Thailand 20250613
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Here is your Mekong Memo Thailand for this week.
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Headlines:
Border Dispute Grinds on, Markets Wither
Trade War Threatens Economy
Thaksin's Legal Troubles Return
EEC Gets Funding Boost
Tourism Industry in Crisis
Transport & Infrastructure: Rail, AI, US Flights
Rivers Contaminated by Myanmar Mining
Embrace of AI with New Law and Education
Financial Sector Regulatory Overhaul
Siriraj Hospital’s International Medical Hub
Household Debt Crushes Consumers
Corruption Allegations Rock SSO, JKN
Gold Industry in Crisis
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Border Dispute Grinds on, Markets Wither
Thailand has put border restrictions in place with Cambodia after a shooting, closing tourist checkpoints and limiting operating hours at other crossings. Both countries have agreed to try and resolve their differences in a Joint Border Committee meeting scheduled for June 14. Thailand has rejected the International Court of Justice's jurisdiction, saying the dispute should be resolved through bilateral mechanisms.
The ongoing standoff has resulted in market volatility, with the SET index falling 4.8% since May 15. Historical analysis suggests that this sort of saber rattling typically causes a 2.8% market draw-down with recovery usually following in 3-6 months. The Stock Exchange of Thailand reports persistent foreign capital outflows - more than 400 billion baht for three years in a row, with 2025’s drawdown already at 70.7 billion baht.
Read more: UCAN News (Border Restrictions), Bangkok Post (Senate Session), Asia Times (Geopolitical Context), Bangkok Post (Diplomatic Approach), The Phuket News (ICJ Rejection), The Diplomat (Cambodia Strategy), Bangkok Post (Market Impact), Bangkok Post (Investor Sentiment), Lansing Institute (Broader Analysis)
Trade War Threatens Economy
The possibility of crippling US tariffs are a worrying threat to Thailand's economy that’s keeping many awake at night. Consumer confidence is down to a two-year low and the economy is noticeably slowing. Manufacturing heads say they expect conditions to worsen in the second half of 2025 and that’s going to have to result in workforce reductions. At the most extreme end of the tariff spectrum, the Solar industry is at risk of tariffs of up to 3,500%, putting the future of Thailand's $3.7 billion solar export industry in question. K-Research is saying there’s a recession risk in H2 2025 and is keeping a 1.4% annual GDP growth forecast.
Read more: Bangkok Post (Housing Impact), Khao Sod English (Consumer Confidence), Bangkok Post (Chinese Exports), Al Jazeera (Solar Industry), TDRI (Economic Strategy), Bangkok Post (Recession Risk)
Thaksin's Legal Troubles Return
The Supreme Court's Criminal Division for Holders of Political Positions has started an investigation into former Prime Minister Thaksin Shinawatra's controversial 181-day hospital stay. The inquiry is expected to make a determination about whether his jail sentence was properly enforced, given that he never spent a night in prison after his initial sentencing. The court's decision could have far-reaching consequences, including possible revocation of his royal clemency, ethical violation charges for some of the doctors involved, and/ or Thaksin being required to serve additional prison time. The outcome could have bigger implications for the political landscape, particularly affecting the ruling Pheu Thai Party and Prime Minister Paetongtarn Shinawatra, Thaksin's daughter.
Read more: Bangkok Post
EEC Gets Funding Boost
Foreign investment in Thailand's Eastern Economic Corridor (EEC) is benefitting from an infusion of cash. Investors ponied up 31.3 billion baht, 54% of Thailand's total foreign investment during the quarter. Japan led with 32 investors bringing 10 billion baht, followed by China (25 investors, 3.86 billion baht) and Singapore (10 investors, 5.93 billion baht). The government wants investment in next-generation industries, particularly electric vehicles and clean energy.
Read more: Bangkok Post (EEC Investment), Xinhua (Economic Roadmap), Reccessary (Green Tech)
Tourism Industry in Crisis
The tourism sector is under threat as foreign visitors dropped 14% in May, mostly due to a reduction in Asian visitor numbers. Chinese tourists, historically the largest group, have dropped by nearly a million compared to last year. The Tourism Council of Thailand is working on reforms to reverse the declining numbers. The restaurant industry has been hit particularly hard, with Chef Thitid Tassanakajohn saying that he’s seen a 50% drop in May sales.
Read more: The Independent (Tourism Drop), Travel and Tour World (Reform Initiative), Bangkok Post (Restaurant Impact), Pattaya Mail (Revival Strategy), VN Express (Chinese Tourists)
Transport & Infrastructure: Rail, AI, US Flights
The Transport Ministry is pushing several big infrastructure works, with the three-airport high-speed rail system development starting up again after a five-year delay. The 271.8 billion baht project will connect Don Mueang, Suvarnabhumi, and U-Tapao airports with trains operating at speeds up to 250 km/h. The Bangkok-Nong Khai high-speed rail line's first phase is 43.79% complete. Bangkok has started to use AI-powered adaptive traffic signals at 72 major intersections, reportedly reducing travel delays by 10-41% (Ed: we’re not sure this claim is borne out by personal experience). Since Thailand had its aviation safety status upgraded again to Category 1 by the US FAA in April, officials are working on plans for direct flights to the United States, including a potential Bangkok-Los Angeles route.
