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Mekong Memo Thailand Weekly: Business, politics, finance, trade & legal news.

Mar 06, 2026

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Headlines:

Hormuz Shutdown Leaves Thailand Running on Fumes

Circuit Breakers Trip as SET Takes 8% Hit

Blue Wave Washes Out Reformists as Anutin Rides to Power

Airspace Closures Threaten to Strand a Quarter of Visitors

Bangkok Flips the Sign From Welcome Mat to Trapdoor

Prices Still Falling, Oil Be Damned

Business Lobby Holds the Line at 2%

Douyin Did What COVID Couldn't

Chiang Mai: Fifth Worst Air on Earth

IMF Chief Blesses Bangkok's Big October Date

War Games Add Keyboards to Kevlar

Hormuz Shutdown Leaves Thailand Running on Fumes

Half of Thailand's oil imports flow through the Strait of Hormuz, and now that Iran has closed the door on it, the country looks like it might be ASEAN's most exposed economy. Thailand’s net oil imports make up nearly 5% of GDP. Brent crude sat around $81 a barrel Thursday; prices could hit $100+ if the closure drags on. The government immediately stopped domestic oil exports except to Laos and Myanmar, ordered PTT to find alternative supplies from Malaysia, the US and Africa, and capped the pump price of diesel at 29.94 baht per liter for 15 days using the state managed Oil Fuel Fund. The 65-day oil reserves will stretch to 95 days once confirmed alternative deliveries arrive, and the energy regulator approved three spot LNG cargoes to offset disrupted Qatari shipments. Every 10% oil price rise worsens the current account by about half a percent of GDP.

Read more: Nation Thailand, Bangkok Post (biofuel expansion), The Star (95-day reserve breakdown), Bernama (alternative suppliers), Market Screener (LNG procurement)

Circuit Breakers Trip as SET Takes 8% Hit

The SET Index dropped 8% on Wednesday, triggering a circuit breaker that stopped trading for half an hour, the first such freeze in the Stock Exchange of Thailand in more than a year. The selloff wiped out more than half of the post-election rally. Traders pointed to oil prices tied to the Iran conflict, which hits particularly hard given the country's heavy energy imports.

Blue Wave Washes Out Reformists as Anutin Rides to Power

The patronage networks delivered where progressive appeals couldn't. Bhumjaithai clinched around 193 of 500 House seats in the February 8 snap election, handing party leader Anutin Charnvirakul the prime ministership and diminishing hopes for a reformist comeback. The People's Party collapsed from 151 seats in 2023 to just 118, and Pheu Thai slid from 141 to 78. Bhumjaithai controlled the Interior Ministry heading into the vote and secured defections from major provincial power brokers in the months before. Nationalism helped too, as the border flare-up with Cambodia took attention away from Anutin's vulnerabilities as his minority government was most exposed.

Airspace Closures Threaten to Strand a Quarter of Visitors

Thai tourism officials are modeling three outcomes if Middle East airspace stays shut. The worst case will reduce arrivals by a quarter. The base case, assuming fighting wraps in three months, still clips almost a fifth off the year to 30 or 31 million arrivals. Long-haul travelers, mostly Europeans who would normally connect through Gulf hubs, account for nearly a third of volume but almost half of revenue. Even if airspace re-opens, rising fuel costs are going to push fares higher. The tourism ministry is going to chase short-haul markets hard and has set meetings with hotel, airline, and tour operators Monday to figure out the best way to run damage control. Last year brought 32.9 million arrivals and 1.53 trillion baht; the 2026 target was a heady 2 trillion. Separately, the Tourism Authority used ITB Berlin to make the case that its value-over-volume pivot is paying off. Germany sent nearly a million tourists, and TAT wants to find more like them as it expands healing-led luxury and year-round distribution over beach-and-Sangsom-in-a-bucket crowds.

Read more: Bangkok Post, Thai Enquirer, TAT News (ITB), Travel and Tour World (ITB)

Bangkok Flips the Sign From Welcome Mat to Trapdoor

Customs is done playing nice with transhippers who have been slapping "Made in Thailand" stickers on Chinese goods bound for America. The department took 503 million baht worth of falsely labeled exports between October and February, a 160% increase from the year prior, and now wants authority to grab suspect cargo immediately instead of settling for paperwork fines. The crackdown points the finger at operators without factory licenses who mysteriously import and export identical products under the same tariff classification. Washington is watching, and Bangkok knows that letting tariff dodgers use local ports as a costume change puts everyone who actually makes things in Thailand at risk.

Prices Still Falling, Oil Be Damned

Eleven straight months of negative headline inflation, and the Commerce Ministry still won't label it deflation. The consumer price index fell almost 0.9% in February, even as core inflation remained positive at 0.56%. The ministry is hoping the nearly yearlong slide will provide a cushion against whatever oil shocks arrive next. Energy and food account for roughly 70% of the consumer basket, so soft oil prices have kept prices well below the central bank's 1% to 3% target range. Inflation is likely to pick up in March as crude climbs; yearly rates could rise to between 1% and 3% if oil settles between $80 and $120 per barrel. The central bank says that any price acceleration is "manageable," even though it recently cut rates by 25 basis points to 1.00%.

Business Lobby Holds the Line at 2%

Thailand's Joint Standing Committee on Commerce, Industry and Banking kept its 2026 growth forecast at 1.6 to 2.0% on Wednesday. The 0.4-point range splits the difference between cautious and slightly less cautious, a forecast that also serves as commentary on an economy that’s still running cool but not quite cold.

Douyin Did What COVID Couldn't

Flight capacity between China and Thailand is at 60% of 2019 levels, but this time the problem isn't lockdowns or health scares. It's kidnapping videos on Douyin, Weibo, and Xiaohongshu. The abduction of Chinese actor Wang Xing near the Myanmar border in January 2025 went viral, and suddenly every scam-related incident, stripped of context and repackaged under alarmist captions, has become proof that Southeast Asia isn't safe anymore. Tour coaches in Phuket and Pattaya that once carried 42 passengers now reportedly average 28. Duty-free spending per Chinese visitor has dropped 18% in RMB terms. Safety is now the top concern in traveler surveys, more important than cost or proximity. Thai authorities have issued reassurances, but perception has moved faster than facts.

Chiang Mai: Fifth Worst Air on Earth

PM2.5 readings hit 69.4 micrograms/ cubic meter on Thursday, almost double the national safe limit of 37.5, as forest fires across the upper North turned Chiang Mai into the fifth most polluted city on the planet. Satellites identified 235 hotspots in 17 provinces. The Air Quality Index swung between 137 and 185, well into “unhealthy” territory, and the numbers could worsen further as there’s no rain in sight.

IMF Chief Blesses Bangkok's Big October Date

IMF Managing Director Kristalina Georgieva stopped by Government House to confirm the Queen Sirikit National Convention Center is ready for the October 12-18 annual meetings. Prime Minister Anutin says the event is a national priority, though he admitted that full coordination will only kick in once the government formation process is finished - a quiet admission that hosting global financial elites may be complicated when the host government is still taking shape.

War Games Add Keyboards to Kevlar

Cobra Gold brought cyber drills into its 45th edition, as teams from eight countries ran simulated attacks and defenses from an air-conditioned command post even as 8,000 other troops from 30 countries trained in jungles and on beaches. Space operations also joined the mix for the first time, part of a push to fold digital warfare into Southeast Asia's largest military exercise. Thailand lost an estimated $2.3 billion to cybercrime since 2022, more than its annual military procurement budget, so the keyboard warriors have something concrete to practice for, to be sure.

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