{"id":464702,"date":"2026-02-07T16:13:25","date_gmt":"2026-02-07T16:13:25","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/464702\/"},"modified":"2026-02-07T16:13:25","modified_gmt":"2026-02-07T16:13:25","slug":"after-years-of-low-growth-and-intensifying-competition-can-thailand-get-back-its-economic-groove","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/464702\/","title":{"rendered":"After years of low growth and intensifying competition, can Thailand get back its economic groove?"},"content":{"rendered":"

HAT YAI\/UBON RATCHATHANI \u2013 Hat Yai is a city slowly getting back on its feet. <\/p>\n

Two months after <\/p>\n

torrential monsoon rains turned streets into raging rapids<\/p>\n

<\/a> and submerged much of the southern Thai city, many downtown shopfronts are finally just reopening after weeks of pressure-washing, mopping and scrubbing. Others remain shuttered, their windows still caked with silt and debris. On many buildings, brown watermarks etched 2m to 3m high offer a blunt reminder of how far the flood waters rose.<\/p>\n

In Hat Yai\u2019s central market, dried fruit and nuts vendor Marisa Wangbenmat was among those who rushed to clean up and reopen, hoping to recoup losses as quickly as possible. She spent more than a month and one million baht (S$40,480) replacing stock after losing about 80 per cent of her goods to the floods.<\/p>\n

But while the streets this time of year are usually thronging with customers from Malaysia, Singapore and other parts of Thailand, the tourists have yet to return.<\/p>\n

\u201cNow I\u2019m only selling about 10 per cent of what I normally do,\u201d Ms Marisa said. Even so, she is better off than some others. \u201cMost of the other shops haven\u2019t reopened because they don\u2019t have the money.\u201d<\/p>\n

\"\"<\/p>\n

Dried fruits and nuts vendor Marisa Wangbenmat in front of her stall in Hat Yai’s central market.<\/p>\n

ST PHOTO: PHILIP WEN<\/p>\n

The catastrophic floods that battered southern Thailand in late November killed at least 145 people, affected nearly three million more, and inflicted economic damage exceeding 500 billion baht, according to finance ministry estimates.\u00a0<\/p>\n

As businesses and households struggle to recover, the disaster has only compounded Thailand\u2019s deep economic and political malaise as it heads into a general election on Feb 8. After a year marked by natural disasters, regional tensions and political upheaval, voters are being asked which party is capable of breaking a cycle of crisis and policy drift.<\/p>\n

\"\"<\/p>\n

Clean-up efforts continue some two months after the floods.<\/p>\n

ST PHOTO: PHILIP WEN<\/p>\n

In 2025, Thailand\u2019s capital was <\/p>\n

rocked by a major earthquake,<\/p>\n

<\/a> its north-eastern border provinces were drawn into deadly conflict with Cambodia, and its international reputation was damaged by headlines highlighting its role as a gateway for human trafficking into <\/p>\n

forced labour scam compounds in the region,<\/p>\n

<\/a> particularly in Myanmar.<\/p>\n

Taken together, the succession of shocks has weighed on foreign investor sentiment, tourism and consumer confidence, aggravating longstanding weaknesses in an economy already struggling to regain momentum.<\/p>\n

In January 2026, Thailand\u2019s Ministry of Finance downgraded its 2025 gross domestic product (GDP) outlook to 2.2 per cent \u2013 from an October projection of 2.4 per cent. This not only represents slower growth from the 2.5 per cent recorded in 2024, but fell short of a World Bank projection of 2.9 per cent at the start of 2025.<\/p>\n

The kingdom\u2019s weak economic growth stands in contrast to that of its neighbours, several of whom have recorded better-than-expected GDP figures despite tariff uncertainty.<\/p>\n

Sluggish external demand linked to global trade uncertainty, persistently high household debt and weak wage growth have added to the strain.\u00a0<\/p>\n

But many economists argue that Thailand\u2019s current predicament cannot be explained by short-term shocks alone. Instead, they trace it back to decades of political instability and policy inertia that have prevented sustained structural reform.<\/p>\n

\"\"<\/p>\n

Political party campaign posters infront of a temple and along busy street to get the attention of voters in Ubon Ratchathani, Thailand.<\/p>\n

