Thailand's Q2 Growth Lags ASEAN Peers at 1.9%

Thailand's economy grew just 1.9% year-on-year in the second quarter of 2026, the slowest growth among six major ASEAN economies compared by the National Economic and Social Development Council (NESDC).

NESDC Secretary-General Danucha Pichayanan announced the figures on Monday, saying growth slowed sharply from 2.8% in the first quarter. After seasonal adjustment, GDP contracted 0.2% from the previous quarter.

Vietnam posted the strongest growth at 8.4%, followed by Malaysia at 6%, Singapore at 5.9%, Indonesia at 5.29% and the Philippines at 2.3%.

The figures underline Thailand's continued struggle to keep pace with its regional peers. The Thai economy grew 2.4% in 2025, the lowest among the same group. In the first quarter of 2026, Thailand was tied with the Philippines for the lowest growth rate at 2.8%.

Danucha said the second-quarter slowdown was driven by weaker private consumption, a sharp slowdown in government consumption and a contraction in public investment.

Private consumption grew 1.9%, down from 3.3% in the previous quarter, as consumer confidence fell to 50.3, its lowest level in 14 quarters.

Government consumption grew just 0.2%, down from 3.4%, while public investment contracted 1.6%, compared with 9.4% growth in the first quarter.

Several production sectors also slowed. Manufacturing grew just 0.1%, down from 1%, while agriculture expanded 1.5%, accommodation and food services 1.5%, and transport and storage 2.6%. Construction growth almost stalled at 0.1%, sharply down from 6.2% in the previous quarter.

However, private investment provided a major boost, surging 13.4% from 10.1% in the first quarter. NESDC said this was the strongest growth in 54 quarters, or since the fourth quarter of 2012.

Goods exports also remained strong, growing 17.6%, driven largely by electronics and high-tech products. Telecommunications equipment exports jumped 129%, while computer parts and equipment rose 65.5%.

Despite the weak second-quarter performance, NESDC raised its forecast for Thailand's full-year 2026 growth to 2.0%-2.5%, with a midpoint of 2.2%, up from its previous forecast of 1.5%-2.5%.

The revision was mainly based on stronger export prospects, higher expected spending by foreign tourists, stronger private investment and a slight improvement in private consumption.

NESDC now expects exports to grow 15.1%, compared with its previous estimate of 9.6%. Revenue from foreign tourists is projected at 1.65 trillion baht, up from an earlier forecast of 1.49 trillion baht.

Private investment is now expected to expand 9.6%, sharply higher than the previous 3.7% forecast, while private consumption growth was revised up to 2.6% from 2.4%.

Danucha, however, warned that the outlook remains subject to risks, including uncertainty over the global economy and trade, a potential slowdown in global demand, El Niño risks affecting agriculture in the second half of the year, high household debt and continued credit risks among small and medium-sized businesses.