Thailand's zombie firm problem is accelerating, with ~12% of operating businesses unable to cover interest payments for two consecutive quarters. Real estate, hotels, restaurants, and SMEs are most vulnerable due to high fixed costs and weak consumer demand. The Bank of Thailand warns that structural dysfunction—not merely cyclical weakness—is limiting new SME credit (down 16 quarters) and constraining capital allocation efficiency across the economy. Without fundamental business model adaptation, stabilization measures may only delay inevitable exits.