Thailand’s post–COVID-19 economic recovery has been characterized by persistently weak growth, averaging only 2.3 percent during 2022–2024—well below its pre-pandemic performance and far from its historical peaks.
Key Points
📉 Growth slowdown: Thailand’s post-COVID recovery has been weak, averaging only 2.3% growth (2022–2024), far below historical peaks. This is seen as a structural, long-term decline rather than a temporary shock.
👥 Labor issues: Aging population, early retirement, conscription, preventable deaths, and declining education quality reduce both labor supply and productivity.
💰 Capital & productivity: Investment growth has slowed, and total factor productivity (TFP) gains have weakened, signaling declining fundamentals.
🏛️ Fiscal strain: Rising public debt (61% of GDP) and persistent deficits risk credit downgrades, with populist policies adding pressure.
🏠 Household debt: Exceptionally high for a developing economy (around 90% of GDP), constraining consumption and growth.
🌍 Exports & FDI: Export competitiveness is eroding under new tariffs and trade conflicts. FDI is shifting from Japanese-led industries to Chinese firms and data centers, with fewer local spillovers.
✈️ Tourism: Still below pre-pandemic levels, facing overcrowding, environmental issues, and stronger competition from regional peers.
📲 Services trade: Imports of services (digital platforms, IT, streaming, etc.) are rising faster than exports, creating a negative balance.
This paper argues that the slowdown reflects not a temporary cyclical shock, but a deepening structural deterioration in Thailand’s long-term growth potential. As the second installment in a three-part analytical series, the study focuses on diagnosing the key structural constraints that have contributed to Thailand’s sustained deceleration in growth relative to regional peers.
Using a combination of quantitative indicators and qualitative policy analysis, the paper examines ten core structural factors shaping Thailand’s growth dynamics: labor, capital, total factor productivity, fiscal sustainability, household debt, the goods-exporting sector, foreign direct investment, tourism, the services-importing sector, and external threats.
The analysis reveals that weaknesses are broad-based and mutually reinforcing. Demographic aging, early labor-force exit, and declining education quality are constraining labor supply and productivity. Sluggish investment and slowing total factor productivity signal weakening growth fundamentals. At the same time, high household debt, limited fiscal space, declining export competitiveness, changing patterns of foreign direct investment, a stagnating tourism model, and a widening deficit in services trade further undermine economic momentum. These challenges are compounded by rising exposure to global trade fragmentation and climate-related risks.
Taken together, the findings suggest that Thailand’s growth engine is impaired across multiple components rather than hindered by a single binding constraint. Each structural area requires targeted policy interventions to stabilize and, collectively, revive Thailand’s long-term growth trajectory.
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Introduction
In the aftermath of the COVID-19 pandemic, Thailand’s economic growth during the period 2022–2024 averaged only around 2.3 percent, representing a marked slowdown compared with the pre-COVID period (2010–2019), when average growth stood at approximately 3.2 percent. This deceleration should not be interpreted as a temporary cyclical weakness. Rather, it reflects a deeper and more persistent deterioration in Thailand’s long-term growth prospects. Historically, Thailand’s GDP growth peaked at an average of 7.3 percent during 1993–1996, before declining to around 5.3 percent during 1999–2007, and subsequently falling further in the pre-COVID decade. Looking ahead, long-term projections suggest that Thailand’s growth rate will continue to decline steadily, period by period, at least until 2080 (Bisonyabut & Tantisan, 2025).
The downward revision of Thailand’s GDP growth trajectory is therefore not unexpected when viewed against the backdrop of the country’s accumulated structural challenges and the limited success of past efforts to address them. What is striking, however, is not merely the presence of these challenges, but their breadth and persistence. Multiple structural weaknesses continue to weigh on economic performance, collectively signaling a broad erosion of competitiveness. Thailand’s growth engine increasingly resembles an economic system suffering from failures across multiple components, rather than a single malfunctioning part.
This paper constitutes the second installment in a three-part series examining Thailand’s prolonged economic slowdown through three complementary analytical lenses. The first paper, published earlier, traced Thailand’s growth trajectory from its historical peak to the present, demonstrating that the observed slowdown is fundamentally structural and long-term in nature, with potentially severe consequences if left unaddressed. Building on that foundation, this paper focuses on identifying the key structural challenges that have contributed to Thailand’s persistently weak growth relative to its regional peers. The third paper, forthcoming, will examine institutional constraints that have hindered effective reform, helping to explain why well-known policy proposals have repeatedly failed to translate into meaningful and sustained progress.
