Business leaders optimistic about Thailand’s 2026 outlook despite AI hurdles

Despite several challenges, particularly those arising from digitalisation driven by artificial intelligence (AI), Thailand’s economy still has room to expand in 2026, several experts said at the Thai Economy Forum hosted by the SMBC Group on Wednesday (November 12).

The forum, held at the Dusit Thani Bangkok Hotel, brought together more than 600 business leaders to discuss sustainable growth, digital innovation, and Japan–Thailand economic collaboration.

Global challenges and opportunities for Thailand–Japan partnership

Kalin Sarasin, President of the Thai–Japanese Association and Honorary Chairman of the Thai Chamber of Commerce and the Board of Trade of Thailand, said the world is undergoing rapid and simultaneous change in many areas, including technology, supply chains, geopolitics, climate change, and demographics.

Kalin outlined several key global challenges that will shape the path ahead:

• Fragmentation of the world economy: The global system is becoming increasingly diversified, with supply chains being redesigned. Companies that depend on a single country or source have become vulnerable. This is why Thailand’s strategic role in Asia is growing in importance.
   
• Labour skills gap: The demand for highly skilled workers is rising sharply, particularly in areas such as automation, digitalisation, and artificial intelligence.
   
• Sustainability pressures: Global customers and investors now expect low-carbon, environmentally responsible, and traceable products. Companies unable to meet these standards risk losing market share much faster than before.
   
• Ageing society: Japan is already an ageing society, and Thailand and other Asian nations will soon follow. This shift will transform healthcare, the workforce, productivity, retirement systems, and consumer demand, while also creating new markets.
   
• Rise of AI: Artificial intelligence will revolutionise production, management, sales, and communication. AI will not replace people, but companies that fail to adopt it will be left behind. It is not a passing trend, but a vital tool to boost productivity, cut costs, and enhance performance.

Kalin also highlighted major opportunities for Thailand, particularly through stronger collaboration with Japan:

• Investment strength: Combining Japanese technology, quality, and credibility with Thailand’s strengths could help build the most resilient supply chain in Southeast Asia.
   
• Smart manufacturing and AI: By integrating automation and AI, manufacturers can lower costs, improve quality, predict machine failures, enhance safety, and tackle labour shortages. Factories in Thailand can leverage Japanese robotics and AI expertise.
   
• Green economy: Thailand’s push towards net-zero carbon emissions aligns with Japan’s technological capabilities. Together, the two countries can lead in renewable energy, hydrogen, energy-efficient factories, and traceable supply chains.
   
• Tourism and service synergy: Japanese brands are highly popular in Thailand. The combination of Thai hospitality and Japanese quality offers potential for world-class collaboration in tourism, food, logistics, wellness, and lifestyle industries.
   
• Corporate–startup innovation: Japan brings deep technology, research and development, and intellectual property, while Thailand contributes creativity and market access. Together, both nations can develop AI solutions for retail, logistics, healthcare, and finance, and use AI to bridge language barriers.
   
• Ageing society solutions: Japan’s experience in homecare robotics, telemedicine, and healthcare finance offers valuable models for Thailand, which is beginning to face similar demographic challenges.

Kalin urged business operators to adopt a new mindset, stressing that success today is determined not by size but by adaptability and collaboration.

“The world faces many challenges,” he said. “But challenges are not obstacles — they are doors. When Thailand and Japan walk through these doors together, we will not only survive the future — we will build it.”

AI as key driver in next phase of Thailand–Japan partnership

AI is emerging as a key force shaping the next stage of Thailand–Japan economic cooperation, according to Masato Otaka, Japan’s Ambassador to Thailand. He said AI has become one of the most transformative elements of digitalisation, reshaping industries, businesses, and daily life. 

Although global discussions about AI began years ago, its real impact has only become visible recently, moving from concept to daily use — from language tools and AI-assisted medical diagnostics to smart surveillance systems in Japan.

Otaka noted that AI-driven consultancy and corporate platforms are boosting efficiency, streamlining supply chains, and strengthening global partnerships. He stressed that both Thailand and Japan are at a crucial turning point: while the automotive industry remains the backbone of bilateral cooperation, both nations must now adapt to the rise of electric vehicles and AI-driven industries to stay competitive.

“There is much to discuss about the future of Thailand and Japan as partners,” he said. “AI is an important starting point, but there are many other areas to explore. I am confident that SMBC will continue to serve as an excellent facilitator, bringing more people into this important discussion.”

Meanwhile, Ahmed Jamil Mazhari, Groupwide AI Transformation Advisor at SMFG and former President of Microsoft Asia, described AI as “the first massive scaling opportunity of human cognition.” He said every major technological leap has historically boosted global GDP, and AI adoption will determine which nations remain competitive.

Mazhari noted that the cost of AI computing has dropped by 95%, while model capacity and efficiency have multiplied dramatically. This progress, he said, has been fuelled by massive investments — with just five global companies expected to spend US$1.5 trillion on AI infrastructure within three years.

