BANGKOK: Thailand upgraded its growth outlook for 2026 as the new government banks on a resurgence in exports and tourism to sustain the momentum from a better-than-expected performance last quarter.
Gross domestic product (GDP) in the three months through December rose 2.5% from a year earlier, the National Economic and Social Development Council (NESDC) said yesterday.
That exceeded the 1.3% median estimate in a Bloomberg News survey and the 1.2% pace in the third quarter.
The economy expanded 1.9% from the previous quarter, marking the largest jump in four years to beat the forecast of 0.6% growth.
Full-year growth stood at 2.4%, prompting the NESDC to raise its outlook for 2026 economic growth to between 1.5% and 2.5%, from the 1.2% to 2.2% projected earlier.
The benchmark SET Index rose 1% to 1,445.20. The Thai baht edged 0.1% higher to 31.027 per US dollar, in line with most emerging market peers.
The move, however, may be affected by thin liquidity with most major Asian centres, including China, closed for the Lunar New Year holiday.
The latest GDP data should boost Prime Minister Anutin Charnvirakul, whose party secured a stronger-than-expected election result and sealed a coalition deal last week.
Anutin has pledged to focus on the economy and cost-of-living pressures, including measures to support households and employment.
Underpinning improved growth prospects for this year, the NESDC said easing trade restrictions should help boost goods exports, while the tourism recovery should drive services exports.
Total exports for goods and services are projected to expand by 2.1%, slowing down from 9.2% in 2025 but improving from 1.1% in the previous projection.
Meanwhile, private consumption should continue firming up due to low inflation and loose monetary policy, the NESDC said.
Headline inflation, which has been negative for the past 10 months, is expected to average between minus 0.3% to 0.7% in 2026.
The Bank of Thailand (BoT) in December cut the nation’s benchmark interest rate for the fifth time since October 2024 to 1.25% to help support the fragile economy.
The policymakers will convene again on Feb 25 for its first rate meeting this year.
Economists in a Bloomberg survey expect the BoT to reduce the key rate anew this quarter and then go on an extended pause.
Two decades of political instability have turned Thailand from an aspiring economy to a regional laggard beset with stagnant growth, soaring debt, widening inequality and a shrinking workforce.
Its annual growth rate of about 2% a year is less than half the pace of Malaysia and Singapore, and barely a quarter of the growth in Vietnam.
However, the South-East Asian nation saw a much-needed uptick last quarter as the government’s stimulus measures helped spur consumption and investment, NESDC chief Danucha Pichayanan told a press briefing on Monday.
The run-up to the vote this month also increased spending, he added.
Investment grew 8.1% in the fourth quarter, a sharp increase from 1.4% in the previous three months. Household consumption expanded 3.3%, while government consumption rebounded from a contraction in the third quarter to grow 1.3% from October to December.
Danucha said key obstacles this year include global trade disruptions, climate change and Thailand’s high levels of household debt.
Any political uncertainty that could arise post-elections and derail the preparation for the next fiscal budget that starts Oct 1 would also be a risk.
“If the government can come into office by early April, the budget next year may be slightly delayed by two months. If it takes a longer time than that, it will lead to further delays and that will affect the economy,” Danucha said. — Bloomberg
