Kasikorn Research Center Predicts Steady 2026 Thai GDP Growth Amid Political Transition

Bangkok: Kasikorn Research Center continues to project a 1.6% GDP growth for Thailand in 2026, despite the recent dissolution of parliament and the ensuing political uncertainties. According to Thai News Agency, the dissolution, which was announced by the Prime Minister, has set the stage for urgent general elections expected to occur between January 26 and February 10, 2026. This political shift has led to the postponement of key projects and negotiations, including the "Half-Price Plus" Phase 2 scheme and trade treaties with the US, as the business sector adopts a cautious approach. Kasikorn Research Center has highlighted that the early parliamentary dissolution, occurring about half a month ahead of their initial expectations, does not alter their overall economic outlook for 2026. However, it may lead to slower growth in the first quarter of the year, with a potential uptick in the third quarter as the new government takes shape. The caretaker government's limited powers have stalled several initiative s, impacting economic stimulus measures. Despite the political transition, the 2026 economic growth forecast remains steady at 1.6%. While existing budget disbursements and approved projects will proceed, spending delays and shifts in budget allocation are anticipated depending on the new government's policies. The lack of early-year stimulus, particularly from the delayed "Half-Price Plus Phase 2" project, is expected to slow the first quarter's growth. Conversely, the release of outstanding budgets post-government formation in the third quarter may boost economic performance. Kasikorn Research Center warns that uncertainties during this transition period could affect policy continuity, budget disbursement, and investor confidence. Businesses are likely to maintain a wait-and-see stance, potentially affecting foreign direct investment and medium-term fiscal policy. These factors could influence credit ratings and have been considered in the current economic forecasts.