Untangling Structural Challenges
To identify the underlying causes of Thailand’s long-term GDP projection decline, this paper examines a set of core macroeconomic structural factors that together form the backbone of the Thai economy. These include:
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labor
capital,
total factor productivity,
fiscal sustainability,
household debt,
goods exporting sector,
foreign direct investment (FDI) sector,
tourism sector,
import services sector
external threats.
These structural components encompass both the supply side and the demand side of the economy and represent the primary channels through which economic growth is generated in Thailand. Weaknesses in any one of these areas can constrain growth; however, when multiple factors deteriorate simultaneously, their combined effects can substantially depress long-term GDP performance.
For each structural factor, this study employs quantitative and/or qualitative analyses to evaluate the extent to which it has supported or constrained Thailand’s economic growth over time. Where appropriate, empirical evidence is complemented by institutional and policy analysis to capture mechanisms that may not be fully observable in aggregate data. Based on these assessments, policy recommendations are proposed for each factor with the aim of mitigating structural constraints and improving Thailand’s long-term growth potential.
Findings
This section presents a detailed analysis of each structural factor, along with corresponding policy recommendations aimed at addressing identified weaknesses and enhancing Thailand’s long-term economic performance.
Labor
Labor employed in the agricultural, manufacturing, or service sectors directly contributes to GDP by producing goods and services that add value to the economy. A key challenge for this growth factor is demographic aging: as the population ages, the labor force both shrinks and becomes older, thereby limiting its contribution to GDP growth. Thailand currently faces several challenges related to this factor.
High-income economies typically counter labor-force shrinkage by extending the retirement age. As shown in Figure 1, most high-income economies have an official retirement age of around 65, while developing economies tend to maintain an official retirement age closer to 60.
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In Thailand, there is no formal retirement age for most workers, except for civil servants, whose mandatory retirement age is 60. However, in practice, many workers retire earlier—often around age 55—which coincides with the age at which individuals become eligible to leave their jobs and receive pension benefits. More concerningly, labor-force statistics (Figure 2) indicate that a significant number of workers exit the labor market as early as their early 50s (TDRI, 2025a).
In addition, Thailand loses part of its labor force through channels that are largely avoidable. Three notable examples include:
Mandatory military conscription among young workers (Prachathai, 2019);
loss of life due to road accidents (approximately 16,000–20,000 fatalities per year, TDRI, 2025b); and
premature deaths related to climate-related incidents, including natural disasters (Kosako, 2025) and prolonged exposure to PM2.5 pollution (Hermayurisca & Taneepanichskul, 2023).
Qualitative aspects further exacerbate the problem. Recent PISA test results (PISA, 2022) show that Thailand’s scores are below the OECD average and below those of peer economies such as China, Malaysia,and Vietnam. More importantly, the trend in Thailand’s educational performance has been declining over time.
In summary, population aging and labor-force shrinkage constitute major constraints on GDP growth. These challenges are compounded by both quantitative losses of labor and declining labor quality. Government policy should therefore focus on extending working lives by raising the effective retirement age and keeping workers in the labor market for as long as possible. At the same time, it should address labor leakage through mechanisms such as military conscription and preventable premature deaths, while placing greater emphasis on improving labor quality.
Capital
Capital refers to machinery and equipment used in the production of goods and services. In Thailand, capital investment indicators have remained sluggish following the COVID-19 pandemic. According to the Bank of Thailand’s database, Business loan growth declined from an average of 4.3% during 2015–2019 (pre-COVID) to just 2.3% between 2021–2024. Similarly, according to NESDC’s database, investment as a share of GDP has grown more slowly, falling from an average growth rate of 2.9% to 1.7% over the same period. Notably, a strong investment cycle is typically characterized by growth rates of around 3.5%–7% per year.
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However, the decline in investment indicators should not be viewed as a standalone problem to be addressed directly. Rather, it reflects deeper structural weaknesses, particularly in foreign direct investment (FDI) and export performance, which will be discussed in subsequent sections.
Total Factor Productivity
Total factor productivity (TFP) measures how efficiently an economy transforms labor and capital into output, capturing gains from technology, innovation, skills, and organizational improvements beyond the mere accumulation of labor and capital. Based on NESDC analysis, TFP accounted for approximately 50% of Thailand’s GDP growth during 2011–2024. However, a clear slowdown in TFP growth has been observed in the post-COVID period. During 2015–2019, TFP growth averaged around 2.0% per year, but following the COVID-19 shock, it declined to just 1.34% per year, signaling increasing constraints on Thailand’s future growth potential (NESDC, 2025).
