Kiatnakin Phatra Bank Public Company LimitedUncertain interest rate outlook and potential for higher long-term rates due to inflation and fiscal deficits, which can pressure bank margins.

Kiatnakin Phatra Financial Group held its KKP 2026 Mid-Year Review seminar, where Dr. Pipat Luengnaruemitchai, Chief Economist, revealed that the first half of 2026 saw the world enter a new investment paradigm and summarized four key themes to watch in the second half. The first is the sustainability of AI investment, which has been a key engine propping up the global economy but carries risk if markets question its value. Dr. Supavud Saicheua, Advisor, noted that AI adoption among large businesses remains low at just 4 to 5 percent and has yet to generate clear profits, while development costs remain high. The second theme is oil prices and fragile Middle East risks, which affect inflation and interest rates. The third is the uncertain interest rate outlook, as inflationary pressures and fiscal deficits make it difficult for long-term rates to fall. The fourth is Thailand's structurally weak economy, with a declining current account balance and an interest rate differential with the US weighing on the baht, while the government has limited stimulus tools. Dr. Supavud also warned that trade negotiations with the US, with a temporary tariff exemption set to expire on July 24, could severely impact Thailand's export sector, which accounts for 40 percent of total exports.
Kiatnakin Phatra Bank Public Company LimitedUncertain interest rate outlook and potential for higher long-term rates due to inflation and fiscal deficits, which can pressure bank margins.