CIMB Thai Bank has adjusted its Thailand GDP forecasts for 2023 to 3% and for 2024 to 3.5% owing to a slowdown in the Chinese economy.

Amonthep Chawla, head of research at CIMB Thai Bank, said the projections have been revised as a deceleration in the Chinese economy is affecting Thailand’s exports.

Instead, he said, growth will possibly be driven by tourism-related services and strong purchasing power among the upper-middle class, alongside anticipated government stimulus in the second quarter of 2024.

Research indicates that Thailand’s economic recovery is uneven, with low purchasing power among low-income households, exacerbated by drought and high household debt. While Thailand’s tourism industry remains robust, most of it is concentrated in major tourist cities.

Thailand’s economic outlook for 2024 depends on the global economy and government policies, which could impact GDP forecasts related to exports, tourism, private and public consumption and investment.

Here are some key points:

The Good

• The US may avoid a soft-landing scenario, and China could implement stimulus policies to drive growth, mitigating issues related to problems of corporate debt and property bubbles.
• Thailand’s exports could rebound quickly, and tourist arrivals could exceed expectations.
• Government stimulus policies aimed at injecting cash into low-income households and stimulating consumption could be implemented by the end of Meanwhile, foreign direct investment (FDI) may rise thanks to political stability and improved investor confidence.

The Bad

• The US economy could slow down due to higher interest rates and inflation, while China could experience a sharper slowdown driven by corporate debt defaults and property market instability.
• Thailand’s exports are projected to grow modestly due to weak global demand, but tourism may continue to remain a growth driver.
• Government stimulus policies might be implemented by the second quarter of 2024 after budget approval, potentially leading to increased consumption and investment. FDI could relocate to Thailand.

The Ugly

• The US could experience slowing economic growth with a technical recession in the first half of 2024, while China might experience a sharper slowdown but still maintain over 4% growth in
• Exports could drop due to weak global demand and supply chain disruptions, while tourism revenue may grow slower than expected.
• Delays in government stimulus policies until the second half of 2024 could worsen consumption among low-income households already affected by a severe drought situation.

The Bank of Thailand could halt the rate hike cycle at 2.25% as a pre-emptive measure against high inflation resulting from the government’s stimulus policies, especially the minimum wage increase. Additionally, the Thai baht may strengthen against the US dollar due to anticipated US rate cuts in 2024 and more tourism revenue in Thailand.

However, several risk factors could potentially hinder Thailand’s economic expansion, namely:

• Decoupling: The complete separation of the US and Chinese economies, driven by trade wars, technological conflicts and supply chain disruptions, could significantly impact Thailand’s exports and the Asean region as a whole.
• De-dollarisation: Reducing reliance on the US dollar in favour of other currencies like the Chinese renminbi, may introduce more exchange rate volatility.
• Disinflation: China’s deflationary pressures could lead to lower prices of goods and divergent monetary policies in the Asean region compared to the US, which still faces inflationary pressures and may hike interest rates.
• Digitization: Thailand’s move into the digital era may pose challenges for small and medium-sized enterprises (SMEs) in adapting to technologies like blockchain. This could worsen inequalities and require government intervention
• Democracy Movement: Political movements advocating for a new Constitution emphasising greater democracy may introduce political tensions or conflicts that impact investor confidence.

Source : THE NATION THAILAND

Thailand’s new Prime Minister, Srettha Thavisin, is looking to boost tourism revenue by easing visa rules for Chinese and Indian travelers and allowing longer stays for visitors from all countries.

The current visa application process for Chinese tourists is costly and cumbersome, while Indian travelers have to pay for a visa on arrival. The government aims to increase revenue from foreign tourists to 3.3 trillion baht next year.

However, the return of Chinese visitors has been slower than expected due to stringent e-visa requirements and China’s economic woes. The tourism sector is calling for additional measures such as adding flights and lengthening visas to attract more tourists.

