The Elephant Not in the Room: Thailand’s 2026 Election Campaigns Sidestep Structural Reforms

In the run-up to Thailand’s general election in February 2026, economic policy has emerged as the main arena of political competition. While most proposals focus on short-term responses to weak economic growth, party platforms differ in important ways. A divided political landscape, where no clear frontrunner can form a single-party government, constrains the structural reforms required to improve Thailand’s long-term economic performance.

The incumbent Prime Minister Anutin’s Bhumjaithai Party comes with “10+ economic policies,” spanning ten broad areas, including the state welfare card plus programme and the made-in-Thailand initiative to support SMEs. The party plans to continue the half–half plus co-payment scheme for purchasing basic goods, food, and services at local shops, excluding alcohol, tobacco, and lottery. This signature programme of Anutin’s brief administration aimed to stimulate domestic consumption, with individual entitlements of THB 2,000–2,400 (US$63.80-76.50). It covered 19.76 million beneficiaries and generated total spending of THB 84 billion (US$2.68 billion).

The People’s Party, Bumjaithai’s foe turned coalition partner, promotes a “new economic model” built on three pillars — new industries, quality jobs, and Thai-made technology — through 54 policy proposals. These include digitalisation and AI-driven upgrading, infrastructure and labour reforms, and a strategic focus on semiconductors and electronics. The party’s platform still bears the imprint of the former Future Forward Party, particularly its strong emphasis on welfare policies spanning the entire life cycle.

Meanwhile, the Pheu Thai Party ousted in September 2025 by the surprising Bhumjaithai-People’s Party pact, presents a broad economic platform. Key proposals include agricultural profit guarantee, the 70-30 scheme (an extension of the original half-half co-payment), a retirement lottery scheme, and a flat fare across all electric rail lines in Bangkok, many of which resemble policies pursued during the party’s earlier terms in office. The party also stresses fiscal discipline, pledging to reduce the fiscal deficit to strengthen the country’s credit standing. It has revived key legacy policies, notably the 30-baht universal healthcare scheme, now extended to mental health, and price guarantees for major agricultural products.

Overall, the three major political parties, which have dissolved former alliances to be head-on rivals in the election, present comprehensive economic proposals covering most segments of the economy, with a strong emphasis on the poor, the elderly, and workers and entrepreneurs in the SME sector — groups that together constitute the majority of voters. Technology and AI clearly emerge as common keywords across party platforms, framed as tools for upgrading skills and improving production efficiency. However, the economic rationale behind the policy agenda of the three parties differs in important ways, and this may constrain their common ground and capacity to collectively address deeper structural challenges.

Some structural reforms on income inequality, industrial policy, and a rapidly ageing workforce can be addressed without requiring a unified government or radical policy realignment.

Bhumjaithai’s approach prioritises consumption stimulus, which can further increase the public debt–to–GDP ratio, now at 65.7 per cent, the highest level in three decades. The People’s Party advances a supply-side economic upgrading strategy, emphasising a new economic model and skill formation. This approach requires institutional capacity and longer gestation before productivity gains materialise, because it depends on reforms to outdated laws and regulations (e.g., restrictive investment law), as well as sustained investment in education and skills formation whose effects only emerge when new cohorts of workers enter the labour market. Pheu Thai’s platform occupies a more ambiguous position. While the party frames its agenda around fiscal discipline and fiscal deficit reduction, several flagship proposals — such as, annual cash top-ups for low-income earners, debt relief measures, and flat electric rail fare — carry high fiscal costs. The platform, however, does not clearly specify how these measures will be financed.

Despite the attractive propositions in these election campaigns, Thailand’s divided political landscape may constrain the scope for addressing long-term structural challenges. Without a clear frontrunner capable of forming a single-party government, economic proposals remain underspecified, allowing parties to retain flexibility once in office rather than committing to detailed policy designs that could limit post-election negotiation. However, some structural reforms on income inequality, industrial policy, and a rapidly ageing workforce can be addressed without requiring a unified government or radical policy realignment.

Reducing economic inequality provides a useful example. The 2026 World Inequality Report reveals that Thailand’s income and wealth inequality is higher than in other developing countries such as Indonesia and Vietnam. Rather than relying on wealth taxation that increases the risk of capital flight and elite resistance, piecemeal reforms (e.g. broadening tax bases and better targeting of existing welfare programmes) can mitigate inequality without expanding fiscal commitments.

Industrial policy is another arena that may hold out viable pathways for coalition governance, which tends to struggle in managing the competing interests of major business groups, powerful lobbies, and large corporations. In this vein, the next government could anchor industrial policy in sectors where Thailand already possesses comparative advantages. The major parties’ economic platforms are consistent with the development of next-generation electronics and automobiles through deepening capabilities in local downstream services and mobilising resources towards research and development.

Effective industrial policy in these two sectors could provide impetus for extension to other sectors, given their long and interconnected production networks. The automobile industry’s push to expand beyond vehicle assembly could promote original equipment manufacturers, original equipment services, and the replacement market. The semiconductor sector could potential spur wider industrial upgrading, but this would require strategic value chain targeting, particularly at higher-value activities such as IC design and advanced packaging. Thailand’s current policy debate, and the major election platforms, still lack such long-term structural vision.

Policy proposals on ageing society have centred on increasing monthly allowances and improving age-friendly infrastructure. While important, these measures address the consequences of ageing rather than its economic implications. Labour market-oriented measures, such as supporting age-friendly jobs for the elderly and retraining mid-skilled workers, are more politically feasible than expanding old-age allowances or raising the retirement age because they are less costly and better aligned with shared well-being objectives.

As Thailand’s general election approaches, political parties have proposed short- and medium-term economic proposals to revive the economy. While their economic rationales differ, some structural challenges could be tackled through incremental reforms within Thailand’s fragmented political constraints, although various deep-seated structural problems remain weakly addressed.

2026/14