Thailand: Solid growth of 2.8% in the first quarter despite turbulence in the Middle East

IN BRIEF Thailand is showing growth in 2.8% year-on-year first trimester, despite the disruptions linked to the war in the Middle East. Progress is driven by themanufacturing industry, there electricity and gas production, L’hotel industry and the financial activities, according to the CNDES. THE Ministry of Finance had, however, anticipated a slowdown after growth of 2.4% in 2025. THE tourism remains vital but visitor arrivals have not returned to pre-pandemic levels. Government projections vary depending on the duration of the conflict: favorable scenario → growth ≈ 1.4% ; extended scenario → ≈ 0.8% (given by Danucha Pichayanan). To limit the impact, the government approved a emergency loan more than 10 billion euros, among the most important in decades.

Thailand is showing growth in 2.8% At first trimester over a year, a result obtained despite the disruptions linked to the war in the Middle East. THE National Council for Economic and Social Development (CNDES) notes that themanufacturing industry, there electricity and gas production, L’hotel industry and the financial activities supported the economy during this period. Faced with what was considered weak growth and a tourism still below pre-pandemic levels, the government approved a emergency loan over €10 billion to mitigate the effects of the conflict. Forecasts for 2026 remain dependent on the duration of the conflict. 1.4% assuming a swift end, or around 0.8% if hostilities continue, according to Danucha Pichayanan, Secretary General of the CNDES.

Thailand recorded an increase in gross domestic product of 2.8% in the first quarter on an annual basis, according to recently published official data. This growth, driven primarily by themanufacturing industry, the production ofelectricity and gas, L’hotel industry and activities financial, occurs despite international uncertainties linked to the war in the Middle East and more cautious economic outlooks for the rest of the year.

Key drivers of growth in the first quarter

The National Council for Economic and Social Development (CNDES) identifies several sectors that have driven growth: the manufacturing sector has shown notable resilience, while energy production (electricity and gas) and the financial sector have helped stabilize activity. The hospitality sector has also contributed to the recovery, even though the number of tourist arrivals remains below pre-pandemic levels.

Industry and energy

The manufacturing sector’s momentum, fueled by domestic demand and export segments, explains a significant portion of the quarterly growth. Meanwhile, production ofelectricity and gas supported industrial and domestic consumption, reinforcing the positive base effect on GDP.

Services and tourism

The tourism sector remains vital to the Thai economy. Despite a noticeable recovery, international arrivals have not fully returned to pre-pandemic levels, thus limiting the extent of the rebound. Several local and national analyses indicate a temporary improvement, as highlighted in a review article published on Gavroche Thailand and a review of the situation on ThaiVisa.

Risks related to the conflict in the Middle East and growth scenarios

The Thai government has incorporated the evolving conflict between the United States, Israel, and Iran into its macroeconomic projections. Danucha Pichayanan, Secretary General of the CNDESHe explained to the press that the growth trajectory would depend heavily on the duration and intensity of this international crisis.

Numbered scenarios

According to government simulations, in the most favorable scenario — if the conflict were to end definitively before the end of the first half of the year — annual growth could reach approximately 1.4%Conversely, if hostilities continue into the following year, growth could fall to around 0.8%These projections illustrate Thailand’s sensitivity to external shocks and disruptions in global energy and transport markets.

Budgetary measures and emergency borrowing

To mitigate the economic impact of the conflict, the government approved in early April a emergency loan of more than 10 billion euros, one of the largest commitments in decades. This package aims to support households, businesses exposed to tourism and foreign trade, and to stabilize domestic markets in the face of increased volatility.

The budgetary choices come in the context of a prior warning from the Ministry of Finance, which in April had anticipated a slowdown in growth for the current year after a rate of 2.4% reached in 2025. Economic analysis notes, including those available on BNP ParibasThey also highlight external competitive pressures, particularly from China.

Tourism: a source of vulnerability and hope

Tourism remains both a key driver of growth and a source of vulnerability. Tourism revenues contribute significantly to service exports, but a full recovery in visitor flows has not yet occurred. Recent analyses point to a temporary improvement in the first quarter, but reiterate that the trajectory will depend on the geopolitical climate and traveler confidence (see also Southeast Asia And TradingEconomics (for historical indicators).

Regional context and economic implications

The situation in Thailand must be understood within a regional context where growth dynamics and foreign investment are changing. Diplomatic and economic ties between Southeast Asian countries are evolving, with summits and initiatives focused on sustainable growth, as evidenced by the participation of the Thai Foreign Minister in regional meetings (see Southeast Asia).

Furthermore, foreign direct investment flows, bilateral cooperation, and regional competition influence Thailand’s outlook. Publications on the region, such as analyses of Vietnam in the area ofdirect investments and on the evolution of relations between Vietnam and Argentina (Southeast Asia), show a changing regional player with implications for Thailand. Neighboring countries like Cambodia are also seeking a balance between political challenges and economic ambitions (Southeast Asia).

Additional indicators and analyses

To complete the diagnosis, several sources and media outlets relayed the figures and analyses: a summary article from Boursorama and regional reports on ThaiVisa And Gavroche ThailandFor time series and international comparisons, macroeconomic data published on TradingEconomics offer a useful overview of past developments and future scenarios.

All of these elements point to an economy that is showing a resilience in the short term, but remains exposed to significant external risks. The 2026 trajectory will depend as much on domestic economic policy decisions as on the course of international events and the fiscal and structural responses deployed by the authorities.

Frequently Asked Questions — Thailand: First-quarter growth and uncertainties related to the Middle East