In response to the call for additional measures to boost tourism, the Thai government is considering various strategies. One potential solution is to streamline the visa application process for Chinese tourists, making it more affordable and convenient. By implementing this change, Thailand aims to attract a larger number of Chinese visitors who are currently deterred by the cumbersome procedures and costs associated with obtaining a visa.

Nomura Holdings Inc. predicts that foreign-tourist arrivals will reach approximately 30 million in 2023, a significant increase from 11.2 million in the previous year. As of Tuesday, the Ministry of Tourism and Sports has reported a total of 17.5 million foreign-tourist arrivals.

Despite China being the largest source of travelers last month with nearly 420,000 visitors, the return of Chinese tourists to Thailand has been slower than expected. In 2019, before the coronavirus pandemic, about 28% of the record 40 million foreign arrivals to Thailand were from China, contributing to approximately 1.9 trillion baht in revenue.

Furthermore, the government is examining the option of extending visa durations for tourists from Belarus, Kazakhstan, and Russia. These countries have shown a growing interest in visiting Thailand, and by allowing longer stays, the country hopes to enhance their tourist experience and encourage them to explore different regions. In addition, the proposal to waive visa application fees is being considered, as this would remove an additional financial burden for international visitors, making Thailand a more attractive destination.

The Phuket Tourism Association has also suggested increasing the number of flights to cater to the rising demand for travel to Thailand. A boost in flights would offer travelers greater flexibility in planning their trips and make it easier to access various parts of the country. By expanding flight routes and increasing capacity, Thailand can enhance its connectivity with different regions and accommodate the growing influx of tourists.

By simplifying visa rules, extending stay limits, and exploring options to enhance accessibility, the country aims to create a more welcoming environment for tourists from around the world. These efforts are part of a comprehensive strategy to achieve the target of 3.3 trillion baht in revenue from foreign tourists next year, contributing to the overall growth and development of Thailand’s economy.

Source : Thailand Business News

The 9th annual EU-ASEAN Business Sentiment Survey (BSS) revealed a positive outlook for European businesses in Southeast Asia (SEA), underscoring growing importance of ASEAN-European Union (EU) relations.

The survey is a vital barometer to gauge European business outlook on key issues including macroeconomic conditions, policy and regulatory environment in Southeast Asia, and the development of bilateral and plurilateral free trade agreements in the region.

The findings from this year’s survey, which had nearly 600 responses from the European private sector, indicate an overall optimistic outlook for ASEAN.

Some 80 per cent of respondents believe that ASEAN markets will become more important in terms of worldwide revenues over the next two years, highlighting the region’s growing significance in the global economy, a 15 per cent jump from 2022.

Eighty-four per cent of respondents expressed their intention to boost levels of trade and investment in ASEAN, a seven per cent increase from 2022. Meanwhile, 65 per cent of respondents anticipate an increase in profits in ASEAN for 2023, showing a continued positive trend in the region’s business landscape. This percentage remains robust despite a slight decrease from last year’s figure of 69 per cent.

The survey also revealed that around two thirds of respondents view ASEAN as the region for best economic opportunities over the next five years, reflecting a consistent perspective compared to the previous year.

While it has strong infrastructure, Brunei scored 51 per cent in the recently released Pulse Internet Resilience Index (IRI) of the Internet Society, ranking third of 11 countries along with Malaysia and Thailand in the Southeast Asian region. It scored behind Singapore with 72 per cent, Vietnam with 52 per cent and Malaysia and Thailand with 51 per cent.

The Sultanate scored well in mobile network (with 72 per cent) and connectivity (with 71 per cent). The regional average is 49 per cent, higher than Asia with 46 per cent, Americas and Oceania with 45 per cent each, and Africa with 35 per cent, but below Europe’s 60 per cent.

Described as a first-of-its-kind tool, the IRI offers insights into the Internet resilience of 170 countries. It is based on four key metrics: infrastructure, performance, security and market readiness.

