Thailand

Uneven economic expansion

Thailand’s economy has continued to grow at a moderate pace in 2026, with expansion driven primarily by exports and investment rather than broad-based domestic demand. Merchandise exports have been particularly strong, rising by 18% year-on-year in the second quarter, supported by electronics, electrical appliances and technology-related products. Private investment has also remained robust, with the Bank of Thailand’s Private Investment Index increasing 17% year-on-year in June, reflecting continued capital spending in export-oriented industries and technology supply chains. Household consumption remains positive but has cooled from the stronger growth seen in the early post-pandemic recovery period. High household debt, slower income growth and rising living costs continue to weigh on spending, although government support measures have helped cushion the impact of higher energy costs. Imports have increased rapidly, with goods imports rising 43% year-on-year in the second quarter, driven by higher prices for fuel products and chemicals, as well as stronger demand for machinery and manufactured goods.

Growth remains uneven across sectors. Export-oriented manufacturing, particularly electronics and higher-value industrial activities, has benefited from the global AI investment cycle and rising data-centre investment. The divergence is reflected in industrial data. Despite strong export growth, manufacturing production declined 0.4% year-on-year in the first half, suggesting gains remain concentrated in a relatively narrow group of industries, including electronics, electrical equipment, paper and food products. Agriculture (6.4% of 2025 GDP but 28.1% of total employment) slowed in first half of 2026 after solid growth in 2025 on back of the El Niño effect. Production of certain major agricultural commodities like paddy rice and oil palm decreased. Tourism has also recovered more slowly than expected. Income from foreign visitors was broadly unchanged in the first half of 2026, following a 6% decline in 2025, while tourist arrivals continue to trend lower. Many SMEs and domestically-oriented businesses continue to face weak demand and intense competition. The pick-up in tourism was also slower than expected. Revenue from foreign visitors remained broadly stable in the first half of 2026, following a 6% decline in 2025, whilst tourist arrivals continued to contract. Looking ahead to the rest of 2026 and 2027, Thailand's economic recovery is likely to remain uneven, with exports and investment continuing to outperform household spending.

Consumer prices began to rise from April 2026 as higher energy and production costs fed through to the broader economy. While underlying price pressures have increased, inflation expectations remain relatively well anchored. Labour market conditions remain broadly stable, although rising factory closures have raised concerns about manufacturing employment.

Fiscal and external challenges

Thailand's fiscal position is manageable, although fiscal space has become tighter. In addition, the external position has weakened noticeably in 2026 after several years of substantial surpluses. The proposed FY2027 budget reflects a cautious move towards fiscal consolidation rather than additional stimulus. Government spending is set to increase only marginally, from THB 3.78 trillion (USD 114.8 billion) in FY2026 to THB 3.79 trillion (USD 115.1 billion), while the fiscal deficit is expected to narrow from around 4.4% of GDP to 3.9%. This suggests a greater emphasis on preserving fiscal space as public debt approaches the government's 70% ceiling. Public debt (almost exclusively domestic) reached nearly 67% of GDP in June 2026, compared with around 41% before the pandemic. Despite tighter fiscal constraints, policy priorities have continued to focus on infrastructure, competitiveness, digitalisation, energy transition and household support.

Thailand's external accounts have weakened considerably in 2026. While exports have remained strong, imports expanded even faster due to higher energy costs, capital goods imports and investment-related purchases. In the first half of 2026, exports grew by 18% year-on-year, while imports surged by 38%, resulting in a sizeable merchandise trade deficit of around USD 32 billion. At the same time, tourism, traditionally an important source of external earnings, has underperformed expectations, with persistently subdued visitor arrivals and tourism receipts. The government will continue to be ambitious about tourism in 2027, targeting a recovery in visitor arrivals through expanded air connectivity, major tourism promotion campaigns, new entertainment and tourism infrastructure, and efforts to attract higher-spending visitors. However, this outlook appears somewhat optimistic given the weaker-than-expected recovery, softer Chinese outbound travel, intensifying regional competition, and lingering concerns over household spending in key source markets. While tourism should continue to recover gradually, a return to pre-pandemic growth momentum may prove more challenging than official projections suggest.

The deterioration in external balances has contributed to downward pressure on the baht during 2026. While a weaker currency could eventually provide support to export competitiveness and tourism, it also increases imported inflation risks, particularly for energy and intermediate goods.

Coalition politics, policy uncertainty

A leaked telephone conversation between former Prime Minister Paetongtarn Shinawatra (centrist-populist Pheu Thai Party) and former Cambodian Prime Minister Hun Sen, in which Shinawatra was widely perceived as taking an overly conciliatory stance during a bilateral dispute, became the focal point of criticism from nationalist groups, conservative elites and parts of the political establishment. The controversy ultimately resulted in the Constitutional Court removing Paetongtarn from office in August 2025, less than a year after she took power. Her dismissal followed the removal of former Prime Minister Srettha Thavisin (Pheu Thai) in 2024, highlighting the continued influence of judicial institutions in Thailand's political system.

