The Bank of Thailand has instructed financial institutions and payment platforms to monitor suspicious fund flows as part of its efforts to curb the grey economy, which it views as one of the country’s key structural economic challenges.
Speaking at the Bank of Thailand Southern Region Office Annual Seminar 2026, titled “How Can Southern Businesses Adapt in an Uncertain World?”, held on Monday, central bank governor Vitai Ratanakorn said it has instructed financial institutions, payment platforms and money changers to strengthen monitoring of suspicious fund flows.
The move forms part of the central bank’s broader efforts to prevent illicit financial transactions and reduce grey money, which it considers a major structural challenge to the Thai economy.
“We do not want regulated financial service providers, including banks, e-money providers and payment gateways, to become involved in transactions linked to illegal activities, the grey economy or corruption,” Mr Vitai said.
He said combating illicit financial activities remains the Bank of Thailand’s top priority because they undermine Thailand’s economic and institutional foundations.
As a result, the central bank will further tighten regulatory oversight. It has already introduced a range of measures to monitor suspicious fund flows and reduce illicit transactions.
Following the introduction on April 1 of a requirement for customers withdrawing more than 5 million baht in cash to declare the source of the funds, suspicious transactions have already declined by around 35%, Mr Vitai said. The central bank aims to increase that reduction to 70%.
In the fourth quarter of this year, the central bank plans to introduce a similar requirement for customers depositing more than 5 million baht in cash to declare the source of their funds as part of its continued efforts to curb grey money.
“Some people may wonder what this has to do with the Bank of Thailand, but we are the country’s banknote issuer,” the governor said.
The central bank has also stepped up oversight of gold trading conducted in baht via digital platforms.
Mr Vitai said such transactions have contributed to baht movements that are inconsistent with Thailand’s economic fundamentals and may also be linked to grey money.
Following the implementation of the measure, the correlation between the baht and gold prices has fallen from 0.8 to 0.45.
Mr Vitai also said Thailand needs structural reforms to raise its long-term growth potential, which has declined from around 5% in the past to 2.7% today.
Although the central bank recently revised up its 2026 GDP growth forecast to 2.3% from 1.5%, he said the pace of expansion remains unsatisfactory because growth continues to be uneven and K-shaped amid heightened global uncertainty.
According to Mr Vitai, Thailand is facing a “new normal” characterised by increasingly frequent global shocks and a shift away from globalisation towards a world shaped by geopolitics and geoeconomics. This transition has led to greater global fragmentation and the emergence of a multipolar economic landscape.
Turning to the southern economy, Mr Vitai said the region has historically recorded stronger economic growth than other parts of the country, with gross regional product (GRP) expanding at a faster pace. However, its heavy reliance on external markets also makes it more vulnerable to global shocks.
Tourism accounts for about 20% of the southern economy, with roughly 80% of visitors arriving from overseas.
Agriculture remains another key pillar, contributing around 32% of the region’s GRP. However, most agricultural exports are shipped as raw materials or intermediate products rather than higher-value-added goods.
The central bank also warned that the region’s competitiveness has weakened in some sectors.
Rubber yields in Thailand have stagnated at just over 200 kilogrammes per rai, while Vietnam has nearly reached 300 kg per rai, highlighting intensifying competition from regional producers.
Economic activity is also concentrated in a handful of provinces. Phuket, Surat Thani and Songkhla account for a significant share of the region’s output. Including Nakhon Si Thammarat, the four provinces together generate more than 60% of the South’s economy, according to Mr Vitai.
Such concentration has contributed to wide income disparities across the region. Income per capita in Phuket is estimated to be about seven times higher than that in Narathiwat, underscoring the South’s persistent inequality despite its strong economic potential.
Source: Original Article
