Thai economy slump drives rise in temporary and part-time employment, says NESDC

Thailand’s prolonged economic slowdown has directly affected the labour market, with businesses slowing investment, reducing staff, and increasingly hiring workers on contractual or part-time terms rather than permanent full-time roles.

Danucha Pichayanan, Secretary-General of the National Economic and Social Development Council (NESDC), reported in the Q2 2025 social report that recent economic uncertainty has prompted organisations to move from permanent full-time employment to contractual and part-time positions.

A JobsDB 2024 survey found that over 25% of organisations in Thailand planned to reduce staff and restructure, favouring contract and part-time employment. Data from 2022 to 2024 show that non-full-time employment in medium and large companies surged: permanent part-time roles rose from 6% to 42%, and temporary/contract part-time roles from 4% to 28%.

This shift also reflects the rise of the gig economy, where businesses hire on a per-task basis to cut costs and adapt to economic uncertainty. Greater adoption of technology has further facilitated part-time and temporary employment.

Danucha warned that the trend towards contract-based work, particularly in large firms, could undermine job security and workers’ income, leaving many without full legal employment rights. He stressed the government must focus on protecting workers in this changing labour landscape.

Advice for early retirees and voluntary exit programmes

For employees aged 45 and above, some firms are offering voluntary exit schemes as part of restructuring, replacing older staff with lower-paid new hires. Danucha emphasised that workers leaving under such schemes should plan carefully for their future, as the compensation received will not cover living costs until retirement age. Options include starting a business or other income-generating activities, depending on personal readiness.

“Today’s cost of living means people cannot survive without work, and government welfare is insufficient. Workers leaving without a clear plan risk social and financial difficulties,” Danucha said, urging individuals to consider carefully before opting for voluntary retirement.

Impact of US tariffs on employment

Danucha highlighted that the Thai labour market could be affected by the US import tariff adjustments. The United States has imposed various tariffs, including specific tariffs on selected products, reciprocal tariffs of 19% applied to Thailand, and measures to prevent misuse of rules of origin.

Thailand must also adjust tariffs on over 10,000 US imports to 0%, particularly agricultural products, which may weaken the competitiveness of Thai goods and affect employment and working hours. Donucha stressed that the government should support the opening of new markets, implement measures to protect Thai products, and monitor potential misuse of origin rules.

Temporary impact from Cambodian labour issues

Meanwhile, Thailand faces a shortage of foreign labour. Currently, 388,000 migrant workers have not renewed their work permits or completed necessary procedures. In addition, Cambodia is reportedly pressuring workers to return home, creating risks of labour shortages in construction, manufacturing, and agriculture.

The Thai Cabinet has approved bringing in workers from other nationalities, including Sri Lanka, Nepal, the Philippines, and Indonesia, to substitute for the shortfall. NESDC views these effects as short-term, manageable, and unlikely to severely impact the Thai economy.

NESDC also warned that work-related hazards are likely to rise. Although serious accidents remain relatively rare, research by Silpakorn University indicates that even the loss of a finger, hand, or arm can significantly diminish a worker’s economic and social standing. Psychological impacts are also difficult to compensate for fully.

Employers are therefore advised to maintain machinery and tools regularly, train employees on safety, and consider opportunity costs when providing compensation to affected workers.

Overall employment trends in Q2 2025

Employment in Thailand remained largely stable in Q2 2025. Non-agricultural employment was near last year’s level, while agriculture continued to contract, making it important to monitor the impact of US tariff adjustments, potential prolonged border disputes, evolving employment patterns, and increasing work hazards.

• Total employment: 39.5 million, up 0.02% from Q2 2024.
• Non-agricultural employment grew 0.4%, with the strongest gains in:
  • Transport and storage: +7.9%
  • Hotels and restaurants: +3.1%
  • Manufacturing: +0.5%

• Employment declined in:
  • Construction: -3.7%
  • Wholesale/retail trade: -1.2%

• Agricultural employment continued to fall 0.9%, particularly in the North, with working hours stabilising at 42.7 hours/week, compared with 46.9 hours/week in the private sector.
• Overtime hours fell 8%, and underemployment decreased 4%.
• Private-sector wages and formal employment wages increased 2.4% and 2.5%, respectively.
• Overall employment fell 1.9%, while the unemployment rate declined to 0.91% from 1.07% in Q2 2024 (370,000 unemployed), mainly among vocational and higher-skilled workers.
• Underemployed workers (those with less than 4 work hours per day) rose 5.2% year-on-year, totalling 2.1 million.

Household debt concerns become harder to resolve

Danucha stated that Thailand’s household debt situation remains under pressure. Although household debt has slightly decreased, the structure of borrowing is increasingly worrying, particularly the growing reliance on informal loans through online applications and the widespread use of “buy now, pay later” (BNPL) services.

Borrowing through savings cooperatives accounts for as much as 15% of total household debt, yet these loans are not recorded in the credit bureau system, creating structural issues that are harder to resolve. This results in underestimation of actual household debt and may conceal risks in the financial system. NESDC emphasised that the supervision of savings cooperatives should involve professionals with financial institution expertise, in addition to oversight by the Department of Cooperative Promotion.

In Q1 2025, total household debt stood at 16.35 trillion baht, contracting slightly by 0.1% following several quarters of slowing growth. This brought the household debt-to-GDP ratio down to 87.4%, from 88.4% in the previous quarter.

However, this slowdown does not reflect household financial strength, as credit quality remains an issue, particularly non-performing loans in auto hire-purchase and credit card debt, which continue to expand.

Signs of vulnerability remain evident, especially in informal online borrowing, where many borrowers rely on high-interest, unregulated loans through social media and lending apps. These often exceed legal interest rate limits and involve illegal debt collection practices, requiring serious oversight and enforcement.

Similarly, BNPL services, which encourage consumers to overextend themselves—such as SPayLater from Shopee and LazPayLater from Lazada—have expanded widely. Credit approval often does not consider the borrower’s actual income, resulting in some individuals being granted limits of hundreds of thousands of baht beyond their repayment capacity. Since such debt is not linked to credit bureau databases, it may lead to significant non-performing loans in the future.

“Household debt is like a time bomb. Resolving it is already complex and is becoming more difficult, especially on platforms that allow consumers to eat or fill up petrol and pay later in instalments. This is an issue that requires serious oversight, because if left unchecked, the problems are likely to worsen. These types of services should ideally require full payment upfront, rather than allowing instalments,” Danucha warned.