var textForPages =["DECEMBER 2023","","BANGKOK POST\u000d\u000aECONOMIC\u000d\u000aREVIEW\u000d\u000aProject Editor: Ranjana Wangvipula, Coordinator: Srisamorn Phoosuphanusorn, Copy Editing: Eric John Baker, Frank Stephen Thomson, Andrew John Foxwell, \u000d\u000aWriters: Business reporters, Photographs & Graphics: Bangkok Post archive\u000d\u000aCREATIVE & SPECIAL PUBLICATIONS: \u000d\u000aDeputy Managing Editor: Ratch Lunchaprasit, Editor: Simon Kind, Design & Layout: Arthit Kannikar, Cover Design: Siriwan Danunantawong \u000d\u000aSPECIAL PUBLICATION ADVERTISING: \u000d\u000aFirst Vice President: Nanthana Singkamala, Tel 0 2616 4440, Fax 0 2240 3649, nanthanas@bangkokpost.co.th\u000d\u000aThe Bangkok Post is edited by Soonruth Bunyamanee for the Bangkok Post Public Company Limited, Printer, Publisher and Owner.\u000d\u000aOffice: Bangkok Post Building, 136 Sunthorn Kosa Road, Klongtoey, Bangkok 10110, Thailand. www.bangkokpost.co.th, Tel +66 (0) 2616 4000, Fax +66 (0) 2240 3666\u000d\u000a14\u000d\u000aCHEAPER FUEL HAS A COST\u000d\u000a18\u000d\u000aBUILDING AN ECONOMIC \u000d\u000aBACKBONE\u000d\u000a28\u000d\u000aTOURISM CONTINUES \u000d\u000aSTEADY IMPROVEMENTS\u000d\u000a30\u000d\u000aRETAIL POISED FOR \u000d\u000aSTRONG REBOUND\u000d\u000a11\u000d\u000aSURGE OF ACTIVITY\u000d\u000a20\u000d\u000aBANKING SECTOR \u000d\u000aANTICIPATES ROSY 2024\u000d\u000a24\u000d\u000aRESIDENTIAL MARKET \u000d\u000aLIKELY TO REMAIN \u000d\u000aDOWNBEAT\u000d\u000a25\u000d\u000aAI ADOPTION SET \u000d\u000aTO SOAR\u000d\u000aMACRO\u0002ECONOMY\u000d\u000aFORECAST IS HAZY\u000d\u000a4\u000d\u000aINSURANCE\u000d\u000aINSURERS CONFRONT ANOTHER \u000d\u000aCHALLENGING YEAR\u000d\u000a22\u000d\u000aTELECOM\u0002MUNICATIONS\u000d\u000aTELECOM SECTOR \u000d\u000aCONCENTRATES ITS FOCUS\u000d\u000a26\u000d\u000aSTOCKS\u000d\u000aANALYSTS HOPE \u000d\u000aFOR A HEALTHIER 2024\u000d\u000a8\u000d\u000aYEAR-END 2023\u000d\u000aINDUSTRY ENERGY INFRA\u0002STRUCTURE\u000d\u000aBANKING\u000d\u000aPROPERTY IT TOURISM RETAIL\u000d\u000aCONTENTS","For the first nine months of the year, Thai exports fell by 3.8% year-on-year to $213 billion.\u000d\u000aThe future of the Thai economy is uncertain, with the strength of its post-pandemic recovery dividing analysts \u000d\u000aacross the board, write Phusadee Arunmas and Wichit Chantanusornsiri\u000d\u000aFORECAST IS HAZY\u000d\u000aRISK FACTORS AFFECTING \u000d\u000aEXPORTS REMAIN \u000d\u000aBOUNTIFUL. IT IS \u000d\u000aFORTUNATE THERE ARE \u000d\u000aSUPPORTING FACTORS \u000d\u000aIN THE AGRICULTURAL, \u000d\u000aAUTOMOTIVE AND \u000d\u000aELECTRONICS SECTORS, \u000d\u000aWHICH CONTINUE TO \u000d\u000aGROW.\u000d\u000aCHAICHAN CHAREONSUK\u000d\u000aCHAIRMAN, THAI NATIONAL SHIPPERS\u2019 COUNCIL\u000d\u000aPrime Minister Srettha Thavisin has emphasised the need to stimulate the economy through \u000d\u000athe digital wallet project. Photo: Chanat Katanyu\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 4\u000d\u000aMACROECONOMY\u000d\u000aA wide disparity exists between econ\u0002omists and the government over the \u000d\u000astate of the Thai economy.\u000d\u000aThe government views the economy as \u000d\u000aweak and requiring a stimulus to recover. \u000d\u000aIn contrast, some economists and former \u000d\u000acentral bankers believe the economy is in \u000d\u000aa period of continued recovery.\u000d\u000aThe government has emphasised the \u000d\u000aneed to stimulate the economy through its \u000d\u000adigital wallet project, noting the rich are \u000d\u000agetting richer and the poor are becoming \u000d\u000apoorer, leading to increasing social disparity\u000d\u000aand a wider wealth gap of up to nine times \u000d\u000abetween the top 20% of wealth and the \u000d\u000abottom 20%.\u000d\u000aMoreover, the household debt-to-GDP \u000d\u000aratio has risen to 91%, which is higher than \u000d\u000athe Bank for International Settlements\u2019 ceil\u0002ing of 80%.\u000d\u000aJulapun Amornvivat, the deputy finance \u000d\u000aminister, said the economy requires stimu\u0002lus measures for a restart because in the \u000d\u000apast decade, it expanded by only 2% a year. \u000d\u000aExpansion at this level is inadequate to pro\u0002vide the government with sufficient income \u000d\u000ato support the country\u2019s ageing demograph\u0002ics in the future, he said.\u000d\u000aThe 10,000-baht digital wallet handout, \u000d\u000awhich requires an estimated budget of 500 \u000d\u000abillion baht, is part of stimulus measures \u000d\u000aexpected to enable average economic \u000d\u000agrowth of 5% annually during the govern\u0002ment\u2019s four-year term.\u000d\u000aHANDLE WITH CARE\u000d\u000a\u201cThis is a fragile situation, which is why \u000d\u000ait is necessary to restart the economy as \u000d\u000aThailand\u2019s GDP grew by only 1.8%, which \u000d\u000ais among the lowest rates in the region,\u201d Mr \u000d\u000aJulapun said.\u000d\u000aHe said the Monetary Policy Commit\u0002tee\u2019s stance of gradual policy rate hikes since \u000d\u000aAugust 2022 was focused on keeping infla\u0002tion under control and promoting a smooth \u000d\u000aeconomic recovery.\u000d\u000a\u201cThe economy rebounded as anticipated \u000d\u000aand continues to recover following the rate \u000d\u000ahikes,\u201d he said.\u000d\u000aGDP in the second and third quarter \u000d\u000arecovered based on domestic demand for \u000d\u000aprivate consumption, said Mr Julapun.\u000d\u000aNon-farm and farm incomes are \u000d\u000acontinuing to rebound, exceeding the pre\u0002Covid level, he said.\u000d\u000aThe Bank of Thailand\u2019s most recent GDP \u000d\u000agrowth forecast for 2024 was maintained at \u000d\u000a4.4%, inclusive of the government\u2019s eco\u0002nomic stimulus measures.\u000d\u000aThe central bank said the planned stimu\u0002lus measures should produce a fiscal mul\u0002tiplier of 0.3-0.6 times, meaning for every \u000d\u000a100 baht spent the GDP will increase by \u000d\u000a30-60 baht.\u000d\u000aCONTEXT DEPENDENT\u000d\u000aAat Pisanwanich, an international eco\u0002nomics analyst and senior consultant at \u000d\u000aInternational Research Consultant Co Ltd, \u000d\u000asaid the digital handout scheme will create \u000d\u000aa fiscal multiplier effect dependent on eco\u0002nomic circumstances.\u000d\u000aIf the economy is stagnant, money circu\u0002lation will be low. However, if the economy \u000d\u000astill has momentum, cash turnover should \u000d\u000abe higher, he said.\u000d\u000aMr Aat predicted the scheme will create a \u000d\u000afiscal multiplier effect in the range of 1.1-1.2 \u000d\u000atimes, or around 800 billion baht if inflation \u000d\u000ais taken into consideration.\u000d\u000aThe Fiscal Policy Office (FPO) down\u0002graded its forecast for 2023 economic \u000d\u000agrowth to 2.7% because of the global eco\u0002nomic slowdown, a significant cut from the \u000d\u000a3.5% outlook in July.\u000d\u000aThe tourism sector and domestic \u000d\u000ademand, particularly private consumption, \u000d\u000aare the leading drivers of the country\u2019s eco\u0002nomy. The FPO forecast foreign arrivals of \u000d\u000a27.7 million in 2023.\u000d\u000aThe office projects GDP growth of 3.2% \u000d\u000ain 2024, with the main support coming from \u000d\u000aprivate consumption and exports, as well as \u000d\u000athe recovery of the tourism sector.\u000d\u000aForeign tourist arrivals are estimated \u000d\u000aat 34.5 million in 2024, up 24.6%, leading \u000d\u000ato increased employment and income\u000d\u000ain the tourism sector and related service \u000d\u000abusinesses.\u000d\u000aThe forecast of 3.2% growth in 2024 does \u000d\u000anot include the impact of government stim\u0002ulus measures, such as the 10,000-baht dig\u0002ital wallet scheme, said the FPO.\u000d\u000aDanucha Pichayanan, secretary-general \u000d\u000aof the National Economic and Social \u000d\u000aContinued on page 6","","ECONOMIC REVIEW \u000d\u000aYEAR-END 2023 6\u000d\u000aMACROECONOMY\u000d\u000aContinued from page 4\u000d\u000aDevelopment Council (NESDC), said over \u000d\u000athe past five years, economic growth has \u000d\u000afailed to meet government targets, while \u000d\u000aover the next two years, Thailand faces \u000d\u000achallenges and uncertainties related to the \u000d\u000aglobal economy.\u000d\u000aDuring the past five years, the Thai econo\u0002my expanded by 1.4% on average, in part \u000d\u000abecause of the impact of the pandemic \u000d\u000abetween 2020 and 2021.\u000d\u000aExcluding the pandemic impact, the \u000d\u000aeconomy grew by only 2.6%, below the \u000d\u000atarget of 5% per year, he said.\u000d\u000aMr Danucha said during the past two \u000d\u000ayears, global growth has been more vola\u0002tile than before the pandemic, with high \u000d\u000ainflation in some countries.\u000d\u000aAccording to the NESDC, the Thai eco\u0002nomy in 2023 is projected to expand by 2.5%, \u000d\u000awith supporting factors including favourable \u000d\u000agrowth of private consumption, a continued \u000d\u000arecovery in the tourism sector, and expan\u0002sion of both private and public investment.\u000d\u000aConsumption and expenditure are \u000d\u000aexpected to increase by 5.0% and 1.6%, \u000d\u000arespectively, according to the state plan\u0002ning unit.\u000d\u000aHeadline inflation is estimated in a range \u000d\u000aof 1.7-2.2% and the current account is pro\u0002jected to record a surplus of 1.2% of GDP.\u000d\u000aBRIGHTER EXPORT OUTLOOK\u000d\u000aThai exports are poised to rebound in the \u000d\u000afourth quarter of 2023, presenting crucial \u000d\u000amomentum for shipment growth in 2024 \u000d\u000adespite persistent uncertainties and geo\u0002political risks.\u000d\u000aAccording to Commerce Ministry data, \u000d\u000aThai exports grew for the first time in 11 \u000d\u000amonths in August, supported by improved \u000d\u000asignals from the global manufacturing \u000d\u000asector, positive consumer spending, and \u000d\u000aan expanding service sector among trading\u000d\u000apartners.\u000d\u000aThe growth was bolstered by the pro\u0002motion of clean energy policies and higher \u000d\u000ademand for technological products, while \u000d\u000athe relative depreciation of the baht also had \u000d\u000aa positive influence on exports.\u000d\u000aAccording to the latest data from the \u000d\u000aCommerce Ministry, exports increased for \u000d\u000aa third straight month in October, up by 8% \u000d\u000ato US$23.5 billion, while imports increased \u000d\u000aby 10.2% to US$24.4 billion, resulting in a \u000d\u000atrade deficit of US$832 million.\u000d\u000aExports from the real sector (excluding \u000d\u000agold, oil-related products, and weaponry) \u000d\u000agrew by 5.4% year-on-year in October.\u000d\u000aFor the first 10 months, Thai exports \u000d\u000adecreased by 2.7% to roughly US$237 bil\u0002lion while imports decreased by 4.6% to \u000d\u000aUS$243 billion, resulting in a trade deficit \u000d\u000aof US$6.66 billion.\u000d\u000aPermanent commerce secretary Keerati\u000d\u000aRushchano said the ministry remains \u000d\u000abullish that shipments could continue to \u000d\u000aimprove during the final three months of \u000d\u000a2023, resulting in a smaller contraction for \u000d\u000athe year than was previously projected.\u000d\u000aFactors contributing to the positive \u000d\u000atrend include collaboration between the \u000d\u000agovernment and the private sector to \u000d\u000aaddress export challenges and increase \u000d\u000ashipment activities, as well as higher imports \u000d\u000aof agricultural and food products because of \u000d\u000adrought conditions, stable exchange rates, \u000d\u000aand stocking up of inventory ahead of the \u000d\u000aChristmas and New Year holidays, he said.\u000d\u000aThe Joint Standing Committee on \u000d\u000aCommerce, Industry and Banking recently \u000d\u000alowered its export outlook for 2023 to a \u000d\u000acontraction of 1-2%, from a contraction of \u000d\u000a0.5-2%, while the Thai National Shippers\u2019 \u000d\u000aCouncil (TNSC) downgraded its export forecast\u000d\u000ato a contraction of 1% from a range of -0.5\u000d\u000ato 1% growth, citing weak global demand.\u000d\u000a\u201cContinued expansion in the final \u000d\u000amonths of 2023 will serve as a pillar sup\u0002porting export growth in 2024. Exports will \u000d\u000aonce again play a pivotal role in propelling \u000d\u000athe Thai economy forward,\u201d said Mr Keerati.\u000d\u000aHe said the ministry is committed to col\u0002laborating closely with the private sector, \u000d\u000aholding quarterly meetings to analyse and \u000d\u000aproject the export landscape, focusing on \u000d\u000athree primary sectors: agricultural and food \u000d\u000aproducts, industrial goods, and lifestyle \u000d\u000aproducts.\u000d\u000aThe ministry plans to monitor trade \u000d\u000aissues and intricacies, assessing support\u0002ing elements, risks and opportunities, while \u000d\u000aconducting comprehensive product-spe\u0002cific export target forecasts, said Mr Keerati.\u000d\u000aHe said shipments in the agricultural and \u000d\u000afood sector, which accounts for 15% of the \u000d\u000acountry\u2019s total exports, are expected to grow \u000d\u000aby 2% in 2023, while industrial products, \u000d\u000awhich constitute 60% of total exports, are \u000d\u000aanticipated to expand by 1%.\u000d\u000aThe ministry is maintaining its export \u000d\u000agrowth target at 1% in 2023 and set a 2024 \u000d\u000aexport growth target at 1.99%. \u000d\u000aCONTRACTION LIKELY\u000d\u000aChaichan Chareonsuk, chairman of \u000d\u000athe TNSC, said while exports expanded \u000d\u000ain August and September, the council still \u000d\u000amaintains its forecast for an export contrac\u0002tion of 1-1.5% in 2023.\u000d\u000a\u201cRisk factors affecting exports remain \u000d\u000abountiful,\u201d Mr Chaichan said. \u201cIt is fortu\u0002nate there are supporting factors in the \u000d\u000aagricultural, automotive and electronics \u000d\u000asectors, which continue to grow.\u201d\u000d\u000aKey risk factors include geopolitical \u000d\u000aconflicts in the East and West, significantly \u000d\u000aaffecting global economic fluctuations, he \u000d\u000asaid. Major trading partners exhibit slow \u000d\u000aand staggered recoveries, such as in the US, \u000d\u000aEurope and China.\u000d\u000aGlobal interest rates remain high, influ\u0002encing financial systems with a downward \u000d\u000aflexible trend, and credit release is more \u000d\u000arestrained, said Mr Chaichan.\u000d\u000aIn addition, China\u2019s market recovery \u000d\u000aand currency stability are crucial to export \u000d\u000aoutcomes, while relatively high production \u000d\u000acost factors, such as electricity bills and raw \u000d\u000amaterial costs, are likely to affect Thailand\u2019s \u000d\u000apricing competitiveness, he said.