This trend underscores the urgent need to strengthen Thailand’s technology and innovation system, including policies that support technological upgrading, technology transfer, and the effective adoption of new technologies across firms and sectors.
Fiscal Sustainability
Thailand’s post–COVID-19 GDP growth slowdown is very pronounced, but less widely recognized is the fact that fiscal policy has already been stretched in supporting the economy. The public debt-to-GDP ratio rose from an average of 41.8% during 2015–2019 to 61.1% in the post-COVID period (2021–2024), and the current medium-term fiscal framework (Cabinet, 2025) projects the ratio to approach its statutory ceiling of 70%. The IMF and international credit rating agencies have warned that Thailand faces an increased risk of a sovereign credit downgrade, which would raise borrowing costs for both the public and private sectors. This situation is not surprising, as the government has operated under persistent fiscal deficits for more than two decades, with the deficit widening from an average of −2.6% of GDP per year during 2015–2019 to −4.1% per year in the post-COVID period (2021–2024).
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Looking ahead, the country faces heightened political risks arising from competition between populist policy agendas and expanding welfare-state commitments, which could further undermine fiscal discipline. Comprehensive fiscal reform is therefore essential to safeguard Thailand’s long-term macroeconomic stability.
Household Debt
Thailand is one of the countries with very high household debt. Notably, many countries with high household debt are high-income economies (Ishak, 2026), such as Switzerland (125% of GDP), Australia (112% of GDP), Canada (100% of GDP), and the Netherlands (94% of GDP). In contrast, Thailand’s household-debt-to-GDP ratio is unusually high for a developing economy, standing at around 84% of GDP before COVID-19 and rising to around 90% after COVID-19. Among developing peers, Malaysia is the closest comparator, with household debt of around 70% of GDP, which is still significantly lower than Thailand’s level.
High household debt constrains economic growth through the consumption channel. Highly indebted households must allocate a large share of their income to debt repayment before consumption, reducing aggregate demand. In addition, high debt burdens can prevent households from expanding economic activities or investing to increase future income, trapping some households in persistent vulnerability or poverty.
Household debt can be reduced gradually over time through economic growth (base-effect reduction) and debt-restructuring or relief programs, typically offered by lenders, the Bank of Thailand, and the government. However, such adjustment processes often take a long time. Even so, targeted debt-support programs can generate positive macroeconomic effects, as they help revive consumption and create multiplier effects throughout the economy.
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Goods-Exporting Sector
Before this point, the factors discussed are primarily internal factors that serve as the backbone of the economy. The remaining factors are external factors that inject income into the system, among which the goods-exporting sector plays a central role. Based on Trademap database, during 2015–2019, Thailand accounted for roughly 1.3% of global exports. After COVID-19, this share declined slightly to 1.2% during 2021–2024.
Looking ahead, however, the global trade environment has changed markedly. The United States has introduced reciprocal tariff measures that apply to a broad range of imported goods, under which Thailand faces a tariff rate of 19% (USTR, 2025). Although this rate is broadly comparable to those imposed on competing exporting countries, the tariffs nonetheless impose significant cost pressures that cannot be easily passed on to U.S. consumers.
Moreover, the emerging trade regime is increasingly shaped by strategic competition between the United States and China, placing Thailand in a vulnerable intermediary position. According to Trademap database, Thailand’s combined export share to the U.S. and China increased from 23.2% during 2015–2019 to 29.3% during 2021–2024, while imports from these two countries rose from 27.3% to 30.8% over the same period. This rising dependence heightens Thailand’s exposure to economic shocks arising from bilateral trade conflicts.
A clear example of this vulnerability is Thailand’s role as a transshipment hub for Chinese products. In 2025, the United States imposed final tariff rates on solar panels and components originating from Thailand, ranging from approximately 375% to 972%, significantly increasing the cost of Thai exports to the U.S. market.
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A new export enhancing strategy is therefore needed to protect the country under this new global trade order and to guide the goods-exporting sector forward.
Foreign Direct Investment
Foreign direct investment (FDI) has long served as a foreign-driven engine of investment and growth for Thailand. Notably, Japanese investment in major industries—including automotive, electrical appliances, and electronics—has not only generated large-scale employment (including jobs in related and upstream industries) but has also supported the development of local supply chains and contributed significantly to the broader local economy.
