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Here is your Mekong Memo Thailand for this week.
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Headlines:
Economy Powers Through on Stimulus Push
Tourism Gets Tax Breaks and Spending Targets
BOT Promises Household Debt Relief
Banking Profit Squeeze After Rate Cuts
Government Borrowing Set at 1.2 Trillion Baht
Exporters Upbeat Despite U.S. Tariffs
Industry Moves Toward High-Value Opportunities
Energy Sector Developing on Multiple Fronts
Japan Backs Green Dreams With Tech Transfer
Political Tensions Rise Over Reform and Reshuffles
Regulatory Crackdowns Hitting Hard
Cybersecurity Threats, 6GHz Infrastructure
Healthcare and Tourism Controversies Surface
Deep South Peace and OECD Negotiations
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Economy Powers Through on Stimulus Push
The government approved a 1.6 trillion baht ($49 billion) investment budget for its state-owned enterprises. This approval comes on top of a 44 billion baht consumer subsidy scheme that’s being called “Khon La Khrueng Plus,” which will run from October 29 to December 31, and provide 2,000-2,400 baht per person to 33 million people. The restaurant sector is hoping that sales will rise up to 30% during the program period, though concerns about tax audits and retroactive bills are making some sellers hesitant to get involved. The government is also moving forward with six billion baht in seminar spending by public agencies and offering double tax deductions for hotel renovations in secondary provinces.
Read more: Trading View (State Enterprise Budget), Bangkok Post (Restaurant Impact), Bangkok Post (Public Reaction)
Tourism Gets Tax Breaks and Spending Targets
The government is also introducing new tourism support measures, including a 20,000 baht tax rebate for travel expenses to major and secondary provinces that will run from October 29 to December 15. Public sector agencies are being told that they need to speed up disbursement of a six-billion-baht seminar spending budget, with 60% of that to be spent by the end of January. Hotels in secondary provinces will be able to claim double tax deductions for renovations until March 2026. Domestic tourism has shrunk 8% over the last eight months. The Federation of Thai Industries wants more support for second-tier provinces, arguing that local communities and SMEs would be the biggest beneficiaries from increased spending in these areas.
Read more: Bangkok Post (New Measures), Bangkok Post (Second-Tier Focus), Travel and Tour World (Strategic Package)
BOT Promises Household Debt Relief
Vitai Ratanakorn, the new governor of the Bank of Thailand, is working to address the crisis of outsized household debt. The Bank plans to put forward debt resolution strategies through Asset Management Companies that would target borrowers with non-performing loans and debts up to 100,000 baht, possibly helping more than two million borrowers. The program will involve commercial banks, specialized financial institutions, and standalone non-banks, with a rollout starting with debt from banks and SFIs in early 2026. The Thai Bankers’ Association is also working on an individual credit scoring system to improve responsible lending and increase data sharing between financial institutions. The Bank most recently kept its policy rate steady at 1.50% despite a market expectation for another cut, as the economy continues to sputter.
Read more: Bangkok Post (Debt Relief Plans), Bangkok Post (Rate Decision)
Banking Profit Squeeze After Rate Cuts
KGI Securities expects the combined net interest income of seven SET-listed banks will fall 3% quarter-on-quarter and 10% year-on-year for Q3 2025, mostly due to the Bank of Thailand’s four policy rate cuts totaling one percentage point since October 2024. The most recent cuts of 25 basis points each occurred in February, April, and August 2025, leaving the current rate at 1.5%. Combined sector earnings are expected to drop 9% quarter-on-quarter and 6% year-on-year, with net interest margin declining 10 basis points quarterly and 40 basis points annually. Fitch Ratings Thailand thinks the impaired loan ratio will rise from 3.4% in 2024 to 3.7% in 2025. The agency expects GDP growth at 2.2% in 2025 and 1.9% in 2026, down from 2.5% in 2024.
Read more: Bangkok Post
Government Borrowing Set at 1.2 Trillion Baht
The government plans to borrow 1.2 trillion baht for fiscal 2026, a little down from 1.22 trillion in fiscal 2025. The borrowing breaks down to 860 billion baht for budget deficit compensation, 80 billion baht carried over from fiscal 2025, 11.4 billion baht for economic development projects, 51.6 billion baht for relending to state transport authorities, 113 billion baht for liquidity management, and ~90 billion baht in new domestic borrowing by 16 state-owned enterprises. The government also plans to manage existing debts of 1.88 trillion baht and repay 503 billion baht in 2026. As of August, public debt stood at 12.16 trillion baht or 64.6% of GDP, still below the government’s 70% ceiling.
