Thailand 20250606
Mekong Memo Thailand Weekly: Business, politics, finance, trade & legal news.
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Here is your Mekong Memo Thailand for this week.
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Headlines:
Border Brawl Brews as Tensions Flare
Ixnay on Tourist Banking, Foreign Income Welcome
Air Force Gets Gripen Jets
Casino Cash and Legal Gambling
Coalition on Shaky Ground
Headwinds Hit Growth
Global Trade Deals Brewing
Tourism: Asia Down, West Up
Grid Makeover for More Clean Energy
Bid-Rigging Bust
Poisoned Rivers Cause Eco Crisis
Healthcare Crisis as Hospitals on Life Support
Data Breach, Cyber Crime, Crypto Spotlight
Rainbow Economy Growing
Border Brawl Brews as Tensions Flare
Things are heating up between Thailand and Cambodia. A fatal shooting near the Chong Bok area, which left one Cambodian soldier dead, has ramped up tensions. Cambodia is now threatening to take the dispute straight to the International Court of Justice, but Thailand isn’t budging; they've rejected the ICJ's jurisdiction since 1960. Both nations have been peacocking with military exercises near the border, but high-level defense meetings are still ongoing to keep things from boiling over. The sticking points are contested areas like Chong Bok, Techo Morokot Village, and Morokot Commune. Talks are expected June 14 in Phnom Penh.
Read more: Khaosod English (Nationalist Tensions), UCan News (ICJ Challenge), Reuters (Diplomatic Response), Bangkok Post (ICJ Rejection)
Ixnay on Tourist Banking, Foreign Income Welcome
Tourists are now being stopped from opening bank accounts, a policy that is hitting Russian and Chinese visitors especially hard. If you're entering on a visa-exempt or tourist visa, you will no longer be able to open an account, and even existing accounts are reportedly getting frozen. In a surprising about-face, reports are now in that the Revenue Department will, rather than (as previously announced) tax money transfers coming in from abroad, welcome foreign cash inflows tax exempt to stimulate spending and support economic momentum.
Read more: Pattaya Mail (Banking Ban), Bangkok Post (Foreign Inflows)
Air Force Gets Gripen Jets
The Royal Thai Air Force is picking up 12 Saab Gripen E and F fighter jets from Sweden in a 60-billion-baht deal. The first planes are expected to hit the tarmac in 2029. The initial batch of four aircraft is costing 19.5 billion baht and comes with tech transfer deals that apparently were a strong factor in closing the deal. The transfers will allow Thailand intellectual property rights for unrestricted use and expansion of the Swedish developed Link-T data system. Sweden's defense offset package is massive, worth more than 100 billion baht (155% of the project value). The new jets will replace the aging F-16s that are retiring between 2028 and 2035.
Read more: Reuters (Acquisition Details), Defense News (Technology Transfer), Bangkok Post (Budget Details)
Casino Cash and Legal Gambling
In another chapter of a seemingly unending saga, parliament is expected to get down to brass tacks on casino legislation next month. The "Entertainment Complex Bill" as it now stands will require a minimum US$3 billion investment to get licenses to run the integrated entertainment complexes. The whole thing features eye-wateringly large numbers - projected annual tax revenues of up to 39 billion baht, and a 20% bump in international tourism. Regulators have identified four possible locations: Bangkok, Chon Buri, Chiang Mai, and Phuket.
Read more: Bangkok Post (Government Push), Gambling Insider (Financial Checks), Reuters (Parliamentary Timeline), Bangkok Post (Opposition View), Yogonet (Investment Requirements), Macau Business (Regulatory Framework)
Coalition on Shaky Ground
Prime Minister Paetongtarn Shinawatra's coalition government is suffering conflict with the Bhumjaithai Party, largely thanks to the aforementioned casino legalization and online gambling regulation mess. The political drama is starting to hit economic indicators, with the SET index at risk of dropping to 1,100 points, and foreign investors are getting twitchier. Washington's new trade bellicosity and an ongoing Supreme Court inquiry involving Takki Shinegra Thaksin Shinawatra are also helping to keep the situation dicey. Business generally continues to be battered, and whispers of a cabinet reshuffle or parliamentary dissolution are growing louder.
Read more: Bangkok Post (Coalition Tensions), ISEAS (Coalition Risk), Bangkok Post (Shareholding Probe)
Headwinds Hit Growth
The economy saw a bit of a bounce in April, with manufacturing growth and exports popping almost 10%. The JSCCIB is forecasting GDP growth below 1% in the second half of this year, but is keeping full-year estimates below an uninspiring 2%. They've dialed back export forecasts to a contraction of 0.3-0.5%, mostly due to US tariff concerns and the baht's recent strength. On the ground, business closures rose 8.3% in Q1 and new registrations dropped 4.4%. High household debt, at 88.4% of GDP, is also keeping some awake at night.
Read more: Investing.com (April Growth), Bangkok Post (Growth Projections), The Phuket News (Business Closures), Sight Magazine (Digital Wallet), Bank of Thailand Expert (Tariff Warnings)
Global Trade Deals Brewing
Virtual trade talks are being scheduled with the US, fresh off the back of recent meetings between Foreign Minister Maris Sangiampongsa and US Trade Representative Jamieson Greer. They'll be talking about steel import tariff hikes from 25% to 50%. Commerce Minister Pichai Naripthaphan sounds upbeat about wrapping up FTA talks with the European Union by year-end; trade between Thailand and the EU notched $43.5 billion last year. Seven candidates - five men and two women, have tossed their hats in the ring for the Bank of Thailand's top job, with the final selection slated for June 24. It’s impossible to say who will win, but our money is on Roong Mallikamas.