In the post–COVID-19 period, however, the composition of FDI has begun to shift (Suleesathira, 2025). Thailand has transitioned from an investment landscape dominated by Japanese firms toward one increasingly shaped by Chinese conglomerates and data center investments. These new forms of investment differ substantially from earlier FDI patterns. First, Chinese firms tend to rely more heavily on their own workers and supply chains, limiting spillovers to local labor and suppliers. Second, data center investments fewer opportunities for local supply chain development.
As a result, although headline FDI inflows have continued to rise and recently reached new record levels, it is unclear whether Thailand’s economy will benefit to a similar extent as in the past. In practice, the primary beneficiaries may instead be industrial estate developers and utility providers servicing these investments. Moreover, growing competition for limited resources—particularly utilities—has emerged as an additional concern, as new FDI projects may crowd out more labor-intensive and supply-chain-rich forms of investment that have traditionally generated broader economic benefits.
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A balanced approach is therefore required—one that carefully weighs the gains from both traditional and new forms of FDI, while ensuring that Thai workers and local supply chains remain integral parts of the investment equation.
Tourism Sector
The tourism sector is a major contributor to Thailand’s GDP. At its peak in 2019, Thailand welcomed nearly 40 million international visitors, with tourism contributing around 10% of GDP (World Travel and Tourism Council, 2024).
However, even in 2025, the number of international visitors has not yet returned to its 2019 level. Estimated arrivals remain at around 33–34 million visitors. Two developments are particularly concerning.
First, Thailand continues to rely heavily on traditional tourism assets, including mountains, beaches, sunshine, and cultural heritage sites. These strengths have long positioned Thailand as one of the world’s most visited destinations. Nevertheless, after decades of offering largely similar experiences, many destinations now face overcrowding, rising prices, environmental degradation, tourist scams, and “tourist traps.” Policy choices have also contributed to these challenges, including the legalization of cannabis, which has affected Thailand’s tourism image in some markets.
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Second, regional competitors have not remained static. Countries such as China, Japan, and Vietnam have actively upgraded and promoted their tourism sectors by introducing new attractions and differentiated experiences. Compounding these pressures, the strength of the Thai baht has placed Thailand at a cost disadvantage, making travel expenses approximately 4–10% higher than those of peer destinations.
To revitalize the tourism sector, it is imperative to reinvigorate the visitor experience. Thailand must preserve the qualities that once defined its appeal—friendliness, hospitality, local character, and a sense of joy—while simultaneously developing new sources of excitement, including well-designed man-made destinations, to compete more effectively with regional peers.
Services-Importing Sector
The services-importing sector functions as a leakage from the economy, capturing expenditures by local residents on services provided outside the Thai economy. It includes travel services, business services (trade-related, professional, and management consulting), transport, financial services, government goods and services, telecommunications, computer and information services, the use of intellectual property, construction services, and insurance and pension services.
In analyzing the external services sector, it is useful to compare services imports with services exports (Tables 1 and 2). During the periods 2015–2019 and 2021–2024, a sharp contrast emerged between these two sectors. While the services-exporting sector declined from an average of USD 70,297 million to USD 48,282 million, the services-importing sector increased from an average of USD 48,898 million to USD 64,847 million.
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As a result, Thailand has shifted into a negative external services balance vis-à-vis the rest of the world. More disaggregated statistics show that Thailand’s major service exports are concentrated in travel, business services (primarily trade-related), and transport, which together account for approximately 95 percent of total service exports. In contrast, service payments have been rising in transport, business services, intellectual property rights, insurance and pension services, financial services, telecommunications, computer and information services, and personal, cultural, and recreational services. Looking ahead, the services-exporting sector remains heavily dependent on relatively stagnant activities, namely travel (linked to tourism), business services (linked to goods exports), and transport (linked to both tourism and goods exports)—all of which face limited growth prospects. Meanwhile, services-importing sectors are growing rapidly in popularity among Thai consumers and businesses, particularly in ride-hailing and food delivery, accommodation platforms, e-commerce marketplaces, mobile app stores, streaming and digital content services, and cloud and IT services. Without policy intervention, the negative balance in services trade is likely to widen further.
External Threats
Last but not least, looking ahead, several external threats could have a significant impact on the economy and overall GDP. One such threat is global warming. Climate-related disasters not only cause premature deaths but also generate substantial economic losses. In recent years, Thailand has experienced an increasing number of extreme events, many of which have set new records. For example, the severe flooding in Hat Yai was caused by an unprecedented rainstorm, the heaviest in more than 300 years (Pasutan, 2025). Similarly, the earthquake in 2025, which was clearly felt in Bangkok. It is a once in a lifetime for most Bangkok’s residents.