Read more: Bangkok Post
Exporters Upbeat Despite U.S. Tariffs
The Thai National Shippers’ Council says it expects to end the year with 5% export growth despite a likely Q4 slowdown. Chairman Dhanakorn Kasetrsuwan says strong growth from the first two quarters will be enough to offset slower performance in the fourth quarter. The TNSC is telling the government that it needs to stabilize the baht at 33-34 per dollar, help reduce operating costs, and bring more private sector representatives into the legislative discussions. Rice exports are on track to hit the 7.5 million tonne target, with almost 6 million tonnes shipped already.
Read more: Bangkok Post (Growth Outlook), Bangkok Post (U.S. Tariffs), Bangkok Post (Rice Exports)
Industry Moves Toward High-Value Opportunities
Knight Frank says that Thailand’s industrial market is making a turn towards capital-intensive operations. The U.S. tariff shock in early 2025 hamstrung investment sentiment and disrupted decision-making timelines for manufacturers. Industrial land transfers fell 42% year-on-year, but foreign direct investment approvals were up 86% in Q1, with especially strong interest in digital technology, electronics, and advanced automotive. Economic fundamentals, including low unemployment and a declining working-age population, are forcing a change in focus from labor-intensive manufacturing to higher-value sectors. In the Ready-Built Factory market, no new supply was added in H1 2025, though net absorption reached 113,193 square meters. The overall occupancy rate rose to 96.2%, with the Eastern Economic Corridor at 98.73%. Developers are only bold enough to build new facilities after they’ve already signed the tenants.
Read more: Real Estate Asia (Market Shift), Real Estate Asia (Factory Demand)
Energy Sector Developing on Multiple Fronts
Thailand’s first standard for sustainable aviation fuel is expected to be announced soon. SAF can result in up to 80% less greenhouse gas emissions compared to conventional aviation fuel. Bangchak Corporation produces neat SAF, and PTT Global Chemical is making a SAF-jet oil mixture, both using used cooking oil as an input. The Electricity Generating Authority of Thailand was able to sell its first bond valued at two billion baht with a 1.4% interest rate earlier this month, drawing 6.57 billion baht in subscriptions. EGAT is the first state-owned enterprise that’s been able to issue a sustainability-linked bond, as it wants to reduce greenhouse gas emissions per unit of electricity by 30% by 2030. Canada’s Valeura Energy is doing well (forgive the pun) and has raised production to 24,800 barrels per day from 23,000 through a ten-well drilling campaign at Nong Yao field, with the rig moving to Jasmine field for nine more wells.
Read more: Bangkok Post (Aviation Fuel), Bangkok Post (Sustainability Bond), World Oil (Offshore Production)
Japan Backs Green Dreams With Tech Transfer
Japanese trade experts assert that Japan’s advanced energy technologies are necessary for Thailand’s carbon neutrality goals by 2050 and net-zero emissions by 2065. On October 12, the Japan External Trade Organisation Bangkok, and Thailand’s Ministry of Energy co-hosted the “Thailand–Japan Green Energy Business Forum” to figure out how to hit those goals together. Ichiro Abe, president of JETRO Bangkok, said that Japan has decades of experience in energy efficiency and stands ready to share knowhow with Thai manufacturers. There are currently 5,856 Japanese companies operating in Thailand, and projects include hydrogen energy, electric vehicles, and an IoT energy consumption pilot program.
Read more: Bangkok Post
Political Tensions Rise Over Reform and Reshuffles
Prime Minister Anutin Charnvirakul engineered a controversial Interior Ministry reshuffle involving more than 45 senior officials ahead of the promised 2026 elections. Critics, including opposition MPs from Chiang Mai, Chiang Rai, and Phuket, say the changes are because of political patronage, not merit, and are going to cause problems. On the constitutional reform front, Deputy PM Borwornsak Uwanno proposed March 29, 2026, for both the general election and a constitutional referendum to save the six billion baht cost that would result from holding them separately. The parliament is working on approval of bills to set up a Constitution Drafting Assembly to revisit the 2017 military-drafted constitution. The Bhumjaithai-initiated bill passed with 629 votes; a Pheu Thai Party proposal was rejected. Senators remain divided, with some asking whether amendments will be to the benefit of the people or just serve political interests.
