Category: The Bangkok Post

Natural Resources and Environment Minister Suchart Chomklin said Thap Lan land disputes will be resolved through parcel-by-parcel verification to separate residents from land speculators and investors.

He made the remarks after a meeting of the House Committee on Land, Natural Resources and Environment, chaired by Bhumjaithai MP Kunlawalee Nopamornbodi on Thursday. The meeting brought together state agencies, academics, conservation groups and civil society networks to discuss overlapping land claims in Thap Lan National Park in Nakhon Ratchasima province.

Mr Suchart said the meeting was conducted in a constructive atmosphere, with all sides exchanging information and proposals. The core agreement was that land rights must be examined on a parcel-by-parcel basis.

“Everyone agreed that the verification of rights must be done on a parcel-by-parcel basis, transparently and fairly, so that genuine local communities are protected while illegal occupations are dealt with under the law,” he said.

Mr Suchart said the proposed solution was unique to the Thap Lan National Park and would not be used as a precedent for other protected forest areas.

The meeting came after groups of conservationists opposed the June 15 decision by the National Parks Committee to approve the withdrawal of 155,865 rai from Thap Lan National Park and to transfer the land to state agencies, including the Agricultural Land Reform Office, for land-rights management and allocation.

Environmental groups have urged the government to reconsider the plan, as the area includes ecologically significant forest land and wildlife habitat. The environment minister at that time defended the decision, saying the boundary adjustment is intended to resolve overlaps between the park and land allocated by the state to people before the park was established. Around 450 encroachment cases are still in court.

Thap Lan National Park chief Prawatsart Janthep said on Thursday in Nakhon Ratchasima the dispute dates back to the declaration of Thap Lan National Park in 1981, when boundaries were drawn without full field surveys in some areas, resulting in overlaps with existing settlements and land reform areas.

He said surveys indicated about 5,000 occupants had been living in affected areas before the park was established. “The challenge is to identify those who occupied land before the park was declared while preventing later encroachment from being legitimised.”

Gold has entered bear market territory, sliding below US$4,000 an ounce for the first time since November 2025 as rising interest rate expectations and a strengthening dollar weigh heavily on bullion, though local traders argue the dip may not last long.

Siriluck Pakotiprapha, vice-president of research at Hua Seng Heng Futures, said a decline below $4,000 has significant implications for gold, which has tripled in price over the past three years from about $1,800 an ounce in 2023.

The recent pullback, driven by a stronger US dollar, rising real yields and hawkish Federal Reserve signals, has resulted in gold prices tumbling roughly 28-30% from an all-time high of nearly $5,600 per ounce in January this year.

Spot gold was down 0.4% to $3,974.89 per ounce yesterday after hitting its lowest level since Nov 20 on Wednesday.

Traders expect three Fed rate hikes this year and are pricing in a 67% chance of a September increase, according to the CME FedWatch Tool.

The US dollar advanced for a third straight session on Wednesday to hit a 13-month high, making gold more expensive for buyers holding other currencies.

“The market is worried about Fed chair Kevin Warsh’s statement earlier this month about sticky inflation in the US, which has remained above the central bank’s 2% target since April 2021,” Ms Siriluck said.

If gold cannot bounce back to a key support level of $4,500, she said there is a possibility the price could fall further to $3,800, which would be roughly 61,000 baht per baht-weight of domestic gold bar.

Hua Seng Heng, Thailand’s largest gold trader, predicts the next support level for the precious metal at $3,500-3,600 an ounce, or 58,000-59,000 baht per baht-weight of domestic gold bar.

Several major banks have trimmed forecasts. Goldman Sachs reduced its year-end target by $500 to $4,900 an ounce, while Deutsche Bank cut its fourth-quarter estimate by 17%. Outflows from exchange-traded funds (ETFs) have removed a traditional support for prices.

However, Ms Siriluck said the price contraction may not last long, as oil prices have declined significantly, easing inflation in many economies, particularly the US.

