The National Economic and Social Development Council (NESDC) reported that Thailand’s GDP for 3Q25 contracted by -0.6% QoQ and grew only 1.2% YoY, falling short of the market’s expectation of 1.6% YoY. This marks the lowest growth rate in 10 quarters.
The main drags were a contraction in service exports and tourism by 10.7% YoY, reflecting slow recovery due to lingering safety concerns among tourists in Thailand, alongside a 3.9% YoY decrease in government spending, and a 5.3% YoY drop in government investment due to political transition affecting budget disbursement.
However, the NESDC maintained its 2025 GDP forecast at 2.0%, revising up export growth to 11.2% (from the prior 5.5%) but lowering government spending growth to 0.3% (down from 1.2%).
Looking ahead, the NESDC estimates that Thailand’s 4Q25 GDP may grow only 0.6% YoY. For 2026, GDP growth is expected to slow to a range of 1.2-2.2% (median 1.7%).
Exports may contract 0.3% due to intensifying global trade barriers, while public and private consumption and investment are likely to grow in the low 1-3% range amid high household and public debt and political uncertainty from next year’s elections. Inflation is expected to remain low at 0.0–1.0% (median 0.5%).
Kasikorn Securities views Thailand’s 3Q25 GDP print as particularly weak, which is negative for the economic outlook and overall investment sentiment. Furthermore, the outlook for the first half of 2026 remains pressured by a high export base and ongoing political uncertainty.
For investment strategy, the brokerage recommends increasing caution as new negative factors continue to pressure the market, especially a weak economic outlook with a lack of positive sentiment drivers.
The securities company sees the next psychological support levels for the Stock Exchange of Thailand (SET) Index at 1,270, 1,230, and 1,145 points, the latter equating to a 13x PE (-1SD from the long-term average) on aggregate EPS of THB 88. KS view this as the likely floor barring a technical recession.
Kasikorn Securities recommends focusing on defensive, low-volatility sectors such as healthcare, alongside high-dividend stocks in the banking and ICT segments. The brokerage also favors tourism and transport sectors, which are seen as having likely moved past their troughs.
