Thailand’s Billions Fail: Bangkok Stock Market Plummets
Thailand’s stock market is experiencing a dramatic downturn, defying a multi-billion-dollar government intervention and raising serious concerns about the country’s economic health. The benchmark SET Index has plummeted over 16% this year, making it the worst-performing of the 92 global indexes tracked by Bloomberg. This sharp decline underscores the failure of the government’s ambitious market rescue plan and highlights deep-seated investor pessimism.
The core problem is a lack of confidence in the government’s ability to stimulate the economy beyond the tourism sector. Concerns about persistently high household debt, lingering political uncertainties, and a series of corporate scandals have further eroded investor trust. Exacerbating these domestic pressures are global economic headwinds, including U. S. President Donald Trump’s trade policies and a strengthening U. S. dollar, triggering capital flight from emerging markets, including Thailand.
Last August, the Thai government launched a seemingly promising initiative: a $4.5 billion injection into the Vayupak Fund, a state-run investment vehicle designed to bolster the stock market by investing in local companies. Initially, this move was met with optimism, with analysts at Goldman Sachs upgrading Thai stocks in anticipation of renewed foreign investment. This optimism proved short-lived.
Despite Macquarie analysts' estimates that 50% to 60% of the Vayupak Fund has been deployed, the SET Index has continued its downward spiral, falling nearly 10% since the fund’s injection. The reality of Thailand’s economic challenges—sluggish growth and stubbornly high household debt—quickly overshadowed the initial enthusiasm. In November, Goldman Sachs reversed its earlier upgrade, downgrading Thai stocks and citing these unfavorable economic fundamentals.
The government, led by Prime Minister Paetongtarn Shinawatra, now faces mounting pressure to implement more forceful economic revival measures. Investors are demanding decisive action to create a more business-friendly environment and stronger regulatory reforms. In response, the government recently unveiled a $44.4 billion cash handout plan aimed at stimulating growth. Other measures include pushing for a weaker currency to support tourism and exports, increasing infrastructure investments, proposing the legalization of casinos, and introducing tax incentives for stock market investments.
However, these efforts have yet to gain traction. Chavinda Hanratanakool, CEO of Krung Thai Asset Management, a co-manager of the Vayupak Fund, acknowledges the pervasive negative sentiment, noting that even these government interventions have been insufficient to counter the global downturn. While the government remains hopeful that its efforts to boost economic growth will ultimately succeed, the current market response suggests deep-seated skepticism.
Thailand is not alone in its struggles. Other emerging Asian markets, including Indonesia and India, have also experienced significant stock and currency market sell-offs due to the strong U. S. dollar. However, the magnitude of Thailand’s stock market decline in 2025 (the text incorrectly states 2025, likely a typo meant to be the current year) significantly outpaces its regional peers, highlighting the erosion of investor confidence in the country’s economic outlook. Analysts, such as Kaushal Ladha, Head of Research Thailand for Macquarie Capital, point to a lack of clear catalysts to address Thailand’s structural challenges, coupled with a general lack of conviction among both foreign and domestic investors, as contributing factors to the ongoing market downturn. The future of Thailand’s stock market remains uncertain, hinging on the government’s ability to effectively address these underlying economic concerns and restore investor confidence.
