Thailand 20250314
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Here is your Mekong Memo Thailand for this week.
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Headlines:
More Handouts to Boost Economic Growth
Trump Trade War Clouds Threaten Economy
Electricity Rate Increase Under Consideration
Modern Slavery Due Diligence Coming
PCB Manufacturing Brings Taiwanese Cash
Health Insurance Reforms Target Medical Inflation
Ranong Port Expands to Capitalize on Trade Shifts
Fruit Exports Generate $6.51 Billion
Mobile Spectrum Auction Imminent
Chinese Investment Changing Higher Education
Tax Incentives to Revive Laggard Bourse
Steel Industry Crisis as Chinese Imports Dominate
Casino Legalization Faces Opposition, Delays
Aviation Safety Inspection, Pilot Labor Lawsuit
EV Industry Investment and Development
Property Market Grinds on Slow Sales
Digital Anti-Scam Platform Launches
USDT, USDC Added to Approved List
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More Handouts to Boost Economic Growth
The government wants to beat a 3% growth rate this year (contrast this figure with the reports in yesterday’s Mekong Memo from Vietnam), and plans to support this objective with its 450 billion baht ($13.3 billion) digital wallet handout. The expectation is that 10,000 baht ($300) will be distributed to 45 million eligible citizens in Q2, with another phase extending to 2.7 million people aged 16-20. A new 27 billion baht stimulus package is planned to provide the same amount to young people, which would be the third phase of cash handouts following previous distributions totaling 175 billion baht.
Read more: Reuters (Growth target), Gulf News (Youth stimulus)
Trump Trade War Clouds Threaten Economy
Potential Trump trade policies are still rocking the boat in Thailand and experts are saying there is a distinct possibility of hefty tariffs on Thai exports to the United States, Thailand's largest export market at 18.3% of total exports (valued at $54.96 billion). The main question is if the Kingdom will take the aggressive approach of anintense trade conflict, or try to find negotiated settlements. recommendations include supporting more domestic consumption, better foreign currency management, and using ASEAN trade agreements to focus more on regional trade. The automotive sector appears most vulnerable, with Thailand's one-ton pickup exports particularly at risk from auto import tariff. The Joint Standing Committee on Commerce, Industry and Banking has called on Prime Minister Paetongtarn to be proactive in trade negotiations.
Read more: Nation Thailand (Economic scenarios), Nation Thailand (Industry impact), Bangkok Post (Automotive risks), Bangkok Post (Negotiation push)
Electricity Rate Increase Under Consideration
The Energy Regulatory Commission (ERC) is taking stock of public opinion on three electricity rate options for May-August: 4.15, 4.95, and 5.16 baht per kilowatt-hour. Higher rates would allow for reimbursement of 71.7 billion baht in losses to EGAT and 15.1 billion baht to PTT and gas shippers. Gas prices are expected to rise from about 301 baht per million BTU rise to 313, which is significant as gas represents 60% of the fuel that Thailand uses in power generation. The public can provide feedback through March 24 via the ERC website.
Read more: Bangkok Post, ERC (Feedback)
Modern Slavery Due Diligence Coming
Thailand is developing a mandatory human rights and environmental due diligence law to improve corporate accountability in supply chains. The legislation, expected to be drafted by March 2025, will require businesses to identify, prevent, and manage human rights and environmental risks. The law is expected to include civil penalties for non-compliance, while offering tax benefits and government contract access to compliant businesses. The regulatory framework is welcome as there are estimates of more than 400,000 people being held in modern slavery on any given day in Thailand. The legislations will also support the country's pursuit of OECD membership.
Read more: Walk Free
PCB Manufacturing Brings Taiwanese Cash
The domestic PCB industry is drawing attention from Taiwanese manufacturers. Sixty Taiwan Printed Circuit Association members recently looked into Thai investment opportunities, with the sector seeing 130 manufacturing and assembly projects valued at 202 billion baht. Thailand is currently Southeast Asia's largest PCB manufacturer and ranks in the global top five. The country's "30@30" EV production hub policy and ongoing geopolitical tensions have been encouraging for manufacturers from China, Taiwan, Hong Kong, and Japan to consider relocating production facilities to Thailand.