ST PHOTO: MAY WONG<\/p>\n

Over the past two decades, Thailand has experienced repeated military coups, dissolutions of Parliament and short-lived governments. That political churn has undermined policy continuity and discouraged long-term planning, allowing structural economic problems to fester.<\/p>\n

\u201cWith the domestic political situation, what it has done is that no government has really stayed in power long enough to focus on the longer-term direction,\u201d said Dr Pavida Pananond, professor of international business at Thammasat University. \u201cWe have been gazing at our navel too much without looking at how the world is changing.\u201d<\/p>\n

\u201cThe political issues at home in Thailand prevent a more serious policy direction and structural reform,\u201d she added.<\/p>\n

The timing of Thailand\u2019s Feb 8 election offers an opportunity to reset after its annus horribilis. But the campaign has also highlighted the mismatch between the need for long-sighted reform and the short-term political incentives that have come to dominate Thai politics.<\/p>\n

The <\/p>\n

progressive opposition People\u2019s Party,<\/p>\n

<\/a> led by Mr Natthaphong Ruengpanyawut, is leading in opinion polls ahead of Prime Minister Anutin Charnvirakul and his conservative Bhumjaithai Party.<\/p>\n

But even if the People\u2019s Party finishes first, it will need a significantly stronger showing than in 2023 to avoid a repeat of the previous election, when its earlier incarnation, the Move Forward Party, won the most seats with 151 but was unable to form a majority governing coalition in the 500-seat Parliament.<\/p>\n

Without a decisive increase in seats, most political analysts see Mr Anutin as having the more straightforward path to a parliamentary majority, provided the Bhumjaithai can finish a close second at least.<\/p>\n

Mr Anutin\u2019s ascent to the premiership in September 2025 was itself a product of pragmatic manoeuvring and opportunism that has become synonymous with contemporary Thai politics.<\/p>\n

\"\"<\/p>\n

Thailand Prime Minister Anutin Charnvirakul addresses supporters during an election campaign in Bangkok, Thailand, on Jan 30.<\/p>\n

PHOTO: EPA<\/p>\n

Just months earlier, Bhumjaithai had been a medium-sized party with 71 seats in Parliament, and a junior partner in a coalition led by then prime minister, Ms Paetongtarn Shinawatra of the populist Pheu Thai party.<\/p>\n

In June 2025, Ms Paetongtarn was widely reported to be considering a Cabinet reshuffle that would remove Mr Anutin from his post as interior minister. But the same month, amid rising border tensions with Cambodia, she was terminally damaged by a leaked recording in which she disparaged the Thai military in a call with Cambodian senate president and de facto leader Hun Sen. <\/p>\n

Mr Anutin withdrew Bhumjaithai from the coalition, leaving Ms Paetongtarn with a wafer-thin parliamentary majority. It culminated in her ousting in August and Mr Anutin\u2019s appointment as prime minister by parliamentary vote the following month. Mr Anutin secured enough votes by winning the support of the People\u2019s Party on the proviso he would push forward a referendum on constitutional reform measures. <\/p>\n<\/p>\n

Having become Thailand\u2019s third prime minister in two years, Mr Anutin, the son of a construction tycoon and Thailand\u2019s public health minister during the coronavirus pandemic, initially enjoyed a brief honeymoon period.\u00a0<\/p>\n

But his standing was soon heavily dented by criticism of his government\u2019s response to the southern floods, which many residents felt was slow, uncoordinated and overly focused on optics. The need for a distraction from this failure may have played into Mr Anutin\u2019s hardline stance on the conflict, political analysts say, when the Cambodian border conflict flared up again in December.\u00a0<\/p>\n

When the People\u2019s Party threatened to pull its support via a no-confidence vote in December, <\/p>\n

Mr Anutin instead dissolved Parliament,<\/p>\n

<\/a> triggering the snap vote on Feb 8.\u00a0<\/p>\n

For much of the late 20th century, Thailand was held up as a model of middle-income success, often mentioned in the same breath as the \u201cFour Asian Tigers\u201d \u2013 Hong Kong, Singapore, South Korea and Taiwan \u2013 as it integrated rapidly into global supply chains, attracting waves of foreign investment while its sun-drenched beaches drew tourists from around the world.\u00a0<\/p>\n

