Thailand 20250905
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Here is the Mekong Memo Thailand for this week.
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Headlines:
Caretaker Clash Shapes Vote
Markets Flinch as Baht Sways
Senate Passes 2026 Budget
US Rules Spur CO Changes
Border Conflict Settles
Migrant Pullback Hits Farms
Tourist Spend Goes Crypto, Hotel Act Revisited
Japan Cuts Hybrids, China Ships EVs
PMI Rises, PCB Bets for Bangkok
Floating Solar, Bio-LNG, Investment Pledge
Digital Assets Going Mainstream
Satellite Market Gets Reg Approval, Money
Debt Stress Meets Bank Shake-Up
Airlines Shift Routes, Nok Air Suspended
Caretaker Clash Shapes Vote
Thailand is running on a caretaker setup after the court sacked Prime Minister Paetongtarn Shinawatra on Aug 29 for ethics violations. A special session set a Sept 5 vote with Anutin Charnvirakul looking like the frontrunner after getting backing from the People’s Party on the condition of dissolving the House within four months. Some MPs are contesting whether a caretaker PM has the power to dissolve parliament. Several other candidates remain in play, raising the chances of extended horse-trading.
Read more: AP News (Vote timeline), Reuters (Coalition math), France24 (Candidates), Bangkok Post (Caretaker powers), VietnamPlus (Session set)
Markets Flinch as Baht Sways
Investors pulled capital from Thai equities, the baht moved in a wider range, and the ratings outlook turned negative as political uncertainty once again became news of the day. The SET is down about 24% this year on $2.3b in outflows, and the baht has dropped 5% vs the USD, trading in a range of 31.8–32.8/$. The central bank cut the policy rate to 1.50% in Aug to try to prop up the generally flaccid economy; analysts see more easing only if things deteriorate sharply. Bankers are warning of a sub-par tax haul and rising debt, and AMRO cut growth expectations to 2.2% for 2025 and 1.9% for 2026.
Read more: Bangkok Post (Rate odds), AMRO (Growth cut), Bangkok Post (Ratings risk), Bangkok Post (Baht range), AINvest (Governance strain)
Senate Passes 2026 Budget
The Senate has approved a 3.78 trillion baht FY2026 budget with an 860 billion baht deficit that represents just over 4% of GDP, reducing fears of a spending freeze that would have surely made the economy slow even further. The House had already passed the bill. The Finance Ministry said the current political maelstrom would not derail Senate debate or execution - immediate investment outlays are set at 864 billion baht.
Read more: Bangkok Post (Senate vote), Bangkok Post (Debate proceeds), VietnamPlus (Budget details)
US Rules Spur CO Changes
Bangkok's going to launch a 50-member task force in October to handle expected growth in the volume of Certificates of Origin that will need to be processed under tougher U.S. anti-transshipment rules. Tariffs on Thai exports were cut to 19% from a threatened 36%, but goods flagged as rerouted (from China, particularly) could get hammered with duties up to 40%. Exporters say that they can see CO requests jumping from around 70,000 a year to the millions, and they want to get ahead of shipping bottlenecks.
Read more: Reuters (CO surge), Gazette (Rule scope), Bangkok Post (Tariff cut), Bangkok Post (Diversification)
Border Conflict Settles
The Thai-Cambodian border dispute has settled into a managed ceasefire with U.S. support; ASEAN coordination remains the main channel for peace dialog. Cambodia asked China to push for disputes to be sent to the GBC/JBC. Bangkok accused Phnom Penh of spreading war propaganda, using drones to harass, and planting land mines. An occasional, scheduled reopening of a Sa Kaeo checkpoint was canceled after just one day under strange circumstances. Reasons for the opening and sudden closure again have not been made clear.
Read more: Asia News Network (ASEAN channel), Nation Thailand (China role), Nation Thailand (Relocation pushback), Asian News Network (Propaganda charge), Bangkok Post (Checkpoint)
Migrant Pullback Hits Farms
More than 300,000 migrant workers have returned home to Cambodia since Aug 8. East Thailand’s sugarcane fields and other seasonal employers find themselves short-handed, and growers are scrambling to recruit from Myanmar and Sri Lanka. Reports say there are a rising number of illegal crossings back into Thailand as migrants try to return to work, with smuggling fees quoted at up to 8,000 baht. Thai authorities eased stay rules for Cambodians that remain in Thailand, but support for them remains weak. Employers say that yields and harvest schedules will suffer if the labor flow stays as it is.
Read more: Bangkok Post
Tourist Spend Goes Crypto, Hotel Act Revisited
Tourists will be able to convert crypto to Thai baht for spending in a regulatory sandbox from Q4, so long as they comply with KYC and monthly limits. Regulators want more information before they decide if and how to scale up the project after the pilot. Lawmakers are remaking hotel rules with a new Accommodation Act, bringing homestays, tents, and short-term rentals into a tiered licensing system, a “Super License” for multiple services, and platform regulation/ oversight. The hotel industry is expecting a 4.5% revenue drop this year on fewer arrivals and lower rates.
