Thailand's economy surprised analysts with robust growth in the final quarter of 2025, expanding at a faster-than-expected pace and fueling optimism for a steady recovery amid ongoing challenges. Gross domestic product rose 2.5 per cent in the October-December period from a year earlier, driven by stronger domestic demand and investment, according to data released by the National Economic and Social Development Council (NESDC) on Monday.
The performance marked a significant improvement over the previous quarter, where annual growth stood at just 1.2 per cent in the three months through September. It also exceeded a median forecast of 1.0 per cent growth, providing a much-needed boost to Southeast Asia's second-largest economy, which has lagged behind regional peers since the pandemic.
On a quarter-on-quarter basis, the economy expanded by a seasonally adjusted 1.9 per cent—the strongest growth in four years—rebounding sharply from a 0.3 per cent contraction in the prior quarter and surpassing expectations of 0.3 per cent growth.
The positive data prompted the Thai government to revise upward its outlook for 2026, signaling confidence in a gradual rebound despite persistent headwinds. These include US tariffs, elevated household debt levels, and a strengthening baht, which have weighed on the kingdom's economic recovery.
Markets reacted enthusiastically to the NESDC's announcement, with the benchmark SET Index surging more than 1 per cent to reach its highest level since December 2024. The rally underscored investor hopes that Thailand's economy is gaining momentum after years of subdued performance.
While the latest figures offer encouragement, economists note that Thailand continues to grapple with structural issues exacerbated by the pandemic. The NESDC's report highlights the role of domestic demand and investment in driving the quarterly uptick, but sustained growth will depend on navigating external pressures and bolstering key sectors.