Following Paetongtarn's sacking, the Bhumjaithai Party (centrist and pragmatic) leader Anutin Charnvirakul secured parliamentary backing to become Prime Minister through an arrangement that included support from the opposition People's Party (progressive, reformist and liberal), on the understanding that Parliament would be dissolved within four months. While Anutin and Bhumjaithai emerged from the February 2026 snap election in a stronger political position, no party holds an outright parliamentary majority, leaving coalition management central to effective governance. Bhumjaithai is also widely believed to hold significant influence within the Senate following the 2024 Senate election, potentially strengthening its ability to shape legislative outcomes and influence the pace of constitutional reform. Meanwhile, the constitutional referendum held at the same time as the February 2026 election underscored majority public support for drafting a new constitution to replace the 2017 charter.

Although Anutin appears to enjoy broader acceptance among conservative institutions than either Pheu Thai or the People's Party, parliamentary support continues to depend on maintaining a coalition of parties with differing priorities. Against a backdrop of slow growth, rising household debt, elevated energy costs and geopolitical uncertainty, the government's ability to deliver policy measures and maintain coalition cohesion will remain an important factor shaping the political environment. Overall, Thailand remains politically stable in terms of public order and institutional functioning. However, coalition fragmentation, continued judicial involvement in politics, and the persistent divide between reformist and conservative political forces suggest that a relatively high level of political uncertainty is expected to prevail over the medium term.

Trade diversification and economic integration through neutrality

Thailand is actively pursuing trade liberalisation as part of its strategy to diversify export markets, attract investment and strengthen its position in regional supply chains. In addition to upgrading the ASEAN-China Free Trade Agreement (ACFTA 3.0), Thailand is accelerating negotiations on several major agreements, including FTAs with the European Union, South Korea and Canada, with the aim of signing them in 2026. At the same time, it is advancing the implementation of recently signed agreements with EFTA, Sri Lanka and Bhutan. These initiatives are intended to expand market access for Thai businesses, reduce reliance on a limited number of export destinations and support longer-term economic competitiveness.

Thailand has also sought to maintain a relatively neutral foreign policy stance, enabling it to attract investment, trade and tourism flows from a broad range of partners. This approach is reflected in its participation across multiple economic groupings and initiatives. Thailand became an official BRICS partner country on 1 January 2025, is a member of the US-led Indo-Pacific Economic Framework for Prosperity (IPEF) and has been pursuing OECD accession since becoming a candidate country in June 2024. In ASEAN, Thailand has become a strong advocate under PM Anutin for a gradual re-engagement with Myanmar’s military-led government owing to practical national interests, including border security, trade and labour, energy supply, and narcotics and trafficking issues. Relations between Thailand and Cambodia have deteriorated since 2025 following a series of border disputes and military incidents along their shared border. While large-scale conflict remains unlikely, the tensions have fuelled nationalist sentiment in both countries, disrupted cross-border trade and tourism, and increased political and security risks in border areas.

Payment

Credit transfer is the main form of payment used by large companies in Thailand. The majority of credit transfers are made electronically and the popularity of this payment method is growing as clearing systems have become more developed.

Cheques are still a popular form of cashless payment in terms of value. They are used by companies and consumers to make a wide range of payments. Post-dated cheques are a common mean of short-term credit.

Although cash remains the dominant payment method in Thailand, telegraphic transfer of money is increasing its popularity along with the cashless trend accelerated by COVID-19.

Debt Collection

Amicable phase

According to the 2015 debt collection Act BE 2558 (AD 2015), the debtor is an individual person or personal guarantor. The Act was created to regulate collection activities carried out by creditors, or by collection agencies in cases of consumer debt. Commercial debt collection houses are also expected to follow the practices set out within the Act. For example, during the amicable phase, creditors can only communicate with the debtor or other persons as authorised by debtor. Creditors or collection agencies are also limited to identifying themselves with the details of debt to the debtor.

Legal proceedings

Thailand’s Judicial Court System comprises three levels: the Supreme Court: this is the highest court authority in the country. All of its decisions are final and must be executed. It hears appeals and contests against decisions made by the Courts of Appeal, Regional Courts of Appeals and Courts of First Instance; Courts of Appeal: these are divided into Courts of Appeal and Regional Courts of Appeal. Both handle appeals against the decisions or orders made by the lower courts; Courts of First Instance: these lower courts comprise the courts in Bangkok, courts in provinces, specialised courts and juvenile and family courts.

A preliminary stage of legal action can be conducted if there is failure to reach an amicable settlement with the debtor. This phase includes communications, negotiations, meetings with debtors, letters of demand and notifying the police in cases where there is a criminal penalty.

The Civil Mediation before Litigation

Recent amendments to Thailand’s Civil Procedure Code in 2020 and already applied since November 2020 will allow parties to submit a matter for court-supervised mediation prior to the actual filing of the case. Encouraging mediation prior to filing a complaint is intended to save time and resources that would otherwise be expended on a trial. The meditation processes introduced by the new act are not subject to any court fees, exempting the postal fee in delivering the letter to the debtor.

