Thailand’s stock market has plunged to its lowest level since the COVID-19 pandemic began. The SET Index has dropped 16% this year, making it the world’s worst performer among 92 indexes tracked by Bloomberg. Investors are losing faith in Thailand’s economic outlook due to weak growth, high household debt, and political uncertainties.
The government’s efforts to revive the market with a $4.5 billion injection into the Vayupak Fund have fallen flat. Analysts say more urgent steps are needed to support the market. “Most people realise our equities are trading at very cheap valuations, but it’s hard to convince them to invest in stocks now with poor sentiment and a weak economic outlook,” said Narongsak Plodmechai, CEO at SCB Asset Management.
Thailand isn’t the only emerging market in Asia to get hit. Stocks and currencies in Indonesia and India have also been sold off due to dollar strength.
Thai market faces major challenges
However, Thailand’s 2025 stock market tumble is at least double that of its peers. “We continue to see foreign outflows as there are no clear catalysts that Thailand will overcome its structural challenges,” said Kaushal Ladha, head of research Thailand for Macquarie Capital. In response to the market decline, the Thai government has announced new measures aimed at stabilizing the market and boosting investor confidence.
These include tax incentives for investors, relaxed regulations on stock trading, and direct financial support for key sectors of the economy. Finance Minister Arkhom Termpittayapaisith said, “We are committed to ensuring the stability and integrity of our financial markets. These measures will provide much-needed support to our stock market during these challenging times.”
The announcement had an immediate impact on market sentiment, with a slight uptick observed in early trading sessions.
However, financial analysts say sustained and effective implementation will be key to restoring investor confidence in the long term. Thailand is taking decisive action to mitigate the effects of the recent stock market slump. The effectiveness of these measures will be closely monitored by both domestic and international market participants.