“Once inflationary pressure eases, the Fed might adopt a less hawkish stance,” she noted.

Gold prices should bottom out at around $3,500-3,600 an ounce by the fourth quarter, said Ms Siriluck, which is traditionally the peak season for gold buying.

Fundamental support for gold remains, particularly central bank buying and the de-dollarisation trend. Imports from China, the world’s largest gold consumer, remain solid, rising 78% year-on-year to 692 tonnes in the first five months of 2026.

Tipa Nawawattanasub, chief executive of YLG Bullion and Futures, said structural drivers such as persistently high public debt across major economies and rising digital gold demand, including tokenised gold and reserve-like digital assets, underpin support for gold, despite near-term risks from energy-driven inflation and ETF outflows.

Thailand’s corporate bond market contracted during the first five months of 2026 as investors became increasingly selective amid concerns over credit quality, higher funding costs and a fragile economic outlook.

According to Kasikorn Research Center (K-Research), the value of long-term corporate bond issuance totalled 337 billion baht between January and May 2026, down 3.7% year-on-year.

The decline reflects growing investor caution following several high-profile bond defaults in recent years, as well as continued uncertainty surrounding geopolitical developments, Thailand’s subdued economic growth, and elevated bond market yields, said the think tank.

The slowdown has prompted companies to adopt a more conservative approach to fundraising. New issuance has been concentrated in investment-grade bonds, defined as securities rated BBB- or higher, which accounted for roughly 95% of total issuance or 321 billion baht.

Despite the weak start, K-Research expects Thailand’s corporate bond issuance in 2026 to reach 850-890 billion baht, on par with last year and close to the forecast of 900 billion by the Thai Bond Market Association.

“Corporate borrowers are expected to remain active in refinancing maturing debt and securing working capital, although volatility in bond yields will continue to influence issuance decisions,” noted K-Research.

DEFAULT RISK CONCERNS

Market data suggests investor concerns remain concentrated in the high-risk segment rather than spreading across the entire bond market. Demand for investment-grade bonds remains strong, with subscription success rates exceeding 96% of offered value, reflecting investor preference for issuers with solid financial positions and credible repayment capacity.

In contrast, high-yield bonds, including those rated BB+ or below as well as non-rated bonds, continue to face significant fundraising challenges. Subscription rates for these securities have fallen below 60%, “underscoring lingering concerns about default risks and financial stability among weaker issuers”, noted K-Research.

The trend highlights a growing focus on credit quality, resulting in capital flows being directed primarily towards financially strong companies while riskier issuers face higher financing costs and limited market access, said the think tank.

Funding conditions have also become less favourable. Thai government bond yields rose in line with global bond market trends and increased domestic government borrowing. As a result, yields on three-year corporate bonds across all major credit ratings, comprising AAA, AA, A and BBB, have risen by 10-18 basis points compared with the end of 2025.

“The increase in borrowing costs led some companies to postpone bond offerings or raise funds only when necessary,” said K-Research.

FLIGHT TO QUALITY

The centre said the biggest risk facing the market is not widespread contagion, but the refinancing ability of weaker issuers, particularly those that previously underwent debt restructuring. Bonds experiencing debt servicing problems account for 2% of total outstanding corporate bonds. Of this group, roughly 0.2% are already in default, while 1.8% have undergone debt restructuring.

Although restructuring eased short-term liquidity pressures, it does not eliminate credit risk. K-Research estimates restructured bonds worth roughly 4.9 billion baht will mature in the second half of 2026, followed by 12.9 billion baht in 2027.

If issuers fail to restore their financial strength, these bonds could face renewed repayment difficulties. Investors should monitor upcoming maturities among high-yield and non-rated issuers, especially those with fragile balance sheets, weak cash flow recovery, or limited access to new financing, said K-Research.

