Kasikorn Research Center keeps 2026 GDP growth forecast at 2%, worried about deep contraction in SME loans
MacroIndustry
Kasikorn Research Center has maintained its forecast for Thailand's economy in 2026 at 2%, expecting growth to slow to just 1.7% in the second half from 2.4% in the first half, citing weaker private consumption amid still-high energy prices and a slowdown in exports. Dr. Kanchana Chokpaisarnsilp, research executive at Kasikorn Research Center Co., Ltd., said that in the second quarter of this year, total loans in the commercial banking system across 17 banks returned to positive territory at about 0.6%, with large corporate loans expanding 5.6% while SME loans contracted 5.6%. Housing loans grew 1%, driven by second-hand homes, while auto hire-purchase loans continued to shrink 7.8%. Kasikorn Research Center has revised up its forecast for large corporate loans this year to 5.6% from 5%, and expects SME loans to contract more deeply at 4.8% from a previous decline of 4.5%, while keeping its overall loan forecast for 2026 at 0.5% per year. On credit quality, the non-performing loan ratio of the overall commercial banking system remained at 2.76% of total loans as of the end of the second quarter of 2026, and NPLs are expected to be in the range of 2.8% to 3% by the end of this year. Over the past year, about 19 out of every 100 debtors that banks had already resolved returned to require fresh handling, or roughly 19%. Meanwhile, the surge in global bond yields, triggered by the US government's announcement of a bond buyback plan of just 6 billion dollars, nearly 10 billion dollars below market expectations, will pose a challenge for bond issuance by businesses with weaker credit ratings, although the impact on Thai bond yields remains limited given that the policy interest rate is expected to stay unchanged at 1%.
