KKP believes the AI investment trend may only last another 2-3 years, and identifies four risks for the second half of the year, including prolonged high interest rates and the continued fragility of the Thai economy.
KKP assesses investment prospects for the second half of 2026, acknowledging that investment in AI stocks remains a key driver of the global market. However, they anticipate this momentum may only last 2-3 years before facing limitations from fundamental factors. They also outline four key risks investors should monitor: persistently high global interest rates, geopolitical uncertainty, global economic volatility, and the fragility of the Thai economy.
Dr. Phiphat Luengnaruemitchai Chief Economist Kiatnakin Phatra Financial Business Group (KKP)
July 21, 2569 Dr. Phiphat Luengnaruemitchai Chief Economist Kiatnakin Phatra Financial Business Group (KKP) It has been revealed that the first half of 2569 proved that the world has entered a new investment environment, with wars returning as a price variable, inflation being more stubborn than expected, and the AI investment trend remaining strong. For investors, the key question is not what happened in the first half of the year, but what should we watch out for going forward?
In summary, there are four key issues that will determine the direction of the market in the second half of this year and into next year.
1) Investment in AI is a key engine driving global economic and stock market growth right now. Dr. Pipat stated that as long as large technology companies continue to invest in data centers and computing chips, Asian economies in the supply chain will continue to benefit. However, investors need to watch for the sustainability of this cycle, as the market is increasingly questioning whether the return on investment is worthwhile. If confidence in this area is shaken, stock markets heavily reliant on AI could face volatility.
"One point we need to carefully consider is the sustainability of AI investment, both from a supply and demand perspective. If we invest this much, will AI truly generate a worthwhile return on investment for those who contribute?" Dr. Pipat said.
Dr. Supavud Saichue, Chairman of the National Economic and Social Development Council.
Dr. Supavud Saichue, Chairman of the National Economic and Social Development Council. And a consultant from Kiatnakin Phatra Financial Group stated that analysts are beginning to warn that investing in AI still carries risks. Surveys show that the use of AI in large businesses is still low, at only 4-5%, and importantly, it hasn't yet generated clear profits or benefits for businesses compared to the internet, smartphones, or various platform businesses. Meanwhile, development costs remain high due to limitations in advanced chips, GPUs, and their enormous power consumption. However, this investment trend is still positive for Thailand as an electronics component manufacturer, but the clear commercial returns need to be monitored within 2-3 years.
2) Oil prices and risks from the Middle East. Dr. Pipat stated that the situation in the Middle East remains uncertain and fragile, and oil prices have not yet truly returned to normal. What has changed is that energy risk has become a variable that must be considered in all investment decisions. High oil prices directly impact inflation, business costs, and the risk of eventual shortages, ultimately affecting interest rates. If tensions flare up again, the impact on the market could be rapid and severe.
Dr. Supavud also stated that another risk to watch is the economic recovery of Middle Eastern countries, which are likely to need to attract more investment back to strengthen their domestic stability and change their development strategies, as conflicts have impacted their strategies for developing the region into a world-class business and tourism hub.
3) Uncertain trends in interest rates, especially long-term interest rates. Dr. Pipat stated that the market's expectations of a downward interest rate trend at the beginning of the year have changed. The large capital required for AI investments, coupled with inflation risks from rising economic trends and oil prices, and the expanding fiscal deficit, makes it more difficult than anticipated to lower inflation and policy interest rates. Therefore, the pressure is shifting towards long-term interest rates.
4) The Thai economy has weak structural instability and limited policy space. Dr. Pipat pointed out that although the Thai economy showed improvement in the first half of the year, global uncertainty clearly impacted its outlook. Thailand enters the second half of the year with a thinner buffer than before. The previously high current account surplus is beginning to decline due to structural issues. The narrowing interest rate differential with the United States is putting pressure on the baht, while the higher fiscal deficit and increasing public debt limit the government's tools for economic stimulus. External shocks may have a greater impact on the Thai economy, leading to a slower recovery.
Dr. Supavud concluded by saying that what needs to be watched in the short term is the trade negotiations with the United States, whose temporary tariff exemption is set to expire on July 24th. This will affect Thailand's export sector, which accounts for 40% of total exports, impacting both the economy and the current account balance, potentially leading to a deficit and a stronger depreciation of the baht than expected.
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