The framework for science research and innovation will be at the centre of Thailand’s push to achieve the status of a high-income country in the next 12 years, says Minister of Higher Education, Science, Research and Innovation Yodchanan Wongsawat.

He was speaking on Wednesday during the launch of a public hearing on the draft of a framework for science research and innovation, organised by the Thailand Science Research and Innovation (TSRI).

The ministry, he said, serves as the backbone of government policies to increase the efficiency of science, technology and innovation, and respond to new challenges and fast-shifting technology.

He said the government invests around 20 billion baht per year in technology and innovation development. Unfortunately, that’s not enough to drive the country toward achieving high-income status within the next 12 years.

For this, the government would need to invest approximately 50-100 billion baht annually, which appears to be unrealistic. However, achieving this target may still be possible if the government can attract investment from global sponsors and partners to support Thailand’s development.

“Semiconductor will be the fundamental component of all industries in the future,” said Mr Yodchanan.

“Our country possesses skills in chip production, however, we trail behind compared to overseas technology … which is why we need to attract investment from global companies to create economic opportunity and technology transfer to advance our human resource.”

Research can be targeted to fit the needs of private firms so that a joint product development project can be set up to bring results from laboratory directly to the market, he suggested.

The TSRI’s public hearing aims to gather feedback from stakeholders on its five-year plan for 2028-2032.

Siam Cement Group (SCG), Thailand’s largest cement producer and industrial conglomerate, has raised concerns that prolonged war in the Middle East could drive up global energy costs and disrupt raw material supplies, posing significant challenges to its operations.

Chief executive Thammasak Sethaudom said that if instability continues until this September, global oil reserves could be affected, leading to higher operating costs across industries.

“The peace talks have yet to reach a final conclusion, so there is still risk for global energy prices, crude oil and petrochemical raw materials such as naphtha,” he said.

The warning comes after Washington and Tehran signed a memorandum of understanding aimed at ending hostilities between the US-Israel alliance and Iran, including efforts to halt fighting in Lebanon.

However, renewed clashes and Israeli strikes in Lebanon have prompted Iran to reconsider closing the Strait of Hormuz, a critical waterway that had recently reopened, according to media reports.

Before the war, about 20% of global oil and liquefied natural gas shipments passed through the strait.

SCG has already felt the impact of supply chain disruptions.

The company was forced to temporarily shut down its Long Son Petrochemicals facility in Vietnam and its olefins plant in Rayong, Thailand, due to restricted shipments of raw materials.

Mr Thammasak said that SCG aims to reopen these facilities in the third or fourth quarters of this year.

To mitigate risks, SCG is diversifying its supply sources. More than half of its imported raw materials now come from regions outside the Middle East, including the Americas and Africa.

The company is also accelerating efforts to explore partnerships with Chinese firms to expand into China’s vast market.

Chinese imports, which account for around 20% of products in the Southeast Asian market, have intensified competition for regional manufacturers, including SCG.

“SCG plans to be partners with Chinese companies, and we want to export our products there,” Mr Thammasak said, adding that the firm’s manufacturing footprint in Thailand, Vietnam and Indonesia offers opportunities for Chinese investors seeking entry into Southeast Asia.

SCG also operates a packaging business.

CG Capital Advisory Ltd, the private equity arm of Central Group, plans to launch its second mixed-use hotel and residential project in Phuket within two months, capitalising on strong demand on the island.

Phoom Chirathivat, managing partner and co-founder of CG Capital, said the hotel and holiday home market in Phuket remains robust, particularly after the pandemic.

“We take a long-term view on Thailand and remain confident in the country’s tourism potential and its appeal as a destination for foreigners seeking a second home,” he said.

“Amid growing geopolitical uncertainty, Thailand enjoys a significant competitive advantage as a safe and attractive destination for both tourism and investment.”

Mr Phoom said Phuket continues to offer abundant investment opportunities, prompting the company to proceed with a second project after the successful launch of its first development, The Standard Residences Phuket Bang Tao, two years ago.

