Thailand 20250822
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:
Growth Holds Up, Price Pressures Stay Soft
Banks Brace for Tougher Credit Cycle
Tariffs Reset Trade, Factories Rework Supply
Markets Rally on Clarity, THB Sparks Debate
Migrant Gap Forces New Hiring Channels
Legal Crosswinds for the Shinawatras
Crypto Wallets for Tourists Move Into Sandbox
Anti-Scam Push Tightens Transfers and SIM Rules
Climate Law, Carbon Deals, a New Power Plan
Hotels Push Back on Wages, Debts Creep Up
New Rules Target Big Tech Practices in E-commerce
Streaming Spend Supports Film
Chip Strategy Targets Manufacturing and R&D
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Growth Holds Up, Price Pressures Stay Soft
The economy was able to grow 2.8% in Q2, beating forecasts, but planners still see a slower second-half as exports will cool and tourism remains soft (export growth was revised up for FY25 after a strong first half; tourist arrivals were trimmed to 33 million). The NESDC is now expecting 2025 growth near 2% with inflation tame at less than 0.5%. The headline CPI fell 0.7% in July on food and energy, but core stayed steady. The central bank cut the policy rate to 1.50% in support of demand; there’s certainly room for more easing into early next year.
Read more: Reuters (Q2 beat), Bangkok Post (Inflation), Khaosod English (Forecast), Reuters (Weak demand), Investing.com (Economists), Bangkok Post (Rate cuts)
Banks Brace for Tougher Credit Cycle
Credit rating agencies say pressure is rising as growth slows and tariffs start to hit home. Loan volumes were down almost 1% y/y in Q2, the fourth straight quarter of drops, with SME lending down 6.2% and SME NPLs rising to 7.62%. System NPLs sit near 2.9% and could move higher as debt service strains are still problematic. Banks are still relatively well capitalized, but profitability and appetite for risk are on the decline, pushing more SMEs to costly alternative finance. Crowdfunding volumes fell 60% in H1. The chorus of voices asking the central bank to study QE is growing louder.
Read more: International Banker (Sector outlook), Bangkok Post (Loan contraction), AInvest (NPL risks), Bangkok Post(QE debate), Bangkok Post (Alt-finance)
Tariffs Reset Trade, Factories Rework Supply
Industrial sentiment once again fell to a three-year low in July as companies digested a 19% U.S. tariff and more strict rules of origin. Bangkok is negotiating a lower local content threshold than the 60% floated by Washington. The finance ministry set aside 26 billion baht in an attempt to try to soften the blow, and some exporters see room to compete on price.
Read more: Reuters (Sentiment), VietnamPlus (Localisation), Khaosod English (RVC gaps), Bangkok Post (Motorcycles), Bangkok Post (Canon), MarketScreener (Buffer)
Markets Rally on Clarity, THB Sparks Debate
Equities jumped in relief after getting clarity on where the U.S. tariff rates will land, with the SET rebounding to 1,280 early in August. Earnings downgrades and political risk have kept a lid on multiples, but there’s room for a choppy Q4 grind higher. On FX, traders are trying to understand baht strength which looks out of step with weak domestic demand and an uninspiring export outlook.
Read more: Bangkok Post (SET rebound), Bangkok Post (Volatility), Pattaya Mail (Baht flows)
Migrant Gap Forces New Hiring Channels
The spat over the border with Cambodia drove an exodus of ~400,000 Cambodian workers, causing manpower shortages in agriculture, construction, and manufacturing. The cabinet has approved the hiring of 10,000 Sri Lankans in the first phase, with more than 30,000 registrants and future options to recruit from Nepal, Bangladesh, Indonesia, and the Philippines. Officials say the push is needed due to an aging workforce and a tight labor supply. A ceasefire has eased tensions with Cambodia, but the workforce doesn’t appear to be coming back any time soon.
Read more: Reuters (Cabinet plan), SCMP (Exodus), The Diplomat (Registrations), Asia News Network (Regional hires)
Legal Crosswinds for the Shinawatras
The suspended prime minister testified in an ethics case tied to a leaked call with former Cambodian leader Hun Sen; a Constitutional Court ruling is due next week. The call battered ties with a coalition partner and caused complaints from senators and the public over what was seen as a lack of integrity. In a separate case, a criminal court is going to rule on ex-PM Thaksin’s lese-majeste charge from a 2015 interview. Both cases will likely redraw political alignments and test party/ coalition unity.
