Veerayut Kanchuchat points out three warning signs beneath Thailand's 2.8% GDP growth in the first quarter: closures of small factories, a record trade deficit with China, and severe difficulties in the agricultural sector facing falling prices, resulting in hardships.
On 19 May 2026 GMT+7, Veerayut Kanchuchat, party-list MP and deputy leader of the Prachachon Party, posted on Facebook about three warning signs beneath Thailand's 2.8% GDP growth: the gradual closure of small factories, a record trade deficit with China, and severe agricultural sector struggles. He noted that today, the National Economic and Social Development Council (NESDC) released Thailand's Q1 GDP growth figures of 2.8%. Compared to other ASEAN countries (Singapore 4.6%, Malaysia 5.4%, Vietnam 7.8%), this may seem low, but against Thailand's own prior quarter growth of 2.5%, it indicates an improving trend.
The main driver this quarter was private sector investment, which expanded by 10.1%. When combined with public investment growth of 9.4%, total investment in Thailand grew by 9.9%, the highest rate in 11 years. Encouragingly, this growth was driven by investment in machinery, a key indicator of quality investment.
Another important contributor this quarter was tourism, with service revenues approaching 500 billion baht, nearly recovering to pre-COVID levels.
However, a critical caveat in interpreting the global Q1 economic data is the impact of the Middle East conflict, which began seriously affecting conditions from mid-March onward. We must pay close attention to emerging "warning signs" amid the positive figures, as these negative signals risk intensifying from Q2 onward.
Veerayut further explained that beneath the 2.8% GDP growth in Q1 lie three warning signs: 1. While large factories expand, small factories are gradually closing, with a steep drop in automobile production. This is the first time in 10 quarters, since late 2023, that the number of factory closures exceeds openings. Although many medium and large factories continue to expand, small factories (employing up to 50 people) are closing at a faster rate than new openings, especially in metal and automotive manufacturing.
This aligns with negative export data beneath the overall positive export figures. Manufacturing sectors with high local content, such as passenger cars, aircraft, air conditioners, washing machines, and wood products, all show export declines ranging from -6% (air conditioners, washing machines) to -43% (passenger cars).
2. Exports are growing, but imports are growing even faster, leading to a record trade deficit with China. Almost every quarter headlines highlight "Thailand's record-high exports," which is true. In Q1 this year, Thai exports reached 2.9 trillion baht, up nearly 8%, an all-time high. However, international trade must be viewed from both sides to understand the true economic picture.
Data from the Ministry of Commerce clearly show that while exports surged, Thailand's imports also soared, reaching 3.3 trillion baht in Q1, up 21%, an unprecedented import level exceeding exports. This is the highest import growth in 18 quarters, resulting in a net trade deficit of 336.5 billion baht in just the first three months of this year. This deficit already surpasses the entire 2025 deficit of 310.3 billion baht. Focusing on trade with China alone, Thailand's deficit is on track for a new high: Q1 2026 deficit with China was 679.7 billion baht, up 40% from last year. Comparatively, in 2025 the full-year deficit with China was 2.27 trillion baht; in 2024, it was 1.62 trillion baht. This record increase happens every year, yet no government has thoroughly examined its impact on Thai manufacturing and labor.
3. Farmer incomes have declined for four consecutive quarters. The most concerning issue requiring serious attention is Thailand's agricultural sector. The agricultural product price index has dropped for five straight quarters, causing farmer incomes to fall for the fourth consecutive quarter by 6%, worsening from the previous quarter's 13% decline.
This is due to falling prices for key Thai agricultural products, including rubber (-12%), pork (-15%), paddy rice (-7%), sugarcane (-22%), and palm oil (-14%).
This trend aligns with continued declines in agricultural export values over several years, especially in the three main products: rice (-16%), rubber (-22%), and fruits (-14%).
Beneath the 2.8% Q1 GDP growth and encouraging investment figures, we must monitor and address three emerging negative signals: the gradual closure of small factories, unprecedented high import values, and the agricultural sector facing continuous price and income collapses.