Thailand 20250815
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:
Rates Cut, Banks Follow, Markets Watching
Baht Firming As Dollar Softens
Tariffs Bite, Policy Pivots To Support Trade
Renewables Access Delays Threaten New FDI
New Oil & Gas JV Targets Gulf Block
FDI Mixed: Applications Up, Political Risk Lingers
Border Ceasefire Holds, Tensions Unresolved
Border Shutdown Drains Trade, Labor, and Ads
Tourism Slows As Rivals Woo Visitors; Airline Profits Rebound
AI Hardware Boom Lifts Power Systems Champion
LEO Broadband Greenlit For Rollout
Sustainable Rice Still A Tough Sell
Cybercrime Compounds Grow; Retail Scams Surge
Weak Governance Unsupportive of Investment
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Rates Cut, Banks Follow, Markets Watching
The central bank cut its policy rate to 1.50%, the lowest since 2022, and lenders passed through the full reduction for the first time in this easing cycle. Economists say there’s scope for more cuts into 2026 as inflation stays soft and growth guidance hovers near 2.3%. Broker views point to a short-term equity bounce thanks to the cheaper money, but bank margins are under pressure, and SMEs remain weak.
Read more: Reuters (Rate cut), Investing.com (Outlook), Bangkok Post (Bank pass-through), Bangkok Post (Equities)
Baht Firming As Dollar Softens
The baht is grinding stronger toward 32 per dollar on expectations of a U.S. rate cut and general dollar weakness, even after Thailand’s own 25 bps easing. Research houses are looking for a year-end range between 31.5–32.1, with the baht already up 5.6% year-to-date. The central bank is watching currency strength because exporters and tourism could face pricing pressure as margins tighten. A stronger baht reduces the threat of imported inflation and helps anyone service debt in dollars but can crimp near-term export receipts and hotel pricing power.
Read more: Bangkok Post
Tariffs Bite, Policy Pivots To Support Trade
The U.S. tariffs are feeding through to exporters and into supply chains, pushing the Finance Ministry to ready tax tweaks, provide faster VAT refunds, and speed up public investment. Washington’s tariff push runs into China’s longer game of shifting production out of China and into ASEAN, a strategy that was expected to dilute tariff effects through regional supply chains.
Read more: Bangkok Post (Stimulus), Bangkok Post (Exporter help), Bangkok Post (Circumvention), Asia Times (China strategy)
Renewables Access Delays Threaten New FDI
Investors want direct access to clean power, but progress on Thailand’s DPPA pilot and peer-to-peer trading is maddeningly slow. TDRI estimates up to 1 trillion baht in lost foreign investment if access to renewable energy stays constrained, with data centers and cloud operators the loudest voices complaining about purchase options outside state channels. A 2,000 MW pilot was approved in 2024, but timelines and rules aren’t yet clear enough to warrant big money on the table. Without bankable pathways to success, big-ticket projects that need 24/7 green power are stalled out or moving elsewhere.
Read more: Reccessary (DPPA risk), Bangkok Post (FDI gap)
New Oil & Gas JV Targets Gulf Block
Chevron Offshore (Thailand) and Bangchak’s BCPR sealed an exploration and development partnership on Block G2/65 in the Gulf of Thailand under a production sharing contract (PSC). Chevron is going to transfer 30% of its rights to BCPR. The parties announced the deal at a ministry event, laying out a work program and showing there’s still an appetite for domestic upstream opportunities.
Read more: Offshore Energy
FDI Mixed: Applications Up, Political Risk Lingers
Foreign investor interest is still active, with 502 FBA applications in H1, up 30% year-on-year and reaching 111 billion baht in value. The EEC pulled in 62.9 billion baht for 158 projects, led by Japan, the U.S., China, Singapore, and Hong Kong. Despite the generally good news, political uncertainty is (once again!) putting the hurt on overall market sentiment.