\u000d\u000aLooking to 2024, Mr Chaichan said exter\u0002nal factors continue to weigh on export \u000d\u000aprospects, not only in Thailand but also \u000d\u000aglobally, as geopolitical conflicts remain \u000d\u000apersistent and unpredictable, while oil \u000d\u000aprices and raw material costs are still \u000d\u000arelatively high.\u000d\u000aShippers face increased labour costs \u000d\u000ain 2024, in addition to drought-related \u000d\u000aproblems and the introduction of new \u000d\u000aenvironmental regulations in foreign \u000d\u000acountries such as the Carbon Border Adjust\u0002ment Mechanism.\u000d\u000aThese external factors are expected \u000d\u000ato affect exports in multiple dimensions, \u000d\u000ahe said.\u000d\u000aAccording to Mr Chaichan, despite dry El \u000d\u000aNi\u00f1o conditions affecting agricultural busi\u0002nesses, Thai crop exports should remain in \u000d\u000agood shape in 2024 as rising prices could \u000d\u000ahelp offset lower export volumes.\u000d\u000aThe baht is projected to move in a range \u000d\u000aof 33-35 to the greenback, making Thai \u000d\u000aexport products competitive in the world \u000d\u000amarket, he said.\u000d\u000a\u201cAgricultural and food products boast \u000d\u000agrowth potential, but the government will \u000d\u000aneed to continuously promote soft power,\u201d \u000d\u000asaid Mr Chaichan.\u000d\u000a\u201cThe industrial sector remains challeng\u0002ing based on the slow recovery in manu\u0002facturing in China and Europe, affecting \u000d\u000aThailand\u2019s industrial product supply chains. \u000d\u000aThis impact is observed for items such as \u000d\u000aplastic pellets, chemicals, rubber and rub\u0002ber-based products.\u201d\u000d\u000aHe said automobile and auto parts \u000d\u000aexports are expected to maintain growth, \u000d\u000awhile electronic components also exhibit \u000d\u000apotential for continued shipments and \u000d\u000afreight costs remain relatively stable.\u000d\u000a\u201cThai exports could post growth in 2024 if \u000d\u000athere are no additional external factors and \u000d\u000aongoing wars between Ukraine and Russia \u000d\u000aas well as Israel and Hamas do not escalate \u000d\u000aand expand,\u201d said Mr Chaichan.\u000d\u000aExports in 2024 are predicted to grow at \u000d\u000aa tiny rate, around 0-2%, he said.\u000d\u000aMr Chaichan says that risk factors affecting exports remain bountiful.","","After Thai markets were battered in 2023, brokerages anticipate Fed rate cuts in 2024 could draw back \u000d\u000aforeign investors, writes Nuntawun Polkuamdee\u000d\u000aANALYSTS HOPE \u000d\u000aFOR A HEALTHIER 2024\u000d\u000aI\u000d\u000an sharp contrast to past stock market ral\u0002lies in election years, The Stock Exchange \u000d\u000aof Thailand (SET) tanked in 2023, con\u0002tracting by more than 16%, among the \u000d\u000aworst performances for emerging market \u000d\u000abourses.\u000d\u000aAs the calendar year draws to a close, \u000d\u000astock analysts are hopeful the Thai exchange \u000d\u000awill recover in 2024, driven by the likelihood \u000d\u000athe US Federal Reserve will not raise interest \u000d\u000arates again as inflation has eased.\u000d\u000aThe end of rate hikes should prompt \u000d\u000acapital to flow out of US money markets and \u000d\u000areturn to high-risk assets, including stocks.\u000d\u000aHowever, the geopolitical situation, espe\u0002cially the war between Israel and Hamas, \u000d\u000astill requires monitoring to determine \u000d\u000awhether it will expand into a regional con\u0002flict, said analysts.\u000d\u000aKobsak Pootrakool, chairman of the \u000d\u000aFederation of Thai Capital Market Organ\u0002izations (Fetco), expects the Fed to start \u000d\u000acutting interest rates in mid-2024 after US \u000d\u000aunemployment rates increase and inflation \u000d\u000arates start to decline.\u000d\u000a\u201cWe still believe external factors will ease \u000d\u000awhen the Fed cuts interest rates and peace \u000d\u000atalks begin for the Middle East war. Then \u000d\u000aforeign investors will return to invest in the \u000d\u000aThai stock market again,\u201d said Mr Kobsak.\u000d\u000aBEARISH SENTIMENT\u000d\u000aForeign capital outflows from the Thai \u000d\u000astock market topped 160 billion baht in 2023 \u000d\u000aas of November, compared with net inflows \u000d\u000aof roughly 200 billion in 2022. However, \u000d\u000aforeign investors sold a smaller amount in \u000d\u000athe first week of November than the average \u000d\u000afor 2023.\u000d\u000aExternal factors shook investor confi\u0002dence around the world in 2023, starting \u000d\u000awith the collapse of several US banks, which \u000d\u000alater spread to Europe. Then the Fed hiked \u000d\u000ainterest rates to a 22-year high of 5.25-5.50%, \u000d\u000apushing the US benchmark treasury yield to \u000d\u000a5%, attracting funds from all over the world \u000d\u000ato money markets there. \u000d\u000aThe Chinese economy slowed considera\u0002bly, weighed down by a lingering debt crisis \u000d\u000ain the property sector. The Israel-Hamas \u000d\u000aWE SUGGEST INVESTING \u000d\u000aIN HIGH-QUALITY \u000d\u000aFOREIGN DEBT \u000d\u000aINSTRUMENTS AND \u000d\u000aHEALTHCARE STOCKS TO \u000d\u000aOBTAIN GOOD RETURNS \u000d\u000aAMID UNCERTAINTIES \u000d\u000aIN BOTH ECONOMIC \u000d\u000aAND GEOPOLITICAL \u000d\u000aCONDITIONS.\u000d\u000aTISCO WEALTH ADVISORY\u000d\u000aAnalysing stock market data on a monitor.\u000d\u000aStock market gurus are showing their \u000d\u000aconfidence that the Thai exchange would \u000d\u000arecover next year.\u000d\u000aconflict, which erupted in early October, \u000d\u000acaused some investors to reduce stock \u000d\u000ainvestments, turning to safe-haven assets \u000d\u000asuch as gold. \u000d\u000aThe global economic outlook is gloomy \u000d\u000aamid concerns over a recession.\u000d\u000aMeanwhile, the Thai bourse was plagued \u000d\u000aby fraud cases for listed companies and eco\u0002nomic policies from the new government \u000d\u000athat dampened investor confidence. \u000d\u000aThe government was slow in providing \u000d\u000aclear details for its planned 10,000-baht \u000d\u000adigital wallet scheme, including the fund\u0002ing sources, as the estimated budget of 500 \u000d\u000abillion baht could burden the country\u2019s \u000d\u000apublic debts, said Paiboon Nalinthrangkurn,\u000d\u000achairman of the Investment Analysts \u000d\u000aAssociation.\u000d\u000aSET president Pakorn Peetathawatchai \u000d\u000aadmitted the two major fraud cases \u000d\u000ainvolving More Return and Stark Corp \u000d\u000acaused investors to lose their appetite for \u000d\u000astock investments.\u000d\u000aTo restore confidence, the Securities and \u000d\u000aExchange Commission (SEC) and the SET \u000d\u000ahave collaborated to review regulations for \u000d\u000afundraising in the primary market through \u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 8\u000d\u000aSTOCKS\u000d\u000aContinued on page 10","","initial public offerings, as well as listing \u000d\u000arules in the secondary market by adding \u000d\u000aprovisions and increasing penalties for \u000d\u000astock manipulation.\u000d\u000aThe SET implemented stricter require\u0002ments for listed companies to disclose infor\u0002mation, while also upgrading its monitoring \u000d\u000aof unusual stock price movement, alerting \u000d\u000ainvestors to pay attention to particular \u000d\u000astocks in order to prevent damages.\u000d\u000aThe Thai bourse lacks a long-term equity \u000d\u000afund that can enhance liquidity during \u000d\u000aperiods of severe stock market declines. \u000d\u000aFetco submitted a proposal to the Finance \u000d\u000aMinistry regarding this issue.\u000d\u000aThe highest outflow from the Thai \u000d\u000aexchange this year was in October, when \u000d\u000athe SET index slipped below 1,400 to finish \u000d\u000aat 1,381.83 points, down 6.1% from the \u000d\u000aprevious month.\u000d\u000aBONDS AND CRYPTO\u000d\u000aThe Thai bond market was volatile in \u000d\u000a2023 because of trends related to US interest \u000d\u000arates and bond yields. In the first 10 months \u000d\u000aof 2023, the capital outflow from the Thai \u000d\u000abond market was roughly 150 billion baht.\u000d\u000aConfidence in the bond market was \u000d\u000adamaged by defaults on bond payments \u000d\u000aby Stark and JKN Global Group. In the first \u000d\u000aeight months of 2023, companies defaulted \u000d\u000aon debt payments totalling 12 billion baht, \u000d\u000aprompting analysts to advise caution for \u000d\u000abonds issued by medium-sized companies.\u000d\u000aAccording to the Thai Bond Market \u000d\u000aAssociation (ThaiBMA), the total outstanding \u000d\u000avalue of the Thai bond market at the end of \u000d\u000athe third quarter in 2023 was 16.7 trillion \u000d\u000abaht, up 5.8% from the end of 2022.\u000d\u000aCorporate bond issuers with high credit \u000d\u000aratings can still issue and offer bonds as \u000d\u000adesired, though some issuers have post\u0002poned issuance to wait for appropriate \u000d\u000amarket timing and desirable interest rates, \u000d\u000asaid the ThaiBMA.\u000d\u000aThe industry groups with high issuance \u000d\u000avalue in 2023 are finance and securities, \u000d\u000aenergy, real estate and banking, noted \u000d\u000athe association.\u000d\u000aAccording to SEC data, the returns of \u000d\u000aassets for the first 10 months of 2023 com\u0002prised: Bitcoin (106%), Ethereum (48%), \u000d\u000aNasdaq 100 (31%), gold (8.5%), oil (7%), \u000d\u000aMSCI World (6.02%), MSCI ASIA (-3%), \u000d\u000aMSCI Emerging Markets (-4.23%), SET \u000d\u000a(-16.8%), and coal (-66.6%).\u000d\u000aHowever, Bitcoin and other cryptocur\u0002rencies were stagnant for a period in 2023 as \u000d\u000amany cryptos platforms collapsed, causing \u000d\u000ainvestors to suffer huge losses, while high \u000d\u000aA representation of the cryptocurrency is seen in front of the Bitcoin logo in this illustration. Photo: REUTERS\u000d\u000aThe Stock Exchange of Thailand has \u000d\u000aincreasingly implemented stricter \u000d\u000arequirements for companies\u2019 \u000d\u000ainformation disclosure. \u000d\u000aPhoto: Phrakrit Juntawong\u000d\u000aForeign investors sold more than 160 billion baht worth of Thai stocks in the first 10 months.\u000d\u000ainterest rates caused liquidity in the market \u000d\u000ato decrease. \u000d\u000aHowever, Bitcoin became active again \u000d\u000ain September after news emerged that \u000d\u000aBlackRock, a top investment firm, is close \u000d\u000ato receiving regulatory approval from \u000d\u000athe US SEC for its spot Bitcoin exchange\u0002traded fund to be listed on the Nasdaq \u000d\u000astock exchange.\u000d\u000aMoreover, with a Bitcoin halving set for \u000d\u000a2024, Sukit Udomsirikul, managing director \u000d\u000afor research at InnovestX Securities, said the \u000d\u000asupply will be cut by half.\u000d\u000aDuring the previous Bitcoin halving in \u000d\u000a2020, the price was at US$8,600. The price \u000d\u000ahas risen to $36,000 as of Nov 9 and some \u000d\u000aanalysts project it to reach $55,000-77,000 \u000d\u000aduring the halving in April 2024.\u000d\u000aGold and oil prices rose in 2023 because \u000d\u000aof the Mideast war and the potential to \u000d\u000aspread to other countries, including the US.\u000d\u000aPREDICTIONS\u000d\u000aAnalysts from YLG Bullion International \u000d\u000aforecast gold prices to surge because of three \u000d\u000afactors, led by the war. A projected economic \u000d\u000arecession and higher gold purchases from \u000d\u000acentral banks around the world are pushing \u000d\u000athe price beyond $2,000 again, noted the \u000d\u000agold firm.\u000d\u000aOil prices increased because of the \u000d\u000aIsrael-Hamas conflict and the chance the \u000d\u000adispute could spread. Analysts predict oil \u000d\u000aprices may exceed $100 per barrel, though \u000d\u000aprices will drop if the war eases, the economy \u000d\u000arecedes, or oil operators increase production \u000d\u000acapacity.\u000d\u000aAs markets are highly volatile and situ\u0002ations are fluid, many brokerages recom\u0002mend diversifying investment risks.\u000d\u000aTisco Wealth Advisory suggests investing \u000d\u000ain high-quality foreign debt instruments \u000d\u000aand healthcare stocks to obtain good returns \u000d\u000aamid uncertainties in both economic and \u000d\u000ageopolitical conditions.\u000d\u000aInnovestX Securities sees banking, \u000d\u000atourism and retail stocks as having the \u000d\u000aopportunity for continued growth.\u000d\u000a\u201cBitcoin and gold are alternative invest\u0002ments if the world economy slips into a \u000d\u000arecession and tensions in the Middle East \u000d\u000aescalate. However, investors should be \u000d\u000acareful when investing in alternative assets \u000d\u000abecause they contain high risks,\u201d said \u000d\u000athe brokerage.\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 10\u000d\u000aSTOCKS\u000d\u000aContinued from page 8","Thailand\u2019s ambition to become a regional manufacturing hub for electric vehicles\u000d\u000ashould continue in 2024, writes Lamonphet Apisitniran\u000d\u000aSURGE OF ACTIVITY\u000d\u000aEV MAKERS ARE IN \u000d\u000aTHE PROCESS OF \u000d\u000aBUILDING THEIR EV \u000d\u000aASSEMBLY PLANTS \u000d\u000aAND DESIGNING \u000d\u000aPRODUCTION \u000d\u000aLINES. WE EXPECT \u000d\u000aTHE FIRST \u000d\u000aLOCALLY-MADE EVS \u000d\u000aTO BE LAUNCHED \u000d\u000aIN THE SECOND \u000d\u000aQUARTER OF 2024.\u000d\u000aKRISDA UTAMOTE\u000d\u000aPRESIDENT, ELECTRIC VEHICLE \u000d\u000aASSOCIATION OF THAILAND\u000d\u000aT\u000d\u000ahailand is entering the next stage \u000d\u000aof electric vehicle (EV) develop\u0002ment as the first locally-made EV \u000d\u000apassenger cars are expected to be \u000d\u000aintroduced in 2024.\u000d\u000aAfter years of persuading motorists to try \u000d\u000aelectric mobility technology and encourag\u0002ing global car companies to build EV \u000d\u000afactories here, the government should start \u000d\u000ato see an outcome from its efforts.\u000d\u000aMeanwhile, the surge in sales of imported \u000d\u000aEVs has affected the domestic production \u000d\u000aof cars using internal combustion engines. \u000d\u000aWith automakers scheduled to produce \u000d\u000aEVs in Thailand in 2024 while a new EV \u000d\u000aincentive package is launched, the segment \u000d\u000ashould continue to attract new buyers and \u000d\u000ahelp Thailand move closer to its goal of \u000d\u000abeing a regional EV hub.\u000d\u000aFIRST EVs\u000d\u000a2024 should mark the first year global EV \u000d\u000amanufacturers, especially Chinese compa\u0002nies, make Thailand an EV production base.