Thailand's private sector must lead the post-Hormuz recovery Latest op-ed published in Nikkei Asia

Research evidence excerpt

Thailand's private sector must lead the post-Hormuz recovery Latest op-ed published in Nikkei Asia

Economics ● Thailand

8 June 2026

To do so, one option for Thailand is to double down on ongoing reforms that can increase the productivity and market access of the

private sector. For instance, policymakers could hasten the enforcement of Thailand's free trade agreement (FTA) with Europe (ex:

European Free Trade Association -- Iceland, Liechtenstein, Norway, and Switzerland) or hasten trade negotiations with the European

Union. Gains in both would likely be huge: among Southeast Asia's economies, Thailand has the least number of FTAs in force

outside of the ASEAN bloc. In fact, at present, it only has two: with Chile and Peru.

Dismantling any obstruction to investments, such as through Thailand's FastPass scheme (which monitors and speeds up licenses

and permits) could also be a quick win. The numbers speak to its great potential: Around 1.1 trillion baht worth of investments

pledged since 2024 have yet to reach shore, most of which are investments related to AI and data centers.

To induce investments from the ground up, introducing a risk-based pricing framework for loans could increase credit access amid

high household debt by making it easier to identify creditworthy small and medium-size enterprises.

All this will be crucial in an aging society such as Thailand; with less workers, capital accumulation is key to boosting productivity and

output.

This doesn't mean that policymakers should take a step back and relax. The business environment will need to be conducive for the

private sector to flourish.

In particular, monetary policy will need to be accommodative enough to incentivize private sector investments amid fiscal tightening.