Thailand Economy Shrinks 0.2% QoQ in Q2

Thailand’s economy contracted 0.2% quarter-on-quarter in Q2 2026, reversing a marginally revised 0.6% expansion in the previous period and marking the first decline in three quarters. Still, the result was better than market expectations for a 0.6% decrease. Private consumption weakened (-0.5% vs 0.4%), reflecting softer household spending amid weaker purchasing power and elevated debts. Government expenditure fell for the first time in three quarters (-2.3% vs 0.8%), dragged by lower social transfers and employee compensation. Fixed investment was flat (vs 1.2%), as a further decline in construction offset slower growth in equipment investment. Net exports offered no contribution to GDP, as exports rose 2.3% (vs 7.0%), well below a 7.2% increase in imports (vs 9.2%). On the production side, non-agricultural activity shrank (-0.2% vs 0.4%), as industrial output stagnated and services declined, while agricultural growth slowed sharply (0.4% vs 2.5%).

Thailand’s economy grew 0.7% qoq in Q1 2026, slowing sharply from 1.9% in Q4 as the Middle East war weighed on overall economic activity. Still, the latest reading topped market expectations for a modest 0.1% gain, marking the second consecutive quarter of expansion. Private consumption lost momentum (0.4% vs 1.5% in Q4), reflecting weaker purchasing power and softer household spending. Government expenditure also eased (1.0% vs 4.9%), mainly due to slower social transfers and lower employee compensation. Meanwhile, fixed investment weakened further (1.9% vs 3.9%), pressured by a contraction in construction activity. On the trade front, exports (7.3% vs 2.4%) rose less than imports (8.7% vs 4.8%), contributing negatively to the GDP. Production-wise, non-agricultural activity slowed notably (0.5% vs 1.9%) amid softer industrial and services output, while agricultural production accelerated to 2.0% from 0.4%, extending growth for a second straight quarter.

Thailand’s economy grew 1.9% qoq in Q4 2025, swinging from a downwardly revised 0.3% decline in Q3 and easily exceeding market forecasts of a 0.3% expansion. It was the fastest quarterly growth since Q4 2021, following a recent election. Private consumption picked up sharply (1.5% vs 0.6% in Q3) while government spending posted a strong rebound (5.0% vs -2.7%) amid a recovery in social transfers and compensation of employees. Net trade contributed positively, even as exports (1.6% vs 0.7%) grew less than imports (4.6% vs 0.9%). Meanwhile, fixed investment continued to grow despite slowing (4.0% vs 5.9%).