Alarm grows as Thai business confidence hits a 35-month low, with weak spending, household debt and rising costs squeezing firms. The Chamber seeks cheap loans as almost every sector braces for worsening conditions through year-end.
Thailand’s business confidence has plunged to a 35-month low as weak incomes, high household debt and rising costs squeeze firms nationwide. The Thai Chamber of Commerce warns conditions may deteriorate across almost every sector through year-end, despite surging exports and improving consumer sentiment. Businesses face persistent liquidity shortages, while Middle East tensions and the Thai-Cambodian border conflict add further risks. The Chamber is pressing for low-interest loans and debt restructuring. It has also sounded the alarm over foreign capital entering retail and restaurant sectors where foreign participation is restricted, adding further pressure on Thai operators.
Thailand’s business confidence has fallen to its lowest level in 35 months as weak purchasing power bears down nationwide. High household debt is restricting spending, while income growth remains weak across every region.
At the same time, businesses face higher energy, electricity and fuel costs. Persistent liquidity shortages are adding another strain for entrepreneurs.
Thanawat Pholvichai released the latest findings from the Thai Chamber of Commerce on Thursday. He is President and Chief Adviser of the University of the Thai Chamber of Commerce’s Centre for Economic and Business Forecasting. The latest confidence index was based on a survey of 369 respondents. Notably, business confidence has now reached its weakest level for almost three years.
Weak incomes, debt and higher costs push business confidence deeper into a three-year slump
Only the North and South recorded any improvement. Even there, confidence rose by just 0.1 points. Elsewhere, the picture remained weaker as businesses struggled with subdued demand and regional economic conditions. Mr Thanawat identified fragile purchasing power as a central factor behind the decline.
Income growth remains low across every region, while household debt continues to limit consumers’ ability to spend. In parallel, reduced employment is holding back household earnings. Poor regional economic conditions are creating further pressure. Tourism remains weak, while agriculture has yet to deliver a significant lift to provincial economies.
Agricultural product prices have gradually improved. However, the country is not currently in its peak harvesting season. As a result, stronger prices have not produced a substantial increase in provincial purchasing power. Businesses are simultaneously dealing with rising operating expenses. Energy, electricity and fuel costs were all identified as pressures in the survey.
International risks are adding to the difficult backdrop. In particular, respondents remain concerned about conflict involving the United States, Israel and Iran. A temporary ceasefire has eased some immediate fears. Even so, the risk of shipping disruption through the Strait of Hormuz continues to weigh on sentiment.
Middle East and Thai-Cambodian tensions add fresh pressure as energy and logistics risks persist
Any disruption could put further pressure on energy prices and logistics costs. Consequently, volatility surrounding the conflict remains a concern for Thai businesses. These risks come while companies are already dealing with weaker domestic purchasing power and higher costs.
Separately, the Thai-Cambodian border conflict was identified as another negative factor. Businesses also cited Thailand’s wider economic situation and the rising cost of living. Household incomes are not keeping pace with current expenses. In turn, consumers have less capacity to spend while businesses struggle to generate stronger sales.
There are positive indicators in the Chamber’s assessment. Among them is the government’s “Thai Help Thai Plus” economic stimulus programme. Exports have also increased by 20.75%, providing support from overseas demand. Meanwhile, the Thai stock market recorded a 32.40-point gain and domestic oil prices declined.
On another front, the Fiscal Policy Office raised its 2026 economic growth forecast to 2.5%. That projection is broadly consistent with the Chamber’s own expectations. The Chamber forecasts economic growth of between 2% and 2.5% this year. Yet those indicators have failed to prevent business confidence from sliding to its 35-month low.
Businesses expect broad weakness through year-end despite export gains and higher growth forecasts
The forward picture is also weak. The Chamber surveyed businesses about current confidence and their expectations over the next six months. Significantly, the outlook deteriorated across every area except services. Consumption, investment, tourism, agriculture, industry, trade and border trade are all expected to weaken.
Mr Thanawat said businesses see little prospect of substantial improvement before the end of 2026. However, they still expect a stronger fourth-quarter turn.
“A survey of current and future confidence over the next six months indicates a worsening trend across all sectors except the service sector.