The branded residential project registered 85% sales, with Thai and foreign buyers equally accounting for 50%. The project is scheduled for completion and unit transfers by the end of this year.

The second project is located in the Layan Beach area, comprising a hotel and a branded residential development, featuring both condominium units and villas.

Mr Phoom said the company is also exploring a second residential project in Bangkok and plans to acquire a plot in a prime location for development.

“We launched InterContinental Residences Bangkok Asoke shortly after the earthquake in March last year, but still received a strong response, with 60% of the project’s 88 units already sold,” he said.

Mr Phoom attributed the solid outcome to three key factors: the convenient location on Sukhumvit Soi 16, the recognised InterContinental brand, and the project’s focus on large units.

All units are designed with generous living spaces, a segment that remains relatively scarce in the Sukhumvit area, helping to differentiate it from competing projects.

With a total sales value of 5.5 billion baht, InterContinental Residences Bangkok Asoke is expected to comprise a 32-storey tower with 88 units.

Unit sizes start from 139 square metres for two-bedroom residences, with prices starting from 44.8 million baht, or around 322,000 baht per sq m.

Mr Phoom said Thailand’s ultra-luxury residential market continues to demonstrate resilience and has outperformed many global markets, supported by a growing wave of global wealth migration.

According to wealth advisory Henley and Partners, the number of wealthy individuals relocating worldwide increased to 142,000 in 2025 from 51,000 in 2013, rising 178% over the past 12 years.

“While many property markets around the world are facing a slowdown, Thailand continues to maintain its position as a world-class destination with strong fundamentals and broad appeal,” he said.

“Buyers have not disappeared, but they have become more selective and discerning in choosing assets that can preserve value and support their lifestyles over the long term.”

He said affluent buyers are increasingly prioritising quality, brand reputation, location and long-term asset resilience when making decisions.

This trend has benefited branded residences, which offer internationally recognised hospitality standards, professional management and a lifestyle proposition that appeals to global investors and second-home buyers.

“Thailand’s strengths in tourism, healthcare, international education and lifestyle continue to attract wealthy individuals seeking a second home or long-term residence in Asia, particularly amid rising geopolitical uncertainty in other parts of the world,” Mr Phoom said.

The Bank of Thailand has upgraded its GDP growth forecast for 2026 to 2.3% from 1.5%, attributed to strong exports, government stimulus and easing geopolitical tensions in the Middle East.

The moves comes as the central bank’s Monetary Policy Committee (MPC) on Wednesday voted unanimously to maintain the policy rate at 1%, as the market expected.

The committee slashed the GDP growth forecast for 2027 to 1.8% from 2% due to the base effect, said MPC secretary Don Nakornthab.

“Thailand’s economic expansion is projected to be stronger than previously assessed, but growth remains low and uneven,” Mr Don told a briefing.

Growth was supported by merchandise exports and private investment associated with the technology and artificial intelligence cycle, he said.

According to the central bank, government measures to alleviate the impact of the energy crisis and an improvement in the Middle East war would also support Thai economic expansion this year.

The impact of the conflict on the manufacturing and tourism sectors has been less severe than previously anticipated, with large businesses demonstrating greater adaptability than anticipated, noted the regulator.

“The Dubai crude oil price has dropped below the central bank’s average of US$100 for the year, while businesses have identified new sources of raw materials and adjusted their transport routes,” said Mr Don.

However, small and medium-sized enterprises continue to face limitations in adaptation and are constrained by intense competition.

Most households are pressured by decelerating income growth and rising living costs, which will weigh on private consumption once government relief measures phase out, noted the central bank.

Inflation is expected to rise due to supply-side factors, but will subsequently fall once these pressures gradually ease, he said. Headline inflation in 2026 and 2027 remains in line with the previous assessment, averaging 2.8% and 1.4%, respectively.

