Bangkok: The National Economic and Social Development Board (NESDB) has revealed that GDP growth in the third quarter of 2025 slowed to 1.2%, with expectations of only 0.6% growth in the fourth quarter due to a contraction in exports and the impact of US tariffs. This trajectory points to an overall growth of 2% for 2025, though a technical recession is not anticipated. Projections for 2026 suggest a GDP growth of 1.7%, alongside a 0.3% contraction in exports. The NESDB has recommended that the government expedite budget disbursements and explore new export markets to rehabilitate the agricultural sector affected by flooding and stimulate economic growth.
According to Thai News Agency, Ms. Aonfa Vejjajiva, Secretary-General of the National Economic and Social Development Council (NESDC), announced that the GDP for Q3 2025 expanded by 1.2%, marking a slowdown from 2.8% in the previous quarter. The deceleration is attributed to continued growth in private consumption expenditure, slower exports and imports of goods and services, and gross fixed capital formation. Government consumption expenditure declined, and production slowed in both the agricultural and non-agricultural sectors. Particularly, non-agricultural production faced setbacks in manufacturing, industrial goods, and construction, as well as a slowdown in tourism-related services. Cumulatively, growth for the first nine months was recorded at 2.4%, a decrease from 2.8% in Q2.
On a quarterly or seasonally adjusted basis, GDP contracted by 0.6% in Q3, the first negative growth in ten quarters. However, a technical recession is not expected, as consumption and tourism are projected to bolster Q4 GDP and stave off further contraction.
While Thailand's export value is projected to increase by 11.2% in 2025, this is a considerable increase from the previous 5.5% growth forecast. However, in 2026, exports are expected to contract by 0.3% due to the pronounced impact of US tariffs.
The headline inflation rate has remained negative for the second consecutive quarter at -0.7%, while core inflation averaged 0.8%. The current account balance recorded a surplus of US$2.7 billion (88.3 billion baht). As of the end of September 2025, international reserves stood at US$262.4 billion, and public debt totaled 12.23 trillion baht, accounting for 64.8% of GDP.
The GDP growth forecast for Q4 2025 is 0.6%, incorporating measures like the "Half-Half Plus" scheme. This will culminate in a 2% GDP growth for the entire year, a slowdown from 2.5% in 2024. Nevertheless, additional government measures anticipated later in the year are expected to boost economic growth in Q4 beyond initial expectations.
Looking ahead to 2026, the NESDB forecasts growth of 1.2-2.2%, with a median of 1.7%, driven by factors such as private consumption, government spending, and recovery in the tourism and agricultural sectors.
The NESDB has stressed the importance of accelerating budget disbursement to enhance capital inflows, particularly in investment. Moreover, maintaining a stable economic and political climate during the election period is crucial to avoid eroding investor confidence.
In terms of Thai-US trade tariff negotiations, continued progress is anticipated, and a clear conclusion will guide private sector decision-making and economic advancement. The ongoing Thai-Cambodian conflict is not expected to impact trade negotiations; however, exploring potential new markets, especially in India, Pakistan, South Asia, and Africa, is deemed necessary.
Delays in negotiations beyond the year-end deadline may necessitate revising Thailand's economic forecast. Currently, the Ministry of Commerce is awaiting clarification from the USTR.
Furthermore, priority actions include rehabilitating flood-affected farmers to prepare them for the next growing season and expediting the approval of investment promotion certificates. Addressing access to credit for businesses and households is also crucial.