All sectors—consumption, investment, tourism, agriculture, industry, trade, and border trade—are projected to deteriorate over the next six months. This reflects the view of entrepreneurs that the current and future economic outlook is unlikely to improve until the end of 2026. However, they still hope for improvement, anticipating a significant upward trend in confidence in the fourth quarter, driven by year-end budget disbursements, new investments, and a vibrant tourist season,” said Mr Thanawat.
That expected fourth-quarter improvement rests on several factors identified by respondents. Year-end government budget disbursements could push more money into the economy. New investment could provide another lift. Additionally, businesses expect the year-end tourist season to become more active.
Chamber seeks low-interest loans and debt restructuring as liquidity shortages continue to hit firms
In response, the Chamber has submitted several proposed measures for the government. Managing volatile costs is one concern. Weak purchasing power is another. Above all, the Chamber highlighted liquidity shortages among businesses and entrepreneurs.
Mr Thanawat said businesses have consistently lacked sufficient liquidity. Accordingly, the proposals include creating greater opportunities for companies to obtain low-interest loans. They also include better access to debt restructuring. Businesses could additionally receive information helping them gain access to restructuring arrangements.
As part of this, the Chamber highlighted risks facing the agricultural sector. It proposed strengthening agricultural capacity and resilience against weather-related threats. Tourism was also included in the proposals, with the Chamber seeking more proactive promotion.
Foreign capital has emerged as another concern. Specifically, Mr Thanawat highlighted its impact on Thai businesses and competition from foreign goods and operators. Retail businesses and restaurants were identified as particularly exposed. The Chamber raised the issue of unfair dumping involving foreign goods and businesses.
Foreign capital draws scrutiny as consumer confidence improves after five months of weakness
For the first time in this survey context, the issue has received particular attention. Mr Thanawat said this was among the first serious examinations of foreign capital’s impact on Thai businesses. The concern comes while domestic operators already face weak demand, liquidity shortages and elevated operating costs.
Consumer confidence, however, is moving in a different direction. The index has improved for a second consecutive month following five months of weakness. Mr Thanawat linked part of that improvement to the government’s “Thai Helps Thai Plus” programme.
Under the programme, consumers have received an additional ฿1,000 in disposable income each month, according to the Chamber. That money has helped households manage living costs. Furthermore, concerns about a potential conflict between the United States and Iran have eased. Global and domestic oil prices have subsequently fallen.
Major agricultural product prices are also higher than last year. Collectively, these factors have produced a positive psychological effect on consumers, according to Mr Thanawat. They have supported purchasing power and contributed positively to economic recovery and living costs.
The headline consumer indicators consequently moved higher. Overall economic confidence increased to 45.3 from 44.1 in June. Job opportunity confidence rose to 49.8 from 48.7. Future income confidence climbed to 60.5 from 59.3.
Confidence measures remain below normal as firms brace for weaker conditions across most sectors
Despite those increases, every index remains below the normal confidence level of 100. Consumers therefore remain cautious about continuing economic uncertainty. The slow pace of economic recovery remains a major concern. Likewise, high living costs continue to weigh on household sentiment.
Current incomes are also failing to keep pace with rising living expenses. That problem mirrors one of the main pressures identified by businesses. Consumers face restricted spending power, while companies face weaker demand and stubborn operating costs.
The divergence is particularly clear in the latest figures. Consumer confidence has improved for two consecutive months after five months of weakness. By contrast, business confidence has fallen to its lowest level in 35 months.
Crackdown on foreign nominee firms and business concerns moves into Krabi with 1,000 firms hot listed
Call for flexible visas to boost the economy as exports, output and business confidence falters
More importantly, businesses expect weakness to extend across almost every major sector during the next six months. Services are the sole exception. Consumption, investment, tourism, agriculture, industry, trade and border trade all carry deteriorating expectations.
For now, businesses are looking towards the fourth quarter for a possible improvement. Year-end budget disbursements, new investment and stronger tourism are expected to provide the main support. Until then, the Chamber’s survey shows weak purchasing power, limited liquidity and rising costs continuing to squeeze Thai businesses.
Join the Thai News forum, follow Thai Examiner on Facebook here
Receive all our stories as they come out on Telegram here
Follow Thai Examiner here
Further reading:
Now the government’s crackdown targets unlicensed hotels. Five managers arrested in Phuket raids
Top Bhumjaithai Party figure defends the party’s position on cannabis. Only supported medical use
