Thailand recorded a stronger-than-expected expansion in the January-March quarter of 2026, the planning agency said, yet policymakers have left the annual growth outlook unchanged because the conflict in the Middle East continues to exert downward pressure on the economy.
The National Economic and Social Development Council (NESDC) reported that gross domestic product rose 2.8% in the first quarter compared with the same period a year earlier, above the median 2.2% forecast in a Reuters poll. On a seasonally adjusted basis, the economy increased 0.7% from the previous quarter, outpacing the poll projection of 0.1%.
For comparison, the final quarter of 2025 saw growth of 2.5% year-on-year and 1.9% quarter-on-quarter. The NESDC attributed the early-2026 improvement to an expansion in manufacturing output and higher government consumption, and added that private consumption and investment also rose during the period.
Nonetheless, labour market indicators showed a modest deterioration: unemployment climbed to 0.91% in the quarter, up from 0.70% in the prior three months, according to the planning agency.
Government fiscal measures and lending plan
The NESDC reiterated that public policies will provide a supporting backdrop for growth this year. The government has approved a 400 billion-baht loan decree - equivalent to $12.26 billion - and is preparing a consumer subsidy scheme scheduled for launch in June. Officials say the borrowing will be used to ease household living costs and to back the clean energy transition.
Overall, the NESDC maintained its full-year GDP outlook for 2026 at a range of 1.5% to 2.5% despite the stronger first-quarter outturn. The council also expects increased private consumption, private investment and public expenditure to underpin economic activity through the year.
Trade and tourism forecasts diverge
Trade prospects received a markedly brighter assessment from the planning agency. Exports, a core engine of Thailand’s growth, are now forecast to expand by 9.6% this year - a substantial upward revision from an earlier estimate of 2.0% growth.
By contrast, tourism projections were revised down. The NESDC now expects 32 million foreign arrivals in 2026, reduced from a February estimate of 35 million, reflecting the hit to travel demand tied to external shocks.
Monetary policy and forecasts
Bank of Thailand Governor Vitai Ratanakorn has recently updated the central bank’s forecast, saying growth is now expected to reach 2.1% this year, up from a prior projection of 1.5% at the previous policy meeting. At that meeting the central bank held its key policy rate steady at 1.00%. The next policy review is scheduled for June 24.
Meanwhile, Standard Chartered economist Tim Leelahaphan said the bank's growth forecast for 2026 remained unchanged at 1.4% and warned of slowing momentum ahead, noting that "We see a slowdown ahead.. the effects of the Middle East conflict began to take hold," in a research note.
Context and closing
The Thai economy expanded by 2.4% in 2025 and has lagged regional peers since the pandemic. Looking ahead, the government and planners are relying on a mix of higher private-sector demand and targeted public borrowing to stabilize living costs and support strategic investments, while acknowledging that external geopolitical tensions and domestic debt burdens remain constraints on the pace of recovery.