaining above its 2% target. Meanwhile, the Bank of Japan is expected to keep its policy rate at 1% throughout the year and could delay further rate increases until 2027 to cushion the economy from higher production costs.
Thai economy faces uneven recovery
Dr. Punyawat said Thailand’s economy is expected to grow 2% in 2026, supported by government stimulus measures, exports and private investment. However, the recovery is becoming increasingly K-shaped, with growth concentrated among large businesses and technology-related industries, including AI, data centers, electronics and digital infrastructure. These sectors have benefited from strong investment and exports in selected product categories, but many have a high import content. This limits the benefits flowing through domestic supply chains, employment and household income.
SCB EIC noted that average Thai household income fell in 2025 for the first time in six years. Income from employment, investment, assets and interest all declined, while government assistance was the only category to increase, largely helping lower-income households.
The decline in the household debt ratio also does not necessarily mean that household financial conditions have improved across the board. Part of the decline reflects more cautious spending and borrowing by households, together with tighter lending standards by financial institutions.
As a result, households and small businesses face greater difficulty accessing financing, while many consumers are cutting back on discretionary purchases and delaying spending to preserve liquidity.
The tighter financial environment is weighing directly on businesses that depend on domestic consumption.
The labor market is also showing signs of greater vulnerability, with the number of business closures increasing while new business openings have declined. This could put further pressure on employment and household incomes in the coming months.
AI investment drives selected sectors
SCB EIC said Thailand’s AI-related investment is expected to continue expanding, in line with investment by major global technology companies and cloud service providers, or hyperscalers.
Foreign direct investment in Thailand is increasingly concentrated in technology, data centers and energy, while investment in other industries has declined significantly compared with the past.
Although the overall value of investment has increased, the country’s production capacity has not been utilized more broadly because much of the expansion is concentrated in semiconductors and selected technology industries.
SCB EIC said this could limit the broader economic impact of the investment boom, similar to the situation in exports.
Thailand’s electronics exports related to AI have expanded rapidly, but the sector remains heavily dependent on imported raw materials and components, including chips and semiconductors. This limits the amount of value added retained within Thailand and reduces the broader impact on employment and domestic income.
SCB EIC expects Thailand’s economy to slow slightly to 1.9% in 2027, as government stimulus measures gradually expire and the economy lacks a new broad-based growth engine capable of sustaining expansion.
Tourism and agriculture remain under pressure
Thailand’s tourism sector is expected to recover, particularly with Chinese tourist arrivals beginning to improve. However, higher travel costs following geopolitical conflicts and stronger competition from other destinations in the region could keep foreign visitor numbers below 2024 levels this year.
The agricultural sector also faces pressure from volatile weather, global competition and rising production costs. Falling farm incomes could add further pressure to purchasing power outside Bangkok. SCB EIC also warned that Thailand faces risks from the Middle East conflict, El Niño conditions and U.S. import tariff measures, in addition to the increasingly concentrated nature of economic growth.
Bank of Thailand expected to hold rates
SCB EIC expects the Bank of Thailand’s Monetary Policy Committee (MPC) to keep the policy interest rate unchanged throughout 2026. The MPC faces the difficult task of balancing inflation risks with an economy that remains fragile. Government measures are still providing support, reducing the likelihood of another rate cut this year. At the same time, SCB EIC does not expect the MPC to raise rates because price pressures could prove temporary, driven largely by energy costs and supply-side factors. The Thai economy is also not considered strong enough to absorb higher financing costs comfortably.
Businesses face mixed prospects
For the remainder of 2026, the overall business environment is expected to slow, but several sectors could continue to expand. These include businesses linked to AI and technology, companies benefiting from production relocation to ASEAN, alternative energy, healthcare, beauty services and tourism. By contrast, steel manufacturing faces pressure from its heavy dependence on imported raw materials and geopolitical risks.
Residential real estate is also expected to remain under pressure from weak purchasing power and tighter lending conditions, while agricultural products face risks from El Niño and higher production costs. Overall, SCB EIC said Thailand’s challenge is no longer simply generating economic growth, but ensuring that growth reaches a broader range of businesses, workers and households rather than remaining concentrated in a limited number of technology-driven industries.