\u000d\u000a\u201cEV makers are in the process of build\u0002ing their EV assembly plants and designing \u000d\u000aproduction lines. We expect the first locally\u0002made EVs to be launched in the second \u000d\u000aquarter of 2024,\u201d said Krisda Utamote, \u000d\u000apresident of the Electric Vehicle Association \u000d\u000aof Thailand (EVAT).\u000d\u000aCar companies enjoying EV incentives \u000d\u000aoffered by the Prayut Cha-o-cha government \u000d\u000aare committed to building EV production \u000d\u000afacilities in Thailand.\u000d\u000aDubbed EV3.0, the package includes tax \u000d\u000acuts and subsidies to promote EV consump\u0002tion and production between 2022-2023.\u000d\u000aThe subsidies range from 70,000 baht to \u000d\u000a150,000 baht depending on the type and \u000d\u000amodel of vehicle, while there are lower \u000d\u000aexcise taxes and import duties on com\u0002pletely knocked down and completely \u000d\u000abuilt-up units.\u000d\u000aThe Board of Investment (BoI) helps \u000d\u000athe government promote investment in EV \u000d\u000amanufacturing through incentive packages. \u000d\u000aCompanies receiving investment privi\u0002leges include BYD, Great Wall Motor and \u000d\u000aSAIC Motor from China, Germany-based \u000d\u000aMercedes Benz, and Horizon Plus, a joint \u000d\u000aventure between PTT\u2019s wholly-owned Arun \u000d\u000aPlus and Taiwan-based Hon Hai Precision \u000d\u000aIndustry Co, a multinational electronics \u000d\u000amanufacturer.\u000d\u000aHorizon Plus plans to open a car assem\u0002bly facility worth US$1-2 billion in Chon \u000d\u000aBuri in 2024 with an annual capacity of \u000d\u000a50,000 units.\u000d\u000aPTT said the company would initially \u000d\u000aserve other firms in producing EVs rather \u000d\u000athan spending huge sums to set up a fully\u000d\u000a -fledged facility to construct EVs under a \u000d\u000anew brand.\u000d\u000aBYD plans to operate its first battery EV \u000d\u000afactory in Asean here in 2024 after buying \u000d\u000a600 rai of land in an industrial estate in \u000d\u000aRayong. \u000d\u000aA model displays a charger for EVs \u000d\u000awhich are among highlights of car \u000d\u000aevents in Thailand. Motorists are \u000d\u000aincreasingly interested in trying \u000d\u000aelectric mobility technology. \u000d\u000aPhoto: Pattarapong Chatpattarasill\u000d\u000aMr Krisda expects more sales of electric cars in 2024 \u000d\u000awhen the first locally-made EVs under the EV3.0 \u000d\u000apolicy will make a debut.\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023\u000d\u000a11\u000d\u000aINDUSTRY\u000d\u000aContinued on page 12","Electric vehicles \u000d\u000aare a magnet for \u000d\u000acar enthusiasts at \u000d\u000athe 2023 Fast Auto \u000d\u000aShow Thailand & EV \u000d\u000aExpo. Photo: Wichan \u000d\u000aCharoenkiatpakul\u000d\u000aMr Surapong believes the Thai EV \u000d\u000aindustry will keep growing, driven \u000d\u000aby the launch of a new EV incentive \u000d\u000apackage, dubbed EV3.5.\u000d\u000aWith an investment of 17.8 billion baht, \u000d\u000athe Shenzhen-based automaker plans to \u000d\u000abuild an EV facility with an annual produc\u0002tion capacity of 150,000 units.\u000d\u000aOther Chinese car companies also \u000d\u000ainvested in Thailand.\u000d\u000aMASSIVE OUTLAYS\u000d\u000aChangan Automobile, which received BoI \u000d\u000aapproval for its 8.86-billion-baht EV project, \u000d\u000aplans to start selling EVs from its Rayong \u000d\u000aplant in 2025.\u000d\u000aThe company, which bought 250 rai to \u000d\u000abuild its factory in an industrial estate in \u000d\u000athe province, aims to produce 58,000 battery \u000d\u000aEVs and 36,500 plug-in hybrid EVs a year.\u000d\u000aThe Chongqing-based manufacturer \u000d\u000awants to produce both EVs and batteries \u000d\u000afor domestic and overseas sales.\u000d\u000aDuring a land purchase deal with WHA \u000d\u000aGroup, Changan announced it plans to buy \u000d\u000aanother 300 rai from WHA to develop a \u000d\u000asecond-phase EV production facility.\u000d\u000aOmoda & Jaecoo International Co, a \u000d\u000asubsidiary of Chery International, a state\u0002owned automobile manufacturer in China, \u000d\u000asaid it plans to apply for the BoI\u2019s incen\u0002tive package.\u000d\u000aThe company wants to produce18,000 \u000d\u000aEVs a year to serve the Thai market, then \u000d\u000aincrease annual capacity to 50,000 units, \u000d\u000awith 45,000 vehicles to be exported.\u000d\u000aAion Automobile Sales (Thailand), a \u000d\u000asubsidiary of Guangzhou Automobile \u000d\u000aCorporation, the second-largest seller of \u000d\u000aEVs in China, plans to spend 6 billion baht \u000d\u000adeveloping its EV business in Thailand.\u000d\u000aWith the rapid growth of the EV market \u000d\u000ain Thailand, EVAT predicts sales to keep \u000d\u000aincreasing in 2024, up from a projection of \u000d\u000a60,000-70,000 units in 2023.\u000d\u000aNEW INCENTIVES\u000d\u000aThe launch of a new EV incentive package, \u000d\u000adubbed EV3.5, is expected to fuel industry \u000d\u000adevelopment under Thailand\u2019s EV roadmap \u000d\u000afrom 2022-30.\u000d\u000aThe government aims to have battery EVs \u000d\u000amake up 30% of total car manufacturing by \u000d\u000a2030, with production of 725,000 zero-emis\u0002sion cars, 675,000 electric motorcycles and \u000d\u000a34,000 electric buses and trucks.\u000d\u000aApplicable between 2024 and 2027, EV3.5 \u000d\u000aincludes subsidies ranging from 50,000 to \u000d\u000a100,000 baht per vehicle for EVs priced 2 \u000d\u000amillion baht or less and equipped with a \u000d\u000abattery of at least 50 kilowatt-hours.\u000d\u000aFor cars with a battery of less than 50kWh, \u000d\u000asubsidies range from 20,000 to 50,000 baht \u000d\u000aper vehicle.\u000d\u000aImport duty and excise tax reductions are \u000d\u000agranted for participating companies, which \u000d\u000aare required to start producing EVs domes\u0002tically from 2026.\u000d\u000aThe scheme is expected to encourage \u000d\u000amore EV makers, especially those with new \u000d\u000abrands, to invest in Thailand, said Surapong \u000d\u000aPaisitpatanapong, vice-chairman of the \u000d\u000aFederation of Thai Industries and spokes\u0002man for its Automotive Industry Club.\u000d\u000aThe new package is good, though it is less \u000d\u000aattractive than its predecessor, when Thai\u0002land was beginning to build its domestic EV \u000d\u000aindustry and needed foreign investors with \u000d\u000atechnological know-how, he said.\u000d\u000aIn October, the club downgraded Thai\u0002land\u2019s 2023 car manufacturing target to 1.85 \u000d\u000amillion units from 1.9 million because of \u000d\u000aa decline in domestic car sales, following \u000d\u000abanks\u2019 stricter criteria for auto loans.\u000d\u000aMr Surapong said earlier the rise in \u000d\u000aimported EVs from China would be factored \u000d\u000ainto the recalculation of the 2023 produc\u0002tion target.\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 12\u000d\u000aContinued from page 11","","While price reductions for diesel and gasohol and a smaller power tariff may prop up the economy \u000d\u000ain the short term, the government needs a long-term plan for energy prices, writes Yuthana Praiwan\u000d\u000aCHEAPER FUEL HAS A COST\u000d\u000aENERGY\u000d\u000aSLASH-AND-BURN \u000d\u000aFARMING PRACTICES \u000d\u000aEMIT PM2.5 POLLUTION, \u000d\u000aBUT THIS PRACTICE HAS \u000d\u000aOCCURRED FOR DECADES \u000d\u000aIN THAILAND AND RARELY \u000d\u000aCAUSED SEVERE DUST \u000d\u000aPROBLEMS. DIESEL IS THE \u000d\u000aREAL CULPRIT.\u000d\u000aLITTEE KITPIPIT\u000d\u000aCHIEF EXECUTIVE, SCAN INTER\u000d\u000aMr Srettha and Foreign Minister Parnpree \u000d\u000aBahiddha-Nukara listen to lawmakers \u000d\u000aquestioning government policies in the \u000d\u000aparliament. The Pheu Thai Party-led \u000d\u000agovernment is heading for new challenges \u000d\u000aafter its energy price reduction\u000d\u000ameasures expire. Photo: Chanat Katanyu\u000d\u000aT\u000d\u000ahe plan by the Srettha Thavisin \u000d\u000aadministration to manage the \u000d\u000aeconomy started quickly by \u000d\u000alowering energy expenses shortly \u000d\u000aafter taking office.\u000d\u000aThe government curbed the domestic \u000d\u000aprices of diesel, gasohol, gasoline and \u000d\u000aliquefied petroleum gas (LPG), as well as \u000d\u000areduced electricity bills, pleasing businesses \u000d\u000aand households.\u000d\u000aYet as Thailand tries to develop its eco\u0002nomy under a Pheu Thai-led coalition \u000d\u000agovernment, it remains uncertain whether \u000d\u000athe outcome will be so rosy.\u000d\u000aAnalysts, scholars and entrepreneurs \u000d\u000araised concerns over the future costs of \u000d\u000acheaper oil and electricity in terms of envi\u0002ronmental standards and public finances.\u000d\u000aIMPLICIT COSTS\u000d\u000aThe government can stimulate the economy \u000d\u000aby reducing energy prices in the short term, but \u000d\u000athere is an opportunity cost to the policy, as it \u000d\u000alimits spending on other campaigns, such as \u000d\u000athe effort to cut carbon dioxide emissions and \u000d\u000aPM2.5 ultra-fine dust.\u000d\u000aWith its decision to subsidise diesel, \u000d\u000agasohol and gasoline prices, the govern\u0002ment is promoting more burning of fossil \u000d\u000afuels, undercutting any attempts to curb \u000d\u000athe PM2.5 levels and push higher usage \u000d\u000aof biofuel.\u000d\u000aRight after delivering the government\u2019s \u000d\u000apolicy statement to parliament on Septem\u0002ber 11 and 12, Mr Srettha and the cabinet \u000d\u000aresolved on September 13 to reduce the \u000d\u000adiesel price to less than 30 baht a litre, down \u000d\u000afrom 31.94 baht a litre.\u000d\u000aThe new price lasts until December 31, \u000d\u000a2023, with the diesel excise tax reduced \u000d\u000aand funding allocated from the state\u2019s \u000d\u000aloss-ridden Oil Fuel Fund to subsidise the \u000d\u000adiesel price.\u000d\u000aThe policy reduces energy costs for \u000d\u000afactory owners, logistics operators and \u000d\u000amotorists, which supports their business \u000d\u000aoperations, but it adds a financial burden \u000d\u000afor the government.\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 14 Continued on page 16","","The Srettha cabinet decided to renew the \u000d\u000aexcise tax reduction for diesel from Sep\u0002tember 20 to December 31, 2023 after the \u000d\u000ameasure expired on July 20.\u000d\u000aThe Excise Department collected 350 \u000d\u000abillion baht from October 2022 to June 2023, \u000d\u000awhich was 17.8% less than its target amount \u000d\u000aof 426 billion, according to media reports.\u000d\u000aAs motorists and transport operators \u000d\u000acontinue to use diesel at reduced prices, it \u000d\u000ahampers any efforts to reduce PM2.5 levels.\u000d\u000aPART OF THE PROBLEM\u000d\u000aLittee Kitpipit, chief executive of Scan \u000d\u000aInter, a compressed natural gas seller and \u000d\u000aclean power operator, singled out diesel \u000d\u000afor worsening the PM2.5 levels as the sub\u0002sidy supports the usage of the fuel, leading \u000d\u000ato greater dust emissions, especially from \u000d\u000aageing internal combustion engines.\u000d\u000aSlash-and-burn farming practices emit \u000d\u000aPM2.5 pollution, but this practice has \u000d\u000aoccurred for decades in Thailand and rarely \u000d\u000acaused severe dust problems, said Mr Littee. \u000d\u000aDiesel is the real culprit, he said.\u000d\u000aPraipol Koomsup, a Thammasat Univer\u0002sity economist and an assistant to the former \u000d\u000aenergy minister, said the state efforts to curb \u000d\u000aenergy expenses are understandable. \u000d\u000aCapping the price of diesel, a key fuel \u000d\u000ain the industrial sector, and fixing the \u000d\u000aLPG price at 423 baht per 15-kilogramme \u000d\u000acylinder until December 31, 2023 for house\u0002holds who use it for cooking are reasonable, \u000d\u000asaid Mr Praipol.\u000d\u000aHowever, he raised doubts over the \u000d\u000areduced prices for gasohol and gasoline, as \u000d\u000afewer motorists use these fuels than diesel.\u000d\u000aThe reduction of between 0.8 to 2.5 baht \u000d\u000aa litre for gasohol and gasoline took effect \u000d\u000afrom November 7 and lasts until January \u000d\u000a31, 2024.\u000d\u000aThe government should develop an \u000d\u000aenergy price management structure because \u000d\u000aprice subsidies and curbs cannot be imple\u0002mented over the long term, said Mr Praipol.\u000d\u000aAuthorities face budget constraints. They \u000d\u000aneed lots of funds for a variety of other \u000d\u000apolicies, including the planned 10,000-baht \u000d\u000adigital wallet scheme and a reduction of \u000d\u000aticket prices for commuters on some electric \u000d\u000atrain routes.\u000d\u000aThailand is also committed to cutting \u000d\u000acarbon dioxide emissions, mainly from \u000d\u000afossil fuels, as it set a target to achieve carbon \u000d\u000aneutrality, a balance between carbon \u000d\u000adioxide emissions and absorption, by 2050.\u000d\u000aThe government must carefully design \u000d\u000aenergy usage plans to better fight global \u000d\u000awarming, said Mr Praipol.\u000d\u000aPOWER BILLS\u000d\u000aThe move to reduce the power tariff, \u000d\u000awhich is used to calculate power bills, also \u000d\u000aA car owner has his car refilled with diesel at a reduced price. More use of diesel is feared to aggravate the PM2.5 dust problem in cities. \u000d\u000aPhoto: Somchai Poomlard\u000d\u000asparked criticism regarding short-term \u000d\u000agains and the long-term negative impact \u000d\u000aon energy management.\u000d\u000aThe tariff, applicable between September \u000d\u000aand December of 2023, was reduced to 3.99 \u000d\u000abaht per kilowatt-hour (unit), down from \u000d\u000a4.45 baht a unit.\u000d\u000aCheaper power bills ease the cost of \u000d\u000aliving for households and reduce operating \u000d\u000aexpenses for businesses, but the tariff cut \u000d\u000adoes not assure effective energy manage\u0002ment in the long term.\u000d\u000aThe lower power tariff also means a \u000d\u000alonger payment period to reimburse the \u000d\u000aElectricity Generating Authority of Thai\u0002land (Egat).\u000d\u000aPart of the power tariff is paid to Egat \u000d\u000ato help it settle huge losses after it subsi\u0002dised electricity bills between September \u000d\u000a2021 and May 2023, as prices were elevated \u000d\u000aduring this period, partially because of the \u000d\u000aimpact of the Russia-Ukraine war last year.\u000d\u000aUnder the 4.45-baht tariff, the authority \u000d\u000awas forecast to clear its losses by April 2025.