Thailand’s economy experienced growth in Q4 driven by stronger domestic consumption and increased external demand

Thailand’s economy grew in Q4, driven by increased domestic and external demand, boosted by exports, private consumption, and government spending. Inflation improved slightly; key issues include baht appreciation and SME liquidity.

Summary

• Thailand’s economy expanded in the fourth quarter, supported by improvements in both domestic and external demand, consistent with supply-side developments. In December, economic activity also increased from the previous month.
  • External demand increased, driven by continued growth in merchandise exports across several categories, particularly electronics and agricultural products.
  • Domestic demand increased, underpinned by higher private consumption and private investment, partially benefiting from government support measures, as well as an expansion in central government spending.
  • Supply-side conditions improved, with the services sector expanding in line with trade and tourism activities. Manufacturing production also picked up, supported by both domestic and external demand, alongside factories that had temporarily shut down for process upgrades resuming normal production.
• Headline inflation became less negative, mainly due to higher raw food prices. Meanwhile, core inflation remained positive but declined slightly compared to the previous month.
• Key issues to monitor: (1) The impact of baht appreciation, (2) tightened business liquidity conditions, especially for SMEs, (3) the recovery of the manufacturing sector, and (4) the recovery in foreign tourist arrivals. 

Thailand’s economy in December expanded from the previous month, supported by higher merchandise exports, particularly technology-related and agricultural products. Private consumption, especially in services, improved following government support measures. Private investment also expanded, led by increased investment in machinery and equipment and vehicles, reflecting accelerated registrations of electric vehicles ahead of the expiration of the EV 3.0 scheme. These developments contributed to stronger activity in related service sectors. Industrial production increased in line with both domestic and external demand and the resumption of normal operations at previously temporary closed factories. However, tourism receipts declined due to fewer foreign tourist arrivals.

On the macroeconomic stability front, headline inflation was less negative, mainly due to rising fresh food prices, particularly vegetables, following flood-related supply disruptions. Core inflation remained positive but declined slightly from the previous month, reflecting lower prices pressures in public transportation fares, personal care products, and cleaning supplies. The current account recorded a surplus, supported by positive balances in trade as well as services, income, and transfers. Overall labor market conditions remained stable.

Overall, Thailand’s economy in the fourth quarter expanded from the previous quarter, supported by stronger exports, particularly in electronics and electrical appliances, as well as higher tourism receipts in line with a gradual recovery in tourist arrivals. Domestic demand also improved, driven by increased private consumption and investment, and rising government spending. Service-sector activities expanded accordingly, while industrial production rebounded, supported by domestic and external demand and the resumption of operations at previously closed factories.

Source : Press Release on the Economic and Monetary Conditions for December 2025 and Q4/2025

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