Bangkok: Krungthai Bank has forecasted a GDP growth rate of 1.8% for Thailand in 2026, emphasizing the need for small and medium-sized enterprises (SMEs) to revitalize their operations through targeted programs.
According to Thai News Agency, Krungthai COMPASS Research Center predicts that Thailand's economic growth in 2026 will be slower compared to its ASEAN-6 neighbors, largely due to existing challenges. This forecast marks a significant slowdown, as it would be the first time in three decades that the country's GDP growth falls below 2.0%, excluding crisis periods.
Dr. Pacharapoj Nantaramas, Senior Vice President and Chief Economist of Krungthai Bank, highlighted that the Thai economy is facing several structural vulnerabilities, including a lack of competitiveness in the global market and governmental challenges. The Reinvent Thailand project is being implemented to tackle these issues by focusing on six key sectors: agriculture and food processing, automotive, medical and healthcare, smart electronics, tourism, and retail and wholesale. These sectors are identified as potential new S-curve industries that could provide widespread economic benefits.
Krungthai COMPASS conducted a survey involving 160,232 SMEs across these sectors, analyzing 15 years of historical data. The survey results indicated a decline in SMEs' return on assets (ROAs) from 2010 to 2024, highlighting a decrease in competitiveness. This decline is attributed to businesses being caught in a 'debt cycle,' where despite efforts to manage costs and compete, revenues often do not cover expenses, leading to liquidity challenges and high debt-to-equity ratios.
The study further revealed that SMEs struggle with low profit margins, as their gross margins are significantly lower than those of higher-performing businesses. This situation underscores the need for a comprehensive overhaul of business models, focusing on value creation and niche market targeting. Such changes require investments to boost capabilities and revenue generation for sustainable profitability.
Current measures under the Reinvent Thailand project, including the SMEs Credit Boost program and low-interest loan programs (Soft Loans), are designed to support these necessary adjustments. The initiative encourages collaboration between large companies and SMEs within the supply chain, and improves access to systems like PromptBiz, which facilitates supply chain financing and enhances SMEs' liquidity and capital access.