（Singapore, 16.02.2026）Thailand’s economy delivered a pleasant surprise at the end of 2025, prompting officials to raise their growth projections for the year ahead and giving a boost to the country’s new government.
Fresh data released on Monday by the National Economic and Social Development Council (NESDC) showed that Thailand’s gross domestic product (GDP) expanded 2.5% in the fourth quarter compared with a year earlier. The figure was well above market expectations and marked a clear improvement from the 1.2% growth recorded in the third quarter.
On a quarterly basis, the economy grew 1.9% from October to December — the strongest jump in four years and far exceeding forecasts of just 0.6%. For the full year 2025, Thailand’s economy expanded 2.4%, outperforming earlier estimates.
Encouraged by the stronger momentum, the NESDC upgraded its 2026 growth forecast to a range of 1.5% to 2.5%, up from a previous projection of 1.2% to 2.2%. The official target is set at around 2%.
Investment and Consumer Spending Lead the Rebound
The biggest driver of the late-year rebound was investment. Total investment surged 8.1% in the fourth quarter — the fastest pace since 2016. This was a sharp acceleration from the 1.4% growth seen in the previous three months.
Private investment rose 6.5%, supported by heavy spending on industrial machinery and office equipment. Businesses appeared to regain confidence amid improving domestic demand and clearer political direction following the election.
One notable factor behind the surge in spending was the government’s EV 3.0 incentive scheme. As the first phase of subsidies approached expiry, consumers rushed to purchase electric vehicles. This “buying frenzy” pushed durable goods spending up by an impressive 12.2% in the final quarter.
Overall household consumption grew 3.3% during the period. Low inflation and loose monetary policy helped support consumer confidence, even as many households continue to face high debt levels.
Government spending also returned to growth, rising 1.3% in the fourth quarter after contracting in the previous quarter.
Exports, Inflation and Policy Support in Focus
Thailand’s export sector delivered mixed results. High-tech exports performed strongly. Shipments of telecommunications equipment jumped 83%, while computer exports soared 91%. This helped cushion weaker performance in some traditional sectors.
However, agricultural exports such as rice and rubber declined due to intense price competition in global markets. The automotive sector also faced challenges, with passenger car exports plunging 36.2%, although exports of pickup trucks and jewelry increased.
Despite these fluctuations, Thailand maintained a healthy trade surplus of US$23.3 billion for the full year.
Looking ahead, the NESDC expects easing global trade restrictions and a continued recovery in tourism to support export growth in 2026. Total exports of goods and services are projected to expand 2.1%. While this would be slower than the 9.2% growth seen in 2025, it is still an improvement from earlier projections of just 1.1%.
Thailand’s inflation environment remains subdued. Headline inflation has been negative for the past 10 months and is forecast to average between -0.3% and 0.7% in 2026.
To support the fragile recovery, the Bank of Thailand cut its benchmark interest rate five times since October 2024, bringing the policy rate down to 1.25% in December. Economists expect the central bank could reduce rates again this quarter before pausing for an extended period.
Political Boost and Ongoing Risks
The better-than-expected economic performance provides a welcome boost for Prime Minister Anutin Charnvirakul, whose party recently secured a stronger-than-anticipated election result and formed a coalition government.
Anutin has pledged to focus on economic growth and easing cost-of-living pressures. Measures to support households and employment are expected to feature prominently in the new administration’s agenda.
According to NESDC Secretary-General Danucha Pichayanan, stimulus measures introduced earlier helped lift consumption and investment in the final quarter. Increased spending in the run-up to the election also contributed to economic activity.
However, risks remain. Danucha highlighted global trade disruptions, climate change, and Thailand’s high household debt levels as key challenges in 2026. Political uncertainty could also pose risks, particularly if it delays the preparation and approval of the next fiscal budget, which begins on October 1.
“If the government can come into office by early April, the budget next year may be slightly delayed by two months,” Danucha said. “If it takes longer than that, it will lead to further delays and that will affect the economy.”
Despite structural challenges such as slower long-term growth compared with regional peers and demographic pressures, the strong finish to 2025 offers cautious optimism.
For now, the data suggest that Thailand’s economy has regained some momentum — giving the new government a stronger foundation as it begins its term.
