Thailand’s economy is booming on paper but leaving thousands of smaller firms behind, as exports surge, investment jumps and big corporations capture up to 90% of export growth. Ministers now warn of a dangerous two-speed economy amid rising global risks.
Thailand’s economy may be growing faster than expected, but Commerce Minister Supajee Suthamphan has warned that the recovery is increasingly turning its back on small business concerns. Behind soaring exports, rising investment and stronger GDP growth lies a widening divide, with large corporations capturing up to 90% of export growth while many SMEs struggle for finance, technology and market access. At the same time, Thailand faces mounting pressure from trade tensions, climate risks, rising costs, trade deficits and intensifying US-China rivalry. As officials push to strengthen domestic supply chains and secure new trade deals, Ms Supajee has delivered a stark warning that growth alone is no longer enough if most Thai businesses are being left behind.
Thailand’s economic recovery is increasingly benefiting large corporations while leaving many smaller firms behind, Deputy Prime Minister and Commerce Minister Supajee Suthamphan warned on Monday.
Despite stronger GDP growth, rising investment and surging exports, she said the gains remain concentrated among major businesses. As a result, Thailand faces a widening divide between large corporations and the broader economy.
Speaking at the 2026 Annual General Meeting of the Five Regional Chambers of Commerce, Ms Supajee described the situation as unprecedented. Thailand is confronting several pressures at once. These include geopolitical tensions, trade disputes, climate change, rising logistics costs and stricter international regulations. Together, they are reshaping global commerce and forcing countries to adjust rapidly.
Thailand warned to reinvent its economy as global trade tensions, climate risks and costs intensify
Against this backdrop, Thailand’s economy expanded by 2.8% in the first quarter of 2026. Earlier, growth reached 2.5% in the fourth quarter of 2025. The figures exceeded expectations and reflected continued momentum entering the year. Investment remained a key driver. Exports also delivered strong support.
Notably, investment expanded by more than 10% during the first quarter. Much of that money flowed into artificial intelligence, advanced technology and emerging industries. Those sectors are viewed as critical to Thailand’s future competitiveness.
However, the benefits have not spread widely. Income gains remain concentrated among larger firms and specialised industries.
Meanwhile, export performance has been particularly strong. Thailand’s exports grew by 17.6% in the first quarter. In April, growth accelerated to 23%. Partly, this reflected shipments being brought forward before the impact of US tariff measures. Yet the headline figures conceal a deeper imbalance.
Export boom driven by large firms as most SMEs remain locked out of international growth gains
According to Ms Supajee, roughly 80% to 90% of export growth came from large corporations. Thailand has more than 30,000 registered export businesses. However, only around 7,000 are large companies. The remainder are mostly SMEs. Despite their numbers, those firms generate only 17% to 20% of export revenue.
Consequently, export growth remains heavily concentrated among a relatively small group of businesses. Smaller companies continue facing barriers to expansion. Many struggle to access overseas markets. Others face difficulties obtaining financing or adopting new technologies. In addition, many lack the tools needed to compete internationally.
For that reason, Ms Supajee said Thailand is experiencing K-shaped growth. Large companies continue to expand and invest. By contrast, many SMEs are recovering slowly. Some have yet to regain their footing. The result is what she described as a two-polar economy.
At the same time, external pressures continue to mount. One of the most significant threats comes from climate change. Ms Supajee pointed specifically to the risk of Super El Niño. Extreme temperatures could disrupt agricultural production across Thailand. Such disruptions would affect a sector that remains important to both exports and employment.
Rising logistics costs and climate threats add fresh pressure to exporters and smaller businesses
Separately, logistics costs have increased sharply. Transportation expenses continue to rise. Shipping charges are higher. Insurance costs have also climbed.
Transit times have become longer. Collectively, these factors have raised business costs by roughly 15% to 20%. Consequently, exporters and SMEs face growing pressure on margins.
Although exports have expanded strongly, imports have increased even faster. Thailand has therefore recorded a trade deficit. Much of the import growth reflects purchases of raw materials and components. These are used in production and re-export activities. Even so, Ms Supajee said the figures highlight another structural challenge.
The key issue, she argued, is increasing local content. Thailand must use more domestically produced materials, components and manufacturing processes. Greater local participation would create more value within the country. It would also allow more income to circulate through the domestic economy.
Government pushes local content strategy to retain more value and income inside the economy
The automotive sector provides a clear example. Thailand continues attracting substantial foreign investment in vehicle production. However, Ms Supajee said the country must secure broader economic benefits from those investments.
Foreign manufacturers should not use Thailand solely as an assembly base. Instead, they should develop stronger domestic supply chains and deeper links with local businesses.
In turn, more value would remain within the country. Thai suppliers would gain larger roles. Domestic production would increase. Income opportunities would spread more widely. Moreover, economic benefits would reach beyond major industrial groups.
