Populist pledges by political parties have apparently diminished during campaigns for next month’s polls

Compared with the previous election, when some parties promised to distribute hundreds of billions of baht in cash and others pledged infrastructure projects worth trillions, the level of populism in campaign pledges during this election appears to have declined, which academics see as a positive development.

DIMINISHING POPULISM

Nonarit Bisonyabut, a research fellow at the Thailand Development Research Institute, said populist vows by political parties in this election appear to have diminished.

However, the detailed policy documents that political parties must submit to the Election Commission (EC) explaining how much each policy would cost have not been seen.

"Unlike the last election, when some parties proposed handing out hundreds of billions of baht in cash and others proposed trillion-baht infrastructure projects, such policies are absent this time. Even the elderly allowance, which was previously advertised at 3,000 baht per person per month, has now been reduced to 1,000 or 1,500 baht, which is considered more moderate," he said. "The reduction in populism is a positive sign."

Mr Nonarit said the decline in populist policies among political parties may be due to EC requirements that parties must explain the sources of funding for each policy, as well as fiscal constraints stemming from more limited government finances.

"At a minimum, the absence of aggressive populist policies opens some room for parties to compete on who can better address the country’s structural problems, such as debt resolution, public health reform and workforce development," he said.

NEW TRENDS

A Finance Ministry source who requested anonymity said party policies in this election reflect three common trends.

The first trend is gamification of the economy, drawing on behavioural economics, with many parties beginning to use "game-based mechanisms" as economic incentives.

Examples include Pheu Thai’s retirement lottery policy, which encourages savings through the National Savings Fund with prize draws as incentives; the People’s Party’s SME receipt lottery, which links consumers with small and medium-sized enterprises through lottery mechanisms; and the Democrat Party’s provincial savings lottery, which promotes savings through prize draws.

The People’s Party’s SME receipt lottery scheme aims to increase customers for SMEs by creating incentives for the public to purchase SME products, with government lottery tickets to be offered for a chance to win prizes.

This approach leverages "desire", or preferences in economic terms, to address problems related to savings and tax system participation.

The second trend is targeted productivity, with parties shifting away from unconditional cash handouts and towards policies focused on training and artificial intelligence (AI). The emphasis on AI by Bhumjaithai and Pheu Thai reflects growing political awareness of the middle-income trap, a long-time structural challenge facing Thailand.

The third trend concerns elevating debt restructuring to a national agenda item, with all parties focusing on resolving non-performing loans and household debt. Policymakers recognise that without addressing household debt, consumption cannot expand as people remain trapped in debt.

PRIORITY SUGGESTIONS

Mr Nonarit advised the new government to "unlock" Thailand’s economy by addressing the problem of high household debt, reaching a conclusion on trade agreements with the US, addressing the issue of strong inflows of foreign direct investment (FDI) that do not translate into tangible benefits for the economy and restoring confidence in the tourism sector.

He said household debt remains high at around 86% of GDP. Such a high level of debt weakens the effectiveness of government stimulus measures, as they yield limited or no results due to low consumer spending power.

Most household income must be used to service debt. Therefore, a long-term strategy is needed to address this issue, but debt forgiveness should not be adopted, as it would create moral hazard.

According to Mr Nonarit, trade agreement issues between Thailand and the US, which are suppressing the nation’s economic potential, require urgent resolution.

He said the trade war is unlikely to end easily even if the US Supreme Court were to rule that President Donald Trump lacks authority to impose tariffs under the Reciprocal Tariffs policy.

Trump is believed to continue to use other laws to target various countries. Therefore, Thailand must mitigate the impact of the trade war and turn it into an opportunity to enhance the country’s competitiveness.

Against the backdrop of FDI strategic planning, he questioned how the new government will ensure that the large volume of FDI promoted through the Board of Investment in recent years translates into tangible benefits for employment and the domestic economy.

Some investments, such as data centres, require substantial capital outlays, yet Thailand mainly benefits from land rentals and electricity charges.

These projects generate limited employment and offer minimal spillover benefits to large, medium and small domestic industries. This stands in contrast to earlier waves of FDI, which had a broader impact by creating jobs and integrating local businesses into global supply chains.

The new government is also being urged to accelerate reviving tourism and capitalise on Thailand’s lack of geopolitical conflicts with any country to attract more tourists, especially from China.

"We must restore confidence and take advantage of the fact that Thailand has no geopolitical conflicts with any country. We must bring tourists back by assuring them that Thailand is safe," Mr Nonarit said.

Regarding Thailand’s economic outlook for 2026, he said he expects growth of only 1.5-1.7%, as several economic engines are still not operating at full capacity. Domestic investment has not translated into higher household incomes because labour has not sufficiently benefited from FDI-related employment.

Tourism is recovering slowly, with foreign arrivals of 36 million projected for this year, slightly higher than last year. Meanwhile, persistently high household debt continues to constrain consumer spending.

The general election scheduled for February could affect the preparation of the 2027 budget, potentially causing delays. As a result, investment expenditure under the fiscal 2027 budget may not be disbursed from October to December, which could weigh on economic activity this year.

CAMPAIGN PLEDGES

People’s Party

Proposals include replacing household electrical appliances with Made-in-Thailand products, with government subsidies of 5,000 baht per person; measures to strengthen Thai SMEs by raising the value-added tax (VAT) registration threshold from annual revenue of 1.8 million baht to 3.6 million, and applying a flat VAT rate of 2.1% instead of the standard 7%; and a co-payment scheme in which the government provides 1,000 baht per person for 12 million people.

Bhumjaithai Party

Policies include electricity prices capped at 3 baht per unit for the first 200 units of consumption; pushing forward the second phase of the co-payment scheme; promoting savings and investment through the Thailand Individual Savings Account with higher tax deductions for salaried employees; a three-year suspension of both principal and interest for debts not exceeding 1 million baht; and the Land Bridge project linking the Gulf of Thailand and the Andaman Sea.

Pheu Thai Party

Policies include a flat 20-baht fare for all electric train lines; allowing debts below 200,000 baht to be settled by repaying 10% of the outstanding amount; debt write-offs for individuals 60 and older with debts below 100,000 baht held by state financial institutions; reducing electricity prices to 3.70 baht per unit; and a three-year suspension on both principal and interest for farmers’ debts not exceeding 500,000 baht per borrower.

Democrat Party

Policies include capping electric train and bus fares at 30 baht per trip; income guarantees for farmers at 1,000 baht per rai for key crops such as rice, rubber, cassava, palm oil and maize; reducing electricity prices to 3.50 baht per unit; cutting personal income tax and doubling tax deductions; investing in a high-speed rail line linking Nakhon Ratchasima-Nong Khai-Kunming; elderly allowances starting at 1,000 baht per month; and increasing disability allowances to 1,600 baht per month from the current 800 baht.