The GDP growth from January to March was due to spending and production, the National Economic and Social Development Council’s (NESDC) secretary general Danucha Pichayanan told reporters.

Expansion in manufacturing, electricity and gas supply, accommodation and food services, and financial activities, as well as private and public consumption, drove the uptick, according to the NESDC.

The finance ministry said last month that growth was projected to drop this year, down from 2.4% in 2025.

Thailand’s vital tourism sector was also forecast to take a hit, with foreign arrivals yet to return to their pre-Covid highs.

The government forecast 2026 growth based on how long the US-Israel war against Iran continues, with a best-case scenario putting growth at 1.4% if the conflict ends within the first half of this year, Danucha said on Monday.

If the war goes into next year, Thailand’s growth could dip to around 0.8 percent, he said.

The government approved a US$12.2 billion emergency borrowing package this month to cushion the economic impacts of the Middle East war, marking one of Thailand’s largest borrowing plans in decades.

Thailand’s core inflation was forecast to hit 3.0% this year, up from an earlier estimate of 0.3%.