Such was its momentum that neighbouring Vietnam looked to Thailand as a benchmark following its 1986 Doi Moi reforms. Former Vietnamese premier Vo Van Kiet cited Thailand\u2019s development on the back of export growth and manufacturing as a \u201cgood example\u201d and instructed delegations to study the Thai experience.<\/p>\n

Today, however, Thailand has lost much of its lustre. After decades of underperformance and policy drift, it now faces persistently low growth, ageing demographics, high household debt and intensifying competition from regional rivals.<\/p>\n

While Thailand\u2019s economy was around 14 times larger than Vietnam\u2019s in 1990, Vietnam is now on track to overtake Thailand in nominal GDP terms in 2026, or 2027 at the latest. The Federation of Thai Industries has warned Thailand could fall to become the fifth-largest economy in ASEAN within five years if current trends persist. Thailand had historically been the second-largest economy in the region, behind Indonesia, before being overtaken by Singapore in late 2024, according to International Monetary Fund data. <\/p>\n

Economists broadly agree there are no quick fixes. Turning around Thailand\u2019s long-term malaise will require structural reform rather than repeated short-term stimulus, as well as policy continuity.<\/p>\n

\"\"<\/p>\n

Democrat Party candidate Juree Numkaew poses with a prospective voter in Hat Yai.<\/p>\n

ST PHOTO: PHILIP WEN<\/p>\n

Thailand\u2019s economic mix remains heavily reliant on agriculture and mature manufacturing sectors such as automotives, electronics and petrochemicals, where margins are thinning and competition is intense.<\/p>\n

The services sector accounts for 60 per cent of Thailand\u2019s GDP, while the remaining industrial and manufacturing, as well as agricultural, sectors are both major contributors to the economic mix simultaneously and a drag on productivity.<\/p>\n

Its manufacturing base \u2013 comprised chiefly of automobiles, electronics and petrochemicals \u2013 was highly competitive in the 1990s and 2000s but mostly remains assembly-focused and low-innovation. Investment in research and development and advanced manufacturing has lagged, while neighbours such as Vietnam provide aggressive competition.<\/p>\n

\"\"<\/p>\n

People shop for flood-damaged products following deadly flooding in Hat Yai district, Songkhla province, Thailand, in November 2025.<\/p>\n

PHOTO: REUTERS<\/p>\n

Agriculture, meanwhile, still accounts for nearly one-third of the workforce but only contributes 9 per cent to GDP, highlighting the productivity gap between sectors.<\/p>\n

\u201cWe have a huge chunk of labour employed in the agricultural sector, like 30 per cent of our workforce, and this is not suitable for a middle- to high-income country,\u201d said Dr Nonarit Bisonyabut, a research fellow at the Thailand Development Research Institute Foundation.<\/p>\n

High household debt has constrained consumption for years, making growth overly dependent on exports and tourism. Analysts stress the need for deeper investment in technology adoption, research and development, and the integration of artificial intelligence, as well as the will to address corruption and the grey economy.<\/p>\n

Indeed, financial and political corruption was the top concern for Thais, cited by nearly half the respondents in a November 2025 Ipsos survey. Thailand ranks 107th out of 180 countries on Transparency International\u2019s corruption index, behind Malaysia, Vietnam and Indonesia. As well as the mismanaged response to the floods, perceptions of high-level links in Mr Anutin\u2019s administration to Cambodia\u2019s industrial-scale scam economy have also weighed on his popularity.<\/p>\n<\/p>\n

Economists say Thailand\u2019s education and vocational training standards have failed to keep pace with industry needs. The country ranked 38th out of 69 economies in the 2025 World Digital Competitiveness Ranking, slipping for the third consecutive year, as a shortage of workers trained in technology and artificial intelligence (AI) have further dampened the pace of digital adoption.<\/p>\n

\u201cProductivity enhancing measures, strengthening the SME (small and medium-sized enterprises) sector, integrating technology, integrating AI, automation and all that, can allow people to become stronger and better in helping the economy grow,\u201d said Prof Pavida. \u201cBut without also a serious addressing of the system that we have, the big bureaucracy that we are, the silo mentality of the state and the corruption that goes on \u2026 it undermines the whole trust in the system.\u201d<\/p>\n

Successive governments have leaned heavily on vote-buying measures such as cash handouts, consumption subsidies and debt relief, repeatedly deferring more difficult reforms.<\/p>\n