\u000d\u000aThe extension of the payment period may \u000d\u000aaffect Egat\u2019s cash on hand and its long-term \u000d\u000adevelopment of smart energy to cope with \u000d\u000aglobal warming, according to researchers \u000d\u000afrom the Thailand Development Research \u000d\u000aInstitute and Chulalongkorn University.\u000d\u000aIn addition, if the tariff reductions con\u0002tinue for a long time, people will not worry \u000d\u000aabout saving energy, noted the researchers.\u000d\u000aEgat needs to adjust its debt management \u000d\u000ato avoid a negative impact on its liquidity \u000d\u000aand credit rating, which can lead to higher \u000d\u000aloan rates, said Prasertsak Cherngchawano, \u000d\u000aassistant governor for corporate strategy \u000d\u000aat Egat.\u000d\u000aExpensive electricity bills remain a headache issue for Thailand as the existing price reduction is only a short-term solution. Photo: Varuth Hirunyatheb\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 16\u000d\u000aContinued from page 14","","With the proposed land bridge project, EEC development and rail lines, Thailand is building the economic \u000d\u000afoundation for decades to come, writes Wichit Chantanusornsiri\u000d\u000aBUILDING AN ECONOMIC \u000d\u000aBACKBONE\u000d\u000aINFRASTRUCTURE\u000d\u000aT\u000d\u000ahe proposed land bridge project, \u000d\u000awith an estimated price tag of 1 \u000d\u000atrillion baht, could help drive the \u000d\u000aeconomy and help the country \u000d\u000aescape the middle-income trap, \u000d\u000aaccording to politicians.\u000d\u000aThe project follows other massive infra\u0002structure schemes such as the Eastern Sea\u0002board project 40 years ago and the Eastern \u000d\u000aEconomic Corridor (EEC) that aims to build \u000d\u000aa high-tech manufacturing hub.\u000d\u000aThe current version of a land bridge \u000d\u000aproject was initiated by the Prayut \u000d\u000aChan-o-cha government in 2021 to propel \u000d\u000athe Thai economy.\u000d\u000aThe former prime minister monitored \u000d\u000athe progress of the project and emphasised \u000d\u000athe need to consider the opinions of stake\u0002holders, business operators, investors and \u000d\u000alocal residents.\u000d\u000aCHANGING THE GAME\u000d\u000aIn October 2023, the Srettha Thavisin \u000d\u000acabinet passed a resolution approving the \u000d\u000aproject in principle, aiming to shift global \u000d\u000alogistics, especially for the transport of oil, \u000d\u000ashortening the travel time by 6-9 days for oil \u000d\u000atankers that pass through the Malacca Strait.\u000d\u000aAccording to some estimates, roughly \u000d\u000a60% of the world\u2019s maritime transport \u000d\u000apasses through the Strait of Malacca, includ\u0002ing oil shipped from the Middle East to Asia.\u000d\u000aMr Srettha said the land bridge project, \u000d\u000awhich involves building two deep-sea ports \u000d\u000aand 90 kilometres of road and rail lines to \u000d\u000atransport goods between the Andaman Sea \u000d\u000aand Gulf of Thailand, would bypass the con\u0002gested Strait of Malacca between Malaysia, \u000d\u000aSingapore and Indonesia, cutting shipping \u000d\u000atime by 6-9 days.\u000d\u000aHe said while this tortured project has \u000d\u000abeen discussed for four decades, the cur\u0002rent version will not dig a canal in the Kra \u000d\u000aIsthmus of Thailand, instead connecting the \u000d\u000atwo coasts with infrastructure such as an oil \u000d\u000apipeline to support the growth of comple\u0002mentary industries such as petrochemical \u000d\u000afactories and gas separation plants.\u000d\u000aChina, which wants to build a locomotive \u000d\u000afactory that would be its largest production \u000d\u000abase outside China, can export to India and \u000d\u000athe Middle East if this project is successful, \u000d\u000asaid Mr Srettha.\u000d\u000a\u201cThis project may be one of the largest \u000d\u000amegaprojects in the world, making Thai\u0002land an attractive country for investment,\u201d \u000d\u000ahe said. \u201cThis government will push \u000d\u000afor this project to be completed during \u000d\u000athis administration.\u201d\u000d\u000aThe economy needs a major stimulus \u000d\u000abecause over the past decade Thailand\u2019s \u000d\u000aGDP grew by only 1.8% per year on average, \u000d\u000awhile household debt increased from 76% \u000d\u000aof GDP to 91% at present, said Mr Srettha.\u000d\u000aThailand has among the highest house\u0002hold debt-to-GDP ratios in Asia and ranks \u000d\u000a10th-highest in the world.\u000d\u000aThe massive project includes the con\u0002struction of a deep-sea port in the Laem \u000d\u000aRiu area, Lang Suan district, Chumphon \u000d\u000aprovince, designed to accommodate 20 \u000d\u000amillion TEUs (20-foot equivalent units) of \u000d\u000acargo, and a 17-metre deep channel.\u000d\u000aA deep-sea port also needs to be built \u000d\u000aon the Andaman coast in the Laem Ao Ang \u000d\u000aarea, Ratchakrut district, Ranong province, \u000d\u000adesigned to accommodate 20 million \u000d\u000aTEUs of cargo with a trench depth of 21m. \u000d\u000aA dual-track railway and motorway from \u000d\u000aChumphon to Ranong spanning 90km is \u000d\u000aalso required, along with development of \u000d\u000acommercial areas behind the ports.\u000d\u000aThe development model is private sector \u000d\u000ainvestment in a government business, in \u000d\u000athe form of a public-private partnership \u000d\u000awhere the private sector is the investor for \u000d\u000athe entire project.\u000d\u000aThe private sector would have the right \u000d\u000ato invest in construction and management \u000d\u000afor a period of 50 years, with the government \u000d\u000aacting as the operator of land expropriation.\u000d\u000aEASTERN PROMISES\u000d\u000aFor the EEC project initiated by the Prayut \u000d\u000agovernment, a cabinet report from April \u000d\u000a2023 provided an update on developments.\u000d\u000aThe high-speed railway project linking \u000d\u000athree airports worth 276 billion baht was \u000d\u000ahanded over to the private sector, accord\u0002ing to the investment contract. The State \u000d\u000aRailway of Thailand (SRT) is amending the \u000d\u000acontract the government signed with Asia \u000d\u000aEra One Co Ltd.\u000d\u000aFor the U-tapao airport development \u000d\u000aproject and Eastern Aviation City, con\u0002struction is progressing on a second runway \u000d\u000aand taxiway, as well as associated taxiways. \u000d\u000aPublic utility systems for the project are \u000d\u000abeing developed, such as water supply and \u000d\u000adrainage systems.\u000d\u000aPhase 3 of the Laem Chabang port \u000d\u000adevelopment project, Pier F, is continuing, \u000d\u000acovering land reclamation, construction of \u000d\u000aa coastal pier building, and compensation \u000d\u000aand relief for those affected by the project \u000d\u000adevelopment.\u000d\u000aIn addition, phase 3 of the Map Ta Phut \u000d\u000aindustrial port development calls for con\u0002struction of a sand dam, which is 71% com\u0002plete. Land reclamation is 61% finished and \u000d\u000athe building of an embankment to protect \u000d\u000athe shoreline against erosion is 39% com\u0002pleted, according to the report.\u000d\u000aThe joint venture between Thai Airways \u000d\u000aInternational Plc (THAI) and Airbus for a \u000d\u000amaintenance, repair and overhaul centre \u000d\u000aat U-tapao airport in Rayong is suspended \u000d\u000aas THAI focuses on developing a business \u000d\u000arehabilitation plan under the guidance of a \u000d\u000abankruptcy court.\u000d\u000aRAIL LINES\u000d\u000aAnother important project that could \u000d\u000aimprove Thailand\u2019s competitiveness and \u000d\u000alead to new trade, investment and tourism \u000d\u000aopportunities is the Chinese-Thai high\u0002speed rail project.\u000d\u000aThe contract was granted to three parties: \u000d\u000athe SRT, China Railway International Co and \u000d\u000aChina Railway Design Corporation.\u000d\u000aOperations on the first phase of the \u000d\u000aproject, with a distance of 251km from \u000d\u000aBangkok to Nakhon Ratchasima, have \u000d\u000aprogressed by 24% and are expected to offer \u000d\u000aservice by 2027, noted the cabinet report.\u000d\u000aThe SRT is conducting an environmental \u000d\u000aimpact assessment.\u000d\u000aRegarding mass rapid transit develop\u0002ment, the government implemented a \u000d\u000atransit master plan and developed several \u000d\u000arail transit lines to alleviate urban traffic con\u0002gestion, with the initial distance only 40km.\u000d\u000aIncluding subways, rail lines now exceed \u000d\u000a200km in 2023.\u000d\u000aIn the next 2-3 years, the distance is \u000d\u000aprojected to increase by 106km, giving Thai\u0002land the longest amount of metro rail lines \u000d\u000aamong Asean countries.\u000d\u000aMany rail lines have gradually opened for \u000d\u000aservice, including the monorail Yellow Line \u000d\u000a(Lat Phrao to Samrong section) in July 2023 \u000d\u000aand the Pink Line (Khae Rai to Min Buri), \u000d\u000awith a distance of 34.5km, scheduled for a \u000d\u000atrial run in mid-November and full service \u000d\u000ain December 2023.\u000d\u000aThe Orange Line project linking Thai\u0002land Cultural Centre and Min Buri (Suwin\u0002thawong) is 22.6km long.\u000d\u000aThe underground stations are finished, \u000d\u000apending final inspections, while the ele\u0002vated stations are 90.9% completed.\u000d\u000aThe government plans to invest in a land bridge megaproject in southern Thailand between Chumphon \u000d\u000aalong the Gulf of Thailand and Rayong along the Andaman Sea.\u000d\u000aAn artist\u2019s interpretation of a deep-sea port in \u000d\u000athe land bridge project.\u000d\u000aTHIS PROJECT MAY BE ONE OF \u000d\u000aTHE LARGEST MEGAPROJECTS \u000d\u000aIN THE WORLD, MAKING \u000d\u000aTHAILAND AN ATTRACTIVE \u000d\u000aCOUNTRY FOR INVESTMENT. \u000d\u000aTHIS GOVERNMENT WILL \u000d\u000aPUSH FOR THIS PROJECT TO \u000d\u000aBE COMPLETED DURING THIS \u000d\u000aADMINISTRATION.\u000d\u000aSRETTHA THAVISIN\u000d\u000aPRIME MINISTER\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 18","","Industry expects healthy loan growth despite tightened regulations, writes Somruedi Banchongduang\u000d\u000aBANKING SECTOR \u000d\u000aANTICIPATES ROSY 2024\u000d\u000aIF THE ECONOMY \u000d\u000aCONTINUES TO GROW, \u000d\u000aIT WOULD SUPPORT \u000d\u000aECONOMIC ACTIVITIES \u000d\u000aAND CAN GENERATE \u000d\u000aRECURRING INCOME FOR \u000d\u000aBOTH BUSINESS AND \u000d\u000aHOUSEHOLD SEGMENTS.\u000d\u000aPAYONG SRIVANICH\u000d\u000aCHAIRMAN, THAI BANKERS\u2019 ASSOCIATION\u000d\u000aL\u000d\u000aoan growth for the banking industry \u000d\u000ais expected to improve in 2024, in line \u000d\u000awith an improving economy amid \u000d\u000atightened regulation and continued \u000d\u000anormalisation of macroeconomic \u000d\u000apolicies. \u000d\u000aPayong Srivanich, chairman of the Thai \u000d\u000aBankers\u2019 Association and president of \u000d\u000aKrungthai Bank, said banking operations \u000d\u000aand profitability in 2024 would mainly \u000d\u000adepend on the country\u2019s economic growth.\u000d\u000aContinued post-Covid recovery should \u000d\u000asupport economic activities, he said. An \u000d\u000auneven economic recovery could pose a \u000d\u000achallenge to some industries and customer \u000d\u000asegments in the banking industry. \u000d\u000aThe stimulus measures proposed by the \u000d\u000aSrettha Thavisin administration should \u000d\u000afacilitate the country\u2019s economic expansion, \u000d\u000asaid Mr Payong.\u000d\u000aIn addition, the government should \u000d\u000aimplement additional stimulus measures \u000d\u000athat are more targeted to vulnerable seg\u0002ments, such as low-income earners, farmers \u000d\u000aand small and medium-sized enterprises, \u000d\u000ahe said.\u000d\u000a\u201cIf the Thai economy continues to grow, it \u000d\u000awould support economic activities and can \u000d\u000agenerate recurring income for both business \u000d\u000aand household segments,\u201d Mr Payong said. \u000d\u000aLeading banks exhibit financial services at Money Expo 2023.\u000d\u000aPeople discuss loans at a KBank booth at the Money Expo 2023.\u000d\u000a\u201cUnder this scenario, it would facilitate \u000d\u000agrowth of the banking business.\u201d\u000d\u000aREGULATION\u000d\u000aRegulatory factors are a key challenge for \u000d\u000athe industry in 2024, particularly the Bank \u000d\u000aof Thailand\u2019s new responsible lending (RL) \u000d\u000aguidelines that aim to improve loan quality \u000d\u000aand sustain the financial system over the \u000d\u000along run.\u000d\u000aThe new rules will add expenses for \u000d\u000afinancial institutions as well as loan-loss \u000d\u000aprovisions for the banking industry, \u000d\u000ahe said.\u000d\u000aThis factor puts pressure on the declining \u000d\u000amarket capitalisation of the banking sector \u000d\u000aoverall, he said.\u000d\u000aThe profitability of the banking sector \u000d\u000anext year is mainly dependent on economic \u000d\u000acircumstances, Mr Payong said. \u000d\u000a\u201cStandardisation of the financial sector, \u000d\u000aincluding both banks and non-banks, \u000d\u000ashould be done on a fair and equitable \u000d\u000abasis. Otherwise it could lead to inequality \u000d\u000ain supervision and market competition,\u201d \u000d\u000ahe said. \u000d\u000aChartsiri Sophonpanich, president of \u000d\u000aBangkok Bank (BBL), agreed the banking \u000d\u000abusiness outlook for 2024 depends on the \u000d\u000acountry\u2019s economic circumstances.\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 20\u000d\u000aBANKING","Visitors at the Government Savings Bank booth at Money Expo 2023 Rayong.\u000d\u000aThe government\u2019s stimulus measures \u000d\u000ashould kick-start GDP growth in 2024 to \u000d\u000aexceed the previous year, supporting loan \u000d\u000agrowth and the banking industry, said Mr \u000d\u000aChartsiri. \u000d\u000a\u201cThe central bank\u2019s new RL guidelines \u000d\u000awill push up operating costs in the industry, \u000d\u000abut BBL is ready to comply with the new \u000d\u000astandard and manage higher expenses to \u000d\u000amaintain suitable earnings,\u201d he said. \u000d\u000aMr Chartsiri said the bank plans to con\u0002tinue to develop digital banking, in line with \u000d\u000athe country\u2019s transition to a digital economy \u000d\u000aand customer needs in the digital era.\u000d\u000aBBL is also improving its core banking \u000d\u000asystem to improve business efficiency, he \u000d\u000asaid. \u000d\u000aLENDING OUTLOOK\u000d\u000aThanyalak Vacharachaisurapol, deputy \u000d\u000amanaging director of Kasikorn Research \u000d\u000aCenter (K-Research), forecasts banking \u000d\u000asector loan growth in 2024 at 3.5-4%, higher \u000d\u000athan the estimate of 2.3-2.5% for 2023.