Faced with sluggish growth and record household debt, Thailand is now relying on public spending.
Finance Minister Ekniti Nitithanprapas has stressed the urgency of accelerating public spending, calling it the only engine capable of pulling the Thai economy out of its current slump.
A country “on the brink of a precipice” according to the Minister of Finance
Finance Minister Ekniti Nitithanprapas outside the Thai Parliament on Tuesday, September 30, 2025. Photo: Bangkok Post
Speaking on Tuesday, September 30, 2025, during the second day of the presentation of the government's general policy statement to Parliament, Mr. Ekniti, who also holds the post of Deputy Prime Minister, warned:
"The Thai economy this year resembles a vehicle hurtling toward a precipice, propelled by four main engines, most of which are now failing or broken down."
Economic crisis in Thailand: exports, consumption, investments stall
Cranes and shipping containers at Bangkok's port. Photo: Bangkok Post.
Exports, which had previously been supported by advance shipments before the US tariff measures took effect under the Trump administration, grew at a healthy rate of around 3% in the first half.
However, following the imposition of these tariffs, this dynamic has slowed considerably.
See: Trump imposes 19% tariffs on Thailand and Cambodia
According to data from the Bank of Thailand, private consumption experienced negative growth in July for the first time in more than a year.
The decline is attributed to falling consumer confidence , ongoing household debt problems and stagnant incomes.
As a result, this economic engine is weakening and is also on the verge of stalling.
As for private sector investment, the capacity utilization rate is currently below 60%, a figure that shows that this third engine is also about to stop, he said.
“Although smaller in scale, public spending is now the only engine still operational and is therefore essential to economic recovery,” said Mr. Ekniti.
Gloomy growth forecasts for 2025
Passersby on a shopping street in Thailand.
He added that projections from three state economic agencies suggest Thailand's GDP will grow by 1.7 percent this year.
However, the outlook for the fourth quarter is bleak, with growth forecast at just 0.3%.
“It is clear that the economic engine is already stuck.
The question now is:
Should we stimulate the economy so aggressively that it risks compromising fiscal discipline?
Should we spend all available resources?
These are questions that I constantly evaluate carefully.
But for now, it is the only engine that works and that allows us to get the economy out of the rut.
If we don't use this engine, if we choose to do nothing, we won't just stay stuck.
We will plunge into the precipice.
“The damage will be immense and much more difficult to repair,” Mr. Ekniti said.
He added that the government's economic challenges encompassed both immediate and long-standing issues.
These include economic slowdown, declining purchasing power, diminishing liquidity, high household debt and declining productivity.
He said he held frequent discussions with his fellow economy ministers to formulate and coordinate economic policies.
Economic recovery: a plan for rapid and significant gains
Economy in Thailand. Illustration: The Nation Thailand
They agreed on an approach described as "a short-term stimulus with long-term benefits and broad distribution."
Short-term stimulus refers to the limited four-month window the government has to implement an effective economic recovery.
See: Thailand Crisis: Can Anutin Revive the Economy in Four Months?
The long-term benefits mean that efforts must go beyond simply distributing money and that the focus must also be on strengthening the sustainable potential of the economy.
Finally, "broad distribution" highlights the need to implement economic policies that affect all regions and all citizens, paying particular attention to supporting SMEs.
Mr. Ekniti said that in response to the challenges mentioned, the government's policy focuses on a "Quick Big Win" approach.
"Rapid" means acting quickly, immediately, and within a short time frame, while "significant" refers to the size of the stimulus, large enough to pull the struggling economy out of the doldrums.
“Winning” means ensuring that benefits accrue to the population, small businesses and micro-enterprises, and are widely distributed across all regions.
Five pillars of economic policy and support for SMEs
Tourists in Bangkok. Photo: National News Bureau of Thailand
Mr. Ekniti said the government's economic policy will be structured around five key pillars supported by one fundamental element.
This includes boosting the economy and tourism through the "Khon La Khrueng Plus" (co-payment plus) program, which aims to ease the cost of living for citizens.
This program targets small traders, including street vendors, market stalls and taxi drivers.
It is important to note that no additional loans will be taken out and no new funds will be introduced.
The program will use the existing fiscal framework approved by the government, combining 25 billion baht from the economic stimulus budget and 19 billion baht from the central reserve fund, all without compromising fiscal discipline.
