Thailand’s economy expanded 3.0 per cent in the third quarter from a year earlier, official data showed, the fastest pace in two years and beating the median forecast of 2.6 per cent growth in a Reuters poll of analysts.

On a quarterly basis, South-east Asia’s second-largest economy grew a seasonally adjusted 1.2 per cent, the National Economic and Social Development Council said. That was the fastest pace in 18 months, and above the poll forecast of 0.8 per cent growth.

The July-September quarter figures compared with downwardly revised annual growth of 2.2 per cent and quarterly growth of 0.8 per cent in the June quarter.

The agency forecast GDP growth of 2.6 per cent this year, inside the previous forecast range of 2.3 per cent to 2.8 per cent, and projected growth of 2.3 per cent to 3.3 per cent in 2025.

Last year’s growth was 1.9 per cent, which lagged regional peers. The economy has struggled because of high household debt and borrowing costs weighing on consumption as well as sluggish demand from major trading partner China.

Tourism and exports, key drivers of Thai growth, are expected to continue to support the economy next year.

The NESDC increased its export growth forecast to 3.8 per cent this year from 2 per cent seen earlier, and said exports were expected to rise 2.6 per cent in 2025.

The agency projected 36 million foreign tourists this year, trimming a previous forecast of 36.5 million, and saw that increasing to 38 million visitors in 2025.

Thailand posted a record of nearly 40 million foreign tourists in 2019, before the pandemic.