Read more: Bangkok Post (Crypto pilot), Travel Mole (Law overhaul), Travel and Tour World (Revenue drop)
Japan Cuts Hybrids, China Ships EVs
Japanese brands are cutting the prices of their hybrid vehicles and pushing new models to try and retain market share as Chinese EV makers continue to ramp up local output. Toyota launched a cheaper Yaris Ativ HEV. Mitsubishi added an HV Xforce. Mazda showed off five HV/EV models by 2027. BYD made its first delivery of Thai-made EVs to Europe to sidestep EU tariffs on China-made cars. Investment rules tie tax perks to local assembly ratios that will rise through 2027, and export numbers are allowed toward commitments - expect to see exports begin to make up a bigger share of the numbers. For the moment, it looks like Thailand is going to be able to stay in the game as a regional assembly hub.
Read more: Asia News Network (Hybrid push), Global Fleet (EU exports), ASEAN Briefing (EV 3.5)
PMI Rises, PCB Bets for Bangkok
Manufacturing PMI is increasing on rising domestic demand and an EEC pipeline. Global PCB maker Victory Giant plans to start producing near Bangkok as supply chains move from China and Taiwan. Industrial land sales on Bang Na-Trat are tracking targets. Companies face U.S. tariffs and tighter export checks, which push upgrades to logistics, quality control, and compliance to keep orders flowing and meet market access requirements.
Read more: AINvest (PMI/EEC), Nikkei Asia (PCB shift), Bangkok Post (Land sales), Bangkok Post (Skills tie-up)
Floating Solar, Bio-LNG, Investment Pledge
EGAT opened bidding for a 280 MWac floating solar project on the water of Srinagarind Dam, part of a plan to build out 2,725 MW of floating solar on reservoirs by 2037. BBGI, part of Bangchak, is planning to invest 2 billion baht to turn ethanol plant wastewater into bio-LNG for power, expecting to process 100 tonnes daily by 2027. Energy officials have rolled out a $76B clean energy investment plan at CEM16/APEC meetings in Busan.
Read more: Asian Power (Floating solar), Bangkok Post (Bio-LNG), Nation Thailand (Investment pledge)
Digital Assets Going Mainstream
Tokenized government bonds are live via G-Token with a $153m first sale offering 3.5% yields, smart-contract coupons, and low minimums. A five-year capital gains tax exemption on crypto trades on licensed platforms kicks in for 2025–2029 to bring trading and investing activity under a regulatory umbrella. Corporates are starting to lean in - DV8 appointed a CEO to run a Bitcoin treasury play after raising THB 241m via a warrant offering.
Read more: AINvest (Tokenized bonds), Fintech News SG (Tax break), CryptoSlate (Treasury pivot)
Satellite Market Gets Reg Approval, Money
Regulators have crafted rules to permit foreign satellite operators to serve Thailand. Applications are through the NBTC, and assessments will be made on technical need, security, and economic value to the nation. For funding, ECAs and banks are backstopping new projects, including a $184m loan for Thaicom 10 financed by Bpifrance and Deutsche Bank. Public agencies are looking at how to put satellite plans, data centers, and 5G buildouts together to support national broadband needs and support disaster recovery.
Read more: Tilleke & Gibbins (Rule draft), AINvest (ECA financing)
Debt Stress Meets Bank Shake-Up
BNPL (Buy Now, Bankrupt Later) use for essentials is on the rise, and the NESDC is raising the alarm on debt traps and calling for more control. Nanofinance loans jumped 52% QoQ in Q2 to 77.7 billion baht after a Shopee unit joined the credit bureau; NPLs also climbed. Banks are restructuring for lower-margin growth and tech disruption, cutting staff and, in the case of KBANK, offering early retirement starting at age 45. More workforce cuts should be expected as three virtual banks come on the scene.
Read more: Bangkok Post (BNPL risk), Bangkok Post (Nanofinance jump), VietnamPlus (Bank cuts), Bangkok Post(Early retirement), Nation Thailand (Aging trend)
Airlines Shift Routes, Nok Air Suspended
Airlines are rebalancing away from a weak China travel market into India, Japan, and the Middle East. Thai Airways is leasing aircraft to keep Asian routes as it waits for additions to the fleet, currently TG is working with Gulf airlines to support long-haul coverage. China is training Southeast Asian regulators and carriers on civil aviation operations and promoting its home-grown C919 to grow commercial aircraft sales. The industry is trying to push more capacity into secondary cities to move traffic away from the most crowded hubs. Nok Air was forced to suspend international flights on orders of the CAAT over safety concerns.
Read more: AINvest (Route mix), Bangkok Post (C919 training), Airways Mag (Nok Air Safety)
That’s it for this week, thanks for reading!
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