Thailand 20260327

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

Mar 27, 2026

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Headlines:

Oil Fund Hits Empty

Empty Skies, Emptier Hotels

Credit Holds, Growth Doesn't

Baht Keeps Finding New Floors

One Tanker at a Time

Gunshots Test December's Fragile Truce

Sixty Days? Make That Thirty

Srettha's Bigger Credit Card

Gold Mine's Toxic Bill Finally Lands

Population Is Shrinking. Hospitals Aren't.

Two Big Bets on Staying Put

The Cloud Needs a Generator

Oil Fund Hits Empty

Thailand junked diesel and gasoline subsidies overnight Wednesday, sending pump prices up 6 baht a liter and pushing diesel to 38.94 baht Thursday morning, an 18% jump, after the Oil Fuel Fund's deficit rose to 35 billion baht. The price of global crude had risen from $198 to $242 per barrel in a week, shattering 2008 records, as the Iran conflict choked off the Strait of Hormuz. The cabinet scrambled to push out seven relief measures Thursday including 100-baht welfare card top-ups, possible excise tax cuts, and targeted help for fishermen and farmers, but the subsidy taps are closed now, seemingly for good. More than half the fishing fleet at Samut Sakhon, the country's largest port, has already docked, unable to break even. Officials admit 86 million liters, roughly a fifth above normal daily volume, vanished into suspected hoarding ahead of the announcement.

Read more: Bangkok Post (stock market impact), Bangkok Post (restaurant and boat fare impacts), Bangkok Post (refinery margin dispute), Nation Thailand (Songkran booking slowdown), Bangkok Post (welfare card top-ups)

Empty Skies, Emptier Hotels

More than 1,000 inbound flights have been canceled since the Gulf crisis began, mostly to Bangkok and Phuket, and arrivals from Europe and the Middle East are running about a sixth below normal levels. First-quarter visitors through March 22 came in at 8.54 million, a 3% year-on-year drop; at that pace, full-year arrivals will get to only about 34 million, already below the government's 37-million target before the whole impact is fully felt. The Tourism Ministry says that if fighting drags on six months, the country could lose 3 million visitors and 150 billion baht ($4.6 billion) of revenue. Luxury hotels are slashing rates by as much as 70% to fill empty rooms, with properties like the Mandarin Oriental Bangkok dropping from $1,000 a night to $300 as European guests cancel en masse. The local hotel association expects the hit to last at least six months even if the situation calms, since traveler confidence never comes back immediately.

Read more: FTN News (flight cancellations), Anadolu Agency (energy dependency), Travel and Tour World (country-by-country breakdowns), Travel and Tour World (hotel pricing)

Credit Holds, Growth Doesn't

Eighteen months of ratings-agency hand-wringing may be over, but what comes next isn’t all sunshine and unicorns. The SCB Economic Intelligence Center has cut its 2026 GDP forecast to 1.4% from an already lackluster 1.8%, saying inflation could get to 3.2% after the fuel subsidy was yanked. Ending the Oil Fuel Fund's chronic deficits makes a credit downgrade less likely, but the price shock makes stagflation more likely. Kasikorn Research sees GDP growth of just 1.9%, with domestic consumption likely to miss even its modest 1.8% target. The fuel fund has followed the same playbook for two decades, always capping prices during global oil jumps, piling up debt, then waiting for prices to fall and clawing the money back. Thaksin's government spent 92 billion baht subsidizing fuel during the Iraq war, eventually floating prices in 2005 after the fund borrowed 71 billion baht. This time, EIC thinks diesel could hit 60 baht a liter as soon as next month if prices aren't managed, with worst-case scenarios pushing growth down to 1.1% and inflation to 4% or 5%.

Read more: Bangkok Post (credit rating), Bangkok Post (managed float advice), Nation Thailand (historical deficits)

Baht Keeps Finding New Floors

Down more than 5% this month (so far), the baht looks like it might be the worst-performing currency in Asia. Kasikornbank sees another 2% weakening from the current 32.8 per dollar by midyear. The currency traded hands at 30/ dollar as recently as late 2024, so the total slide is about 9%, turning the Hormuz blockade into a balance-of-payments problem as energy costs go up just as seasonal dividend repatriation typically brings capital from offshore. Businesses are now paying nearly 10% more for dollar-denominated imports, just as exporters are managing tighter margins on goods priced in weakening local currency.

One Tanker at a Time

A Bangchak Corporation oil tanker made its way through the Strait of Hormuz on Monday after Foreign Minister Sihasak Phuangketkeow negotiated passage with Iran's ambassador in Bangkok, the company said Wednesday. The vessel had been anchored in the Persian Gulf since March 11, waiting while the US-Israeli war on Iran choked off a fifth of global oil and gas flows through the waterway. Everyone made of point to mention that no payment changed hands. Iran told the UN Security Council and the International Maritime Organization that "non-hostile vessels" can transit if they coordinate first, but the arrangement hasn't yet allowed for the passage of an SCG Chemicals tanker still standing by. The deal came two weeks after the Thailand-flagged bulk carrier Mayuree Naree was hit by a projectile in the strait, forcing the crew to evacuate; three crew members remain missing. It seems that each tanker, in other words, now needs its own diplomatic negotiation, leaving the country's oil supply chain hostage to ad hoc arrangements with Tehran. But no payment changed hands for the first one.