Read more: Bangkok Post (H1 FDI), AINvest (Political risk), AINvest (Market flows)
Border Ceasefire Holds, Tensions Unresolved
Thailand and Cambodia agreed to interim observations of their ceasefire with ASEAN participation. Thai commanders say the borders are not ready to reopen and accuse Cambodia of laying landmines; Phnom Penh denies new mines. Thailand says it can hold 18 POWs until hostilities come to an end under international law. Domestic friction has been on the rise on both sides of the border as military statements cause political blowback and claims of mixed messaging. Some are wondering who, exactly, is in charge.
Read more: Your Conroe News (Observers), Bangkok Post (Border status), News.az (Landmines), CGTN (China role)
Border Shutdown Drains Trade, Labor, and Ads
Border trade has been devastated to the tune of an estimated 500 million baht monthly, tourism in eastern provinces has all but disappeared, and Cambodian cross-border spending has almost entirely evaporated. Some Thai consumer brands have frozen ad budgets until they see some light at the end of the tunnel.
Read more: Bangkok Post (Trade losses), Asia News Network (Brand pullback), Bangkok Post (Worker extensions), Bangkok Post (Illegal entry), Bangkok Post (Hiring debate)
Tourism Slows As Rivals Woo Visitors; Airline Profits Rebound
Arrivals are lagging expectations as Vietnam and South Korea have reduced visa friction and honed their pricing. Safety chatter on social media and a stronger baht haven’t helped.. Hotels have seen a limited lift from domestic subsidies, but they are still suffering as Chinese arrivals remain particularly soft. Thai Airways posted a 12 billion baht Q2 net profit on lower fuel and better yields, relisted itself on the SET, and plans to introduce new routes.
Read more: Bangkok Post (Slowdown), Travel And Tour World (THAI profit), Bangkok Post (Phuket needs), Travel And Tour World (Vietnam edge)
AI Hardware Boom Lifts Power Systems Champion
Delta Electronics (Thailand) is expecting double-digit sales growth for years as AI servers and data centers are increasing demand for power and thermal solutions. AI products might reach as high as half of all their sales by year-end; two new Bangkok plants are expected to come online in Q4. Management says U.S. tariffs have added costs, but so far, those can be passed through. Asia-Pacific data center capacity is expected to double by 2030. The story isn’t so much about what the trend means for Delta, so much as that Delta is a bellwether for where the industry is headed in the Kingdom.
Read more: Livemint
LEO Broadband Greenlit For Rollout
Regulators approved National Telecom’s bid to offer satellite broadband through OneWeb’s low-earth-orbit (LEO) constellation, with service starting this month for regional markets via a gateway in Ubon Ratchathani. NT wants to see US$10 million in revenue by 2030 from this business, separate from OneWeb’s 200 million baht annual rental fee. The partners have invested more than US$25 million in local infrastructure and plan to serve 50,000 users in year one. Global LEO demand is rising in remote areas not reached by fiber. No recent news on Starling’s plans for Thailand.
Read more: Bangkok Post
Sustainable Rice Still A Tough Sell
Thai rice exporters say high investment, weak branding, and unclear policy keep sustainable production from reaching its potential. An Integrated Sustainable Rice Landscapes project is working to update policy and train farmers, but millers say it’s tough to get any price premium in competitive retail channels. The Rice Department wants to find ways to lower production costs, reduce chemical use, and raise yields, but industry leaders say there needs to be more political backing, funding, and marketing to make sure Thai product finds a place in premium markets where traceability and ESG are mandatory.
Read more: Bangkok Post
Cybercrime Compounds Grow; Retail Scams Surge
A new book follows the rise of cyber-enabled fraud compounds across Southeast Asia, describing “compound capitalism” built on coercive labor, poor regulation, and lax enforcement. Thailand and its neighbors say that they’re working on action against online scams, but victims keep piling up.
Read more: The Diplomat (Compound model), Bangkok Post (Border agenda), AINvest (Romance scam)
Weak Governance Unsupportive of Investment
An anti-corruption watchdog has given the government a failing grade for governance due to opaque plans and declining public confidence in integrity. Business groups say that better governance is important to support investment, saying that stalled reforms and bureaucratic drift haven’t been helpful.
Read more: Bangkok Post (ACT view), Bangkok Post (Case pressure)
That’s it for this week, thanks for reading!
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