Bangkok: The Thai economy is anticipated to experience significant volatility in mid-2026, with inflation figures showing a slowdown to 1.08% in June. Despite this, the cost of living and prices of finished goods continue to rise, posing a formidable challenge for small and medium-sized enterprises (SMEs), according to Dr. Wisit Limluecha.
According to Thai News Agency, a temporary respite has been provided by the improvement in global oil prices, largely due to a 60-day ceasefire agreement between the US and Iran aimed at facilitating negotiations. This development has positively impacted business sentiment as oil prices influence various sectors, including transportation and petrochemical packaging. Nonetheless, global purchasing power remains subdued, with consumers prioritizing essential and cost-effective goods over discretionary spending.
The primary concern for Thai SMEs is that sales are not keeping pace with rising costs. These businesses are grappling with increased expenses related to raw materials, energy, rent, labor, and transportation. Concurrently, consumer spending is cautious due to household debt issues, and access to credit is increasingly challenging as banks become more risk-averse, often denying loans to businesses lacking collateral or with unstable sales.
To navigate this downturn, Dr. Wisit offers five survival strategies for small businesses:
1. Weekly Cash Flow Management: SMEs should shift from monthly to weekly monitoring of income and expenses to maintain sufficient cash flow for purchasing raw materials.
2. Focus on Profitable Core Business: Identify and prioritize products that generate primary profits, while reducing emphasis on unprofitable or loss-making items.
3. Target Niche Markets and Seniors: Shift focus from mass markets to niche segments with stable purchasing power, such as financially prepared senior citizens, and engage with their communities to understand their needs.
4. Expedite Debt Collection and Negotiate Credit Terms: Ensure timely payment from trading partners by negotiating stringent payment terms to avoid cash flow issues.
5. Avoid Unnecessary High Standards: For SMEs involved in exports, meeting every standard set by large corporations can be costly. Instead, meet the minimum standards required by destination countries to maintain profitability.
Dr. Wisit emphasizes the necessity for SMEs to adapt by shifting from mass production aimed at cost reduction to adding value and diversifying risks across multiple markets. Managing liquidity, he stresses, is crucial: "You must have cash on hand. If you run out of cash, it will be very difficult to continue," he concluded, urging entrepreneurs to exercise caution in an era where uncertainty is the only certainty.