{"id":589795,"date":"2026-05-18T01:55:10","date_gmt":"2026-05-18T01:55:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/589795\/"},"modified":"2026-05-18T01:55:10","modified_gmt":"2026-05-18T01:55:10","slug":"bangkok-post-war-on-the-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/589795\/","title":{"rendered":"Bangkok Post – War on the economy"},"content":{"rendered":"

\t\t\t\t\t\t\t\t\t\t\t\t\"Stimulus<\/p>\n

\t\t\t\t\t\t\t\t\t\t\t\t\tStimulus schemes meant to strengthen purchasing power raise concerns about inflation.\u2009 Chanat Katanyu\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

Nearly three months have passed since the US-Israeli air strikes on Iran began, with no resolution to the war in sight, while almost two months have elapsed since the Thai government took office.<\/p>\n

Economic stimulus measures were issued, with a further round scheduled for next month via the emergency loan decree for 400 billion baht drawing criticism.<\/p>\n

Critics question the justification for the emergency loan decree and whether stimulus efforts will be sufficient to address the prolonged crisis. The massive stimulus could also accelerate the inflation risk for a fragile economy.<\/p>\n

TWIN EFFECTS<\/p>\n

Kasikorn Research Center (K-Research) predicts Thai inflation could jump to 5-6% this year, while staff layoffs will rise as manufacturing costs increase because of the protracted Middle East war.<\/p>\n

“Thailand relies heavily on energy imports from the Middle East, both for oil and natural gas,” said Burin Adulwattana, managing director and chief economist at the think tank.<\/p>\n

As the Iran conflict drags on, Thailand is unavoidably feeling the effects on two fronts. First, energy supplies have become increasingly tight and the manufacturing sector has been affected by the rising cost of fuel, Mr Burin noted.<\/p>\n

“The cost of manufactured goods has increased. Manufacturers have little choice but to continue to buy raw materials at higher prices because they are afraid supply will run out in a month or two, as they see no end to the Middle East conflict,” he said.<\/p>\n

As inflation soars, K-Research trimmed its economic growth forecast for Thailand to 1.2% from 1.9%, partly due to fragile domestic consumption.<\/p>\n

“Consumption stimulus financed by the emergency loan decree is needed to help vulnerable groups survive. However, such efforts to lift GDP cannot happen frequently because the country’s public debt is already high,” Mr Burin said.<\/p>\n

The “Thai Chuay Thai Plus” (Thais Help Thais) consumption stimulus, scheduled to launch next month, is expected to lift the public debt-to-GDP ratio by more than two percentage points, nearing the statutory ceiling of 70%.<\/p>\n

“Based on our observations, some businesses may not be able to survive this economic turbulence, and could shut down. Some companies, particularly logistics operators, must change their fleets from petrol-based vehicles to electric vehicles to lower the cost,” he said.<\/p>\n

Meanwhile, banks are tightening their loan criteria and limiting lending, partly because competitiveness in some sectors has reduced, said Mr Burin.<\/p>\n

As economic prospects fade, the job market has become more competitive, particularly for new graduates, as some roles are now completed by artificial intelligence.<\/p>\n

“I’m hearing that companies have begun laying off staff during this hardship. Layoffs are projected to increase,” he noted.<\/p>\n

\"\"
\nWAR IS THE CULPRIT<\/p>\n

Nonarit Bisonyabut, a research fellow at Thailand Development Research Institute, said the government’s emergency loan decree is unlikely to significantly stoke domestic inflation, as part of the spending is expected to be absorbed by inventories, including low-cost imports from China, rather than generating substantial new manufacturing activity.<\/p>\n

Instead, the ongoing conflict in the Middle East poses a far greater inflationary risk. If the war persists, higher oil prices will place upward pressure on inflation, he said.<\/p>\n

“The more Thailand imports goods from China, the greater the benefit from subdued import inflation due to the relatively low prices of Chinese products. Therefore, the loan decree is unlikely to trigger inflation,” said Mr Nonarit.<\/p>\n

