Economy Thailand Faces Economic Challenges as Thousands of Businesses Close

[snoop1130]

Photo courtesy of Bangkok Post

 

Thailand's economy is grappling with significant challenges as nearly 4,000 companies closed their doors in the first four months of 2025—a rise of 8.3% over the same period last year, based on data from the Department of Business Development (DBD). These closures, involving a collective registered capital of nearly 16 billion baht, have sparked alarm among lawmakers amid ongoing fiscal debates.

 

Despite the launch of 30,148 new businesses within the same timeframe, a 4.4% decrease in registrations from early 2024 signals a cautious sentiment among entrepreneurs navigating economic uncertainties. However, the DBD has not detailed which sectors experienced the most significant closures or welcomed the most start-ups.

 

During discussions over the proposed 3.78 trillion baht budget for fiscal 2026, lawmakers expressed concerns about the factors driving the wave of company shutdowns. Key issues identified include climbing household debt, reduced consumer spending power, persistent global economic volatility, and ambiguous US trade policies.

 

Supporting these concerns, the Kasikorn Research Centre (K-Research) warned of increasing factory closures surpassing figures from the last two years, attributing it to a weakened manufacturing sector and ongoing economic challenges.

 

The deliberations in the House of Representatives, spanning four days this week, will culminate in a critical vote on the budget's first reading this Saturday at 6 pm. This financial backdrop highlights the pressure on policymakers to address these economic hurdles, aiming to stabilise the economy and restore private sector confidence.

 

With debts climbing, a fragile global market, and dwindling consumer demand, the urgency for government intervention grows. The following months will be pivotal for Thailand's economic resilience, as it strives to bolster its business climate and preserve its entrepreneurial dynamism amid ongoing uncertainty.

 

  Adapted by ASEAN Now from The Thaiger 2025-05-30

 

 

[ozz1]

Yet the government can't see what's happening in the tourist and export industries all due to the high baht next they will be saying the are expecting millions of tourists and exports thriving they really haven't a clue what is going on out of their elite circles and the handout was just a vote buying exercise

[ronnie50]

So that's an average of 4 million baht capital per company. Small businesses if that's the average capital for most. It doesn't surprise me though. How often have you seen a new small shop open, install brand new equipment (like European coffee espresso makers, signage, new paint etc.) and then disappear six months later? I've seen it many times. I've often wondered if these 'business people' know what a 'business plan' actually is - or do they just think they have a good idea, ask grandpa for a loan and then wing it?

[BritManToo]

They should just invite a few more Indian tourists to make up any short falls 

[ronnie50]

49 minutes ago, ozz1 said:

the handout was just a vote buying exercise

..which they stopped, because they need the money to build a money-laundering casino complex 

[ronnie50]

What I could never understand about Thaksin when he was in power - and this government now - was the missed opportunities to turn at least part of Isan into a special economic/investment zone for factories, etc.

 

After all, that (and the North) was his party's base.

[scorecard]

1 hour ago, ozz1 said:

Yet the government can't see what's happening in the tourist and export industries all due to the high baht next they will be saying the are expecting millions of tourists and exports thriving they really haven't a clue what is going on out of their elite circles and the handout was just a vote buying exercise

 

... and after a very long time and much valueless chit chat it's been cancelled.

 

now an obvious question - does the public trust the parties involved? NO.

 

And will they ever be trusted in the future? NO. 

 

And meantime there's much discussion about the lack of capability of the PM. 

 

[dinsdale]

Prayut, nonsensical lockdowns and financial mismanagement. 

[ikke1959]

How many same kind small businesses are here?? Coffee shops?? Uncountable, mom and pop shops same, Restaurants with the same menus, you don't need to go far in Thailand... No wonder if everybody copy eachother and when they open they have many times a good business, but after a few months they start to use less quality product, raise prices, minimalize portions, less service or name it and a few months later they are gone.. I always say Thailand is a hub of destroying their own businesses by greed and mismangement.

[Dan O]

1 hour ago, ronnie50 said:

So that's an average of 4 million baht capital per company. Small businesses if that's the average capital for most. It doesn't surprise me though. How often have you seen a new small shop open, install brand new equipment (like European coffee espresso makers, signage, new paint etc.) and then disappear six months later? I've seen it many times. I've often wondered if these 'business people' know what a 'business plan' actually is - or do they just think they have a good idea, ask grandpa for a loan and then wing it?

 

1 hour ago, ronnie50 said:

So that's an average of 4 million baht capital per company. Small businesses if that's the average capital for most. It doesn't surprise me though. How often have you seen a new small shop open, install brand new equipment (like European coffee espresso makers, signage, new paint etc.) and then disappear six months later? I've seen it many times. I've often wondered if these 'business people' know what a 'business plan' actually is - or do they just think they have a good idea, ask grandpa for a loan and then wing it?

We have a cafe in a small rural town in NST and are doing ok but sales are down about 10 % this year as well as food and drink supply cost at up about 20%. I repriced our menu and got rid of most non performers restuaraunts are a high cash flow business with lower profitability of typically 5% over all costs. Every other shop owner i know said I was crazy and would lose customers so they didn't want to follow. I explained that i may lose a few customers, but i wouldn't be losing money on every order we filled.  They could not understand this concept.  We are still here while most all the other shops are gone or have turned over at least 1 time in 8 to 12 months.

 

The problem is what you outline most often. They see someone else with a business 2 shops down and immediately think they can do it too. The renovate (maybe) but buy up all the needed equip and supplies. They buy in bulk on the supplies to get a discount. They are notorious poor money managers and tie up all their cash and have nothing to support the everyday needs until they can build a customer base which often will take a year or more. The first 3 months they are popular because its new but after that without something different or special your just 1 more shop competing with noodle shops and carts up and down every soi

[connda]

I know - declare a new Covid pandemic and close all small and medium sized non-essential businesses again.  Hell, there so many new "variants" now that I think they are running out of numbers and letters to name them all. 

[Pouatchee]

if taxksin had his way he would close down all the weed shops and shoot all the owners... all this because apparently his son was an addict... good to see budhists on a vengeance rampage. 

 

seriously... if the puppet gvt get their way with the legislation many weed businesses will be closing down... great job puppet girl

[Dan747]

 This has been going on for some time, especially after Covid where it is getting worse. My wife owns 15 shophouses that we rent out to businesses, pre-covid we kept 11 rented. After Covid we are only renting 5 of the fifteen. We do get some renters in, but they only last one month, and they leave in the middle of the night to get out of the contract of six months. Our shophouses are very competitive at 2,500 Baht per month rent, where others in our area of Ubon are 3,000+, we are well below with those of rival merchants. As we look around Ubon, we see a lot of shophouses closed down or up for sale. "Good Luck" to those who are trying to run their businesses in this terrible economy.

[StayinThailand2much]

5 hours ago, BritManToo said:

They should just invite a few more Indian tourists to make up any short falls 

 

...wearing gold necklaces and visiting Pattaya. 😆