\u000d\u000aThe central bank\u2019s elevated growth out\u0002look from 3.8% to 4.4% would be a key factor \u000d\u000agrowing banks loans, particularly corporate \u000d\u000aloans, she said. \u000d\u000aNet interest income (NII) should con\u0002tinue to grow in 2023, in line with loan \u000d\u000aexpansion and rising interest rates, said \u000d\u000athe think tank.\u000d\u000aK-Research predicts NII to increase mar\u0002ginally to 3.3% in 2024 from 3.1% in 2023 and \u000d\u000a2.3% in 2022. The marginal improvement is \u000d\u000athe result of higher financial costs for deposit \u000d\u000amobilisation, said the research house.\u000d\u000aMs Thanyalak said the banking industry \u000d\u000ashould be able to manage non-performing \u000d\u000aloans (NPLs) in 2024 through both debt \u000d\u000arestructuring and sales of NPLs.\u000d\u000aThe NPL ratio in for commercial banks \u000d\u000ais expected to remain stable at 2.5-2.75% of \u000d\u000atotal loans in 2023, compared with 2.72% \u000d\u000athe previous year.\u000d\u000aAs a result, banks are likely to ease loan\u0002loss provisions in 2024, said K-Research.\u000d\u000aIn addition, the industry\u2019s credit costs for \u000d\u000a2024 should continue to return to pre-Covid \u000d\u000alevels, she said.\u000d\u000aPrior to the pandemic, the industry\u2019s \u000d\u000acredit costs were around 1.2-1.3%, rising to \u000d\u000a1.7-1.8% during the pandemic. \u000d\u000aThe central bank\u2019s RL guidelines should \u000d\u000anot significantly affect operating costs \u000d\u000anor loan-loss provisions in 2024 as the \u000d\u000anew rules are gradual implemented, said \u000d\u000aMs Thanyalak.\u000d\u000aThe RL guidelines are slated to start on \u000d\u000aJanuary 1, 2024 as part of an effort to reduce \u000d\u000athe country\u2019s household debt.\u000d\u000aThe guidelines cover advertising and \u000d\u000aselling debts, particularly for new loan offer\u0002ings starting from 2024.\u000d\u000aThe regulator prohibits ads and market\u0002ing campaigns that may encourage excessive \u000d\u000aborrowing or discourage a healthy credit \u000d\u000aculture, including terms such as \u201cinstant \u000d\u000aloan\u201d or \u201cno collateral needed\u201d without clear \u000d\u000aexplanations about how the interest and \u000d\u000aprincipal are computed or deducted from \u000d\u000aeach payment.\u000d\u000aMoreover, the central bank is scheduled \u000d\u000ato implement new persistent debt (PD) \u000d\u000ameasures from April 1, 2024, offering low \u000d\u000ainterest rates to low-income debtors with PD \u000d\u000aand revolving personal loans to enable them \u000d\u000ato exit from the debt cycle faster.\u000d\u000aMr Payong reiterated that the \u000d\u000aprofitability of the banking business \u000d\u000afor next year would mainly depend on \u000d\u000aeconomic circumstances.\u000d\u000aThe atmosphere at \u000d\u000athis year\u2019s Money Expo.\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023\u000d\u000a21","While the insurance industry \u000d\u000aexpects some benefits from \u000d\u000athe government\u2019s economic \u000d\u000astimulus package, firms are \u000d\u000aconcerned that high interest \u000d\u000arates, inflation, a volatile exchange rate and \u000d\u000aheightened competition could dampen busi\u0002ness prospects in 2024.\u000d\u000aThomas Wilson, president and chief \u000d\u000aexecutive of Allianz Ayudhya Assurance, \u000d\u000asaid the Thai insurance market was \u000d\u000aamazingly resilient during 2023 in the face \u000d\u000aof great uncertainty from inflation, restrictive \u000d\u000amonetary policies worldwide, the de-risking \u000d\u000aof supply chains and international tension \u000d\u000ain Ukraine and the Middle East.\u000d\u000a\u201cIn spite of these conditions, demand \u000d\u000afor insurance in Thailand remained robust, \u000d\u000aespecially for health and savings, driven by a \u000d\u000areturn to full employment, robust domestic \u000d\u000aconsumption and international tourism,\u201d Mr \u000d\u000aWilson told the Bangkok Post.\u000d\u000aSUCCESS STORIES\u000d\u000aClaude Seigne, chief executive of AXA \u000d\u000aThailand General Insurance (GI), said the \u000d\u000ageneral insurance market expanded by 5.1% \u000d\u000afor the first nine months of 2023, with growth \u000d\u000adriven by motor, industrial risk and health \u000d\u000ainsurance, according to data provided by the \u000d\u000aThai General Insurance Association.\u000d\u000aThis growth has helped AXA Thailand GI \u000d\u000ato develop rapidly in these three segments, \u000d\u000aproducing a growth rate greater than twice \u000d\u000athe rate of the overall market, he said.\u000d\u000aSara Lamsam, president of the Thai \u000d\u000aLife Assurance Association (TLAA), said \u000d\u000athe industry remains on course to grow by \u000d\u000a0-2% in 2023 with total premiums of 612-623 \u000d\u000abillion baht. In the first six months of 2023, \u000d\u000atotal premiums surged 3.78% year-on-year \u000d\u000ato 300 billion baht, with first-year premiums \u000d\u000arising 8.93% to 86.8 billion.\u000d\u000aSales via agents account for about \u000d\u000ahalf of the total premiums, followed by \u000d\u000aVisitors check out insurance products at a fair.\u000d\u000abancassurance, brokers, direct marketing, \u000d\u000aand the digital channel at 39.1%, 5.55%, \u000d\u000a2.29% and 0.16%, respectively. The other \u000d\u000a2% was generated by other channels, such \u000d\u000aas retail marketing events and conve\u0002nience stores.\u000d\u000aHealth and pension insurance products \u000d\u000abecame increasingly popular during the \u000d\u000afirst half of the year, reflecting consumer \u000d\u000aconcerns about health following the \u000d\u000apandemic, higher medical costs and the \u000d\u000acountry\u2019s ageing society, said Mr Sara, \u000d\u000awho is also president and chief executive \u000d\u000aof Muang Thai Life Assurance.\u000d\u000aTo grow the business in 2024, Mr Seigne \u000d\u000asaid the main priorities for AxA Thailand \u000d\u000aGI will remain centred around enhancing \u000d\u000aits partnerships, streamlining processes to \u000d\u000adecrease operational costs, and simplifying \u000d\u000athe company\u2019s products.\u000d\u000a\u201cWe aim to make our health products \u000d\u000amore accessible to a broader range of \u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 22\u000d\u000aWhile the sector proved resilient in 2023, it anticipates a variety of challenges over the next 12 months, \u000d\u000awrites Nareerat Wiriyapong\u000d\u000aINSURERS CONFRONT ANOTHER \u000d\u000aCHALLENGING YEAR\u000d\u000aINSURANCE","THE STRICTER LENDING \u000d\u000aPOLICIES ADOPTED \u000d\u000aBY BANKS CAUSED A \u000d\u000aSIGNIFICANT DECLINE \u000d\u000aIN NEW CAR SALES. IN \u000d\u000aRESPONSE, SOME INSURERS \u000d\u000aARE CUTTING THEIR \u000d\u000aRATES TO RETAIN THEIR \u000d\u000aEXISTING PORTFOLIO WHILE \u000d\u000aAIMING TO ATTRACT NEW \u000d\u000aCUSTOMERS, CREATING A \u000d\u000aSOFT MARKET. \u000d\u000aCLAUDE SEIGNE\u000d\u000aCHIEF EXECUTIVE, AXA THAILAND\u000d\u000aGENERAL INSURANCE\u000d\u000afamilies at affordable prices. We also have \u000d\u000astrategic plans in place to introduce new \u000d\u000acyberproducts in response to the increasing \u000d\u000arisk associated with this field,\u201d he said.\u000d\u000aAt Allianz Ayudhya, Mr Wilson said \u000d\u000athe company will continue to focus on \u000d\u000aexpanding agencies via its Franchise \u000d\u000aBuilder programme.\u000d\u000a\u201cIt is designed to empower entrepreneurs \u000d\u000ato build a robust business for themselves \u000d\u000aand their legacy. In addition, we will con\u0002tinue to work with our bank and financial \u000d\u000aservices partners to effectively service the \u000d\u000ainsurance needs of their customers,\u201d he said. \u000d\u000aCHALLENGES AHEAD\u000d\u000aLooking ahead, Mr Wilson said global \u000d\u000ainsecurity and potential energy and food \u000d\u000aprice inflation are likely to dampen con\u0002sumer and investor confidence, as well as \u000d\u000ainternational tourist flows.\u000d\u000aThese factors present a potentially more \u000d\u000achallenging outlook for 2024 and impact \u000d\u000ademand for insurance to a great degree, \u000d\u000ahe said.\u000d\u000a\u201cThe potential inflation caused by a \u000d\u000aweakening baht and the increasing cost of \u000d\u000amedical services may weigh on insurance \u000d\u000aprofitability,\u201d he said.\u000d\u000aMr Seigne at AXA Thailand GI said the \u000d\u000astricter lending policies adopted by banks \u000d\u000acaused a significant decline in new car sales. \u000d\u000aIn response, some insurers are cutting their \u000d\u000arates to retain their existing portfolio while \u000d\u000aaiming to attract new customers, creating a \u000d\u000asoft market, he said.\u000d\u000a\u201cThis heightened competition may \u000d\u000apresent difficulties for insurance companies \u000d\u000ato maintain their market share and \u000d\u000aprofitability in 2024. It could also hinder \u000d\u000atheir ability to invest in technology to \u000d\u000aenhance the customer experience, stream\u0002line operations, and improve risk manage\u0002ment,\u201d Mr Seigne told the Bangkok Post.\u000d\u000a\u201cInflation is a pressing issue for econo\u0002mies worldwide, and Thailand is no excep\u0002tion. It would not be a big surprise if the \u000d\u000aBank of Thailand continues to raise interest \u000d\u000arates in the coming months.\u201d\u000d\u000aChanges in interest rates can affect \u000d\u000ainvestment returns and overall market \u000d\u000aperformance. Geopolitical risks such as \u000d\u000awar can also lead to market volatility and \u000d\u000auncertainty, he said.\u000d\u000a\u201cAfter Ukraine, the ongoing conflict \u000d\u000abetween Israel and Hamas can definitely \u000d\u000aimpact the global economy, including \u000d\u000afinancial markets and investor sentiment. \u000d\u000aInsurance companies in Thailand may face \u000d\u000achallenges in managing investment portfo\u0002lios,\u201d said Mr Seigne.\u000d\u000aArsh Kaumi, country manager of \u000d\u000aGenerali Thailand and chief executive of \u000d\u000aGenerali Life Assurance (Thailand), said \u000d\u000ainsurance companies are not immune to \u000d\u000aeconomic headwinds.\u000d\u000a\u201cAny economic impact such as inflation \u000d\u000aor high interest rates is going to affect the \u000d\u000ainsurance industry, notably volatile interest \u000d\u000arates,\u201d he told the Bangkok Post.\u000d\u000a\u201cAll of those headwinds would affect \u000d\u000aevery insurance company in terms of \u000d\u000ademand. However at Generali, we believe \u000d\u000athe impact will be short-term. In the long \u000d\u000aterm, the Thai insurance industry should \u000d\u000astrengthen as demand improves upcountry \u000d\u000aand from the ageing demographic eager for \u000d\u000ahealth and life protection.\u000d\u000a\u201cWe pay close attention to volatility to \u000d\u000aensure we have safeguards in place to miti\u0002gate the impacts of interest rate movements.\u201d\u000d\u000aMr Sara from TLAA said in addition to \u000d\u000aglobal economic uncertainty, geopolitics \u000d\u000aand trade wars need to be monitored as \u000d\u000athey affect inflation and consumer pur\u0002chasing power.\u000d\u000aCybersecurity threats can also affect the \u000d\u000astability of the insurance system and con\u0002sumer confidence, he said.\u000d\u000aGOVERNMENT SUPPORT\u000d\u000aMr Seigne said the Srettha Thavisin \u000d\u000agovernment may embark on a new economic\u000d\u000achapter depending on its policies.\u000d\u000a\u201cA focus on policies that promote domes\u0002tic consumption, encourage investment and \u000d\u000adrive sustainable economic growth could \u000d\u000astimulate economic development,\u201d he said.\u000d\u000a\u201cIf there is continuous promotion of \u000d\u000aThailand as a regional trade and investment \u000d\u000ahub, this may continue to attract foreign \u000d\u000ainvestors, driving job creation and eco\u0002nomic expansion.\u201d\u000d\u000aHowever, whether a new economic phase \u000d\u000ais achieved depends on several factors, \u000d\u000aincluding the effective implementation of \u000d\u000astate policies and prudent fiscal manage\u0002ment, said Mr Seigne.\u000d\u000aMr Wilson said the Thai \u000d\u000ainsurance market this year was \u000d\u000aamazingly resilient in the face of \u000d\u000agreat macro uncertainties.\u000d\u000aMr Sara said the industry \u000d\u000aremains on course to grow \u000d\u000awithin a range of 0-2% this year \u000d\u000ato achieve total premiums of \u000d\u000aaround 612-623 billion baht.\u000d\u000aMr Seigne said under the new government in Thailand, it is possible that \u000d\u000athe country may embark on a new economic chapter.\u000d\u000aCorruption still needs to be tackled, while \u000d\u000amaintaining political stability and navigat\u0002ing external economic challenges, such as \u000d\u000aa global economic slowdown or trade dis\u0002putes, he said.\u000d\u000a\u201cWhile there are promising signs for \u000d\u000aThailand\u2019s economic prospects under the \u000d\u000anew administration, only time will tell if its \u000d\u000apolicies and initiatives will lead to a new \u000d\u000aeconomic chapter for the country,\u201d said \u000d\u000aMr Seigne.\u000d\u000aTo drive economic growth and support \u000d\u000athe Thai insurance industry, companies \u000d\u000awould like government support via policies \u000d\u000athat encourage greater adoption of digital \u000d\u000atechnologies and insurtech startups, he said.\u000d\u000a\u201cEncouraging the adoption of digital \u000d\u000atechnologies can lead to increased effi\u0002ciency, cost savings and improved customer \u000d\u000aexperiences. The creation of an environ\u0002ment that supports and nurtures insurtech \u000d\u000astartups can contribute to the growth and \u000d\u000ainnovation of the insurance industry,\u201d said \u000d\u000aMr Seigne. \u000d\u000aThe government could create an envi\u0002ronment that supports the growth of the \u000d\u000ainsurance industry, attracts investments and \u000d\u000aenhances financial stability. This, in turn, \u000d\u000acould contribute to economic growth and \u000d\u000aresilience in the country, he said.\u000d\u000aMr Wilson said Thailand holds tremen\u0002dous potential, especially in terms of foreign \u000d\u000ainvestment driven by the realignment of \u000d\u000aglobal supply chains. However, other Asean \u000d\u000acountries such as Vietnam and Indonesia \u000d\u000aare competing for the same investment \u000d\u000adollars, he said.