Read more: Bangkok Post (Reshuffle Criticism), Bangkok Post (Election Date), Bangkok Post (Senate Doubts)
Regulatory Crackdowns Hitting Hard
The Department of Business Development is making changes to how it tackles the issue of illegal nominee businesses, now planning to target large firms to begin with. After allegations of foreign nominee land holding (shock!) and operations on Koh Samui and Koh Phangan, the DBD plans to reduce the burden of looking into 46,918 businesses by starting with a few thousand high-risk cases. Business closures are on the rise, but new business registrations are also increasing. The Revenue Department says that all income earners, including influencers and online sellers, are going to need to file and pay income tax. The Office of Insurance Commission is addressing unauthorized sales of foreign and life insurance by Thais without proper licenses. The government is also saying that all migrant workers must buy health insurance, with nationwide implementation expected by January 2026 after a pilot in four border provinces.
Read more: Bangkok Post (Nominee Crackdown), Travel and Tour World (Islands Impact), Bangkok Post (Tax Enforcement), Asia Insurance Review (Insurance Sales), Asia Insurance Review (Migrant Health)
Cybersecurity Threats, 6GHz Infrastructure
Kaspersky says Thailand has the highest rate of web threat incidents in Southeast Asia, with 2.52 million counted in the first half of 2025, followed by Malaysia (1.70 million) and Indonesia (1.63 million). Thai organizations faced an average of 3,201 weekly cyber-attacks in early 2025, far in excess of the global average of 1,946. Check Point said that phishing scams were the top attack vector, with FakeUpdates malware affecting about 1 in 7 organizations. On the positive side, the National Broadcasting and Telecommunications Commission started talks with the U.S. Embassy and Wi-Fi Alliance to discuss moving forward with the use of 6GHz spectrum. Tests at Ramathibodi Hospital showed a twofold increase in data throughput and a 400% reduction in latency using full-band 6GHz WiFi. An economic study predicted the 6GHz spectrum’s use could help grow the economy by more than 1.8 trillion baht by 2030.
Read more: Bangkok Post (Cyber Threats), The Thaiger (WiFi Expansion)
Healthcare and Tourism Controversies Surface
The Ministry of Commerce is launching the “Healthy Body, Comfortable Wallet” project, allowing patients at more than 300 private hospitals to buy prescribed medicines from external pharmacies, a move that should save the public more than 32.4 billion baht annually. The Department of Health Service Support will enforce compliance, issuing fines of up to 10,000 baht for failing to display prices and up to a year in prison for overcharging. A coalition of medical professionals, academics, and civil society groups is asking the Health Ministry to revoke its 2022 decision to decriminalize cannabis, warning that the shift from strict medical use to quasi-recreational use has led to increased hospitalizations and addiction. On the tourism front, the Chinese Embassy posted a warning regarding “cheap tour” scams after videos showed a Chinese guide without a valid Thai license allegedly coercing tourists to buy products under the threat of being left behind. Officials on Koh Pha Ngan are also trying to manage rising tensions after reports that Israeli nationals are buying up land through nominees and running businesses that cater to Israeli tourists.
Read more: Pattaya Mail (Drug Costs), Vietnam News (Cannabis Concerns), VnExpress (Chinese Tourists), The Thaiger(Israeli Tensions)
Deep South Peace and OECD Negotiations
Prime Minister Anutin Charnvirakul appointed Gen Somsak Rungsita to lead the southern peace dialogue panel during his first visit to the region as PM. Gen Somsak said he’s ready for talks with all insurgent groups, including the Barisan Revolusi Nasional. A formal order to set up a new negotiating body is expected soon. On the international front, the cabinet appointed Deputy PM and Finance Minister Ekniti Nitithanprapas to lead trade negotiations with the U.S. and Thai-EU Free Trade Agreement discussions. Thailand is also negotiating OECD membership. The OECD requires non-discrimination in SOE bidding and would require amendments to laws restricting the services of state-owned financial institutions to Thai nationals. Thailand has asked for five years for SOEs to adjust their practices.
Read more: Bangkok Post (PM Visit), Bangkok Post (Peace Dialogue), Bangkok Post (Trade Talks), Bangkok Post (OECD Membership)
That’s it for this week, thanks for reading!
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Really interesting stuff about Bangchak's sustainble aviation fuel initiative! It's great to see Thai companies actualy leading the way in the SAF space. Using used cooking oil as an input is pretty clever and could realy help with the emissions targets. Do you think the SAF standard will help accelerate adoption across the region?