Thailand GDP Forecast Raised to 2.6% After MPI Revision
Thailand's 2026 GDP growth forecast has been revised upward to 2.6% from 2.3% following a major overhaul of the Manufacturing Production Index by the Office of Industrial Economics. The new methodology, which includes broader factory coverage and a chain-linked calculation, shows manufacturing grew 2.4% in the first seven months instead of contracting. However, researchers warn the gains may not fully translate to GDP or labor income due to high import reliance and a low labor share in the booming electronics sector.
Krungthai COMPASS Research Center expects the Office of Industrial Economics' (OIE) revision of the Manufacturing Production Index (MPI) to have significant implications for the Thai economy. The OIE initially updated the MPI in September 2026 and changed the calculation methodology in October 2026, adding new products and expanding the factory sample group to cover integrated circuits (IC) and electronic components. Most recently, the index calculation was switched to a chain-linked method.
The expanded MPI coverage flips the production picture for the first seven months of 2026 from a 0.1% contraction to 2.4% growth, narrowing the gap between export growth and manufacturing output, particularly in the computer and electronics group. However, the revised MPI reflects an even more pronounced K-shaped pattern in the manufacturing sector.
"The new MPI may support the 2026 GDP estimate, raising it from the previous view of 2.3% growth to 2.6%, an increase of just 0.3%, because the MPI upward revision does not pass through to GDP in the same proportion due to high reliance on imported raw materials. Moreover, the labor sector may not yet see clear benefits, as the computer and electronics group has a labor compensation-to-export value ratio of only 10.1%, below the average of 16%."
The next challenge is to increase domestic value added, raise the proportion of local content usage, and distribute benefits to the labor force through supplier development and upgrading existing industrial groups to adapt.