Mr Don said headline inflation is expected to peak at 4.5% in the fourth quarter of this year, attributed to energy prices and El Niño effects. However, consumer prices would not rise 5% for the year, as the central bank earlier estimated.

For the remainder of 2026, inflation could exceed the target range of 1-3% due to the pass-through of energy and production costs, before declining in 2027 given the dissipation of supply-side pressures and the effect of a high base in 2026.

While inflation has increased due to supply-side factors, the MPC will continue to monitor its outlook and associated risks going forward, he said.

NO NEED FOR A HIKE

Nuttaporn Triratanasirikul, deputy managing director of Kasikorn Research Center (K-Research), said the market widely expected the central bank would keep the rate unchanged at this month’s meeting, as elevated inflation seems to be temporary.

The think tank anticipates the Thai policy rate will stay at 1% throughout the year.

“Oil prices have decreased, particularly West Texas Intermediate crude to less than $74 per barrel, easing concerns about inflationary pressure in the Thai economy,” she said.

In addition, stimulus programmes have been introduced to prop up the subdued economy.

“Clearly, there will be no more rate cuts, but an increase seems unnecessary for now with oil prices dipping,” Ms Nuttaporn told the Bangkok Post. “A hike could exacerbate the fragile Thai economy.”

According to K-Research, government stimulus through the emergency borrowing of 400 billion baht could lift the economy by 0.3-0.6 percentage points. The centre projects Thai GDP growth of 2% this year thanks to the 2.8% year-on-year uptick in the first quarter.

HOLD FOR LONGER

Pundits anticipate the policy rate could be maintained at 1% for at least one year to support the economic recovery, resulting in a prolonged interest rate differential between the US and Thailand and contributing to further short-term weakness of the baht.

The baht plunged to test the new 13-month low of 33.40 to the greenback. The Thai currency has depreciated 5.5% this year.

The CME FedWatch Tool prices in two rate hikes this year, while Bank of America predicts the Federal Reserve could enact up to three increases, delaying rate cuts for another two years.

“If US rates stay higher for longer or rise while Thai rates remain on hold, the widening US-Thailand yield gap could drive capital outflows from Thailand towards higher and safer US yields, putting depreciation pressure on the baht,” said Therdsak Thaveeteeratham, executive vice-president of Asia Plus Securities.

Koraphat Vorachet, assistant managing director and head of research at Krungsri Securities, anticipates the central bank will keep the policy rate unchanged until the end of 2027 to drive private investment.

Raising the interest rate in Thailand would be more difficult than in the US or other countries given that the economic recovery remains fragile, he noted.

The Department of Special Investigation (DSI) has summoned People’s Party MP Pawoot Pongvitayapanu for questioning about a high-profile foreign-exchange fraud case, while the politician insists he is ready to prove his innocence.

Justice Minister Rutthapon Naowarat said on Thursday that Mr Pawoot was among many people being called in for questioning. Mr Pawoot was ordered to meet investigators on July 2 but he can do so earlier if he is ready, the minister said.

The DSI has officially taken over the case based on the large scale of the operation, and its officials will need some time to prepare charges as they have to review as many as 70,000 financial transactions, according to Pol Lt Gen Rutthapon.

The minister said investigators would determine whether videos featuring Mr Pawoot discussing forex trading constituted investment promotion, with the courts making the final decision.

The investigation followed police raids on 24 locations in Bangkok and nearby provinces last week, with many people including a politician and a well-known entertainer suspected of being involved in investment and forex scams.

Officials impounded 65 million baht in cash, gold and silver bullion, ornaments, luxury bags, guns, cryptocurrency hardware wallets, luxury cars and computers.

Mr Pawoot’s name was among those that had come up during the investigation, officials said, while stressing that he had not been formally accused of any wrongdoing.

Mr Pawoot, a list-MP with the People’s Party, said at parliament on Thursday that he had nothing to do with any scams or any Ponzi schemes and was collecting evidence to prove his innocence.