The most recent election campaign reflected that pattern. Pheu Thai has proposed giving away one million baht per day to nine people via a lottery system to boost consumption. Bhumjaithai has pledged to resume its popular \u201cHalf-Half\u201d shopping programme, subsidising half the cost of food and grocery items. The People\u2019s Party has proposed rental subsidies and bonus payments for elderly citizens and parents of newborn babies.<\/p>\n

Dr Supavud Saicheua, chairman of the Office of the National Economic and Social Development Council (NESDC), the government\u2019s central economic planning agency, offered a blunt assessment of the proposals.<\/p>\n

\u201cI must admit the truth: most of the policies will not help restructure the economy that much,\u201d he said at a public forum on Jan 13. \u201cThe policies are mostly about pleasing the people rather than helping with transformation.\u201d<\/p>\n

Instead of these populist measures, first-time voter, 20-year-old Achinadda Limleartpholaboon, believes fixing the economy should be the No. 1 priority for all parties because \u201cthe prices of things are increasing every day but Thai people\u2019s salaries still remain the same\u201d. <\/p>\n

\u201cSo there\u2019s like a big gap, and it\u2019s harder for us to survive with such little salary,\u201d she said.<\/p>\n

As a university student, she\u2019s also concerned about her employment when she graduates as \u201cjob opportunities are also harder day by day\u201d. <\/p>\n

\u201cI feel like nowadays, AI is also taking over. So I think a lot of jobs are being taken away from people and it\u2019s harder to find jobs with good paying salaries,\u201d she added.<\/p>\n

The consequences of Thailand\u2019s economic pressures are often felt most acutely outside Bangkok. And with Bangkok, which accounts for just 33 parliamentary seats, and other urban hubs with younger demographics an almost certain lock for the People\u2019s Party, it is the regional areas which form the critical battleground where the election will be won or lost.\u00a0<\/p>\n

\"\"<\/p>\n

Thailand Prime Minister Anutin Charnvirakul during a walkabout at a local market in Ubon Ratchathani.<\/p>\n

ST PHOTO: MAY WONG<\/p>\n

With 133 seats, Thailand\u2019s rural north-eastern Isan region has long been the heartland of Pheu Thai\u2019s electoral strength, helping it and its predecessor parties associated with Thaksin Shinawatra secure majorities in previous elections.<\/p>\n

But anger over Ms Paetongtarn\u2019s handling of the Cambodia conflict and the leaked phone recording scandal, as well as general frustration with Pheu Thai\u2019s mishandling of the economy and inability to deliver on pre-election promises while in power, has allowed both Bhumjaithai and the People\u2019s Party to make significant inroads, according to latest polling.<\/p>\n

In Ubon Ratchathani, a rice-growing province in Thailand\u2019s north-east, farmer Rungnapa Kongsui, 47, comes from a family of long-time Pheu Thai supporters. But she plans to vote for Bhumjaithai this election, citing Mr Anutin\u2019s decisive handling of the Cambodia border conflict.<\/p>\n

\u201cWe look for those who can truly implement their policies, rather than those who just say things to get our votes,\u201d said Ms Rungnapa, who moved back from Bangkok in 2017 to care for her ageing parents.<\/p>\n

\"\"<\/p>\n

Ms Rungnapa Kongsui tending to her chillis in her organic farm in Ubon Ratchathani. She comes from a family of long-time Pheu Thai supporters.<\/p>\n

ST PHOTO: MAY WONG<\/p>\n

Given the sizeable chunk of agricultural workers in Thailand\u2019s 40 million-strong labour force, the farmer vote continues to wield outsized political influence. Parties routinely tailor platforms towards them, promising farming debt moratoriums, crop price guarantees and improved irrigation.<\/p>\n

Mr Phaisit Chomsamut, 40, who runs a family trading business importing coffee and cassava from Laos, said his business suffered heavy losses during the Cambodia border conflict as truck movements were disrupted.<\/p>\n

\u201cIt paralysed us,\u201d he said. \u201cI usually run 70 to 80 trailer trucks a day, but that dropped to just 10 or 20 because we couldn\u2019t get in to collect the goods.\u201d He wants long-term peace and stability on the border rather than repeated bouts of conflict.<\/p>\n