\u000d\u000a\u201cThe new government appears to recog\u0002nise this potential and we are optimistic that \u000d\u000ait will promote investment in manufacturing \u000d\u000ato drive economic and export expansion, as \u000d\u000awell as further wealth accumulation among \u000d\u000aThais,\u201d said Mr Wilson.\u000d\u000a\u201cThais recognise the need for security \u000d\u000afrom insurance. The government can sup\u0002port this need by engaging in predictable, \u000d\u000abusiness-oriented fiscal and monetary \u000d\u000apolicies, giving Thai consumers and inter\u0002national investors the confidence they need \u000d\u000ato ensure that Thailand and the Thai insur\u0002ance industry lives up to its full potential.\u201d\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 23","A row of high-rise buildings in Bangkok\u2019s central business district. Photo: Somchai Poomlard\u000d\u000aPeople browse house and condo deals \u000d\u000aat a property fair. Photo: Facebook: \u000d\u000aHouseandcondoshow\u000d\u000aT\u000d\u000ahe residential market continues \u000d\u000ato grapple with several nega\u0002tive factors, including a sluggish \u000d\u000aeconomy, a surge in interest rates, \u000d\u000aa high level of household debt and \u000d\u000arestricted access to credit, affecting home \u000d\u000apurchasing prospects in 2024.\u000d\u000aPornarit Chounchaisit, president of \u000d\u000athe Thai Real Estate Association, said the \u000d\u000anegative factors considerably diminished \u000d\u000aconsumer purchasing power, prompting \u000d\u000abanks to exercise greater caution in offering \u000d\u000amortgages to potential homebuyers.\u000d\u000a\u201cThe high loan rejection rate, which \u000d\u000apeaked at 50% in 2023, prompted developers \u000d\u000ato resell units continuously,\u201d he said. \u201cThe \u000d\u000ainability to transfer units affected business \u000d\u000aliquidity, further strained by the stringent \u000d\u000acredit conditions for project finance.\u201d\u000d\u000aMIX OF ELEMENTS\u000d\u000aVichai Viratkapan, acting director-gen\u0002eral of the Real Estate Information Center \u000d\u000a(REIC), said there was risk for a slowdown in \u000d\u000aboth demand and supply in the residential \u000d\u000amarket in 2023.\u000d\u000a\u201cThe end of an eased loan-to-value limit \u000d\u000aon January 1, 2023 affected potential home\u0002buyers with mortgages for second or third \u000d\u000ahomes throughout 2023,\u201d he said. \u201cThis \u000d\u000amomentum will carry on in 2024.\u201d\u000d\u000aHousehold debt remained particularly \u000d\u000ahigh, accounting for nearly 90% of GDP in \u000d\u000a2023, while interest rates were raised on five \u000d\u000aoccasions between March and September \u000d\u000a2023, accounting for a total increase of 125 \u000d\u000abasis points.\u000d\u000aThese factors significantly affected the \u000d\u000amiddle to lower end of the housing market, \u000d\u000aas it relies heavily on loans, said Mr Vichai. \u000d\u000aThe tightening of credit approvals and rising \u000d\u000ainterest rates diminished consumers\u2019 ability \u000d\u000ato purchase a residence. \u000d\u000aIn the second quarter of 2023, the number \u000d\u000aof residential transfers nationwide dropped \u000d\u000aby 4.4% year-on-year to 91,085 units, while \u000d\u000athe value rose by 0.5% to 258 billion baht. \u000d\u000a\u201cThis indicated that most of the transfers \u000d\u000aoccurred at higher unit prices,\u201d he said. \u201cThe \u000d\u000aaverage price per unit was 2.83 million baht, \u000d\u000ahigher than the pre-pandemic average of \u000d\u000a2.21 million.\u201d\u000d\u000aFive provinces that posted a drop in \u000d\u000aboth the number and value of units sold \u000d\u000awere Nonthaburi, Pathum Thani, Rayong, \u000d\u000aNakhon Ratchasima and Samut Sakhon, \u000d\u000aaccording to the centre.\u000d\u000aREIC conducted a field survey in 27 \u000d\u000aprovinces across the country where\u000d\u000asignificant property transactions took place, \u000d\u000areporting a decline of 11.7% and 27.8% \u000d\u000ain the number of new residential units \u000d\u000alaunched and sold, respectively.\u000d\u000a\u201cVarious factors affected demand, while \u000d\u000athe increasing cost of development reduced \u000d\u000athe confidence of residential developers to \u000d\u000alaunch new projects and their sales outlook \u000d\u000afor 2023,\u201d said Mr Vichai.\u000d\u000aPUTTING IT OFF\u000d\u000aMany developers slashed their project \u000d\u000alaunches for 2023, postponing them until \u000d\u000a2024, with the year-on-year growth rate \u000d\u000athe lowest in the last seven quarters of the \u000d\u000aland price index for Greater Bangkok in the \u000d\u000athird quarter.\u000d\u000aHe said the REIC projected a base-case \u000d\u000ascenario for 2023 of a 5.5% dip in new \u000d\u000aresidential units nationwide and a 20% decline\u000d\u000ain sales year-on-year. As a result, the unsold \u000d\u000aresidential inventory would increase by 2.6%.\u000d\u000aBy the end of 2023, the number and value \u000d\u000aof residential transfers were expected to \u000d\u000adecrease by 14.5% and 8.2%, respectively, \u000d\u000aaccording to REIC.\u000d\u000a\u201cThere was a positive change,\u201d said Mr \u000d\u000aVichai. \u201cInternational markets demon\u0002strated growth, rising from 20.5% of the total \u000d\u000aproportion in the second quarter of 2022 to \u000d\u000a24.5% in the corresponding period of 2023, \u000d\u000aconfirming robust demand against a weak \u000d\u000adomestic market.\u201d\u000d\u000aNattha Kahapana, managing director of \u000d\u000aproperty consultant Knight Frank Thailand, \u000d\u000asaid residential demand from foreign buyers \u000d\u000aexpanded in some areas as they were look\u0002ing for new locations to live.\u000d\u000a\u201cIn 2023, foreign buyers shifted from \u000d\u000ainner Bangkok to suburban areas along \u000d\u000athe mass transit lines and other provinces,\u201d \u000d\u000ahe said. \u201cSome of them were interested in \u000d\u000asecond-hand units located near mass transit \u000d\u000alines because of more attractive prices.\u201d\u000d\u000aCONDO OUTLOOK\u000d\u000aAccording to Knight Frank, the sales price \u000d\u000aof condos in the central business district was \u000d\u000aroughly 248,000 baht per square metre in the \u000d\u000asecond quarter of 2023, representing a 1.72% \u000d\u000aincrease from the first quarter.\u000d\u000aThe average sales price of a condo on the \u000d\u000afringe of the city was 121,300 baht per sq m, \u000d\u000aup 1.85%, while the average sales price of \u000d\u000aa condo in Bangkok\u2019s suburbs was 68,000 \u000d\u000abaht, a 3% increase quarter-on-quarter. \u000d\u000a\u201cChinese groups returned to buy high\u0002priced condos, with ownership transfers \u000d\u000astarting from the beginning of the year,\u201d \u000d\u000asaid Mr Nattha.\u000d\u000a\u201cAnother factor influencing purchasing \u000d\u000adecisions was the proximity of the property \u000d\u000ato international schools.\u201d\u000d\u000aThe REIC forecast new residential supply \u000d\u000alaunched in Greater Bangkok in 2023 would \u000d\u000adrop by 12.5% to 95,732 units worth 498 \u000d\u000abillion baht, representing a 9.6% decrease.\u000d\u000aThe total number of newly sold residential \u000d\u000aunits in 2023 was expected to decrease by \u000d\u000a15.6% to 80,239 units worth 409 billion baht.\u000d\u000aThe REIC expects the condo market to \u000d\u000aimprove in 2024, with 13.7% growth in new \u000d\u000asupply launched to 108,886 units worth 572 \u000d\u000abillion baht, up by 14.9%.\u000d\u000aNew sales should recover to 109,184 units \u000d\u000aworth 552 billion baht, gains of 36% and 35%, \u000d\u000arespectively, said the centre.\u000d\u000aThe monthly absorption rate, which was set \u000d\u000ato drop to 2.8% in 2023 from 3.9% in 2022, \u000d\u000ashould rebound to 3% in 2024, according \u000d\u000ato the REIC.\u000d\u000aIN 2023, FOREIGN BUYERS \u000d\u000aSHIFTED FROM INNER \u000d\u000aBANGKOK TO SUBURBAN \u000d\u000aAREAS ALONG THE MASS \u000d\u000aTRANSIT LINES AND OTHER \u000d\u000aPROVINCES.\u000d\u000aNATTHA KAHAPANA\u000d\u000aMANAGING DIRECTOR, KNIGHT FRANK THAILAND\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 24\u000d\u000aProspects remain dim as several negative factors persist, reducing the purchasing power of consumers, \u000d\u000awrites Kanana Katharangsiporn\u000d\u000aRESIDENTIAL MARKET LIKELY \u000d\u000aTO REMAIN DOWNBEAT\u000d\u000aPROPERTY","The continued adoption of AI is seen as one of the key engines to drive Thailand\u2019s digital transformation.\u000d\u000aMr Chaichana said that given generative AI development is dynamic, the country should \u000d\u000amonitor its global development first before issuing any regulations.\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 25\u000d\u000aThe technology is among the top three trends predicted to have the biggest impact on Thailand \u000d\u000ain the next 12 months, writes Suchit Leesa-nguansuk\u000d\u000aAI ADOPTION SET TO SOAR\u000d\u000aIT\u000d\u000aT\u000d\u000ahe local adoption of artificial intel\u0002ligence (AI), especially generative \u000d\u000aAI, is expected to take off in 2024 \u000d\u000aafter large companies and state \u000d\u000aorganisations started to embrace \u000d\u000athis technology in 2023.\u000d\u000aGenerative AI is one type of AI tech\u0002nology that can generate various types of \u000d\u000acontent, including text, imagery and audio.\u000d\u000aGenerative AI is among the top three \u000d\u000atrends expected to impact Thailand the most \u000d\u000ain the next 12 months, Gordon Candelin, \u000d\u000asenior expert and leader of McKinsey \u000d\u000aDesign Southeast at McKinsey & Company \u000d\u000aThailand, recently told the Bangkok Post.\u000d\u000a\u201cGenerative AI has already shown the \u000d\u000apotential for transformative business \u000d\u000aimpact. This new entrant represents the \u000d\u000anext frontier of AI,\u201d he said.\u000d\u000aThailand expects to have the digital \u000d\u000aeconomy account for 30% of GDP by 2027, \u000d\u000aup from 12.2% at present.\u000d\u000aContinued adoption of AI is one key \u000d\u000aengine to drive the nation\u2019s digital trans\u0002formation, said Mr Candelin.\u000d\u000aThe digital economy contributed 2.1 \u000d\u000atrillion baht to GDP in 2022, a 1.9% increase \u000d\u000afrom 2021.\u000d\u000aSELF-REGULATION\u000d\u000a\u201cIn 2024, we\u2019ll step up our role as a \u000d\u000aco-creation regulator to facilitate the \u000d\u000adevelopment of the digital economy,\u201d said \u000d\u000aChaichana Mitrpant, executive director of \u000d\u000athe Electronic Transactions Development \u000d\u000aAgency (ETDA).\u000d\u000aRegarding AI, Thailand will continue \u000d\u000aits self-regulation policy and promote AI \u000d\u000agovernance guidelines and toolkits, he said.\u000d\u000aGiven the dynamic development of \u000d\u000agenerative AI, the country should monitor \u000d\u000aits global development first before issuing \u000d\u000aany regulations, said Mr Chaichana.\u000d\u000aIn 2022, the Office of the National Digital \u000d\u000aEconomy and Society Commission (ONDE) \u000d\u000alaunched Thailand AI Ethics Guidelines for \u000d\u000aresearchers, designers, developers and AI \u000d\u000aservice providers.\u000d\u000aIn 2023, ETDA launched AI Governance \u000d\u000aGuidelines for Executives for organisations \u000d\u000ato help govern their AI applications. The \u000d\u000aguidelines mainly cover three elements: \u000d\u000aAI governance structure, strategy and \u000d\u000aoperations.\u000d\u000aThe agency signed a memorandum of \u000d\u000aunderstanding with Mahidol University on \u000d\u000athe application of AI using good governance.\u000d\u000aETDA also invited partners from 33 \u000d\u000aagencies in healthcare, finance and govern\u0002ment to join this partnership.\u000d\u000aThe country has a national AI strategy \u000d\u000aand action plan for 2022-27 to improve its \u000d\u000aranking in the AI Governance Readiness \u000d\u000aIndex. Thailand\u2019s position climbed from \u000d\u000a59th out of 181 countries in 2021 to 31st out \u000d\u000aof 160 countries in 2022.\u000d\u000aNATIONAL STRATEGY\u000d\u000aChai Wutiwiwatchai, a member of the \u000d\u000anational AI strategy working committee, \u000d\u000asaid the panel plans to ask the govern\u0002ment to allocate a budget of 1 billion baht \u000d\u000ato accelerate the creation of 30,000 AI jobs \u000d\u000aby 2027.\u000d\u000aThe budget will be used in the second \u000d\u000aphase of the national AI strategy and action \u000d\u000aplan, spanning 2024-27, he said.\u000d\u000aThe plan covers five strategies, including \u000d\u000apreparing Thailand\u2019s readiness in society, \u000d\u000aethics, laws and regulations for AI \u000d\u000aapplications.\u000d\u000aThe other strategies comprise developing \u000d\u000aa national infrastructure for sustainable AI \u000d\u000adevelopment, increasing human capability \u000d\u000aand AI education, driving AI technology and \u000d\u000ainnovation development, and promoting the \u000d\u000ause of AI in the public and private sectors.\u000d\u000aIn the first phase of the national strategy, \u000d\u000athe committee invested in a super computer \u000d\u000aas part of the national AI infrastructure. \u000d\u000aThe panel also implemented AI use cases \u000d\u000ain three out of 10 targeted sectors, which \u000d\u000aare food agriculture, medical and govern\u0002ment services.\u000d\u000aThe other seven sectors comprise: edu\u0002cation, security safety, energy and environ\u0002ment, logistics, the creative economy and \u000d\u000atourism, manufacturing and trade finance.\u000d\u000aThe second phase focuses on AI training \u000d\u000ain higher education, using the technology \u000d\u000afor electric vehicles and innovative food, \u000d\u000aauditing, and behavioural and cogni\u0002tive education.\u000d\u000aThe committee plans to promote AI use \u000d\u000ain the tourism, financial and industrial sec\u0002tors, as well as for public surveillance, said \u000d\u000aMr Chai.\u000d\u000aThe strategy calls for increasing digital \u000d\u000ainfrastructure investment 10% per year to \u000d\u000asupport AI development, creating more than \u000d\u000a30,000 AI jobs and developing at least 100 \u000d\u000aR&D prototypes.\u000d\u000aWide adoption of AI research, develop\u0002ment and innovation will help create busi\u0002ness and social impact of at least 48 billion \u000d\u000abaht, according to the committee.\u000d\u000aAccording to a survey commissioned by \u000d\u000aglobal software firm Salesforce, nearly 99% \u000d\u000aof Thai workers using generative AI reported \u000d\u000aincreased levels of productivity. More than \u000d\u000a60% of Thai employees viewed generative \u000d\u000aAI as key to career advancement.