Thailand’s economy gained momentum in the first quarter of 2026, expanding 2.8% year‑on‑year and outperforming several Southeast Asian peers despite rising geopolitical and energy‑related pressures.

The latest data from the National Economic and Social Development Council (NESDC) shows growth picking up from 2.5% in the previous quarter and exceeding market expectations of 2.2% .

The stronger‑than‑expected performance was driven by robust goods exports, increased investment, and higher government consumption . Exports surged 15.5% from a year earlier—nearly double the pace of the previous quarter—supported largely by high‑tech electronic products, according to NESDC secretary‑general Danucha Pichayanan .

Regional Context: Thailand Bucks the Slowdown

While Thailand gained speed, several ASEAN economies saw growth cool. The Philippines posted its weakest expansion in five years at 2.8% , while Vietnam, Malaysia and Singapore all recorded slower growth compared with the previous quarter amid rising inflation pressures Current page. Indonesia was a notable exception, with growth edging up to 5.6% on the back of increased government spending .

Tourism Hit by Iran Conflict

Despite the headline GDP improvement, Thailand is already feeling the early economic impact of the Iran conflict. Air transport disruptions and higher ticket prices have weighed on tourism, with foreign arrivals falling 2.4% in Q1 to 9.3 million visitors . Analysts warn that prolonged instability in the Middle East will continue to push up energy and living costs, dampening domestic consumption .

Inflation Rebounds on High Fuel Prices

After a full year of declining prices, Thailand’s consumer inflation jumped to 2.9% in April, driven by elevated fuel costs linked to damaged oil infrastructure in the Middle East . NESDC officials cautioned that high global oil prices could persist for several years, posing risks to both the Thai and global economies.

Government Moves to Cushion Households and SMEs

In response to rising living costs, the government issued an emergency decree to borrow 400 billion baht (US$12.2 billion) to support vulnerable groups and subsidize essential expenses . Part of the funding will also provide liquidity to small and medium‑sized enterprises to prevent bankruptcies amid tightening conditions Current page.

Outlook

The NESDC maintained its 2026 GDP forecast at 1.5%–2.5%, citing ongoing risks from global energy markets and geopolitical tensions . Other ASEAN economies have issued similar warnings, though Indonesia—being a net energy exporter—is expected to weather the energy shock more effectively Current page.

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