New-industry investment and exports signal Thai economic transition

Minister of Finance Ekniti Nitithanprapas offered his assessment of Thailand’s economic outlook after the Office of the National Economic and Social Development Council (NESDC) reported that the economy grew by 1.9% in the second quarter of 2026, slowing from 2.8% in the first quarter.

Ekniti explained that the figure was close to the Finance Ministry’s earlier forecast and reflected the Thai economy during a period of transition.

Although GDP growth was not yet at a level the government regarded as satisfactory, its components showed signs of growth in new economic engines that would be important to expansion in the period ahead.

Middle East war affects the economy through living costs

One factor weighing on the Thai economy in the second quarter was the impact of the war in the Middle East, which had begun to be felt in waves since late March, particularly through higher energy prices feeding into product costs and the cost of living.

Ekniti pointed to inflation rising to 2.7% in the second quarter from -0.5% in the first as evidence of the impact.

Private consumption, one of the main engines of the Thai economy, also grew more slowly, expanding by 1.9% in the second quarter compared with 3.3% in the first.

The slowdown reflected pressure from higher living costs.

If that cycle could not be halted, it could lead to weaker purchasing power and an economic contraction in the period ahead.

The government therefore needed measures to support purchasing power and ease the public’s cost-of-living burden.

One key measure was the “Thais Help Thais Plus” programme, funded through the emergency loan decree.

For any implementation in the final quarter of the year, however, Ekniti added that the government would have to assess the results of the first phase, which is due to end in the third quarter, and consider the remaining budget to ensure that the country derives the greatest benefit from the resources used.

Current-account deficit reflects Thailand’s reliance on energy imports

Another important signal from the second-quarter figures was Thailand’s current account swinging back into a significant deficit, reflecting the country’s vulnerability arising from its dependence on imported energy.

Ekniti reported that the current-account deficit was about US$17.6 billion in the second quarter, or nearly THB600 billion, after a surplus of about US$1.4 billion in the first quarter.

The figures showed that when global energy prices rise, Thailand is directly affected by higher import costs, which also feed through to production and transport costs, goods prices and the public’s cost of living.

Ekniti therefore viewed accelerating the shift from imported fossil fuels to clean energy as a structural priority that Thailand could not defer.

THB200 billion energy investment targets future infrastructure

The Finance Ministry views energy investment as more than a short-term economic stimulus measure.

An energy-transition programme worth about THB200 billion, covering rooftop solar, power grids, energy-storage systems and electric vehicles, has been positioned as investment in “infrastructure for the future”.

Ekniti distinguished borrowing to invest in such infrastructure from borrowing for temporary spending, explaining that the former created assets and reduced the country’s long-term risks.

The aim is to strengthen the country’s capacity to produce and manage energy, reduce fuel imports, lower its exposure to volatility in global energy prices and build infrastructure capable of supporting new private-sector investment.

The approach also aligns with plans to increase generating capacity and clean-energy use under the Ministry of Energy’s Power Development Plan (PDP).

Iran war signals urgency of energy transition

Ekniti described the conflict in the Middle East as a turning point and a warning for Thailand because a crisis overseas could directly affect the country through energy prices, transport, goods prices and living costs.

Thailand should therefore not wait for an energy-price crisis before beginning to address the problem, but should accelerate investment to reduce its vulnerability to imported fuel and to oil or gas prices on global markets.

Given the constraints on time and budget, the government must move quickly to establish energy infrastructure that can support the transition and strengthen long-term energy security.

Private investment stands out with 13.4% Q2 growth

The second quarter also delivered a particularly strong positive sign for the Thai economy: private investment expanded by 13.4%, the highest growth rate in 11 years.

Importantly, private investment recorded double-digit growth for a second consecutive quarter, following a 10.1% increase in the first quarter.

Ekniti attributed part of the increase to the Thailand FastPass programme of the Thailand Board of Investment (BOI), which helped accelerate investment procedures and bring actual private-sector investment in the second quarter to about THB255 billion.

Most of the investment was spread across targeted and future industries, including electronics, artificial intelligence (AI), clean energy and agricultural processing.

The figures were therefore an important signal that although overall economic growth remained modest, the private sector was accelerating investment in new industries that could become the main engines of the Thai economy in the period ahead.

Exports grow 12.5%, supported by electronics

Another factor supporting the Thai economy was the continued expansion of goods and services exports, which grew by 12.5% in the second quarter, up from 12.1% in the first.

Electronics were an important export group, in line with global market demand and the direction of Thailand’s investment in new industries.

Ekniti viewed the simultaneous growth of exports from new industries and private investment as an important signal because it reflected Thailand’s opportunity to become part of global supply chains in future industries.

The key challenge from this point is therefore not merely to keep pace with new industries, but to determine how Thailand can seize opportunities arising from the new industrial revolution and genuinely extend them to domestic industries and entrepreneurs.

‘New economy’ emerges as a new engine for Thailand

Judging from the components of the economic data, Ekniti observed that Thailand was beginning to form part of the global “new economy”.

Relevant government agencies are adjusting how various indicators are grouped to align them with the world’s new industrial structure.

This change will provide a clearer picture of which sectors are growing, which industries are becoming new engines and how extensively Thailand can link foreign investment with Thai entrepreneurs.

Ekniti noted that although second-quarter GDP growth of 1.9% was still not at a level the government regarded as satisfactory, the component figures confirmed that its forecasts and economic-support measures were heading in the right direction.

“The Thai economy is at a stage where the government is moving quickly to support it through the transition so that it can grow to its full potential,” Ekniti added, noting that the second-quarter figures had begun to show signs of growth in new economic engines.

Thailand’s economic direction from this point will still require close attention to structural adjustments and economic recovery measures over the short, medium and long term.

This includes extending the benefits of investment in new industries to small and medium-sized enterprises (SMEs) and other sectors, a key challenge for the government as it seeks to broaden the economic transition.