Gunshots Test December's Fragile Truce

A Thai marine commander accused Cambodian forces of firing across the Trat frontier over the past week, saying that it’s a breach of the December 27 ceasefire and saying troops would respond to further incidents. Capt Thammanoon Wanna, who leads the Trat Marine Task Force, blamed the flare-up on a recent change of Cambodian unit commander and said Thai forces now control the Thmor Da casino building, in contested territory. In a separate claim, Thammanoon claims the wider Thmor Da area has become a scam hub run by financiers of “Chinese descent,” with new arrivals claiming Chinese embassy protection; no independent confirmation is available for this bold claim. Thammanoon said Cambodian troops are digging fresh fortified trenches along the line, while Thai forces have laid out positions and barbed wire near Ban Sam Lang, just under a kilometer from Cambodian positions.

Sixty Days? Make That Thirty

Foreign Minister Sihasak Phuangketkeow confirmed last week that the government will soon cut visa-free stays from 60 days back to 30 for citizens of 93 countries, reversing the tourism-friendly policy introduced in July 2024. The reason is that most tourists don’t stay more than 30 days anyway, and the longer window has brought foreigners setting up businesses, buying real estate through nominee schemes, and running scam operations. Visitors wanting more time will still be allowed to extend their stay another 30 days at an immigration office for 1,900 baht, but they'll need to show up in person. The change puts the country in step with Indonesia, Vietnam, Malaysia, and Kazakhstan, all of which have tightened visa rules recently on concerns that generous exemptions invite gray-area residency more than they drive legitimate tourism.

Read more: Travel and Tour World (regional context), Travel and Leisure Asia (extension cost)

Srettha's Bigger Credit Card

Former Prime Minister Srettha Thavisin wants to raise the public debt ceiling from 70% to 80% of GDP, a change that he says would unlock roughly 2 trillion baht ($61 billion) of fiscal headroom. Speaking Wednesday, Srettha said his proposal would be both a cushion against the Iran war's spillovers and a long-term growth play, so long as the money goes toward infrastructure like airports, highways, and flood-mitigation works instead of populist handouts. He thinks that rating agencies and the public would be willing to accept the expanded borrowing if the spending was pointed toward productive assets.

Gold Mine's Toxic Bill Finally Lands

In a class action that’s been grinding through courts since 2016, a Bangkok court found Akara Resources liable for contamination from the Chatree Gold Mine, ordering the Australian subsidiary to pay 50,000 to 200,000 baht to each villager, plus separate costs for medical expenses and emotional distress. More than 300 residents in Phichit province said that toxic runoff poisoned their water and soil with arsenic, cyanide and manganese. The judge said the company couldn't prove the contamination came from elsewhere. The verdict is the first successful environmental class action since a 2015 legal reform allowed such suits. The mine itself has been shuttered since former PM Prayuth Chan-ocha pulled its license with post-coup powers, a move that triggered a separate investor lawsuit which Kingsgate settled last year.

Population Is Shrinking. Hospitals Aren't.

The population dropped to 65.8 million last year, a reduction of about 142,000 from 2024, with roughly a quarter of the population now over 60 years of age. Of those, more than a third are still working, often because they have no savings. The hospital sector is looking at the same census data and seeing dollar signs. Sector earnings are expected to grow 4.6% this year as Thailand slides further toward super-aged status, with more than a fifth of the population expected to be “elderly” by 2030. Private chains like Bumrungrad and Bangkok Dusit are growing, but the Hormuz blockade is cutting into Bumrungrad's Middle Eastern patient base, which accounts for more than a quarter of its revenue. The domestic tailwind from aging demographics is, for now, keeping analysts on the overweight side.

Read more: Bangkok Post (elderly employment), Bangkok Post (sector earnings forecast)

Two Big Bets on Staying Put

Central Pattana, the operator behind Central World, says it will put 110 billion baht into growing its shopping mall empire over the next five years as it plans to go from 27 mixed-use projects to 33 by 2030. The new plazas, office towers and integrated developments will be concentrated in Bangkok, Phuket and Chiang Mai in a bet that consumers and tourists will keep showing up. Seagate reminded investors this week that Thailand remains its global manufacturing anchor, with more than half its worldwide workforce and 100 billion baht worth of capital equipment already in place. The hard drive maker's reaffirmation comes as other manufacturers are side-eyeing Vietnam and India. the twin commitments an unusual vote of confidence in the kingdom's industrial and retail fundamentals.

Read more: Bangkok Post (Central commitment), Bloomberg (paywall)

The Cloud Needs a Generator

The Board of Investment approved 36 data center projects worth $23 billion in 2025, then greenlit at least seven more valued at $3.1 billion in January this year. The problem is that maybe the nation’s power supply won’t be able to keep up. Malaysia just hit the brakes on new approvals after realizing server farms are going to eat up 39% to 60% of Peninsular Malaysia's peak power demand by 2030. Singapore already put a moratorium on a few years ago, in decision that pushed the expansion wave to Johor and Batam. Vietnam's grid already buckles during peak months. Coal capacity across Southeast Asia was at 121 GW in 2025, climate commitments be damned, the cloud needs juice.

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