Other catastrophic events, whether natural or man-made, cannot be ruled out in the future. Countries that are well prepared for such shocks are better positioned to preserve economic stability and protect their citizens from the unforeseen hardships these events may impose.
Conclusion
This article compiles empirical evidence and statistical data to diagnose Thailand’s economic growth slowdown. The findings suggest that the deceleration is not driven by a single factor, but rather by simultaneous deterioration across ten structural dimensions, collectively producing a systemic weakness. This dynamic can be likened to the human body, which may withstand isolated health issues to some extent, but becomes critically ill when multiple conditions occur concurrently.
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The article also outlines broad policy directions for addressing each structural challenge, emphasizing that problem recognition and appropriate strategic orientation are essential first steps toward effective reform. However, given space limitations, the article does not provide detailed policy prescriptions for each area. More comprehensive solutions are discussed in the referenced literature, alongside additional policy proposals that have long been debated within academic and policy circles.
References
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Hermayurisca, F., & Taneepanichskul, N. (2023). Estimation of premature death attributed to short- and long-term PM2.5 exposure in Thailand. Environmental Monitoring and Assessment, 195(10), 1176. https://doi.org/ 10.1007/s10661-023-11807-4
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Ishak, I. (2026, January 30). Ranked: The 35 countries with the highest household debt. Visual Capitalist. https://www.visualcapitalist. com/cp/35-countries-with-highest-household-debt/
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Pasutan, P. (2025, November 24). What does Hat Yai’s “heaviest rainfall in 300 years” actually mean? [ฝนตกหาดใหญ่ “หนักสุดในรอบ 300 ปี” หมายความว่าอย่างไร?] ThaiPBS. https://www. thaipbs.or.th/now/content/3403
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Author: Nonarit Bisonyabut, Ph.D. and Sunan Phumkham.
Matt McAlear, chief executive officer of Chrysler and Dodge, during the 2026 New York International Auto Show (NYIAS) in New York, US, on Wednesday, April 1, 2026.
Bing Guan | Bloomberg | Getty Images
Chrysler and Dodge CEO Matt McAlear wants the world to know that the minivan is not dead. Far from it, he said, at the New York International Auto Show, where he showed off the latest version of the Pacifica Pinnacle, the highest-end trim of the brand’s sole product line.
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The Chrysler brand — once one of the biggest names in the auto industry — only sells a single family of minivans, which many take as a sign of the brand’s impending demise.
Chrysler, which has been promising new products for years, said it will share more plans at parent company Stellantis‘ investor day on May 21 in Auburn Hills, Michigan. McAlear didn’t elaborate further but said the brand had “a lot of things in the works” and touted its only vehicle.
“We absolutely see the minivan market growing, and we believe there’s an opportunity for Chrysler to continue its growth year over year,” McAlear said. Chrysler is the best-selling brand in the segment, he added.
Minivan resurgence?
Chrysler is often credited with inventing the minivan, or at least mainstreaming it in the United States in the early 1980s. Rivals followed, but many have since abandoned it.
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Since the 1990s, minivans have steadily lost ground to SUVs, which are considered sportier and more adventurous. Minivan sales were a mere 1.7% of the market in 2017, according to Edmunds. In 2025, they were up to 2.4%.
Sales numbers from Chrysler and its few competitors in this segment indicate growing interest in the adaptive and often affordable “multipurpose vehicle,” as the minivan is sometimes called. The average transaction price for a large SUV is $77,215, according to Edmunds. The average minivan price, meanwhile, is $48,269 — just above the overall industry average cost for a new vehicle of $48,402.
There is enough demand that Chrysler saw fit to unveil a new highest-end version of its minivan at the Auto Show, called the Pinnacle. The vehicle is full of features common in higher-end family vehicles, like screens on the backs of seats so passengers in a rear row can watch movies on a road trip. But there are also some perks that are tough to find outside the segment: both second and third row seats on some versions can be completely stowed in the floor, for example.
Companies like Chrysler are also trying to look beyond the “family hauler” identity the minivan has had for much of its history. Its Grizzly Peak concept has knobby tires and a roof rack, for a more rugged option and McAlear said the company was thinking about how to do more of that.
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“We’re looking at it,” he said. “We’re trying to figure out if there’s a way to do it because people love it. And it is unlike anything you’ve ever seen from a minivan brand before.”
McAlear also touted the van’s storage capacity compared with similar vehicles.