He said he was gathering data dating back five years and it would take four to five days. When he obtained enough evidence, he would meet with DSI interrogators, he said.

Mr Pawoot, who was a well-known technology and e-commerce businessman before he entered politics, said he traded gold futures as an individual investor and never persuaded others to invest with any investment platform.

Asked about reports of 28 million baht transferred into his accounts in 14 transactions of 2 million baht each, the MP said he would explain the transactions after receiving complete banking records.

Commenting on a video showing him discussing QRS Global, one of the firms under investigation, Mr Pawoot said he was only describing his personal trading experiences and was not promoting investment with the platform.

Mr Pawoot has been the point man for the People’s Party in its heavy scrutiny of the government’s 1.6-billion-baht AI Passport project, raising questions about transparency, costs and technical merits.

The government has denied that naming the opposition MP in connection in the forex trading case amounted to political persecution, but even some frustrated members of his own party have said it’s time for him to clear the air.

The National Human Rights Commission (NHRC) on Wednesday urged government officials to exercise caution in disciplinary practices, adding teachers may face legal action if they punish students in ways deemed inappropriate.

The call was made at the launch of the 2025 Human Rights Assessment Report and a seminar titled “Thailand’s Human Rights Landscape: Key Issues of 2025 to 2026”.

Presenting the report, NHRC chairwoman Pornprapai Ganjanarintr said Thailand has made progress in several areas in safeguarding and promoting human rights.

These include enforcement of the law against torture and enforced disappearance, stronger labour protections and measures to assist people displaced by conflict in Myanmar.

However, she said bail rights in political cases, harassment of human rights defenders and protection against refoulement needed to be addressed.

NHRC commissioner Pitikan Sithidej told the forum the treatment of suspects during arrest and detention remained vulnerable to human rights violations.

The concern came despite the introduction of body cameras and the enforcement of the Act on Prevention and Suppression of Torture and Enforced Disappearance, she said.

Ms Pitikan also warned that violations of the anti-torture law were not confined to police, military or prison officials.

“Cases have emerged in schools, including one in which a teacher ordered a student to do 200 sit-ups as punishment, resulting in injury,” she said. “Teachers may not realise that, as state officials, they can also be held liable under the law.”

The commissioner proposed reviving the national justice administration development mechanism established in 2006 as the framework to strengthen cooperation on human rights protection throughout the justice process.

She said the NHRC would also work with police on a proposal to remove the names of former offenders from criminal records to improve their employment opportunities.

Other issues discussed at the forum included the impact of tensions along the Thai-Cambodian border on children’s rights and Cambodian migrant workers, as well as the situation in the deep South.

This article is intended to rebuke the Bank of Thailand (BoT) and those who believe Thailand’s trade deficits are “transitory” and will return to a surplus once oil prices fall back to normal levels.

This article is intended to rebuke the Bank of Thailand (BoT) and those who believe Thailand’s trade deficits are ‘transitory’ and will return to a surplus once oil prices fall back to normal levels.

Thailand used to take pride in its successful export economy. Over the past 20 years, there was not a single year in which the country recorded a trade deficit, even during the Russia-Ukraine war. Although the trade surplus was halved to $13.5 billion in 2022, it remained at an admirable level. At the peak of the oil price spike to $115 (3,839 baht) a barrel in June that year, Thailand’s trade balance briefly slipped into deficit for a couple of months at $1.3 billion per month before returning to a strong surplus, indicating the country’s solid export base.

Contrary to the central bank’s belief, however, a rebound to a trade surplus in 2026 (and beyond) is highly unlikely due to an eroding export base. Oil prices account for only 40% of the deficit problem, yet receive 100% of the blame.

The trade deficit in April 2026 was $6.8 billion, the worst in 20 years. An observant economist such as myself would immediately question the figure. How could an oil price of $101 per barrel – roughly the same level as in April 2022 – have caused a historic trade deficit, particularly when the trade balance in the same month in 2022 showed a surplus of $386 million?