Prior to filing a complaint, one of the parties in a dispute may petition the appropriate court to appoint a mediator to resolve the dispute. If the petition is accepted, and the opposing party consents to the mediation, the court will bring the parties together (with or without their lawyers) and appoint the mediator. If the mediation yields a successful settlement, the court will consider to: Arrange a compromise agreement and assuming it is fair, made in good faith, and in accordance with both the law and the parties. In case if any parties breached the agreement, they are still able to bring the case to ordinary lawsuit process. Or, the parties may agree and request the court to issue a judgment in accordance with the compromise agreement with mutually agreed by the parties. If the court agrees that it is necessary, it will issue the judgment accordingly. The judgment would be enforced if the debtor has failed to do so, leading to the execution process at the end.

The court’s judgment is considered final and can only be appealed if there is an allegation of fraud against any party to the case, or if the judgment is alleged to go against either the agreement or a provision of law involving public order.

If, on the other hand, the mediation is unsuccessful, any limitation period that was either barred after the submission of the petition or will be barred soon will be extended for 60 days from the end of the mediation. After that, the creditor still has a right to file the case into the lawsuit as an ordinary proceeding.

Ordinary proceedings

If the debtor fails to comply with demand notices, the creditor can file a claim with the Court, depending on the value of the debt: If the debt does not exceed THB 300,000 (Thai baht), the complaint must be lodged at the District or Provincial Court; if the debt exceeds THB 300,000, the complaint must be filed at the Civil or Provincial Court.

Court policy is to screen unnecessary cases from court trial. Most Civil Courts have mediation centres for parties to negotiate and compromise on an arrangement. Once a case has been decided amicably, a compromise agreement is prepared and the court passes judgment in accordance. Each of the parties is responsible for documenting evidence and the burden of proof associated with their case. A judgement is made once the court has considered and weighed the evidence presented by both parties.

The time frame for proceedings with the Court of First Instance can take between one to three years.

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Enforcement of a Legal Decision

If the debtor fails to comply with a domestic judgment, the creditor is entitled to apply for the execution of the judgment. This can involve the issuance of an execution decree, delivery of an execution decree to the debtor, issuance of a writ of execution and the seizure and sale of property belonging to the debtor.

Thailand has no reciprocal recognition and enforcement agreements with other countries. Enforcing foreign judgments requires new legal proceedings, where the evidence will be considered and legal defence made available to both parties.

One exception is that Thailand is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1985). International arbitration awards by member countries of the Convention can be enforced if they are already final.

Insolvency Proceedings

Thailand has legislation on bankruptcy and reorganisation proceedings (Bankruptcy Act BE 2483). (Latest amendment in 2018, B.E. 2561)

REORGANISATION PROCEEDINGS

Limited Companies, Public Limited Companies and Financial Institutions (Large Enterprises)

A petition can be filed against an insolvent corporate debtor who owes one or more creditors a known sum of THB 10 million (USD 333,000) or more. Once the court has accepted the petition for further proceedings, it appoints a planner to prepare and submit a reorganisation plan to the official receiver within three months. The court may extend this period up to a maximum of two times, for one month from the publication date of the court order appointing the planner. Secured and unsecured creditors must then apply for payment of debts within one month from the date of publication of the order for appointment of the planner. Once the official receiver is in possession of the reorganisation plan, he will convene a meeting with the creditors to consider the proposal. If it is accepted, the court needs to approve it and confirm the appointment of the plan’s administrator. The latter is then responsible for the debtor company’s reorganisation, as set out within the plan.

SMEs registered with the Office of SME Promotions or other government agencies for conducting business

Petition can be filed against: insolvent individuals who owe one or more creditors a known sum of THB 1 million or more; insolvent limited partnerships, registered partnerships, non-registered partnerships, groups of persons or other juristic entities who owe one or more creditors a known sum of THB 3 million or more; insolvent private limited companies owing one or more creditors a known sum of between THB 3 million and 10 million.

In cases such as these, the petitioner should file a petition, along with a proposed plan of not more than three years in length in execution.

BANKRUPTCY PROCEEDINGS

A creditor can file a bankruptcy petition against a debtor if the latter is insolvent and owes one or more creditors a definitive sum of over THB 1 million (if the debtor is an individual), or owes more than THB 2 million (if the debtor is a legal entity).

Once a petition for bankruptcy has been filed, the proceedings normally include hearing the witnesses, temporary receivership of the debtor’s property, the appointment of an official receiver, filing of claims for debt payments by creditors within two months from the publication date of the permanent receivership order, a bankruptcy order against the debtor (if no agreement can be reached with the creditors, issuance of a permanent receivership order, seizure of property, sale of property by public auction and pro rata distribution of the sale proceeds to creditors.

Last updated: August 2026