“I’ve got a friend that’s a racecar driver,” he said. “One of his favorite things about this is he puts a shifter kart in the backseat with the third row down, with his kids so he can keep it safe and doesn’t have to have a trailer. Another buddy of mine loves kiteboarding, and he doesn’t want to put it on the top because it’s hard to get it up and down. It’s hard to keep it secure and safe. He keeps it inside.”
Pacifica sales were only up slightly in 2025. The affordable Voyager model, which the brand has since renamed the Pacifica LX, sells in lower quantities but saw a bigger jump. Pacifica sales were down for the first quarter of 2026, but Chrysler said they were up nearly 84% in March year over year.
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There are only a handful of vehicles in this segment in the U.S., or five basic model lines including the electric Volkswagen ID Buzz, which VW prefers not to call a minivan.
Toyota Sienna sales jumped 35% in 2025, and were up again in the first quarter of 2026. It’s nowhere near Toyota’s best-selling vehicle, and many models — some of which were new ones or refreshes — saw greater increase. Toyota’s Japanese rival Honda saw sales of its Odyssey jump 10% last year. But they dipped in the first quarter of 2026.
One especially successful model has been the Kia Carnival. Volumes rose in 2025 and in the first quarter of 2026. It still doesn’t match Kia’s comparable SUVs, as minivan sales are just a few thousand shy of the three-row Sorento, but far below the popular, more rugged Telluride.
“Carnival is just a great family, practical vehicle,” said Eric Watson, vice president of sales operations for Kia America. “I think in the stage of life when people have kids and want those power sliding doors and the configuration of what that vehicle provides, it’s perfect in that life stage.”
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Kia was one of the later entrants into the segment, and though it has the sliding rear door that defines the minivan segment, the body panel on it is punched into give the illusion the vehicle is an SUV.
“I think that attracts a lot of people and lowers that stigma of being a minivan family,” Watson said.
But some are attracted to the segment itself. While the Chrysler Pinnacle starts above $56,000, the lowest priced LX, starts just above $41,000.
“We’re actually seeing a resurgence,” McAlear said. “At the end of the day, these things make life easier and you don’t always have to impress everybody.”
A Lufthansa passenger aircraft is parked at a gate while a SASCA fuel truck services it on the apron at Toulouse Blagnac Airport in Blagnac in Occitanie in France on March 15, 2026.
Isabelle Souriment | AFP | Getty Images
The surging price of jet fuel isn’t the airline industry’s only problem. Now, it’s whether it will have enough.
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Since the U.S. and Israel attacked Iran on Feb. 28, the price of jet fuel in the U.S. has nearly doubled, going from $2.50 a gallon on Feb. 27 to $4.88 a gallon on April 2, with the increases even sharper in other regions. The effective closure of the Strait of Hormuz is choking off supplies of both crude and refined products like jet fuel, further driving up the price.
That’s forcing airlines to consider cutting flights, especially overseas.
Carsten Spohr, CEO of Germany’s Deutsche Lufthansa, told employees in a webcast last week that the carrier is assigning teams to come up with contingency plans because of the war in the Middle East, including for drops in demand or a lack of jet fuel, a spokesman said. Those plans could include grounding some of its aircraft.
The U.S. produces a lot of jet fuel and isn’t as exposed as other regions like Europe and parts of Asia are in comparison. But aircraft fill up locally, so some U.S. airlines could face shortages on international trips.
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United Airlines CEO Scott Kirby told reporters late last month that the carrier, which has the most service to Asia among U.S. airlines, would have to cut back its flights there. He also said it’s “not impossible” that airlines collectively would have to reduce service in that region.
He noted that as the price of jet fuel goes up, it could be more acute in parts of the U.S. that aren’t as connected by pipelines.
“There’s not enough refining capacity, and so fuel price prior to this and going forward is more susceptible to supply weakness on the West Coast than anywhere else in the country,” he said.
Kirby told employees earlier in March that the airline is preparing for oil to stay above $100 a barrel through 2027 and is pruning some of its flights in the near term.
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“To be clear, nothing changes about our longer-term plans for aircraft deliveries or total capacity for 2027 and beyond, but there’s no point in burning cash in the near term on flying that just can’t absorb these fuel costs,” he said in a March 20 message to employees.
Travel demand wild card
Airlines overall are pruning some flights for the coming months, though they often adjust schedules throughout the year to match demand, aircraft availability or other complications.
Domestic capacity in the second quarter for U.S. carriers is up 2.1%,down from previous plans of 2.3% growth,while total capacity is set to rise 1.1%, down from 2.4% on the week ended March 20, according to a Monday report from UBS.