My suspicions led me to investigate the matter. I had previously estimated that rising oil prices of around $100 per barrel would lead to a trade deficit of $1-2 billion per month. There must therefore be other factors hidden within the $6.8-billion deficit figure.

After a careful examination of the sources of the deficit, I found 41% was driven by higher fuel import costs, 28% by increased imports from China, and 26% by higher imports from Taiwan. The first factor – rising oil prices – may be transitory, as the BoT has suggested. However, the other two factors are likely to be more structural. The evidence is presented in the attached table below.

Before explaining the essence of the table, has any reader noticed the significant drop in export growth in February? Can anyone guess the reason? The answer is Chinese New Year. When Chinese populations, both in mainland China and Taiwan, are on holiday, the Thai economy effectively slows as well, as though it is an extension of theirs. There was no comparable drop in export activity in April, as China does not observe Songkran holidays.

The unflattering implication is that Thailand has little control over its export sector and, by extension, its economic destiny. It may therefore be prudent to introduce Chinese language courses as a mandatory part of the school curriculum.

Incidentally, readers searching for trade balance data online – particularly on Trading Economics – will find that Thailand’s April 2026 trade deficit was reported at $10.2 billion (even more concerning). This is not incorrect, as the data is drawn from the Ministry of Commerce, which uses a different accounting method.

The $6.8-billion figure is based on the Bank of Thailand’s methodology, which follows IMF guidelines. The BoT does not include shipping and insurance costs in import figures under the trade account, instead recording them under the services account.

Returning to the essence of the table, it highlights two alarming issues. The BoT and the government may not be alarmed, but as a Thai citizen, I am.

The first is ‘transfer pricing’ involving Taiwan, as shown in the final row of the table. It is notable that Taiwan, a much smaller economy than China, records a trade imbalance with Thailand second only to China. Moreover, the shift from an average monthly deficit of $1.7 billion a year ago to $4.9 billion in April 2026 is striking.

This unusually large deficit with Taiwan would not occur without transfer pricing practices. Taiwanese firms may sell intermediate goods for assembly in Thailand at prices higher than the export price of the finished products shipped onward to end markets.

For example, integrated circuits from Taiwan may be exported to Thailand for assembly at $100 per set. After assembly in Thailand, the finished product – which should, in theory, be exported at $110 to reflect a $10 assembly cost – is instead exported to the United States at $80, because US customers will not pay more. In this case, Thailand pays Taiwan $100 for intermediate goods but receives only $80 from the US for the finished product.

The incentive behind such practices is to boost the profitability of the parent company in Taiwan, thereby potentially supporting its stock valuation. This is not a new phenomenon. According to a study by the Thailand Development Research Institute (TDRI), similar transfer pricing practices have been observed in durian exports. Chinese intermediaries reportedly purchase durians from Thai farmers at 100 baht per kilogramme and then export them to parent companies in China at 60 baht per kilogramme.

I am not concerned with stock price manipulation. The real question for Thailand is: what benefits does it derive from exporting other countries’ products? The table shows that the more Thailand exports, the larger the trade deficit becomes. The best month for the trade balance is February, when exports are at their lowest.

The second alarming issue highlighted by the table is the ‘China shock’. Owing to excess supply in China, Chinese producers are dumping goods into global markets, including Thailand. Compared with the average monthly deficit in 2025, Thailand’s trade deficit with China in 2026 has increased by 35%. One only has to consider the local industries being displaced by cheap Chinese imports.

Thailand should stop deceiving itself with export-growth illusions. The top-line export figures are meaningless; the bottom line of the trade deficit is what truly matters.

As for the familiar argument that trade deficits arise from imports of new machinery, I would simply note that these are ‘their’ machines, designed specifically to produce ‘their’ products, which may later become obsolete.

A simple comparison of the size of the trade deficit against increases in GDP investment would suggest that this argument is not particularly convincing.