Read more: Travel and Tour World (Airport Rail), Bangkok Post (Smart Traffic), Bangkok Post (Transport Projects), The Thaiger (US Flights)
Rivers Contaminated by Myanmar Mining
Unlicensed mines in Myanmar's Shan state, operated under United Wa State Army control, are causing arsenic contamination in Thai waterways. Testing shows arsenic levels reaching 49 microgrammes per liter, almost five times higher than international drinking water standards. The pollution, originating from rare earth mining operations with Chinese involvement, particularly affects the Kok River in Chiang Rai province. The situation has become worse since Myanmar's 2021 coup. Thai authorities are considering dams as mitigation and have started diplomatic outreach to Myanmar, sending a formal request for talks.
Read more: France24 (Mine Contamination), Bangkok Post (Diplomatic Response)
Embrace of AI with New Law and Education
The government has approved an AI law that sets safety standards and apparently will promote responsible innovation. The law requires overseas AI providers to have local legal representatives and demands the reporting of “serious” AI incidents. The Ministry of Education and the Ministry of Higher Education have partnered with Microsoft Thailand on an AI education project that in support of the 2030 national AI strategy which is expected to develop 30,000 AI specialists. The tie-up introduces the TH AI Academy project for high school students and uses a National Digital Learning Platform with more than 200 free online AI courses in the Thai language.
Read more: Bangkok Post (AI Law), Microsoft (Education Initiative), Bangkok Post (AI Principles)
Financial Sector Regulatory Overhaul
The Bank of Thailand is going to take over supervision of automobile rent-to-own and leasing loans from the Office of the Consumer Protection Board under an amended royal decree effective December 2, 2025. This will result in new oversight of about 3,000 loan operators who carry outstanding loans of 1.6 trillion baht on their books. The Cabinet has approved an Electronic Securities Bill that's designed to bring digitization to local capital markets allowing for an upgrade from paper-based to electronic securities.
Read more: Bangkok Post (Auto Loans), Reuters (Non-Bank Providers), Asian News Network (Securities Bill)
Siriraj Hospital’s International Medical Hub
Siriraj Hospital is building a 17-billion-baht Bangpho Medical Hub project beside the Chao Phraya River to expand international patient services while promising not to forget its core mission of serving Thai citizens. The 19-story, 150,000-square-meter facility will facilitate 650,000 outpatient visits and 20,000 inpatient stays a year. The project's funding is 11.05 billion baht from the state budget and 5.91 billion baht from Siriraj's resources. The facility is expected to be profitable within 4-5 years of operation.
Read more: Khao Sod English
Household Debt Crushes Consumers
Household debt remains a big domestic issue and stands at 16.4 trillion baht: 88.4% of GDP. Non-performing personal loans total 1.22 trillion baht ($37.3 billion). The National Economic and Social Development Council is asking for more debt restructuring support, saying action is urgent due to metrics including an 8.94% NPL rate and 568 billion baht in “special mention” loans. A third of Thais are buying luxury items primarily for social recognition (Hello, Instagram!), and only half the population has enough emergency savings to carry them through 6 months.
Read more: Khao Sod English (Debt Patterns), Bangkok Post (NESDC Recommendations)
Corruption Allegations Rock SSO, JKN
An Interior Ministry special committee has discovered that the Social Security Office significantly overpaid for the SKYY9 Building, spending 7 billion baht on a property valued at only about 3 billion baht. The investigation was brought about thanks to allegations by whistleblower MP Rukchanok Srinork. The Securities and Exchange Commission has filed criminal charges against JKN Global Group's CEO Jakkaphong Jakrajutatip and sister Pimuma Jakrajutatip for allegedly falsifying financial statements and manipulating company records. The SEC investigation showed fictional creditor and debtor information, overstated revenue and liabilities, and misrecorded royalty liabilities in 2023 and Q1 2024 financial statements.
Read more: Bangkok Post (SSO Overpayment), Bangkok Post (JKN Charges)
Gold Industry in Crisis
Thailand's gold jewelry industry is in crisis with sales plummeting 50% to historic lows. According to the Gold Traders Association, 177 of the country's 9,728 registered gold shops closed in 2024, with small-scale shops making up 80% of the sector. The sales slump has left 20,000-30,000 of Thailand's 50,000-60,000 goldsmiths unemployed. Gold Traders Association President Jitti Tangsitpakdee says the the downturn can be blamed on a 20% increase in gold prices in 2024 and another 20% rise in early 2025, combined with weak consumer purchasing power and high household debt. The industry is also under pressure from strict anti-money laundering compliance requirements.
Read more: Pattaya Mail
That’s it for this week, thanks for reading!
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