“We expect more capacity cuts in the coming weeks,” UBS said.
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So far, airline executives have said that travel demand is strong, but the fuel strains and price spikes are a headache for carriers and passengers alike as the peak summer travel season approaches.
Fuel is generally airlines’ biggest expense after labor, and carriers are already raising airfare and fees like for checked luggage to make up for the added cost.
A truck parks after refuelling a Citilink Airbus at Soekarno-Hatta International Airport following the government approval of a jet fuel surcharge, amid the U.S.-Israeli conflict with Iran, in Tangerang, on the outskirts of Jakarta, Indonesia, April 6, 2026.
Ajeng Dinar Ulfiana | Reuters
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Investors will be listening for more insights into how the jet fuel spike could affect the industry as airline earnings kick off Wednesday with Delta Air Lines. That carrier owns a refinery, so it could benefit from jet fuel sales.
The strong demand, particularly compared with this time last year could further insulate airlines, at least in the U.S. Last year, bookings fell as President Donald Trump‘s trade war kicked off with steep tariffs, markets sank and layoffs within the government, led by Elon Musk‘s so-called Department of Government Efficiency, took effect.
“The positive commentary on demand is still holding, but fuel at $4/4.50 [a gallon] for longer isn’t something airlines can pass through,” said Savanthi Syth, an airline analyst at Raymond James. “If fuel stays high, you’ll just see capacity being cut.”
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Airlines could see a bigger problem if higher gasoline prices and other pressures on consumers cause a pullback in spending.
“We’re watching the airlines very closely right now. This doesn’t have to go on too terribly long at these [fuel price] levels before you start to see potential for ratings pressures,” said Joseph Rohlena, senior director at Fitch Ratings who covers U.S. airlines.
Bank of America, Citadel Securities and Goldman Sachs Group have rallied in support of a controversial plan from the world’s largest options clearing house. Retail brokers warn the changes would add hundreds of millions of dollars in extra costs. Executives from the three firms backed a proposal from the Options Clearing, which would change how contributions to a pot of money that pays out in the event a clearing member goes bust are tallied up. They said the plan “reduces the likelihood of abrupt and destabilizing clearing fund reallocations during periods of market stress.”
“Clearing members whose activities drive growth in the size of the overall clearing fund today are not responsible for funding that increase,” wrote Stuart Bourne, co-head of global equities and global head of prime financing at BofA Securities; Stephen Berger, global head of government and regulatory policy at Citadel Securities; and Alicia Crighton, global co-head of futures and global head of clearing at Goldman Sachs.
The row is a sign of growing tensions between Wall Street and retail brokers over risk management amid the explosion in retail derivatives trading since the Covid pandemic, with the Options Clearing now handling trades worth about $4 trillion in notional value a day. The clearinghouse wants risk charges “more fairly” allocated among large banks and retail brokers such as Robinhood Markets and Charles Schwab, which have helped fuel a 130% increase in average daily volume to 69 million trades a day, according to the clearinghouse.
Phoenix Education Partners, Inc. (PXED) Q2 2026 Earnings Call April 7, 2026 5:00 PM EDT
Company Participants
Elizabeth Coronelli – Vice President of Investor Relations Christopher Lynne – President, CEO & Director Blair Westblom – CFO & Treasurer
Conference Call Participants
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Jasper Bibb – Truist Securities, Inc., Research Division Alexander Paris – Barrington Research Associates, Inc., Research Division Keen Fai Tong – Goldman Sachs Group, Inc., Research Division Griffin Boss – B. Riley Securities, Inc., Research Division Ryan Griffin – BMO Capital Markets Equity Research Stephanie Benjamin Moore – Jefferies LLC, Research Division
Presentation
Operator
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Good afternoon, and welcome to Phoenix Education Partners Second Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions]
I would now like to turn the call over to Beth Coronelli, Vice President of Investor Relations. Please go ahead.
Elizabeth Coronelli Vice President of Investor Relations
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Thank you. Welcome to the Phoenix Education Partners’ Second Quarter Fiscal 2026 Earnings Conference Call. Speaking on today’s call are Chris Lynne, our Chief Executive Officer; and Blair Westblom, our Chief Financial Officer. Before we begin, I would like to remind everyone that certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on current market, competitive and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially.
Listeners should not place undue reliance on such statements. We undertake no obligation to update publicly any forward-looking statements after this presentation. The risks related to these forward-looking statements are described in our filings with the SEC, including our most recent Form 10-K, Form 10-Q and other public filings.