Read more: KPVI (Testimony), Reuters (Verdict), ABC (Political stakes), Al Arabiya (Ouster case), Intellinews(Monarchy lens)
Crypto Wallets for Tourists Move Into Sandbox
Regulators gave the go-ahead to a sandbox for TouristDigiPay, letting visitors convert crypto to baht for QR payments through licensed exchanges and e-money wallets. All users will need to comply with KYC/CDD checks. Spending caps of 50,000 baht monthly for small vendors and higher limits will be applied for verified merchants. The rollout is planned for Q4 and is expected to run for up to 18 months, with rule tweaks expected as regulators watch AML controls, usability, and learn more through the process. Backers say this will be a good way to reach crypto-native travelers and increase spending.
Read more: Tilleke & Gibbins (Sandbox rules), AInvest (Investor view), AInvest (Launch)
Anti-Scam Push Tightens Transfers and SIM Rules
The central bank has capped most online transfers at 50,000 baht daily to curb scam rings; risk-based exceptions apply to customers with clean histories. About 12 million mobile users should expect to see changes by year-end. Regulators said June saw losses of 2.8 billion baht (!) tied to fraudulent transfers, with children and elderly users hit the hardest. Telecom rules now require live facial verification for new SIMs and replacements, with in-person or app-based onboarding and tighter data controls. Officials say the measures will help freeze funds and cut mule account use.
Read more: Intellinews (Transfer cap), Khaosod English (Implementation), Bangkok Post (SIM verification)
Climate Law, Carbon Deals, a New Power Plan
Officials are drafting the country’s first climate law, wishing for carbon neutrality by 2050/ net zero by 2065, with a climate fund, reporting for thousands of firms, and an ETS for large emitters by 2031. KBank executed the first carbon credit forward referencing Verra VCS, giving buyers and developers long-term price certainty for projects. Energy planners are also updating the Power Development Plan to increase renewables to 51% of the mix by 2037.
Read more: Bangkok Post (Climate bill), Carbon Herald (Carbon forward), Bangkok Post (PDP update)
Hotels Push Back on Wages, Debts Creep Up
The Thai Hotels Association voted to sue the wage committee over the nationwide 400-baht minimum wage for hotels, arguing it violates the Labour Protection Act and ignores regional realities. Hoteliers want a regional wage map and say that if things are not made right, there will be hotel closures due to uneven earnings, soft foreign arrival numbers, and debt stress. There is no real catalyst for change on the horizon.
Read more: Bangkok Post (Court plan), Bangkok Post (Legal filing), Bangkok Post (Hotel NPLs)
New Rules Target Big Tech Practices in E-commerce
The competition regulator has introduced new draft guidelines for e-commerce platforms that spell out what is counted as “unfair conduct.” Bans will be placed on below-cost pricing, rate-parity clauses, excessive fees, self-preferencing, exclusive dealing, and misuse of seller data. The guidelines explain how the watchdog is going to evaluate justifications and will give businesses a window to adjust their errant ways before enforcement kicks in.
Read more: Tilleke & Gibbins (Draft rules), Bangkok Post (Counterfeits)
Streaming Spend Supports Film
Netflix has poured $200 million into Thai storytelling since 2021, producing more than 20 originals and doing a great amount of work training local crews. Thai titles logged 750 million viewing hours in 2024 - nine more are expected in the remainder of this year.
Read more: SCMP (Strategy), Netflix (Investment)
Chip Strategy Targets Manufacturing and R&D
The investment board is finalizing a plan to scale semiconductors and advanced electronics, with a workforce plan and incentives to attract fabs, OSAT, and PCB expansions. A new Semiconductor Board will support skills pipelines and research links - there’s apparently an FDI potential of at least 500 billion baht by 2029. The country now has about 500 approved projects in the space, currently worth more than 700 billion baht.
Read more: Bangkok Post
That’s it for this week, thanks for reading!
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