Bank of Thailand flags AI and OECD as two turning points to revive the Thai economy

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Don Nakornthab, Assistant Governor of the Monetary Policy Group at the Bank of Thailand, said at a seminar on the 2027 global investment outlook, organised by TSFC Securities, that investment in AI technology together with joining the Organisation for Economic Co-operation and Development, or OECD, are two key turning points that will help revive the Thai economy in the long term. Data on investment promotion from the Board of Investment, or BOI, since 2025 shows that applications for investment promotion in the digital and data centre sectors rose to a record high, while the electronics and electrical appliance sectors have also benefited from this investment cycle. Positive factors from investment and exports of AI-related goods were one of the main reasons the Bank of Thailand raised its forecast for Thai economic growth last June to 2.3%, although there remain constraints from a rise in the import content from 50% to 70% and from still-low employment in the digital sector. According to a World Bank report, Thailand ranks in the world's top five for the value of AI-related exports and in the world's top ten for the value of data centre investment. It estimates that the application of AI will add roughly 0.3% to Thailand's potential economic growth, which, combined with the existing potential rate of 2.7% estimated by the Bank of Thailand, would push Thailand's potential GDP up to 3% with little difficulty. Don said that Thailand, as a neutral country, can attract investment from both the United States and China, with big tech firms such as TikTok, as well as Google and Microsoft, investing in data centres, and he stressed the issue of data centre management, both in terms of energy resource management and data sovereignty. He also explained the Bank of Thailand's work under three main partnerships: financial stability, keeping the policy rate at its current accommodative level of 1%; financial institution stability through the adjustment loan programme and the SME Credit Boost programme under the leadership of Bank of Thailand Governor Vitai Ratanakorn; and the domestic and cross-border payment system. As for why foreign investors still hold underweight positions in the Thai stock market, Don said a distinction must be drawn between foreign direct investment and capital market investment, noting that the SET index has very few companies involved in the AI supply chain, apart from hard disk drive makers such as Seagate or Western Digital, and that investors remain concerned about contract enforcement and governance, unlike the Japanese stock market, which hit a new high on the back of serious corporate governance reform. Don, who previously managed the Bank of Thailand's international reserves worth more than 300 billion US dollars, said Thailand does not need to compete in making advanced chips or developing generative AI, but should look for its own distinctive strengths to insert itself as a key link in the global AI chain, such as the Japanese company Ajinomoto, which turned a by-product of monosodium glutamate production into thermal insulation film for microprocessors, and TOTO, which used advanced ceramic technology from sanitary ware production in key components of AI devices. He sees potential for Thailand in optical equipment and photolithography. Currently, the rate of AI adoption in Thai businesses is only 12%, compared with more than 40% in the United States, and is mostly limited to AI chatbots, while the use of AI agents in Thailand is very low at only 1-2%. Accelerating the promotion of AI adoption among SMEs and large organisations is therefore the key to raising productivity and driving the Thai economy in the long term.

Impact on stocks 6

Artificial Intelligence▲ · 2 stocks
Cloud & Digital Infrastructure▲ · 2 stocks
Synthetic Biology (non-pharma)▲ · 1 stocks
Industrials▲ · 1 stocks

Theme Impact 3

Off-coverage companies 2

ByteDancePrivate± Mixed
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Securities Finance Corporation of Thailand (TSFC)Private± Mixed
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