Growth Slows as Investment and Exports Drive Expansion
The economy expanded 1.9% year-on-year in the second quarter, decelerating from 2.8% growth in the first quarter, according to figures released by the National Economic and Social Development Council (NESDC) on August 17. The reading beat market expectations of around 1.7%, even as growth eased to its slowest pace in three quarters. Total investment rose 9.1%, with private investment up 13.4% on spending on machinery, equipment and vehicles, while public investment contracted 1.6%.
Exports remained the standout performer, with the value of goods exports climbing 17.6% and export volume rising 13.7%, led by electronics and electrical appliances amid strong global demand for AI-related products. Imports grew even faster, up 42.3% in value, pushing the current-account balance into a deficit equivalent to 12% of GDP for the quarter. Tourism added further support, generating 663 billion baht in revenue on 6.55 million international arrivals.
Full-Year Outlook Raised, Household Spending Lags
NESDC Secretary-General Danucha Pichayanan said the council has lifted its full-year 2026 growth forecast to a range of 2.0-2.5%, with a midpoint of 2.2%, and sharply raised its export growth projection from 9.6% to 15.1%. Rising energy prices weighed on households, however, with private consumption growth slowing from 3.3% to 1.9% amid persistently high household debt. The unemployment rate edged up slightly to 0.96%, while headline inflation stood at 2.7% for the quarter.
The government has stepped up fiscal support to cushion the impact, rolling out 176 billion baht in consumer subsidies as part of a wider 400-billion-baht borrowing plan aimed at easing cost-of-living pressures tied to energy prices. The NESDC said maintaining export momentum, supporting farm incomes and sustaining government spending would be key priorities for the rest of the year, alongside monitoring risks from conflicts in the Middle East.