Energy initiatives to ease the cost of living
Solar panels in Thailand.
Energy Minister Auttapol Rerkpiboon said the government was committed to advancing key energy initiatives.
One of the priorities is the popular solar energy program, which aims to reduce energy costs.
This initiative includes a 1,500 megawatt community solar farm project, covering more than 15,000 households, and a solar-powered water pumping program for agriculture, with a target of 1,200 projects covering 700,000 rai.
- The Finance Minister compares the economy to a vehicle heading towards a precipice.
- Exports, consumption and private investment are stalling.
- Public spending is presented as the only engine still active.
- The “Quick Big Win” recovery plan aims to support SMEs, households and tourism.
- Solar initiatives should reduce energy costs and support agriculture.
See also:
Thailand's new plan for tourism and economic recovery
Thailand: Alert: Strong baht threatens tourism and exports
Foreign investment in Thailand to jump 125% by 2025
Thailand's economy experiences prolonged K-shaped growth
Towards a major financial crisis in Thailand?
Source: Bangkok Post
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3 comments
A few weeks ago, we were talking about mini nuclear power plants.
Is it over already?
The implementation of the various energy projects will not be implemented in 4 months.
These are good intentions that will not come to fruition, unfortunately for the Thai people.
Another load of nonsense!
What should we take away from this rather detailed article?
First, the fact that, to partly justify the poor health of exports, the Thai Minister of Finance blames the 19% tax imposed by the Trump Administration on all Thai products entering the United States...
Initially, the tax was 30%, but Trump gave Thailand a "gift" by lowering the tax to 19%.
Yay, thanks, Uncle Donald... that's forgetting the fact that during these "negotiations", Trump demanded in return, an abandonment of taxes on American products entering Thailand, taxes which varied between 7 and 40% depending on the product...
Which amounts to saying that Trump largely recovers the difference of 11% of "negotiated" taxes on Thai products by a "free tax" on more than a hundred major American products which enter Thailand with 0% taxes!
Conclusion: a loss of revenue for the state coffers.
The country understands today (better late than never!) that Trump never gives gifts!!!
Second point: the significant drop in domestic consumption, which experienced negative growth in 2025, is due to chronic household debt and the decline in the purchasing power of Thais, whose income from work does not keep pace with the rise in the cost of living, in the absence of a legal process for automatic indexation of salaries, therefore a reduction in expenditure in the domestic economy and, there too, a reduction in tax revenue via VAT on consumer products.
And thirdly, the eternal methodological dilemma of how to bring back foreign investors en masse to relaunch an economy that is also undergoing restructuring in terms of technology and cutting-edge innovative industries, particularly in the field of AI...
So, there you have it... apparently the Minister of Finance and his colleagues in the temporary government (still 3 months before "resigning") are counting on "Quick Big Win" shock measures, a tactic that goes against the wait-and-see attitude generally applied by the country's political authorities when it comes to shaking the plum tree to harvest the fruits that risk rotting on the tree!
A detail that strikes me and concerns the initiatives that the Ministry of Energy intends to take concerning the installation of "solar" power stations (I suppose that he is talking about photovoltaic installations): I note that these are community projects and that there are no tax incentives in his projects to develop the installation of photovoltaic panels among individuals who would be encouraged to install such panels on their houses, as has been done in our country for a long time, even though Thailand has a much higher rate of sunshine than the majority of our European countries....
Nor is there any mention of measures to influence the exchange rate of the baht against gold and the dollar to make it more attractive and less expensive for exports and international tourism...
In a previous comment, barely a week ago, I spoke of the need for a significant "electroshock" to re-boost the Thai economy and all of its moribund components...
Has the government decided to administer shock treatment to its patient, the miracle vaccine that will reverse the situation in 3 months???
I only wish one thing: that Anutin and Company don't break their necks by the end of the year, and for the rest: Alea jacta est!!!
Thailand is a wonderful country.
I have already been, a very enriching culture of spirit, I recommend to all tourists to discover a country where the places are marvelous and the Thais are people who are of an Abysmal sobriety and they know how to welcome you.
I wish them happiness.
To all Thai women and ???????? Thailand.
All the happiness possible.