We will also discuss certain non-GAAP financial measures. You should consider our non-GAAP results as supplements to and not in lieu of our GAAP results. Reconciliations to the most directly comparable GAAP measures can be found in
“Sebi has received representation from the industry body on difficulties faced by the issuers in mobilising resources and accessing the capital market in the backdrop of ongoing geopolitical tensions in West Asia. This has led to several issuers to defer, recalibrate or withdraw issuance plans leading to potential lapses in observation letter validity and duplication of regulatory processes,” Sebi said in a circular.
The regulator said observation letters expiring between April 1, 2026, and September 30, 2026, will now remain valid until September 30, 2026. The relief is conditional upon the lead manager submitting an undertaking confirming compliance with updated disclosure requirements when filing revised offer documents.
“This is a pragmatic move by Sebi acknowledging the impact of global macroeconomic conditions on IPO market activity,” said Dharmesh Mehta, MD & CEO, DAM Capital Advisors.
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Out of 141 valid approvals that were to collectively raise about ₹1.73 lakh crore through IPOs, regulatory nods for 15 mainboard companies were about to expire in 1-3 months with issuance worth ₹26,000 crore, according to data from Prime Database.
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Under existing norms, Sebi’s observation letters – a key clearance for launching public issues – are valid for 12 months, or up to 18 months in certain cases. The regulator said the new rule takes immediate effect.
Levi Strauss saw another quarter of strong sales, helped in part by higher prices, and direct-to-consumer sales made up more than half of its overall revenue — a milestone for a company that has long relied on wholesalers.
The denim maker’s revenue grew by 14% while DTC sales through Levi’s own stores and website jumped 16%, bringing total DTC sales to 52% of overall revenue.
In an interview with CNBC, CEO Michelle Gass said she expects DTC revenue to make up more than half of overall sales for the duration of the year, even as its more traditional wholesale channel continues to grow.
The growth is not from increased sales volume alone: Levi is benefiting from higher prices and positive foreign exchange headwinds. Finance chief Harmit Singh, who announced plans to retire on Tuesday, said about half of Levi’s growth is related to recent price increases and half is tied to actual units sold.
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Given its first-quarter beat, Levi raised its guidance. It’s now expecting full-year adjusted earnings per share to be between $1.42 and $1.48, shy of expectations of $1.47 per share on the low end, according to LSEG.
It’s expecting sales to rise between 5.5% and 6.5%, largely ahead of estimates of 5.6%, according to LSEG.
Here’s how the apparel maker did in its first fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
Earnings per share: 42 cents adjusted vs. 37 cents expected
Revenue: $1.74 billion vs. $1.65 billion expected
The company’s reported net income for the three-month period that ended March 1 was $175.8 million, or 45 cents per share, compared with $135 million, or 34 cents per share, a year earlier.
Sales rose to $1.74 billion, up about 14% from $1.53 billion a year earlier.
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Levi’s DTC-first strategy comes with bigger margins but also higher costs in the short term as it changes its distribution system, which has weighed on earnings. However, Singh said its sales are becoming more profitable as DTC scales.
He also noted that Levi’s guidance could rise later in the year. Currently, it’s assuming a 20% global tariff, though President Donald Trump has for now set a 10% duty on U.S. imports after the Supreme Court rolled back so-called reciprocal tariffs earlier this year. If that 10% tariff remains in effect, it could boost full-year earnings by $35 million, or 7 cents per share. The company could also be refunded as much as $80 million after the Supreme Court struck down Trump’s previous global tariff policy, Singh said.
While that could boost earnings, Levi could face weaker sales in the coming months as consumers digest higher gas prices and consider pulling back on nice-to-haves like new clothes. Gass told CNBC she has not seen a pullback in spending so far, and the business is segmented in a way that it’s reaching a wide array of consumer demographics.
For example, Levi’s value brand Signature saw sales rise 16% during the quarter and its middle market Red Cap was up 9%, while its premium line Blue Tab is also growing, said Gass.
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“We talked about over the last couple years, we made big, bold moves like selling Dockers and other brands and businesses. Now we’re really focused on segmentation around the Levi’s umbrella,” said Gass. “We feel like we’re really covered to serve the consumer across really every demographic and psychographic cohort and I think the other piece is, when we think about our business globally, 60% of our business is outside the U.S., which also gives us some really nice diversification. So we’re watching it closely, but overall, we’re feeling good about the consumer.”
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