Read more: Bangkok Post (US Talks), Bangkok Post (EU Negotiations), Business Times (Bank Governor)
Tourism: Asia Down, West Up
The tourism situation is a mixed bag. May 2025 data saw a 14% dip in foreign tourists, mostly from an 11% slide in Asian arrivals. Chinese visitor numbers plummeted relative to 2024, reportedly due to security worries from border scam centers and earthquake concerns. On the flip side, Western tourism has seen a rebound. US interest in Koh Samui jumped 65% (White Lotus?), European arrivals rose 18%, and UK visitors were up a fifth to 512,000. The government began a new "Sawasdee Nihao" program to try and lure the Chinese back (and, we suspect, to bury negative Google search results that might have previously popped up when searching the phrase).
Read more: Travel and Tour World (Tourism Trends), TAT News (Chinese Relations), Travel and Tour World (Japanese Visas)
Grid Makeover for More Clean Energy
Thailand currently has an energy mix that's 85% fossil fuels and only 15% clean energy, but regulators want more than half of power to come from clean energy by 2037 and about three quarters by 2050. They're up against fragmented planning and limited market liberalization though. Gunkul Engineering says Thailand is falling behind regional competitors in bringing power investment, only clocking 5,000MW of solar and wind capacity while Vietnam has announced more than four times that figure. A new solar law is on the table to make it easier to install rooftop solar, though it may be revised over whispers that the law gives too much power to the Minister of Energy. On a positive note, the Oil Fuel Fund has finally seen its first positive balance since 2021.
Read more: Bangkok Post (Regional Comparison), Bangkok Post (Energy Transition), Reccessary (Solar Law), Bangkok Post (Oil Fund)
Bid-Rigging Bust
A corruption scandal is rocking the construction sector. The DSI has pointed the finger at about 70 state officials involved in bid rigging, all tied to the collapsed State Audit Office building that killed 89 workers during the earthquake of March 28. The 2+ billion baht project was supposedly rigged to favor a joint venture called PKW by tweaking the bidding rules. More than a hundred boxes of documents allegedly show that construction inspections were never completed China Railway No.10 (Thailand) Co is now facing charges for operating illegally; the company's Chinese director and three Thai shareholders are accused of using dummy shareholders to get around foreign business rules.
Read more: Bangkok Post (Official Involvement), Bangkok Post (Contractor Charges)
Poisoned Rivers Cause Eco Crisis
Things are getting nasty on the environmental front in northern Thailand. Arsenic levels in the Sai River are now reportedly 10 times the safe limit. Research from Mae Fah Luang University found heavy metal pollution affecting four cross-border rivers: the Kok, Sai, Ruak, and Mekong. The Pollution Control Department says it found arsenic at 40 times the safety level in northern river systems, all a result of mining operations in Myanmar's Shan State. Separately, Universal Mining is getting pushback from Karen communities over plans to reopen a fluorite mine in Mae La Noi district, locals are worried about further polluting the Mae La Luang River.
Read more: Khaosod English (River Pollution), Bangkok Post (Heavy Metals), Mongabay (Karen Opposition)
Healthcare Crisis as Hospitals on Life Support
Thailand's public health system is on the brink of a financial meltdown. The Ministry of Public Health spilled the beans: state hospitals are saddled with 4.2 billion baht in deficit. The top 10 most indebted hospitals lost almost 2 billion baht in the first quarter of 2025 alone, and 218 state-owned hospitals are still deep in the red. Worse, 91 other facilities are running on fumes, with cash reserves below 5 million baht. The crisis is a result of too-little universal healthcare funding; the National Health Security Office only kicks in 7,100 baht per patient, when treatments actually cost an average of more than 13,000 baht. Without intervention, experts say the whole thing could go belly up within three years.
Read more: Bangkok Post
Data Breach, Cyber Crime, Crypto Spotlight
The National Cyber Security Agency says there’s been a huge jump in data breaches, with compromised credentials skyrocketing from 80,000 to 5 million year-over-year, apparently largely due to the use of pirated software (don’t use pirated software). On the cyber-scam front, a coordinated operation in six Asian jurisdictions, law enforcement nabbed more than 1,800 people involved in online scam networks and recovered $20 million in fraudulently earned funds. The operation went after the big international crime groups running scam centers in the border regions. Finally, the SEC says it is going to block five unauthorized cryptocurrency exchanges – Bybit, OKX, CoinEx, 1000X, and XT.COM – starting June 28.
Read more: Khaosod English (Arrests), Fintech News (Crypto Ban), Bangkok Post (Data Breaches)
Rainbow Economy Growing
Thailand's LGBT community, numbering about 6 million folks, will generate 150 billion baht for the economy annually. Globally, the LGBT travel market is expected to be more than $600 billion by 2032. Thailand already rakes in $2 billion a year in the segment and has long been a go-to spot for sex-change surgery. Medical tourism in the sector is expected to reach 16 billion baht by the end of this year. Big retailers like Central Pattana are cashing in on the trend with nationwide Pride celebrations, backed by growing social acceptance, especially among younger people.
Read more: Straits Times
That’s it for this week, thanks for reading!
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