Read more: Bangkok Post
Health Insurance Reforms Target Medical Inflation
Thailand's Life Assurance Association is putting a new co-payment health insurance system in place from March 20, 2025. The new formula requires policyholders to pay 30-50% of medical expenses for common diseases when making multiple claims. The change is in response to Thailand's 8-15% medical inflation rate and is being sold as a measure to ensure insurance sustainability. The co-payment system is expected to impact roughly 5% of health insurance policyholders but excludes major surgeries and critical illnesses. Proponents of the change say the measure will reduce unnecessary hospital admissions and potentially (ha!) lower insurance premiums while improving private health insurance accessibility.
Read more: Bangkok Post (Co-payment system), Asia Insurance Review (Industry impact)
Ranong Port Expands to Capitalize on Trade Shifts
The Transport Ministry is putting a new shine on Ranong Port in the wake of(no pun intended) of big growth in maritime trade activity, largely thanks to regional instability in Myanmar. The port recorded increases in fiscal year 2024, with 281 ships docking (69% increase), 2,796 containers handled (111% increase), and 324,933 tonnes of cargo processed (251% increase). The Port Authority of Thailand is overseeing expansion efforts, including container yard expansion and facility upgrades. The port has become increasingly important for handling commodities like animal feed maize and cement, particularly as trade routes shift while Myanmar's unrest grinds on.
Read more: Bangkok Post
Fruit Exports Generate $6.51 Billion
Fruits worth $6.51 billion were sent out of the country in 2024, accounting for more than a fifth of agricultural exports, with fresh fruit sales topping $5 billion. Durian led exports with 859,183 tonnes valued at $3.76 billion, with China being the primary market (97.4% share). Other top exported fruits included longan, mangosteen, young coconut, and mango. The Trade Policy and Strategy Office is calling for export diversification beyond China to markets like the US, Europe, and the UK while making sure producers are able to comply with stricter regulations.
Read more: Bangkok Post
Mobile Spectrum Auction Imminent
The National Broadcasting and Telecommunications Commission (NBTC) is getting ready to run a new mobile spectrum auction in May 2025. The auction covers six spectrum bands with a combined reserve price of 121 billion baht. True Corp (54% domestic market share), and AIS (most of the rest), controlling the biggest number of Thailand's 100 million mobile accounts, are expected to be the primary bidders. It is important that this auction gets run successfully as existing spectrum partnerships expire in August.
Read more: Bangkok Post (Auction), Bangkok Post (True Corp Appointment)
Chinese Investment Changing Higher Education
Chinese investors are snapping up stakes in Thai private universities even as local enrollment drops due to record-low domestic birth rates. Big schoolS like Krirk University and Shinawatra University now have 71% and 79% Chinese student populations respectively. The Ministry of Higher Education says there are 21,828 Chinese students in the top 20 universities, a 24% increase since 2020. The ministry is putting stricter oversight measures in place while trying to capitalize on Thailand as a regional education hub. The demographic shift comes as Thailand records a meager 461,421 2024 births, the lowest rate in 70 years.
Read more: Nation Thailand
Tax Incentives to Revive Laggard Bourse
Tax incentives to revitalize the struggling local bourse are being introduced, offering allowances up to 300,000 baht for new investments in ESG X equity funds. The incentives includes additional tax breaks for investors transferring from expiring long-term equity funds to new ESG X funds, with benefits up to 500,000 baht for 5-year locked investments. The announcement comes as the SET Index has fallen more than 15% in 2025, with foreign investors pulling 25.7 billion baht from local stocks. The government says it will launch ESG X funds by June, identifying companies with strong environmental, social, and governance ratings.
Read more: Bangkok Post (Incentive details), Market Screener (Market context), Nation Thailand (Fund launch)
Steel Industry Crisis as Chinese Imports Dominate
The Thai steel industry has seen 71 factories closing this year, apparently due to an influx of cheap Chinese steel. China exported 110 million tonnes of steel last year, most of it to ASEAN markets. In addition, Chinese manufacturers are reportedly using banned (due to environmental considerations) induction furnaces that allow them to undercut Thai producers. Chinese prefabricated steel structure exports rose by 50% to 600,000 tonnes. Thai factories using electric arc furnaces are unable to compete due to their higher production costs, leading to layoffs by the big players. The industry wants government intervention.
