World Bank raises Thailand’s 2026 growth outlook to 2% but warns AI dependence and climate risks remain

The World Bank has raised Thailand's growth outlook for 2026 to 2%, elevating it by 0.7 percentage points from its prior projection. This forecast upgrade is primarily due to a surge in exports driven by the global AI boom. However, the bank also cautions that Thailand's growth could be constrained by potential flooding, a severe El Niño event, and insufficient domestic adoption of AI.

The situation is further complicated by ongoing heavy flooding, which complicates the relationship between technology-driven exports and climate-related disruptions.

A significant finding from the World Bank's survey is that only 12% of Thai firms had adopted AI by December 2025, a stark contrast to 43% in the United States. Furthermore, just 4% of Thai firms were paying for AI tools, and around 80% reported no productivity gains from the technology. This highlights a significant productivity gap, making it clear that wider AI adoption is not yet a reality in Thailand.

Despite these challenges, Thailand is part of a broader East Asia and Pacific region that's projected to grow by 4.5% in 2026. The region benefits from the same technology cycle that is boosting growth in Thailand, Malaysia, the Philippines, and Vietnam. AI-related products now account for more than 70% of export growth in these countries, making electronics and technology supply chains increasingly important sources of external demand.

The World Bank acknowledges that Thailand's primary strength lies in producing AI-enabling goods rather than actively adopting AI across its domestic economy. The policy challenge for Thailand now lies in two areas: leveraging the AI-driven export boom to generate more domestic productivity and mitigating climate risks that could have devastating effects on agriculture and food production sectors.

To seize this opportunity, Thailand must focus on strengthening digital infrastructure, upskilling its workforce, securing financing, and creating a more favorable business environment. The bank emphasizes that simply investing in high-tech export industries is not enough; Thailand must also work on adopting AI technology to boost productivity in traditional sectors such as manufacturing, tourism, and agriculture.