BANGKOK, THAILAND – Thailand’s economy ended 2025 with stronger‑than‑expected growth, but analysts warned that post‑election uncertainty and a weakening tourism sector were already weighing on the outlook for 2026.
Growth in late 2025 exceeds forecasts
The National Economic and Social Development Council (NESDC) and the University of the Thai Chamber of Commerce reported that the economy closed 2025 with unexpectedly strong momentum. On 16 February 2026, Danucha Pichayanant presented official figures showing that gross domestic product expanded by 2.5 percent year‑on‑year and 1.9 percent quarter‑on‑quarter in the fourth quarter, implying full‑year growth of 2.4 percent, above the previously expected range of 1.8 to 2.0 percent.
Investment surge and construction drive expansion
According to the NESDC, the late‑year acceleration was mainly driven by higher investment, supported by significantly increased state budget spending and more public construction projects. Regional stimulus programmes underpinned the provinces, while private investment rose by 6.5 percent in the final quarter and construction of industrial facilities jumped by 12 percent after eased approvals, making the construction sector a key pillar of growth as new projects started before year‑end.
Services, trade and consumption strengthen
The trade and services sector also expanded in the fourth quarter, growing by 6.8 percent as wholesale and retail trade benefited from stronger domestic demand. Repair services for cars and motorcycles climbed by 31.6 percent, partly due to flood damage, so services provided additional support while higher private consumption and government spending broadened internal demand.
Labour market improves amid low inflation
At the start of 2026, the macroeconomic environment appeared stable, with the unemployment rate at 0.71 percent in the fourth quarter, down from 0.76 and 0.88 percent in the comparison quarters, indicating a gradual labour‑market improvement. Headline inflation stayed negative for the third consecutive quarter at minus 0.5 percent, while core inflation averaged 0.6 percent, and a current account surplus of 0.9 billion US dollars, foreign reserves of 281.9 billion US dollars and public debt of 12.45 trillion baht, or 65.6 percent of GDP, pointed to generally robust conditions.
Post‑election political uncertainty threatens budget
Despite the stronger data, Danucha warned after the 8 February parliamentary election of a potential growth setback if government formation were delayed. If a cabinet was in place by March or early April, budget process delays would likely remain limited, but prolonged deadlock could affect the 2027 budget, especially as lawsuits over ballot papers with barcodes questioned the validity of the vote and could postpone new spending by more than two months.
2026 outlook: moderate growth and role of state firms
For 2026, the NESDC projected growth between 1.5 and 2.5 percent, with a midpoint of 2.0 percent, supported by an expected 2.1 percent rise in private consumption and export growth now forecast at 2.0 percent instead of earlier anticipated declines. Government room for manoeuvre was expected to widen through a 7 to 8 percent increase in spending and planned state‑enterprise investments of around 92 billion baht in the fourth quarter of 2026, so late disbursements could serve as a buffer against political delays.
“Thailand Fast Pass” aims to speed up projects
With the “Thailand Fast Pass” programme, the government sought to accelerate approvals for investments, particularly in capital goods, machinery and land in industrial zones, in order to move private projects into implementation more quickly. At the same time, planners reported that reservoirs were close to full capacity, giving agriculture a relatively secure starting position, while additional investment projects were intended to shield the economy from external uncertainties.
Tourism weakens despite ambitious targets
The tourism sector sent mixed signals, as the NESDC still expected 35 million foreign visitors in 2026 and revenues of 1.65 trillion baht with average spending of 47,000 baht per trip, but early figures showed a decline. Between 1 January and 15 February 2026, only 5.07 million foreign visitors arrived, a drop of 7.59 percent year‑on‑year that called into question assumptions of a strong recovery, even though experts pointed to a high comparison base in 2025 after arrivals had slumped amid security concerns over Burmese scam centres and missing Chinese nationals.
External headwinds and tight credit conditions
Beyond the tourism downturn, the NESDC highlighted persistent global risks from volatile markets, high debt ratios among many trading partners and rising geopolitical tensions that could weigh on external trade. Domestically, high household debt prompted banks and other financial institutions to be cautious in extending credit, particularly for car loans and financing for small and medium‑sized enterprises, while extreme heat threatened harvests and the EU’s carbon border adjustment mechanism put additional adjustment pressure on exports of steel, aluminium and cement.
Business community praises stimulus measures
The Thai Chamber of Commerce welcomed the fourth‑quarter results and, through Dr. Poj Aramwattananon on 16 February 2026, pointed to a clear acceleration compared with the third quarter, which had grown by only 1.2 percent. The chamber now estimated overall growth for 2025 at 2.4 percent and attributed the improved momentum to stimulus packages, faster fund disbursements, the “Half‑Price Plus” project, quicker investment approvals via the Board of Investment and expanded trade talks with the United States and China, which under Prime Minister Anutin Charnvirakul and his deputy and Finance Minister Dr. Ekniti Nitithanprapas had supported output in industry and services.
“The chamber now sees 2.4 percent growth for 2025 and links the stronger momentum to stimulus measures, faster disbursements, the ‘Half‑Price Plus’ project, speedier investment approvals and expanded trade talks that supported production in industry and services under the current government.”
said Dr. Poj Aramwattananon, representative of the Thai Chamber of Commerce.