Thailand's Q2 GDP Beats Forecasts, Full-Year Outlook Raised

Thailand's economy grew 1.9% in the second quarter of 2026 compared with a year earlier, surpassing the 1.7% median forecast in a poll of economists. On a seasonally adjusted basis, the economy contracted 0.2% quarter-on-quarter, a milder decline than the 0.6% predicted.

The National Economic and Social Development Council, the state planning agency, attributed the better-than-expected performance to stronger private investment, which helped offset weak consumption and lower public investment. The agency also raised its full-year growth forecast to 2.0%–2.5%, from a previous range of 1.5%–2.5%.

In the first quarter, the economy expanded 2.8% year-on-year and a revised 0.6% quarter-on-quarter. For the first half of the year, growth stood at 2.4% annually.

Agency chief Danucha Pichayanan said growth is expected to pick up in the third quarter, after the second quarter was hit by the Middle East conflict. The baht strengthened and the stock benchmark rose 1% following the data release.

Economists see limited room for monetary easing. Kobsidthi Silpachai, head of Capital Markets Research at Kasikornbank, said with inflation easing and growth below 2% year-on-year, the policy rate is likely to stay at 1% for the next 12 months. The central bank left the rate unchanged in June, and the next review is set for August 26.

Exports, a key growth driver, are now projected to rise 15.1% this year, up from an earlier forecast of 9.6%. Tourist arrivals are expected at 32 million, unchanged from the previous projection. The unemployment rate edged up to 0.96% in the second quarter from a revised 0.94% in the first.

Household debt and living costs continued to weigh on consumption. In June, the government launched a 176 billion baht ($5.33 billion) consumer subsidy scheme under a broader 400 billion baht borrowing plan to ease cost-of-living pressures.

The finance ministry last month raised its 2026 growth forecast to 2.5% from 1.6%, citing stronger exports and domestic demand. Headline inflation slowed to 1.95% in July, within the central bank's 1%–3% target range, and the planning agency projects full-year inflation at 1.5%–2.0%.