Read more: Nation Thailand
Casino Legalization Faces Opposition, Delays
The final review of the Thailand Entertainment Complex Act, which would legalize casino gambling within entertainment complexes, has been postponed following concerns from stakeholders. The controversial bill includes a requirement that Thai citizens must have THB 50 million (Yes: USD 1.5 million!) in bank accounts to participate in legalized casino gambling. Opposition groups have continued to talk up concerns about social ramifications and the spectre of gambling addiction. Chinese President Xi Jinping has also expressed reservations about the proposal. Economic experts say the project risks severe social costs and many are calling for alternative development paths focused on agricultural modernization and technology innovation.
Read more: Yogonet (Decision delay), Bangkok Post (Economic concerns)
Aviation Safety Inspection, Pilot Labor Lawsuit
The Civil Aviation Authority is preparing for a critical FAA inspection that will allow it to regain its Category 1 safety rating, lost in 2015 due to regulatory deficiencies. Under Air Chief Marshall Manat Chavanaprayoon's leadership, CAAT has working hard on ensuring agency independence from political interference and improved safety oversight. The Thai Pilots Association is starting legal action against the Labour Ministry, saying that the authorization of foreign pilots on domestic flights through wet lease agreements is wrong. The association argues the authorization violates both the 2017 Foreigners Working Management Emergency Decree and 1954 Air Navigation Act.
Read more: Nation Thailand (Safety rating), Bangkok Post (Foreign pilots)
EV Industry Investment and Development
Sunwoda Electronics will invest $1 billion to set up battery cell manufacturing facilities in the Eastern Economic Corridor. The first factory in Chonburi Province will produce lithium-ion battery cells for EV manufacturers, creating more than thousand jobs. The Finance Ministry will present new tax measures for plug-in hybrid electric vehicles to the cabinet by April, with implementation expected in January 2026. The measures introduce separate tax structures for PHEVs and EVs, with rates tied to vehicle range per charge. EV importers are being called on to produce 100,000 EVs domestically next year as Thailand supports its automotive transition.
Read more: CNEVPost (Battery investment), Bangkok Post (Tax structure), Bangkok Post (Incentives)
Property Market Grinds on Slow Sales
Property developers are calling for immediate government intervention as the market grinds through a market slowdown. They want a reinstatement of property incentives, reduced transfer and mortgage fees, relaxed loan-to-value limits, and lower interest rates. The housing market's deterioration is being seen in a 77% mortgage rejection rate for lower-income buyers last year, with property absorption rates growing from almost 3 to more than 4 years. In response to the slowdown, developers like Ananda Development have moved their focus to foreign buyers, increasing their share from 11% to 40% in 2024.
Read more: Bangkok Post
Digital Anti-Scam Platform Launches
The Digital Economy and Society Ministry has launched "DE fence," an anti-scam platform tied in with telecom operators, Royal Thai Police, and the Anti-Money Laundering Office. The 40-million-baht system features a classification system categorizing numbers into black (criminal), grey (suspicious), and white (verified government) lists. The “DE fence” is in response to a sharp rise in cybercrime, including more than 300,000 online reports between October 2023 and September 2024, with estimated damages of 37 billion baht. The platform will be available for free download after the trial period and may be pre-installed on mobile phones in the future.
Read more: Bangkok Post
USDT, USDC Added to Approved List
The Securities and Exchange Commission (SEC) has added Tether’s USDT and Circle’s USDC to its list of approved cryptocurrencies for trading on digital asset exchanges. Previously, only Bitcoin, Ethereum, XRP, Stellar, and a handful of Bank of Thailand tokens were allowed. The decision comes after a public consultation in February, and brings Thailand into alignment with global trends recognizing stablecoins' role in digital payments. The new rules will take effect on March 16, and are expected to pave the way for broader financial integration of stablecoins in the Thai market.
Read more: CoinDesk
That’s it for this week, thanks for reading!
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