Bangkok: Thailand's current economic outlook is defined as a "K-shaped economy," characterized by clear uptrends and downtrends, particularly for small and medium-sized enterprises (SMEs). These SMEs face rising costs, dwindling liquidity, and fierce competition from large corporations and foreign products.
According to Thai News Agency, a report from the Office of the Small and Medium Enterprise Promotion (OSMEP), comparing data between Q4 2025 and Q1 2026, reflects concerning trends for Thai SMEs across three main groups. The Green group, indicating continued growth, has declined sharply from 21% to just 6%. Meanwhile, the Yellow group, which sustains income enough to pay debts but not enough for investment, has increased from 61% to 72%, making it the largest group currently. The Red group, facing continuing losses and needing new loans, has increased from 18% to 22%.
The most worrying issue is the debt situation, with most SMEs found to be in a "hybrid debt" situation, meaning they have both formal and informal debt. This figure has risen from 40% at the end of last year to 47% in the first quarter of this year. This problem is extremely dangerous because soaring interest rates on informal debt erode the ability to repay formal debt, potentially leading to a chronic problem.
Mr. Saengchai emphasized that Thai SMEs must transition from competing on price to competing on quality, standards, and innovation. The key approaches include utilizing technology and AI to create "smart SMEs," raising standards with certifications like FDA, TIS, Halal, or Green Standards, and accessing funding and government measures such as the BDS project of the Small and Medium Enterprise Development Bank (SME Bank), incentives from the Board of Investment (BOI), and fundraising channels through the Stock Exchange of Thailand's Live Exchange.
Additionally, branding is crucial, involving establishing an identity and trust at three levels: product brand, corporate brand, and CEO branding, to build consumer confidence. In conclusion, although Thai SMEs are affected by external factors such as geopolitical and trade wars, if entrepreneurs can "break away" from traditional business models, create differentiation through innovation, and access support strategies from various agencies such as DEPA, NIA, or research institutions, these small businesses can become "small but mighty," agile, and sustainably growing in the new economic landscape.