Thai growth slows to 1.9 per cent as energy prices counter stimulus

BANGKOK – Thailand’s economic growth slowed dramatically in the second quarter, with GDP rising by 1.9% year-over-year, according to the National Economic and Social Development Council. This was faster than the 1.8% median estimate in a Bloomberg survey but significantly slower than the 2.8% growth in the first quarter. On a seasonally adjusted quarterly basis, GDP contracted by 0.2%, below economists’ forecast of a 0.4% drop. Thailand’s growth remains below that of main ASEAN economies, despite a 400 billion baht (S$17 billion) stimulus package led by Prime Minister Anutin Charnvirakul. The baht strengthened slightly against the dollar, while stocks were not yet trading post-data release. The economy is projected to grow between 2% and 2.5% in 2026. Thailand’s reliance on Middle Eastern oil and gas imports has been exacerbated by supply disruptions linked to the Iran war. Domestic demand and tourism, key GDP contributors, were subdued due to higher energy costs, reducing household spending and business activity. Vietnam leads ASEAN with 8.39% growth in Q2, followed by Singapore and Malaysia, all benefiting from global AI sector expansion. The Bank of Thailand maintained its policy rate at a near four-year low, anticipating a recovery in the third quarter driven by easing Middle East tensions and stimulus rollout.