In a surprising turn of events, the reformist Move Forward Party secured the most seats in Thailand’s 2023 elections, but it was the populist Pheu Thai Party that ultimately formed a majority government, overlooking the country’s stagnant economy. The new government’s approach favored immediate demand stimulus over fundamental economic reforms, opting for a ‘digital wallet’ cash handout and a minimum wage hike, while neglecting long-term issues such as low private investment and worker productivity.

The 2023 elections brought about significant political changes in Thailand, with the reformist Move Forward Party winning 151 seats, largely due to its support among younger voters. However, the party’s efforts to form a government were thwarted by maneuvering within the unelected 250-member senate, leading to the formation of a coalition government led by the Pheu Thai Party.

Despite these political developments, Thailand’s economy continued to experience sluggish growth, with 2023’s real GDP growth estimated at 2.5 per cent, the lowest in Southeast Asia after Myanmar. The outlook for 2024 and beyond indicates similarly weak growth, while inflation remained below 1 per cent and real wages continued to stagnate.

Following the election, the Pheu Thai Party swiftly moved to fulfill its campaign promises, initiating a ‘digital wallet’ program that allocated 10,000 Thai baht (US$286) to each citizen for local purchases. This approach, while providing immediate relief, raised concerns about the government’s failure to address long-standing economic challenges.