SMEs remain central to that objective. They account for approximately 35% of Thailand’s economic revenue. They also play an important role in employment and local commerce. Nevertheless, many continue to face structural disadvantages in the current environment.
In response, the Ministry of Commerce has prioritised SME upgrading across several areas. The first focus is capability development. Entrepreneurs must understand changing global markets. They must also adopt technology more effectively. Furthermore, they need stronger competitiveness to operate internationally.
Commerce ministry targets SME upgrades through skills development and stronger competitiveness
A second priority involves market access. The ministry is connecting SMEs with domestic and international opportunities. This includes support through projects such as Thai Helps Thai Plus. The initiative is designed to expand sales channels for smaller businesses. In parallel, the Ministry of Commerce is working with the Ministry of Industry to improve product quality and production standards.
Financing remains another major challenge. Many SMEs lack traditional collateral. As part of this effort, the Ministry of Commerce and the Ministry of Finance are examining alternative lending models. One proposal would allow cash flow to be considered during loan assessments. That approach would reduce dependence on conventional security requirements.
On another front, officials are promoting intellectual property finance. Under this model, entrepreneurs could use brands, patents and innovations to access funding. Product formulas and creative works could also be recognised as financial assets. The goal is to unlock new funding sources for businesses with valuable intellectual property.
Trade platforms form another part of the strategy. Events such as THAIFEX connect Thai businesses with international buyers. They also create links with investors and overseas partners. Through those channels, SMEs can access wider markets and new commercial opportunities.
Balancing US and China ties becomes central to Thailand’s increasingly complex trade strategy
Beyond domestic policy, Ms Supajee devoted significant attention to trade diplomacy. She said geopolitics and geoeconomics have become inseparable. As a result, trade negotiations require careful management. Policies pursued with one country can affect relations with another.
For example, Thailand’s participation in Select USA demonstrates support for investment ties with the United States. Simultaneously, China remains Thailand’s largest trading partner. Maintaining balance between the two powers has therefore become increasingly important.
During a recent APEC meeting, Commerce Ministry officials discussed China’s economic strategy with Chinese counterparts. According to Ms Supajee, Beijing’s current five-year plan seeks deeper integration into overseas supply chains. The strategy relies on investment, local sourcing and production partnerships in target countries.
Accordingly, Thailand is seeking opportunities within that framework. Officials are promoting pilot projects in agricultural processing. The objective is to encourage foreign investors to use more Thai agricultural products. If successful, greater value would be added domestically. Farmers would also receive a larger share of the economic benefits.
Likewise, the government is encouraging manufacturing investments that rely more heavily on Thai suppliers. Stronger local sourcing would support domestic businesses throughout the supply chain. It would also reduce reliance on imported inputs.
Team Thailand’s strategy seeks stronger supply chains, transparency and broader domestic benefits
Additionally, greater local participation could help address transhipment concerns. It could improve transparency in exports. It could also strengthen Thailand’s long-term competitiveness in international markets.
Ms Supajee stressed that achieving those goals requires cooperation across multiple sectors. The “Team Thailand” approach remains essential. Investment promotion and trade negotiations cannot be handled by a single agency. Instead, government departments, businesses and related organisations must work together to secure results.
Elsewhere, trade agreements remain a major focus. During a recent visit to France, Commerce Ministry officials met European investors. Those investors urged Thailand to accelerate negotiations on the Thailand-EU Free Trade Agreement.
The ninth negotiating round is scheduled for later this month. So far, 11 chapters have been completed. Another 13 chapters remain under discussion. Officials are attempting to consolidate those issues into roughly six chapters. The aim is to accelerate progress.
Thailand-EU trade deal seen as key to market access, investment and future export growth
If concluded, the agreement could open important new markets for Thai products and services. It could also strengthen investor confidence. Europe remains particularly attractive because of its purchasing power.
However, the market also places strong emphasis on standards, sustainability, environmental protection and supply-chain transparency.
Abhisit Vejjajiva calls for scrutiny of flagship AI project being pursued by Digital Economy ministry
Short term and long term warnings lights for the ailing Thai economy as it ploughs through headwinds
Concluding her remarks, Ms Supajee said the global environment has changed fundamentally. Thailand can no longer rely on old assumptions. Instead, it must pursue what she described as “rethinking and reinventing” to remain competitive.
The challenge, she suggested, is not simply achieving growth. Rather, it is ensuring that growth reaches more businesses throughout the economy while strengthening Thailand’s position in an increasingly complex trading world.
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:
Ministry fails to halt ฿25.4 billion payment order to Hong Kong based firm linked to 1990 contract
Microsoft accepts charges of corrupt payments in Thailand as it makes a deal with US investigators
Provincial agency boss arrested in Mukdahan after trying to extort ฿2 million from a businessman
Parliamentary vote on constitutional reform is questioned, court says referendum may be needed
Bangkok MP on Phuket mission to investigate controversial local condo project before the courts
Drinks giant Thai Beverage to resume expansion with Singapore IPO for Asean regional beer operation