\u000d\u000aThe study was conducted online \u000d\u000abetween July 24 and Aug 3, sampling 1,049 \u000d\u000apeople age 18 and older who are full-time \u000d\u000aoffice workers.\u000d\u000aIN 2024, WE\u2019LL STEP UP OUR \u000d\u000aROLE AS A CO-CREATION \u000d\u000aREGULATOR TO FACILITATE \u000d\u000aTHE DEVELOPMENT OF THE \u000d\u000aDIGITAL ECONOMY.\u000d\u000aCHAICHANA MITRPANT\u000d\u000aEXECUTIVE DIRECTOR, ELECTRONIC TRANSACTIONS \u000d\u000aDEVELOPMENT AGENCY","MOBILE SERVICE TARIFFS \u000d\u000aHAVE RETURNED TO \u000d\u000aMORE REASONABLE \u000d\u000aLEVELS SINCE 2023 AS \u000d\u000aOPERATORS SHIFTED FROM \u000d\u000aPRICING COMPETITION TO \u000d\u000aOTHER FACTORS SUCH AS \u000d\u000aCUSTOMER EXPERIENCE \u000d\u000aAND NETWORK QUALITY.\u000d\u000aSOMCHAI LERTSUTIWONG\u000d\u000aCHIEF EXECUTIVE, ADVANCED INFO SERVICE\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 26\u000d\u000aTELECOMMUNICATIONS\u000d\u000aA lower level of competition should allow operators to reduce aggressive promotional campaigns,\u000d\u000awrites Komsan Tortermvasana\u000d\u000aTELECOM SECTOR \u000d\u000aCONCENTRATES ITS FOCUS\u000d\u000aThe True-DTAC merger which was completed in March 2023 has reduced the number of major mobile phone service \u000d\u000aoperators to only AIS and True. Subscribers to these firms\u2019 services account for more than 95% of all subscribers.\u000d\u000aT\u000d\u000ahe telecom sector is expected to \u000d\u000afare slightly better in 2024 than the \u000d\u000aprevious year because of reduced \u000d\u000acompetition for both mobile \u000d\u000aphone and fixed broadband\u000d\u000ainternet services. \u000d\u000aThe markets for both services in 2024 \u000d\u000aare likely to be driven by a duopoly and \u000d\u000asemi-monopoly, respectively, decreasing \u000d\u000acompetition and making it less necessary \u000d\u000ato offer aggressive promotional campaigns.\u000d\u000aUPBEAT PROJECTION\u000d\u000aPisut Ngamvijitvong, senior equity \u000d\u000aresearch analyst at Kasikorn Securities \u000d\u000a(KS), said the brokerage projects the annual \u000d\u000agrowth of mobile phone services provided \u000d\u000aby telecom operators would remain at 3-4% \u000d\u000ain 2024.\u000d\u000aRevenue generated from fixed broadband \u000d\u000ainternet services would grow by 15% in 2024, \u000d\u000awhile revenue from enterprise business \u000d\u000awould rise by 15-20% on average, according \u000d\u000ato KS.\u000d\u000aTelecom operators\u2019 total revenue in 2023 \u000d\u000ais expected to grow by 3% year-on-year, \u000d\u000aMr Somchai at a press conference on \u000d\u000aNovember 6. He says that the mobile phone \u000d\u000aservice tariff has been going back to more \u000d\u000areasonable prices since 2023.\u000d\u000arising to 5% in 2024. Their annual opera\u0002tional costs will continue to grow at a double\u000d\u000a-digit rate in both 2023 and 2024, said \u000d\u000athe brokerage.\u000d\u000aMr Pisut said telecom service revenue \u000d\u000awould continue to grow as this service is a \u000d\u000adaily requirement for people, regardless of \u000d\u000aeconomic factors. \u000d\u000aHowever, he said competition should \u000d\u000adecline for both mobile phone and fixed \u000d\u000abroadband internet service following the \u000d\u000acompletion of the merger between True \u000d\u000aCorporation and Total Access Communi\u0002cations (DTAC) earlier in 2023, as well as the \u000d\u000atakeover of Triple T Broadband (TTTBB), \u000d\u000aknown for its 3BB brand, by Advanced Info \u000d\u000aService (AIS).\u000d\u000aThe True-DTAC merger reduced the \u000d\u000anumber of major mobile service operators \u000d\u000ato AIS and True, with their combined sub\u0002scribers comprising a market share of more \u000d\u000athan 95%.\u000d\u000aFive of the seven members of the National \u000d\u000aBroadcasting and Telecommunications \u000d\u000aCommission (NBTC) board took part \u000d\u000ain a meeting on Nov 10 to consider AIS\u2019s ","ECONOMIC REVIEW \u000d\u000aYEAR-END 2023 27\u000d\u000aproposal to take over TTTBB. Four of them \u000d\u000a\u2014 Suphat Suphachalasai, AM Thanapant \u000d\u000aRaichareon, Pirongrong Ramasoota and \u000d\u000aSomphop Purivigraipong \u2014 approved the \u000d\u000adeal. Commissioner Torpong Selanon chose \u000d\u000ato abstain.\u000d\u000aThe takeover of 3BB reduces the number \u000d\u000aof major players providing fixed broadband \u000d\u000aservices to three, comprising True, AIS and \u000d\u000aNational Telecom (NT).\u000d\u000aNT faces a tough challenge over the \u000d\u000along term as its broadband service has a \u000d\u000alow profit margin and inflexible opera\u0002tions structured as a state enterprise, said \u000d\u000aMr Pisut.\u000d\u000aHe said the new telecom market structure \u000d\u000awill become clearer one or two years after \u000d\u000athe True-DTAC merger.\u000d\u000aREVENUE OUTLOOK\u000d\u000aMobile phone services account for \u000d\u000aaround 80-85% of each mobile phone \u000d\u000aoperator\u2019s revenue. Operators want to \u000d\u000aexpand the revenue contribution from \u000d\u000aenterprise and solution businesses from \u000d\u000a10% to more than 20% within a few years.\u000d\u000aSomchai Lertsutiwong, chief executive of \u000d\u000aAIS, said previous competition and service \u000d\u000atariffs imposed by the NBTC meant telecom \u000d\u000afirms dealt with a low profit margin for years.\u000d\u000aAIS\u2019s total revenue typically grows at a \u000d\u000arate 1-2 percentage points higher than the \u000d\u000acountry\u2019s annual GDP growth, he said.\u000d\u000aThe company\u2019s operational costs \u000d\u000ahave been growing at a double-digit rate \u000d\u000aannually, driven by the financial burden \u000d\u000aof securing 4G and 5G licences and the \u000d\u000aongoing effort to maintain service quality, \u000d\u000asaid Mr Somchai. \u000d\u000a\u201cAIS predicts our revenue stream will \u000d\u000astill be 1-2 percentage points higher than \u000d\u000athe Thai GDP growth rate in 2024, while \u000d\u000aoperational costs will grow by more than \u000d\u000a10%,\u201d he said.\u000d\u000aMobile service tariffs have returned \u000d\u000ato more reasonable levels since 2023 as \u000d\u000aoperators shifted from pricing competition \u000d\u000ato other factors such as customer experience \u000d\u000aand network quality, said Mr Somchai.\u000d\u000aFIXED MOBILE CONVERGENCE\u000d\u000aHe said the fixed broadband internet\u0002mobile service convergence, or FMC, will \u000d\u000abecome an important shift for major operators \u000d\u000ato provide more attractive packages.\u000d\u000aAIS plans to offer mobile phone service \u000d\u000ato 3BB customers to entice them to apply \u000d\u000afor a bundled package, said Mr Somchai.\u000d\u000aA display describes a promotional package offered by 3BB. AIS has proposed to acquire a 100% stake in the \u000d\u000acompany and a 19% holding in Jasmine Broadband Internet Infrastructure Fund. Photo: Kitja Apichonrojarek\u000d\u000aAn AIS shop at CentralWorld department store in Bangkok. Photo: Chanat Katanyu\u000d\u000aMr Pisut said the FMC strategy is \u000d\u000aexpected to take shape in 2024.\u000d\u000aConsumer groups have expressed con\u0002cerns over this FMC strategy, urging the \u000d\u000aNBTC to govern affiliates of AIS and 3BB \u000d\u000ato continue to provide enough packages \u000d\u000aof solely fixed broadband service, separate \u000d\u000afrom bundled packages.\u000d\u000aThe consumer groups are worried cus\u0002tomers could be coerced into subscribing \u000d\u000ato only bundled packages.\u000d\u000aTILTING TOWARDS MONOPOLY\u000d\u000aA telecom veteran who requested ano\u0002nymity said the True-DTAC merger is the \u000d\u000afirst major change in the mobile service \u000d\u000amarket since 2021.\u000d\u000aIn November 2021, Charoen Pokphand, \u000d\u000athe parent company of True Corp, along \u000d\u000awith Telenor Group, the parent of DTAC, \u000d\u000aannounced the merger deal. The deal was \u000d\u000awidely criticised in the media by academics \u000d\u000aand consumer protection advocates.\u000d\u000aNBTC\u2019s management set up four sub\u0002committees in April 2022 to scrutinise \u000d\u000athe deal.\u000d\u000aAccording to a study from the subcom\u0002mittee on the economic effect, the merger \u000d\u000amay reduce GDP growth by 0.05% to 1.99%, \u000d\u000aor between 8.2 billion and 323 billion baht \u000d\u000ain terms of value, depending on the level \u000d\u000aof cooperative marketing among major \u000d\u000amobile operators.\u000d\u000aIn addition, the market price of mobile \u000d\u000aservices is likely to increase by between \u000d\u000a2.03% and 19.5%, even without collusion \u000d\u000aafter the merger, according to the study.\u000d\u000aHowever, five commissioners on NBTC\u2019s \u000d\u000aboard on October 20, 2022 voted 3-2 that \u000d\u000ait has no authority to approve or reject \u000d\u000athe deal, then acknowledged the deal and \u000d\u000aissued remedy measures.\u000d\u000aThe takeover of 3BB by AIS could lead to \u000d\u000aa change in the home broadband internet \u000d\u000amarket, although the deal differs in several \u000d\u000aways from the True-DTAC merger.\u000d\u000aFirst, after the takeover of 3BB, three \u000d\u000amajor players remain in the market, unlike \u000d\u000athe two for mobile service. \u000d\u000aSecond, the number of Thai households \u000d\u000ausing broadband internet services is less \u000d\u000athan 60% of total households nationwide, \u000d\u000aindicating the market still has room to grow.","LURING MORE TALENT \u000d\u000aAND FOREIGN WORKERS \u000d\u000aTO THE INDUSTRY \u000d\u000aAND DETERMINING AN \u000d\u000aAPPROPRIATE MINIMUM \u000d\u000aWAGE HIKE IN LINE WITH \u000d\u000aLIVING COSTS AND \u000d\u000aBUSINESS EXPENSES CAN \u000d\u000aENSURE THE STEADY \u000d\u000aGROWTH OF THAI \u000d\u000aTOURISM.\u000d\u000aMARISA SUKOSOL NUNBHAKDI\u000d\u000aPRESIDENT, THAI HOTELS ASSOCIATION\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 28\u000d\u000aWhile the sector is not an economic superstar as predicted, it is continuing to pace revenue growth,\u000d\u000awrites Molpasorn Shoowong\u000d\u000aTOURISM CONTINUES STEADY \u000d\u000aIMPROVEMENTS\u000d\u000aTOURISM\u000d\u000aT\u000d\u000ahe tourism industry was forecast \u000d\u000aas the economic catalyst for 2023 \u000d\u000aas exports and domestic consump\u0002tion slowed, with the government \u000d\u000adeploying mechanisms such as \u000d\u000avisa exemptions to promote key markets.\u000d\u000aThe outcome was positive, but not as \u000d\u000abright as some expected, with the estimated \u000d\u000anumber of foreign arrivals at 25-28 million, \u000d\u000awith revenue generated by these arrivals \u000d\u000apossibly falling short of the Tourism Authority \u000d\u000aof Thailand target of 2.38 trillion baht.\u000d\u000aLooking ahead to 2024, several negative \u000d\u000afactors are anticipated such as delayed \u000d\u000abudget allocation and declining tourist con\u0002fidence as people are concerned about the \u000d\u000aeconomy and geopolitical tension.\u000d\u000aAs the government targets an ambitious \u000d\u000agoal of 3.5 trillion baht in tourism revenue in \u000d\u000a2024, operators expect the administration to \u000d\u000atake an active role in increasing Thailand\u2019s \u000d\u000atourism competitiveness.\u000d\u000aUNEVEN RECOVERY\u000d\u000aMarisa Sukosol Nunbhakdi, president of \u000d\u000athe Thai Hotels Association, said the tourism \u000d\u000arecovery in 2023 benefited only a certain \u000d\u000agroup of hotels, mainly in major cities such \u000d\u000aas Bangkok and Phuket and mostly five\u0002star accommodation.\u000d\u000aThere was a strong resumption of travel \u000d\u000aamong upscale independent tourists after the \u000d\u000apandemic, as higher airfares limited leisure \u000d\u000atrips to those with spending power, she said.\u000d\u000aA couple wearing elephant print clothing take photos near Tha Phae Gate in Chiang Mai. Photo: AFP\u000d\u000aTravellers from India are greeted by officials upon \u000d\u000aarrival at Suvarnabhumi on November 10, 2023, \u000d\u000afollowing the inauguration of the visa-waiver scheme. \u000d\u000aPhoto: Nutthawat Wichieanbut","ECONOMIC REVIEW \u000d\u000aYEAR-END 2023 29\u000d\u000aWhile temporary visa exemptions for \u000d\u000avisitors from China, India and Taiwan as well \u000d\u000aas extending the length of stay for Russians \u000d\u000aoffer promise, Thailand still faces obstacles \u000d\u000athat require time to solve, said Adith Chairat\u0002tananon, honorary secretary-general of the \u000d\u000aAssociation of Thai Travel Agents.\u000d\u000aThese roadblocks include tourist \u000d\u000asentiment after the mass shooting at Siam \u000d\u000aParagon and negative perceptions about \u000d\u000atraveller safety in Thailand among Chinese, \u000d\u000asaid Mr Adith.\u000d\u000aIn addition, the global economic slow\u0002down resulted in a subdued tourism \u000d\u000arecovery in the second half of 2023, he said.\u000d\u000aIn terms of domestic tourism, Kantapong \u000d\u000aThananerngroth, president of the Thai \u000d\u000aTourism Promotion Association, said the \u000d\u000amajority of Thais trimmed their travel \u000d\u000abudget by choosing nearby distances with \u000d\u000aa shorter length of stays.\u000d\u000aMany destinations in the region gained a \u000d\u000asmaller amount of revenue because of fewer \u000d\u000atourists compared with major destinations, \u000d\u000asaid Mr Kantapong.\u000d\u000aHOPEFUL ON AIR TRAVEL\u000d\u000a\u201cAll airlines in Thailand can optimisti\u0002cally hope for a full air recovery among both \u000d\u000adomestic and international passengers next \u000d\u000ayear,\u201d said Pinyot Pibulsonggram, head of \u000d\u000acommercial at Thai VietJet (TVJ).\u000d\u000aMr Pinyot said the recovery rate in 2023 \u000d\u000ahovered around 70% of the 2019 level for \u000d\u000ainternational passengers thanks to the \u000d\u000astrong reputation of Thai tourism, while \u000d\u000adomestic passengers already reached 90%.\u000d\u000aHe said airline competition in 2024 \u000d\u000awould become more aggressive, especially \u000d\u000aamong popular outbound routes to Japan.\u000d\u000aPlayers from Thailand and Japan want \u000d\u000ato increase capacity and add new routes to \u000d\u000acapture growing travel demand, including \u000d\u000aTVJ, which is planning connections to new \u000d\u000acities in Japan, said Mr Pinyot.\u000d\u000aHe said most airlines will also focus \u000d\u000aon resuming flights to China in 2024 to \u000d\u000acapitalise on the visa exemption privilege, \u000d\u000awhich should increase the load factor to a \u000d\u000amore satisfactory level.