“Inflation in Thailand is being driven more by the US-Iran conflict.”<\/p>\n

Regarding the use of 200 billion baht from the loan decree to support the transition from fossil fuels to clean energy, he said he agrees that investment in the energy transition is necessary. However, policymakers should consider whether the benefits are broadly distributed.<\/p>\n

Under a sustainable growth model, there should not be a handful of businesses owning the production factors or large power plants that sell electricity back to the public, even if electricity prices become cheaper, noted Mr Nonarit.<\/p>\n

Instead, the transition should enable citizens to become owners of production, such as through rooftop solar systems that allow households to sell excess electricity back to the state, he said.<\/p>\n

Furthermore, if such transition investment projects are activities the private sector can undertake on its own, such as building owners hiring private firms to retrofit their buildings with greener facilities, this can significantly reduce electricity expenses, in some cases by 30-50%, through upgrades or equipment replacement.<\/p>\n

As the private sector can make these investments and directly benefits from them, the government should not be using taxpayer money to subsidise such activities, said Mr Nonarit.<\/p>\n

If the government wishes to provide support, offering low-interest loans should be sufficient, he noted.<\/p>\n

In addition, there are already business models in which companies invest in rooftop solar systems for households and provide long-term maintenance services.<\/p>\n

Homeowners use the savings from lower electricity bills to repay the installation costs. For example, a household previously paying 5,000 baht per month for electricity could reduce the bill to 2,500 baht after installation, with the savings used to repay the system over 5-10 years.<\/p>\n

Mr Nonarit said the private sector and market mechanisms are capable of handling many of these investments on their own without state subsidies.<\/p>\n

The government’s role should be to support low-interest financing, he noted, which would prevent public spending from ballooning while also improving efficiency, allowing the government to direct budget resources towards projects that are truly necessary for Thailand’s economic transition.<\/p>\n

\"Rising<\/p>\n

Rising manufacturing costs are expected to raise consumer products in the second and third quarters.\u2009VARUTH HIRUNYATHEB<\/p>\n

URGENT HELP FOR SMES<\/p>\n

The 200-billion-baht budget for economic recovery has the potential to strengthen state efforts to address weak consumer purchasing power and reeling small and medium-sized enterprises (SMEs), said Kriengkrai Thiennukul, honorary chairman of the Federation of Thai Industries (FTI).<\/p>\n

The co-payment Thais Help Thais Plus scheme should help to increase consumer purchasing power, stimulate their consumption and increase SME revenue, noted the FTI.<\/p>\n

“SMEs and vulnerable groups of people need quick assistance,” said Mr Kriengkrai.<\/p>\n

The economic recovery portion of the emergency loan decree should not face heavy criticism, unlike the portion allocated for the transition to renewable energy, he noted.<\/p>\n

The latter has sparked a heated debate on whether a push for clean energy adoption meets the definition of “urgent”, as stipulated by law.<\/p>\n

“I think all sides agree the economic recovery portion is necessary,” Mr Kriengkrai said.<\/p>\n

“The government can use 200 billion baht to reduce the cost of living for people and stimulate the economy.”<\/p>\n

Given the economic circumstances, authorities should prioritise SMEs’ lack of liquidity over renewable energy promotion, which is less urgent, he said.<\/p>\n

SMEs comprise the core of the FTI, as more than 90% of 16,000 FTI members across 48 industries are SMEs.<\/p>\n

Small businesses make up a sizeable chunk of the Thai economy, contributing 30% of GDP or 5.7 trillion baht, according to the FTI.<\/p>\n

FTI executives met with Prime Minister Anutin Charnvirakul early last week to submit proposals that address the economic downturn. They stressed the need to provide immediate help to SMEs, especially making finance more accessible for entrepreneurs.<\/p>\n

The federation said the government should set up an asset management corporation specifically focused on helping SMEs deal with non-performing loans, alongside new measures to deal with SMEs’ debts and financial problems.<\/p>\n

\"Measures<\/p>\n

Measures to support those related to transport services are viewed as ineffective as demand still decrease. (Pattarapong Chatpattarasill)<\/p>\n

