KKP Research Warns of Prolonged Global High-Interest Rate Environment

KKP Research has issued a warning regarding a potential long-term period of high global interest rates, driven by structural pressures such as significant fiscal deficits in major economies, massive capital requirements for AI investment, and persistent inflation risks. According to the report, these factors suggest that interest rates are unlikely to return to the low levels observed over the past decade.

For residents and investors in Thailand, the situation warrants close attention. While Thailand currently maintains lower interest rates, KKP Research suggests this may reflect underlying economic fragility rather than fiscal strength, particularly as public debt approaches the 70% ceiling. The report notes that rising global bond yields, including those in the U.S., Japan, and France, create a challenging environment for private investment and increase the burden of public debt.

Although recent U.S. political developments have provided some temporary relief regarding government spending policies and oil price volatility, overall costs remain significantly higher than historical averages. The competition for capital between public and private sectors remains a critical factor. It remains to be confirmed how these global structural shifts will specifically impact Thailand's long-term fiscal policy and whether the government will implement measures to mitigate the risks associated with high debt levels and potential capital outflows.