Internet Society, a non-profit Internet watchdog, tracks resilience across key metrics including infrastructure, performance, security, and market readiness through its Pulse Platform.

“Internet resilience means maintaining an acceptable level of service and connection despite faults and challenges to normal operation. This focus has been increasing among policymakers and activists worldwide as Internet infrastructure becomes essential for a nation’s economy and society,” the Internet Society said in a statement recently.

For performance, the Sultanate scored 65 per cent and 46 per cent for security. Security measures the ability of the network to resist intentional or unintentional disruptions through the adoption of security technologies and best practices, while market readiness is the ability of the market to self-regulate and provide affordable prices to end-users by maintaining a diverse and competitive market.

The infrastructure score is based on the existence and availability of physical infrastructure that provides Internet connectivity, while performance is the ability of the network to provide end-users with seamless and reliable access to Internet services.

Source: Borneo Bulletin

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In the first quarter (Q1) of 2023, the Sultanate’s gross domestic product (GDP) at constant prices recorded a year-on-year increase of 0.8 per cent, according to a Department of Economic Planning and Statistics (JPES) report.

The year-on-year increase was attributed to an increase in the non-oil and gas sector by 6.2 per cent. Meanwhile, the oil and gas sector fell by five per cent.

The increase in the sector was driven by the rise in subsectors such as air transport by 285.1 per cent, followed by finance (71.7) and other transport services (33.1).

The increase in the finance subsector was in line with an increase in the income of banking activities. Meanwhile, the increase in the air transport and the other transport services was driven by an increase in passenger air arrivals and departures, corresponding to the full lifting of travel measures.

The manufacture of petroleum and chemical products subsector under non-oil and gas sector experienced a decline due a decrease in the production of petrochemicals as a result of maintenance activities.

Source: Borneo Bulletin

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ASEAN and WIPO launched the ASEAN Intellectual Property (IP) Register at the 55th ASEAN Economic Ministers' Meeting. The Register, powered by a state-of-the-art information exchange system and maintained by WIPO, is a one-stop IP information portal that incorporates up-to-date IP data on patents, trademarks and designs from all ten ASEAN Member States (AMS). It enables all stakeholders from policy-makers to private sectors and innovators to conduct IP searches seamlessly for the ASEAN region.

Access the ASEAN IP Register here.

Source: ASEAN Secretariat

The digital economy contributed 2.1 billion baht to Thailand's gross domestic product (GDP) in 2022, marking a 1.9% increase from the 2.04 billion baht the previous year.

Putchapong Nodthaisong, secretary-general of the Office of the National Digital Economy and Society Commission (ONDE-Thailand), said this week that Thailand's digital economy GDP in 2022 grew by 3.49% compared to the 4.44 billion baht the previous year. This growth was the result of the improving situation following the pandemic, leading the overall economy to return to a state of normalcy and resulting in the expansion of the digital economy.

As part of the “Digital Contribution to GDP” project to measure economic growth through the analysis of digital technology-induced aggregate product within the country, a framework was established to measure the value of the digital economy. This was done using the GDP measurement methodology of the country, focusing on production, income, and expenditure. The outcomes provide preliminary data for ONDE to understand the overall landscape of the country's digital economic activities, thereby providing tools for studying, analysing and monitoring the situation, as well as assessing the impacts of transitioning to digital technology. These results will also aid in formulating future policies and strategies for the development of the country's digital economy.

Putchapong added that the true expansion rates of the digital economy for 2021 and 2022 were 11.83% and 1.90%, respectively. When comparing the proportions between the digital economy value and the GDP at current prices, it was revealed that the percentages were 12.66% and 12.19% for 2021 and 2022, respectively.

This demonstrates that the government needs to implement policies to further stimulate the digital economy in order to achieve the goal of reaching a 30% contribution by 2027, as outlined in the 13th National Economic and Social Development Plan.

Source : THE NATION THAILAND