Can Thailand’s new government cure an ailing economy?

Two weeks after the general election, the Election Commission of Thailand (ECT) has yet to confirm the final allocation of seats, even though it has released vote count sheets as its “official” results. For many civil society groups, academics and voters, the election was far from free and fair. Complaints range from discrepancies between ballots cast and voters recorded to the unexplained presence of unique QR and bar codes on ballot papers. None of this, however, has stopped Prime Minister Anutin Charnvirakul and his Bhumjaithai Party from moving swiftly to assemble a new government. A coalition with the third-place Pheu Thai Party gives Bhumjaithai over half the seats in the House, returning Anutin to office.

Although the new government will enjoy support from both the House and “blue” senators, parliamentary stability does not guarantee smooth governance. His next term will be far more challenging than his last — especially with an economy long overdue for structural transformation.

A recent Bloomberg article reports that Thailand’s growth has stagnated at around 2% for five years and warns that the country needs new engines of growth amid rising household debt, manufacturing weakness, and declining tourism — even labelling Thailand “the sick man of Asia”. Anutin rejected the label, saying it reflected past administrations, not his own, and committed to strict fiscal discipline to strengthen economic fundamentals and investor confidence. Similarly, Finance Minister Ekniti Nitithanprapas said the Thai economy had “left the ICU”, citing projected 2025 GDP growth of 2.4%, above the 2% forecast. He later outlined “10 pills” to cure the Thai economy.  The ten measures, combining grassroots income support with competitiveness-enhancing policies, were framed as making this the “Year of Investment” and driving GDP growth to 3%.It sounds like a quick fix. But is this the right prescription for the country?

While the incoming government has yet to present its policy statement to a joint parliamentary session, it is already clear that big businesses and investors will be at its core. This was evident in Bhumjaithai Party’s campaign for a ‘professional cabinet’, fronted by Ekniti and Commerce Minister Suphajee Suthumpun. A technocratic cabinet anchored in economic stability no doubt delighted markets.

As Sarath Ratanavadi, chief executive of Gulf Development, observed, business and foreign investor confidence improved significantly after the vote, reflected in a sharp rise in the Stock Exchange of Thailand (SET) index. In the same week, Gulf Development raised its shareholding in Kasikornbank to 10%. Analysts view the conglomerate as well positioned for the emerging data-centre industry through its growing reach across energy, banking and telecoms. Notably, the Board of Investment (BOI), chaired by Ekniti, approved seven data-centre projects in January worth more than 96 billion baht. Big capital and high-tech industries may raise GDP in the short term. Sustaining high growth, however, requires deeper structural transformation. According to the World Development Report 2024, escaping the so-called middle-income trap requires governments to “discipline incumbents” and ensure contestability for new entrants. That has rarely occurred in Thailand’s energy, banking, or telecoms sectors. If anything, they risk strengthening incumbents rather than disciplining them.

Yet the current growth strategy prioritises large capital over small businesses and households. For SMEs, only broad policy directions have been signalled so far, such as improved access to credit and greater participation in government procurement. Even so, such measures appear unlikely to deliver the kind of contestability needed to discipline incumbents. At the same time, little has changed for ordinary earners. As expected, the Kon La Khrueng Plus scheme, used during Anutin’s previous term in government, was a campaign flagship and will continue. It operates as a co-payment programme in which the government covers 50% of eligible spending at local shops to stimulate domestic consumption. Other measures, such as debt restructuring and cost-of-living support, may ease short-term pressures on the grassroots; for an economy in need of surgery, they look more like a bandage.

Inequality has long been a serious problem in Thailand. The World Inequality Report 2026 suggests it may be worsening. Income distribution remains highly skewed, with the top 10% accounting for over half of total income and the bottom half only 11%. Against this backdrop, the proposed “10 pills” are unlikely to be sufficient. Whether Bhumjaithai sees inequality as a structural concern remains unclear. The recent election outcome indicates that political incentives may align with maintaining existing disparities. The reported number of constituency seats won by Bhumjaithai, though still unconfirmed, approaches 180 out of 400. Part of this electoral success can be attributed to the deeply rooted power of the so-called “big house”. Leaving inequality unaddressed may therefore reinforce the patronage structures that sustain both the existing economic order and electoral advantage. Combined with familiar stimulus measures, this approach may reproduce the very political economy that brought it to power.

On the campaign stage, Anutin declared: “If I get four years, I guarantee I’ll keep working until people say, ‘That’s enough, we’re too rich already’.” It is difficult to imagine such prosperity reaching all Thais. On the one hand, economic stability and investor-friendly policies may help the government hit its growth target. On the other, the existing economic order may persist — and inequality may deepen. Growth may return. Structural change may not.

Itsakul Unahakate is a lecturer at the Faculty of Economics, Thammasat University