Thailand’s economy contracted by 0.2% quarter-on-quarter in Q2 2026, reversing a marginally revised 0.6% expansion in the previous quarter and marking the first decline in three quarters. Nevertheless, the outcome was better than market expectations for a 0.6% drop.
Private consumption weakened (-0.5% vs 0.4%), reflecting softer household spending amid eroding purchasing power and elevated debt levels. Government expenditure declined for the first time in three quarters (-2.3% vs 0.8%), weighed down by lower social transfers and reduced employee compensation.
Fixed investment was unchanged (0.0% vs 1.2%), as a further contraction in construction offset slower—but still positive—growth in equipment investment. Net exports also dragged on growth: exports rose 2.3% (vs 7.0%), lagging a 7.2% increase in imports (vs 9.2%).
On the production side, non-agricultural output fell (-0.2% vs 0.4%), as industrial production stagnated and services activity declined, while agricultural growth decelerated sharply to 0.4% from 2.5%.