INEFFECTIVE SUPPORT<\/p>\n

Sanyaputthi Kerdbundit, president of the Association of Domestic Travel, said the government’s soft loans and stimulus for transport operators were insufficient to sustain tour businesses as living costs surge.<\/p>\n

He said people are cutting back on trips because of higher travel costs, saving their money for necessary expenses.<\/p>\n

Combined with the government’s work-from-home policies, bookings from public organisations to the provinces have declined over the past few months.<\/p>\n

These trends have caused cash flow shortages among many tour companies. Some operators temporarily closed and plan to reopen during the next high season, said Mr Sanyaputthi.<\/p>\n

Others opted to scale down their operations and reduce their staff, especially desk jobs, but are maintaining a number of client service employees.<\/p>\n

Domestic tours are earning lower profits, less than the typical average of 300 baht per traveller, he noted.<\/p>\n

Tour operators are also competing for customers by offering discounts, which is not healthy for the industry, said Mr Sanyaputthi.<\/p>\n

In some cases, this has led to trip cancellations because the prices fell below the actual costs, he noted.<\/p>\n

Tour companies are leveraging risk by diversifying away from domestic travel packages to serve both inbound and outbound markets to popular destinations.<\/p>\n

Mr Sanyaputthi said the government should accelerate tourism stimulus programmes, which include travel subsidies through licensed tour companies and mass transport to promote more local destinations.<\/p>\n

According to the Tourism Department, Thailand has 15,585 licensed tour companies. Last month, 117 operators closed down or did not renew their licences.<\/p>\n

BOON FOR RESTAURANTS<\/p>\n

Chanon Koetcharoen, president of the Restaurant Association, described the government co-payment scheme as “better than nothing”.<\/p>\n

If the scheme is introduced in June as anticipated, it will arrive during the restaurant industry’s low season, which runs from May to September. This period includes the rainy season and the start of the school term, both of which contribute to reduced restaurant sales, he noted.<\/p>\n

The previous co-payment scheme helped lift sales for small eateries and street food vendors, with sales increasing about 30% compared with the usual period, said Mr Chanon.<\/p>\n

If the co-payment scheme is reintroduced this year, he said it will help revitalise the industry.<\/p>\n

The price subsidy is expected to encourage diners to try new food vendors during its implementation.<\/p>\n

Mr Chanon said the programme is a short-term stimulus measure unlikely to increase inflation.<\/p>\n

However, the previous co-payment scheme excluded legal entities with annual revenue exceeding 1.8 million baht, preventing many medium-sized restaurants from taking part.<\/p>\n

He said the government should intensify efforts to attract foreign arrivals during this period, as increased tourism could help offset the decline in domestic spending and result in more customers for the industry.<\/p>\n

Amid geopolitical conflicts and elevated fuel costs, Mr Chanon urged the authorities to maintain stable energy prices.<\/p>\n

Costs have increased by 5% on average for restaurant operators, but there are no signs of raw material shortages.<\/p>\n

He said restaurants have raised their menu prices by about 5-10 baht per dish.<\/p>\n

In addition, one delivery platform raised its gross profit charge by 5% from previously agreed rates, said Mr Chanon.<\/p>\n

According to the Department of Business Development, restaurants ranked among the top three business categories for closures in the first quarter of this year. During this period, 131 legally registered restaurants closed, representing combined capital of 295 million baht.<\/p>\n","protected":false},"excerpt":{"rendered":"Stimulus schemes meant to strengthen purchasing power raise concerns about inflation.\u2009 Chanat Katanyu Nearly three months have passed…\n","protected":false},"author":2,"featured_media":589796,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,56929,1294,5410,14173,201764,163868,56751,201765,4654,160933,56,54,55],"class_list":{"0":"post-589795","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economic-stimulus","10":"tag-economy","11":"tag-energy-transition","12":"tag-inflation-rate","13":"tag-kasikorn-research-center","14":"tag-middle-east-conflict","15":"tag-public-debt","16":"tag-thai-gdp","17":"tag-thailand","18":"tag-thailand-economy","19":"tag-uk","20":"tag-united-kingdom","21":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/589795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=589795"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/589795\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/589796"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=589795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=589795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=589795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}