Speaking on his 20-rai or 3.2ha farmland, another Ubon Ratchathani farmer, Mr Saksayam Lakkan, grows avocado and mulberry to make bottled juices for sale. But the father of two young teenagers has incurred a debt of more than $80,000 and is now considering new income streams such as breeding grasshoppers for fish feed or growing coffee on his land.\u00a0<\/p>\n

Mr Saksayam expressed frustration that the government did not sufficiently promote the use of technology and educate the next generation of farmers, citing an example of inadequate irrigation systems in the country.\u00a0<\/p>\n

\u201cThailand has vast underground water resources but the technology to extract it is limited,\u201d he said.<\/p>\n

\u201cWithout water, we can\u2019t farm. We also need technology for high-quality fertilisers so we don\u2019t have to use as much of the regular ones. Right now, we import expensive fertilisers,\u201d he added.\u00a0<\/p>\n

Back in southern Thailand, the election has turned Hat Yai and the surrounding provinces into one of the country\u2019s most fiercely fought battlegrounds.<\/p>\n

Once a stronghold of the centre-right Democrat Party, the south is now a key test of whether Bhumjaithai can cement itself as a national force. The party is aiming to win roughly half of the 59 seats across eight southern provinces.<\/p>\n

The People\u2019s Party is also seeking breakthroughs in urban districts. In Hat Yai, former hospital director Supat Hasuwannakit holds a polling edge but faces possible disqualification over procurement irregularities during the pandemic, which he says are politically motivated.<\/p>\n

\"\"<\/p>\n

Dr Supat Hasuwannakit of the progressive People’s Party is looking to pull off a major upset by winning a seat in Hat Yai.<\/p>\n

ST PHOTO: PHILIP WEN<\/p>\n

With Bhumjaithai in its newfound status as among the main front runners in the general election, it has poached several dozen former Members of Parliament and candidates from other parties to bolster its depth. These include sitting MPs from smaller parties but also directly from larger rivals like Pheu Thai and United Thai Nation.\u00a0<\/p>\n

Among the biggest defections, however, has come from Democrats, such as veteran local politician Somyot Plaiduang, who is now running for Bhumjaithai in the south.<\/p>\n

Mr Somyot told The Straits Times that the Democratic Party\u2019s waning in size and influence no longer met his objectives and that he would be able to do more for the community in his mixed rural-urban community, which predominantly relies on the cross-border rubber trade with Malaysia.\u00a0<\/p>\n

\u201cI am confident that my close connection with the people will see them vote for me regardless of which party I represent,\u201d he said while on the campaign trail.\u00a0\u00a0<\/p>\n

For residents like Ms Suphit Kaewrueng, a 37-year-old drink vendor living near Hat Yai\u2019s railway tracks, frustration has turned political. She said her family was trapped for three days in flood waters that reached neck height even on the second floor of their house. Adding insult to injury, the snap election has the government in caretaker mode, delaying new budget approvals and relief measures.<\/p>\n

\u201cAnutin was just showing off during the flood, trying to show he was doing something,\u201d she said, referring to highly publicised footage of the Prime Minister cooking and distributing supplies to flood victims. \u201cActually he was just doing it in front of the cameras.\u201d<\/p>\n

\"\"<\/p>\n

People wade through a flooded area in Hat Yai district on Nov 22, 2026.<\/p>\n

PHOTO: REUTERS<\/p>\n

As Thailand gears up to vote, Hat Yai\u2019s stained walls offer a quiet reminder of how disasters, politics and economics intersect, and of growing despair with a system that has promised recovery for years, but been unable to muster much beyond fleeting half-measures. <\/p>\n

If the People\u2019s Party is widely seen as the reformist party equipped with fresh ideas and ambitions for long-term change, but considered by more conservative voters as a bit risky and untested, then Mr Anutin\u2019s Bhumjaithai represents the extension of the pro-establishment status quo. <\/p>\n

In the cut and thrust of Thai politics, gaining power may always be the imperative, but holding on to it is never a given. Whoever ends up winning will require a clear runway of political stability that their recent predecessors have not enjoyed, if long-term economic fixes are to be found. <\/p>\n","protected":false},"excerpt":{"rendered":"HAT YAI\/UBON RATCHATHANI \u2013 Hat Yai is a city slowly getting back on its feet. Two months after…\n","protected":false},"author":2,"featured_media":464703,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":{"0":"post-464702","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/464702","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=464702"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/464702\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/464703"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=464702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=464702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=464702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}