However, he warned of uneven AI adoption between developed and developing nations. “We still see a clear divide between the global north and south,” he said, adding that his hope is for AI to drive more inclusive growth.

He pointed out that while Japan leads in industrial automation, there remains room to expand in digital and AI innovation. Thailand, he added, stands to benefit from rising investment in data centres and AI platforms, which will also generate new jobs.

“I am not only optimistic, but also confident that if we are able to create more inclusive growth, we will see fundamentally stronger and broader economic acceleration,” Mazhari said.

Experts discuss AI's transformative potential across industries 

At the panel discussion on "The Overall Landscape of AI Trends," industry experts highlighted the significant opportunities AI presents across various sectors, including healthcare and banking.

Ahmed Jamil Mazhari, Groupwide AI Transformation Advisor at SMFG, noted, "AI is actually a general-purpose technology like electricity or a computer and has the potential to impact many industries."

He emphasised AI’s transformative role, particularly in drug discovery, where advancements in protein structure research could revolutionise healthcare. While AI’s potential is vast, Mazhari stressed that AI should augment human roles rather than replace them, creating a "dual engine" effect where both AI and humans improve together.

Dhanawat Suthumpun, Managing Director at Microsoft Thailand, shared similar insights, stating, "AI is not just about the change, but it’s about transforming how we operate." He described AI as a massive opportunity for businesses of all sizes, urging organisations to integrate AI into their strategies.

He encouraged companies to start by identifying the most cost-consuming and time-intensive areas of their operations, exploring how AI can accelerate and improve processes.

Rehan Ahmed, CEO of Marketnode, discussed AI’s potential in the financial sector, specifically in transforming high-volume operations. He shared how AI has helped reduce exceptions in fund settlements, a complex process previously reliant on human intervention. 

"AI, blockchain, and digital money will bring a new business model together," Ahmed concluded, envisioning a future where AI reshapes financial services globally.

Kasama Kongsmak, Acting Senior Executive Vice President of the Digital Economy Promotion Agency (depa), emphasised the importance of AI adoption across all sectors in Thailand. AI is for everyone, she said, explaining that its applications range from farmers predicting crop yields to content creators enhancing their work.

Kasama highlighted depa’s efforts to push for digital transformation, aiming to make Thailand’s businesses AI-ready by 2027.

These speakers underlined the critical role AI will play in shaping future industries, urging businesses and governments to strategically integrate AI for sustainable growth and innovation.

Key challenges and opportunities for Thai economy

Dr Supavud Saichuea, Chairman of the National Economic and Social Development Council (NESDC), has identified five major challenges that Thailand’s economy will face in the coming years, along with strategies to unlock new growth opportunities.

He began by noting the impact of renewed border tensions with Cambodia after a Thai soldier was injured by a landmine on November 10, prompting the prime minister to suspend all bilateral activities.

He warned that if peace remains distant, local economies along the 800-kilometre border could suffer and tensions might escalate further.

Secondly, he said ASEAN continues to face pressure from US–China geopolitical competition. The ceasefire agreement signed between Thailand and Cambodia in July 2025 came amid US tariff disputes that could affect Thai export competitiveness.

The third challenge, he said, is the country’s slow economic growth. Thailand’s GDP is expected to expand by just 2.2% this year, with inflation near zero – a risk reminiscent of Japan’s deflationary period. The Bank of Thailand (BOT) projects only 1.1% inflation next year.

Fourth, Supavud pointed to political uncertainty ahead of the expected general election in March 2026. He predicted a fragmented outcome that could weaken policy direction. 

Without a strong mandate, he said, it would be difficult to push through meaningful reforms, while populist short-term schemes such as Khon La Khrueng (Let’s Go Halves) continue to dominate the political agenda.

The fifth challenge is limited macroeconomic policy space. He noted that the government has little fiscal flexibility as revenues decline and deficits shrink, while BOT remains cautious about preserving room for future crises.

To overcome these constraints, Supavud proposed five measures to revitalise the economy:

• Accelerate BOI approvals: Fast-track major investment projects in key sectors such as automotive, electric vehicles, advanced electronics, medical and wellness, data centres, and food innovation.
   
• Enhance regulatory agility: Eliminate outdated laws and regulations within the next decade to improve business flexibility.
   
• Advance green transition: Move Thailand’s net-zero target forward from 2065 to 2050 and expand direct power-purchase agreements beyond data centres to all industries seeking renewable energy sources.
   
• Implement the Rail Transport Act: The law allows private firms to operate passenger and freight services on state rail lines, creating opportunities to boost logistics efficiency and tourism.
   
• Showcase Thailand at the World Bank Annual Meetings 2026: Hosting the event in October 2026 is a chance for Thailand to demonstrate its economic potential, attract investment, and strengthen its global profile as it works to escape the middle-income trap.

“I’m hopeful the government will not let this opportunity go to waste,” Supavud said. “It will not only stimulate economic activity but also enhance Thailand’s reputation as a relevant and growing player on the global stage.”

