From Coup Cycles to Ballot Box Stability, Thailand’s New Government Faces an Old Economic Problem
An article titled How Thailand became the ‘sick man’ of Asia, published by the Financial Times on February 3rd, 2026, has drawn considerable attention among Thai economists. It documented the Thailand’s anaemic growth, slowdowns in consumption, manufacturing and tourism, and the mounting pressures on household incomes and national stability. Structural weaknesses have deepened. Thailand, Southeast Asia’s second-largest economy, has been stuck in a low-growth trap of roughly 2% for the past five years.
The contrast with the past is stark. In 1988, Thailand’s economy expanded by 13%. Today, that era of dynamism feels distant. Demographics are deteriorating: the country is ageing rapidly, the population has declined for four consecutive years, and the 2025 birth rate was the lowest in 75 years. Household debt stands near 90% of GDP, the highest ratio in Asia. Competitiveness has eroded as Thailand loses market share to emerging rivals. Domestic manufacturing faces pressure from cheap Chinese imports and intensifying competition from Vietnam. Even the automotive sector, long the backbone of Thai industry, has shown strain, with several Japanese manufacturers closing plants or cutting production.
Shortly before Thailand’s general election, another foreign report, Bloomberg, highlighted the reformist opposition’s ambition to revive the “fifth tiger” narrative, invoking the country’s once-celebrated growth potential. Both international perspectives captured the same underlying reality: a prolonged economic slowdown over the past two to three decades.
The election result on February 8th, however, delivered a political surprise. The conservative Bhumjaithai Party secured more than 190 parliamentary seats, winning a decisive plurality and positioning itself to form a stable government. The implications for policy continuity, and for economic strategy, are significant. Economic policy has never been central to Bhumjaithai’s political brand. Yet its transformation into the leading party has been accompanied by the recruitment of respected technocrats, Dr Ekniti Nitithanprapas as deputy prime minister and finance minister.
Dr Ekniti rejects the nostalgic narrative outright. Thailand, he argues, was never truly an Asian tiger. “We were not even a tiger”, he remarked in a recent interview. The boom preceding the 1997 Asian financial crisis, in his view, was overstretched growth that ended predictably in collapse. His metaphor for today’s economy is equally blunt: Thailand resembles an ageing car, old engine, elderly driver, obsolete technology, stuck in traffic created by cumbersome regulations. Without reform, he warns, the country risks becoming Asia’s economic sick man.
Political economy provides part of the explanation. Over the past two decades, Thailand has suffered persistent instability that undermined policy continuity. According to political scientist Thitinan Pongsudhirak, conservative elites were unable to win elections consistently after the rise of Thaksin Shinawatra’s Thai Rak Thai Party in 2001, which built unprecedented grassroots support. Electoral victories by the Thai Rak Thai Party were repeatedly followed by institutional interventions—military coups, judicial dissolutions, and constitutional rewrites—culminating in the 2006 and 2014 coups. The result was prolonged uncertainty and high political costs.
Thailand has had only two administrations to complete full four-year terms since 2001: Thaksin’s elected government and Prayut Chan-o-cha’s military-backed administration, which did not win the popular vote. Against this backdrop, the latest election marks the first time in two decades that conservative forces have secured a decisive electoral mandate.
Financial markets responded quickly. Thai equities surged nearly 50 points, with trading volumes exceeding 102 billion baht, levels unseen for years. Investors appeared to welcome the prospect of political stability. Ironically, part of the victory of the Bhumjaithai Party stemmed from earlier parliamentary support it had received from a progressive party, the People’s Party, during leadership votes.
The party had voted to back Anutin Charnvirakul as prime minister in exchange for constitutional amendments promised for September 2025. The agreement ultimately collapsed, however, and instead contributed to a conservative electoral advantage. This shift was reinforced by a surge of nationalist sentiment along the border with Cambodia, as well as by the government’s influence over bureaucratic appointments and reshuffles, which in turn affected the outcomes of local elections.
Analysts widely expect the new administration to complete a full term, potentially restoring policy predictability. Yet stability alone will not revive growth. As Thitinan notes, voters who once supported reformist parties did so in search of a structural transformation that could reposition Thailand within global supply chains. If the new government fails to deliver tangible improvements in incomes and opportunities, public frustration may intensify. Electoral victory, in that sense, could prove temporary.
Political stability is a necessary but insufficient condition for economic revival. The past two decades suggest that Thailand’s weak growth and inconsistent policy trajectory were shaped not simply by electoral outcomes but by repeated disruptions triggered when reformist parties won power. Conservative actors often treated political stability as leverage, intervening through military or judicial means. Now, with conservatives holding a clear democratic mandate, the burden of proof has shifted. If economic recovery follows, it may reshape Thailand’s political narrative. If not, the argument that stability alone can deliver prosperity will ring hollow.