\u000d\u000aTVJ launched scheduled flights to \u000d\u000aA tour guide leads a group of Chinese tourists touring the Grand Palace and Wat Phra Kaeo, \u000d\u000awhich are among the capital\u2019s top tourist attractions. Photo: Apichart Jinakul\u000d\u000aShanghai and Hangzhou in December in \u000d\u000aaddition to seven Chinese destinations \u000d\u000aoperated by chartered flights.\u000d\u000aThe airline also targets two to three new \u000d\u000aChinese cities per month in 2024, said \u000d\u000aMr Pinyot.\u000d\u000aHe said the main concern for airlines is \u000d\u000athe ongoing wars that could affect fuel prices \u000d\u000aand prompt high airfares compared with \u000d\u000apre-pandemic expenses.\u000d\u000aMr Pinyot said TVJ is monitoring the \u000d\u000aimpact from the Israel-Hamas and Russia\u0002Ukraine conflicts, attempting to maintain \u000d\u000aappropriate pricing and not pass on too \u000d\u000amuch burden to passengers.\u000d\u000aSOFT POWER BOOSTER\u000d\u000aAs the government pledged to increase \u000d\u000atourism value through soft power, including \u000d\u000alocal culture and festivals, the tourism \u000d\u000aindustry expects tourists to explore new \u000d\u000aplaces, especially second-tier cities, he said.\u000d\u000aMr Pinyot said the airline is ready to help \u000d\u000acombine promotional campaigns with flight \u000d\u000apackages to generate tourism revenue for \u000d\u000amore areas.\u000d\u000aMr Kantapong said soft power should \u000d\u000abe promoted through elevating unique \u000d\u000acultural traditions.\u000d\u000aA government budget should be allocated \u000d\u000ato train people in communities to learn \u000d\u000ahow to accommodate tourists, developing \u000d\u000ahigh-value original products and events and \u000d\u000alearning sustainable tourism measures to \u000d\u000agenerate higher-end tourism, he said.\u000d\u000aLooking ahead, government policies \u000d\u000ashould help subsidise living costs and \u000d\u000astimulate domestic consumption, making \u000d\u000aThai travellers more eager to travel \u000d\u000adomestically and explore new places, said \u000d\u000aMr Kantapong.\u000d\u000aCLEAR ROADMAP NEEDED\u000d\u000aAs the government set a tourism revenue \u000d\u000atarget for 2024 of 3.5 trillion baht, it is \u000d\u000aessential policymakers solidify a tourism \u000d\u000aroadmap, said Mr Adith.\u000d\u000a\u201cA higher target without a plan would \u000d\u000abe impossible to achieve and could lead \u000d\u000ato tourism overcrowding in some destina\u0002tions,\u201d he said.\u000d\u000aA clear roadmap is needed, including \u000d\u000ahow to build new attractions, develop skilled \u000d\u000atourism workers and distribute tourists to \u000d\u000asecond-tier cities, said Mr Adith.\u000d\u000aVisa waivers for short-haul markets \u000d\u000ashould be continued after the first phase \u000d\u000aends, extended throughout 2024 to create \u000d\u000amomentum and welcome visitors year\u0002round, he said. This move would help people \u000d\u000ain price-sensitive markets such as India \u000d\u000amake their travel decisions, said Mr Adith.\u000d\u000aAs geopolitical tension affects long-haul \u000d\u000amarkets, focusing on short-haul travellers is \u000d\u000athe best option for 2024, he said.\u000d\u000aMrs Marisa said ease of travel and \u000d\u000agenerating revenue equally for all players \u000d\u000ashould be prioritised, particularly for hotels \u000d\u000awith three stars or fewer, in addition to \u000d\u000asupporting the resumption of Chinese tour \u000d\u000agroups in the future.\u000d\u000aShe said more hotels can increase their \u000d\u000aroom rates if occupancy rates improve.\u000d\u000aThe occupancy rate nationwide during \u000d\u000athe high season in 2023 is predicted to fall \u000d\u000ashort of the 80% posted in the same period \u000d\u000ain 2019. A full recovery might occur in \u000d\u000a2024 or early 2025 when flight frequency \u000d\u000aincreases, said Mrs Marisa.\u000d\u000aShe said the hotel industry in 2024 still \u000d\u000afaces a labour shortage, which requires \u000d\u000aimmediate government assistance to resolve.\u000d\u000aLuring more talent and foreign workers \u000d\u000ato the industry and determining an \u000d\u000aappropriate minimum wage hike in line \u000d\u000awith living costs and business expenses can \u000d\u000aensure the steady growth of Thai tourism, \u000d\u000asaid Mrs Marisa.\u000d\u000aPeople check out travel deals at a Thai Tiew Thai Travel Fair held at BITEC. \u000d\u000aPhoto: Somchai Poomlard\u000d\u000aVisitors take in a sweeping \u000d\u000aevening view of Wat Arun, \u000d\u000aknown as the Temple of Dawn, \u000d\u000afrom the opposite side of the river. \u000d\u000aPhoto: Pattarapong Chatpattarasill","ALONGSIDE THE LAUNCH \u000d\u000aOF NEW RETAIL VENTURES \u000d\u000aTHIS YEAR, BOTH LOCAL AND \u000d\u000aINTERNATIONAL TENANTS \u000d\u000aEXHIBIT UNWAVERING \u000d\u000aCONFIDENCE IN EXPANDING \u000d\u000aTHEIR PRESENCE IN THE THAI \u000d\u000aMARKET IN 2024.\u000d\u000aSUPOJ CHAIWATSIRIKUL\u000d\u000aMANAGING DIRECTOR, ICONSIAM CO\u000d\u000aECONOMIC REVIEW \u000d\u000aYEAR-END 2023 30\u000d\u000aIndustry sees new concept stores and a host of international brands flocking to Thailand, \u000d\u000awrite Charoen Kittikanya and Pitsinee Jitpleecheep\u000d\u000aRETAIL POISED FOR \u000d\u000aSTRONG REBOUND\u000d\u000aRETAIL\u000d\u000aT\u000d\u000ahe Thai retail industry registered \u000d\u000awidespread changes in 2023, \u000d\u000astarting with a rebound that had \u000d\u000aits roots in the second half of 2022 \u000d\u000aas economic growth flickered and \u000d\u000atourism recovered following the reopening \u000d\u000aof borders.\u000d\u000aRetailers across various formats are \u000d\u000aresuming their investments to capitalise \u000d\u000aon these trends.\u000d\u000aNew retail concepts have emerged, such \u000d\u000aas the introduction of wholesale strategies, \u000d\u000athe opening of new branches like Central \u000d\u000aWestville, and the launch of the new Makro\u0002Lotus\u2019s hybrid wholesale model operated \u000d\u000aunder the same roof by CP Axtra Plc.\u000d\u000aA host of brand names spanning fashion, \u000d\u000alifestyle, beauty, food, bags, jewellery and \u000d\u000aeyewear have eagerly opened new concept \u000d\u000ashops in Bangkok.\u000d\u000aA roster of leading brands opened \u000d\u000aBangkok shops in 2023. The list includes \u000d\u000aFred Jewelry under the LVMH Group; \u000d\u000aFoot Locker, the New York-based athletic \u000d\u000aspeciality retailer; Lululemon, the Canadian \u000d\u000aathletic apparel and accessories brand; \u000d\u000aCraft, a Swedish sportswear label; Gentle \u000d\u000aMonster, a Korean eyewear brand; Nitori, \u000d\u000aa leading Japanese furniture and home \u000d\u000afurnishing retailer; On-Running from \u000d\u000aSwitzerland; Sundububu & Mil Toast \u000d\u000aExpress, a Korean restaurant and bakery; \u000d\u000aL:A Bruket, a premium organic skincare line \u000d\u000afrom Sweden; and Shiori Udon Ginza.\u000d\u000aMore brands are poised to enter the Thai \u000d\u000amarket in late 2023 or 2024, including Loro \u000d\u000aPiana, an Italian fashion brand; Cult Gaia, \u000d\u000aa US affordable luxury brand; By Far bags \u000d\u000aand shoes from Bulgaria; GCDS, a luxury \u000d\u000afashion brand from Italy; Alo, a US active\u0002wear fashion brand; and Golden Goose, an \u000d\u000aItalian lifestyle fashion brand known for \u000d\u000aits sneakers.\u000d\u000aEven the US franchise Duck Donut plans \u000d\u000ato test the waters in Thailand.\u000d\u000aRENOVATIONS BEEFED UP\u000d\u000aMany leading malls were renovated in \u000d\u000a2023 or are scheduled for a 2024 upgrade, \u000d\u000asuch as Central Chidlom, Iconsiam and \u000d\u000aThe Emporium, in an effort to capitalise \u000d\u000aon the recovering economy and the return \u000d\u000aof foreigners.\u000d\u000aCentral Group, for instance, plans to \u000d\u000atransform its Chidlom branch by focusing \u000d\u000amore on fashion products to differentiate \u000d\u000aitself from rivals. The company wants to \u000d\u000aintroduce affordable luxury brands un\u0002available elsewhere in Thailand.\u000d\u000aBy late 2023, several brands plan to \u000d\u000alaunch at Central Chidlom, including \u000d\u000aCult Gaia luxury brand, By Far bags and \u000d\u000ashoes, and GCDS fashion brand for men \u000d\u000aand women.\u000d\u000aThe company said more fashion and \u000d\u000aaffordable luxury products will be unveiled \u000d\u000aat Central Chidlom in 2024.\u000d\u000aIconsiam Co, the operator of the Icon\u0002siam mall, plans to invest 1 billion baht to \u000d\u000arenovate the complex, scheduled to com\u0002mence in July 2024.\u000d\u000aIconsiam plans to incorporate flagship \u000d\u000astores for select luxury brands and introduce \u000d\u000ainternational food and beverage options in \u000d\u000aresponse to customer demand.\u000d\u000aAn additional 200 million baht was \u000d\u000aallocated to create a new attraction on \u000d\u000athe eighth floor, with plans to commence \u000d\u000ain 2025. A feasibility study is planned to \u000d\u000adetermine a suitable museum to occupy \u000d\u000a5,000 square metres on the eighth floor, with \u000d\u000aconstruction slated to begin in 2025.\u000d\u000aDespite the recent shooting at Siam \u000d\u000aParagon mall in October, the operator \u000d\u000aremains committed to investing 3 billion \u000d\u000abaht from 2023 through the first half of \u000d\u000a2024 to transform it into \u201ca new world of \u000d\u000alifestyle shopping\u201d.\u000d\u000aGROWING TRENDS\u000d\u000aAccording to SCB Economic Intelligence \u000d\u000aCenter, the local retail industry posted \u000d\u000astrong growth in 2023, up by about 10% \u000d\u000aas economic activities increased and con\u0002sumer spending resumed.\u000d\u000aStore-based retail value is expected to \u000d\u000areturn to pre-pandemic levels by 2024, while \u000d\u000anon-store retailing is expected to continue \u000d\u000aits sustained growth, said the centre.\u000d\u000aThe growth of e-commerce has been \u000d\u000asteady amid strong competition, though it \u000d\u000aslowed slightly after consumers returned to \u000d\u000avisiting stores after the pandemic.\u000d\u000aConsumer behaviour has shifted to \u000d\u000aincreased online purchases because of \u000d\u000aconvenience, especially as e-marketplace \u000d\u000aretailers offer a variety of products from \u000d\u000amultiple sellers, enabling price and service \u000d\u000acomparison among different stores, said the \u000d\u000athink tank.\u000d\u000aBuy now, pay later (BNPL) has gained \u000d\u000aprominence in retail, especially for e-com\u0002merce. Businesses may need to adapt \u000d\u000aby incorporating BNPL as an additional \u000d\u000apayment method, facilitating purchasing \u000d\u000adecisions to increase store sales, said the \u000d\u000aresearch house.\u000d\u000aHowever, rising living costs and house\u0002hold debt will affect purchasing power, \u000d\u000asaid the SCB centre. Elevated interest rates \u000d\u000aincreased financial costs, influencing bor\u0002rowing and weakening the value of the baht, \u000d\u000aconsequently affecting imported goods.\u000d\u000aThe research house forecast the retail \u000d\u000amarket value would reach 3.7 trillion baht \u000d\u000ain 2023. \u000d\u000aTOURISM PUSH\u000d\u000aSuchada Ithijarukul, chief executive of \u000d\u000aCentral Food Wholesale, part of Central \u000d\u000aRetail Corporation, the country\u2019s biggest \u000d\u000aretailer, said she is confident the retail \u000d\u000aindustry in 2024 will fare better than the \u000d\u000aprevious year because of the rapid recovery \u000d\u000aof the tourism sector, which plays a sig\u0002nificant part in helping the economy and \u000d\u000aretail business.\u000d\u000a\u201cIn 2023 foreign arrivals are likely to \u000d\u000areach 29 million, with the projection nearing \u000d\u000a35 million for 2024, approaching the pre\u0002pandemic level. There is no doubt the retail \u000d\u000abusiness will thrive next year,\u201d said Mrs \u000d\u000aSuchada.\u000d\u000a\u201cThe government\u2019s stimulus measures \u000d\u000aand the active participation of Thais has \u000d\u000aattracted tourists back to our country, as \u000d\u000avisitors feel safe to explore here.\u201d\u000d\u000aSupoj Chaiwatsirikul, managing director \u000d\u000aof Iconsiam Co, was optimistic about the \u000d\u000aretail sector for 2024.\u000d\u000a\u201cFollowing our discussions with the Thai \u000d\u000aRetailer Association, it became evident the \u000d\u000aindustry demonstrated a consistent recovery \u000d\u000athroughout 2023, with this upward trajectory \u000d\u000aexpected to persist into 2024,\u201d he said.\u000d\u000a\u201cAlongside the launch of new retail ven\u0002tures this year, both local and international \u000d\u000atenants exhibit unwavering confidence in \u000d\u000aexpanding their presence in the Thai market \u000d\u000ain 2024.\u201d\u000d\u000aAccording to Mr Supoj, retail business \u000d\u000ashould thrive thanks to the government\u2019s \u000d\u000ainitiatives to step up soft power promotion.\u000d\u000aThe government also intends to bolster \u000d\u000atourism across various dimensions, he said. \u000d\u000aMr Supoj expressed concerns about con\u0002flicts between Russia and Ukraine as well as \u000d\u000aIsrael and Hamas causing consumers to be \u000d\u000amore cautious in their spending.\u000d\u000aNattakit Tangpoonsinthana, chief marketing \u000d\u000aofficer of Central Pattana Plc, a retail and \u000d\u000aproperty developer, said there are several \u000d\u000asupporting factors that will help boost the \u000d\u000agrowth of retail business in 2024, including \u000d\u000athe government\u2019s digital wallet scheme and \u000d\u000aplanned tourism promotion measures.\u000d\u000aForeign investment is also expected to \u000d\u000aincrease, while local consumer confidence is \u000d\u000alikely to improve, resulting in active spending \u000d\u000ain 2024, he said.\u000d\u000a\u201c2024 is likely to be a good year for the \u000d\u000aretail sector,\u201d said Mr Nattakit.\u000d\u000a\u201cWe are monitoring domestic inflation \u000d\u000arates, household debt, the global economy \u000d\u000aand the impact of the war between Israel \u000d\u000aand Hamas. These factors impact customer \u000d\u000aspending power.\u201d\u000d\u000aA shopper takes a photo with the floral creation at the Childlom Central Department Store \u000d\u000aat Central\u2019s 76th anniversary celebration held in October.\u000d\u000aPhoto: Varuth Hirunyatheb\u000d\u000aMr Supoj is optimistic about the retail \u000d\u000aoutlook for 2024.","",""]