Thailand’s economic hurdles and potential for growth

At the “Thailand Economic Outlook & Opportunities in ASEAN” panel discussion, Korn Chatikavanij, Former Finance Minister, outlined Thailand's structural challenges and the hurdles that are slowing its growth. 

He pointed to demographic issues and high household debt as key factors undermining the country’s economic potential. 

Korn highlighted the shrinking workforce, noting that Thailand is facing a demographic decline, while neighbouring countries such as Vietnam and the Philippines continue to experience a growing working-age population. Furthermore, the high level of household debt is curbing domestic consumption.

Korn also addressed the impact of US tariffs on Thailand’s trade, acknowledging that while the tariffs affect Thailand and its ASEAN neighbours equally, they still pose significant challenges. 

“The good news is that the rate we're facing is the same as our neighbouring countries, but we all have to adjust to this new normal of higher tariff rates and higher friction in international trade,” he said. 

He stressed that Thailand’s economic growth relies on comprehensive reform, noting that fiscal or monetary measures alone will not achieve the desired results.

Dr Supavud Saichuea, Chairman of NESDC, while acknowledging the challenges, remained optimistic about Thailand’s prospects for recovery. He highlighted the need to improve the supply side of the economy, advocating for smarter labour and better energy solutions, particularly in solar power. 

“Debt is the past. We should focus on assets that will generate returns for the future,” he said. 

Supavud called for long-term investments in areas like solar energy and human capital development, asserting that embracing technological and energy solutions would enhance Thailand’s competitiveness.

Chanintr Chalisarapong, Vice Chairman of the Thai Chamber of Commerce, identified government transparency and regulatory inefficiencies as major obstacles to economic growth.

He argued that excessive regulations and slow digitalisation are deterring foreign direct investment (FDI). 

We need external push through trade liberalisation to unlock investment and innovation in Thailand, he stated, advocating for free trade agreements (FTAs) to drive growth and calling for improved governance to reduce regulatory burdens.

Mitsuhiro Furusawa, President of the Institute for Global Financial Affairs at SMBC, acknowledged that global growth had outperformed expectations but cautioned that Thailand’s long-standing structural weaknesses, such as an aging population and high household debt, continue to hinder progress. 

He called for strategic reforms to strengthen the country’s resilience and promote regional trade integration. 

"I believe strategic reforms are essential to strengthen resilience and drive medium-term growth," he said, adding that key priorities for Thailand include promoting competition, enhancing physical and ICT infrastructure, upskilling the workforce, and fostering regional trade and financial integration.

On a more optimistic note, Koichiro Yui, Country Head of SMBC Thailand, highlighted significant growth opportunities for Thailand, despite the challenges it faces. He pointed to strong indicators such as high foreign exchange reserves, robust FDI, and a narrowing income gap. 

He also emphasised the strength of Thailand’s manufacturing base and the growing digital economy and tourism sectors. 

“Thailand may face many difficulties, but I still believe we have a lot to grow. With the right strategies in place, we can achieve significant growth,” Yui said, encouraging businesses to focus on market segmentation and differentiation, rather than solely on GDP growth.

Thailand’s future strategies amid global transformation

Dr Narongchai Akrasanee, Founding Member of the Thailand Development Research Institute (TDRI), delivered the closing remarks, outlining Thailand’s current challenges and strategies for navigating a world reshaped by unexpected global shifts.

Narongchai began by revisiting the conclusions of the 2016 seminar, which had projected the country’s economic outlook for 2020. Those forecasts anticipated:

• Slower economic growth with limited structural transformation, including a shrinking agricultural sector.
   
• A political environment prioritising tradition, security, and stability over prosperity.
   
• The challenges of an ageing population.
   
• Accelerated urbanisation.
   
• The rising influence of digital technology.

He noted that these predictions largely proved accurate, as the period between 2017 and 2025 was defined by profound and unforeseen developments both globally and domestically:

• 2017: The presidency of Donald Trump marked a departure from support for liberal institutions, open economics, and multilateral cooperation.
   
• 2020: The Covid-19 pandemic caused unprecedented global disruption lasting through 2022.
   
• 2022: The Russia–Ukraine war reignited geopolitical tensions, described as the “Revenge of Geography” and “Revenge of History.”
   
• November 2022: The launch of ChatGPT accelerated the mainstream adoption of AI.
   
• 2022–2025: Thailand grappled with balancing the “politics of tradition” and the “politics of representation,” while its economy, led by resilient corporate and financial sectors, managed to endure.

Concluding his address, Narongchai outlined three key strategies for Thailand to adapt and thrive in a rapidly changing global landscape:

• Managing global (dis)order: Restructure the Thai economy to address the challenges of an increasingly fragmented international system.
   
• Embracing AI: Integrate artificial intelligence across economic and administrative functions to boost productivity, supported by robust AI governance.
   
• Prioritising ASEAN: Position ASEAN at the centre of Thailand’s economic and diplomatic strategy to ensure stability and relevance in a volatile world.