Economic growth more than doubles in Q4 2025

Economy beats highest market forecast in Q4: Thailand's GDP increased 2.5% in annual terms in Q4, following a 1.2% expansion in the previous quarter. This beat even the most optimistic economist projections. On a seasonally adjusted quarter-on-quarter basis, the economy grew 1.9% in Q4, following a 0.3% contraction in the prior quarter. In 2025 as a whole, GDP rose 2.4%, slowing from 2024’s 2.9% expansion due to slower increases in private and public spending.

Domestic demand fuels acceleration: Relative to the previous quarter's data, readings in Q4 improved for private consumption (+3.3% on a year-on-year basis vs +2.5% in Q3), government consumption (+1.3% vs -3.9% in Q3), fixed investment (+8.1% vs +1.4% in Q3) and imports of goods and services (+9.1% vs +5.9% in Q3). In contrast, the reading for exports of goods and services worsened in Q4 (+5.6% vs +7.6% in Q3). On the domestic front, economic activity was lifted by government stimulus, reconstruction efforts following November’s floods and an acceleration in public capex disbursements under the new administration. Regarding the external sector, goods exports decelerated, mainly due to falling agricultural sales amid intensifying global competition, and services exports continued to deteriorate amid persistent weakness in the tourism sector.

GDP growth to slow again in 2026: In 2026, economic growth is forecast to slow again from the prior year on the back of cooling momentum in private spending, fixed investment and exports. As a result, Thailand is likely to remain among ASEAN’s laggards this year due to structural issues, including the highest household-debt-to-GDP ratio in the region and limited reform progress curbing investment prospects. Still, stronger growth in public spending this year should provide tailwinds, and lower interest rates should prevent a sharper deceleration in private spending and fixed investment. Downside risks to GDP growth include an escalation of conflict in the Middle East leading to a surge in energy prices, logistical disruptions to global supply chains and a further weakening of tourist inflows amid an already struggling domestic services sector.

Panelist insight: Nomura’s Euben Paracuelles and Yiru Chen said: “Taking into account the better-than-expected Q4 outturn, we raise our 2026 GDP growth forecast to 1.8% from 1.4% […]. As discussed above, the sources of upside surprise in Q4 are unlikely to be sustained, in part due to fiscal support measures, which were likely disrupted, owing to another period of political transition […]. Investment spending is unlikely to be sustained owing to the uncertain external environment, some structural domestic impediments still in play, and relatively high real rates. Household debt remains high and the negative feedback loop between the weak economy and tight financial conditions likely persists, in our view. Cheaper imports from China are exerting some downward pressure on domestic industries, exacerbating other factors already weighing on competitiveness, including deteriorating demographics and limited reform prospects.”

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