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https://www.nationthailand.com/thailand/economy/40024141

FTI predicts growth in 17 industries will drive Thai economic rebound in 2023

THURSDAY, JANUARY 19, 2023

The Federation of Thai Industries (FTI) expressed confidence that Thailand’s economic recovery will continue this year as the Covid-19 situation improves, prompting higher domestic consumption and a tourism rebound.

The tourism sector is expected to welcome at least 20 million foreign arrivals this year thanks to pent-up demand during Covid-19, China lifting travel restrictions, and government measures to boost tourism, said FTI vice president Kriangkrai Thiannukul on Wednesday.

Exports this year are slowing in line with the slumping global economy. However, benefits of free trade agreements under the Regional Comprehensive Economic Partnership (RCEP) and new FTAs with countries in the Middle East would help keep the Thai export sector afloat this year, he said.

The FTI estimates that 17 Thai industrial sectors will enjoy substantial growth this year, namely mechanical and metallurgical, automotive parts and components, digital, sugar, medical equipment, electricity generation, renewable energy, furniture, pharmaceutical, automotive assembly, petroleum refinery, metal casting, roofing and equipment, steel, food and beverage, printing and packaging, and environmental management.

Factors contributing to industrial growth in 2023 are Board of Investment (BOI) investment privileges, especially in industries related to the new and BCG or Bio-Circular-Green economy; baht balancing to benefit both importers and exporters; government investment in infrastructure; and rising private consumption.

Potential factors that could hamper industrial growth this year include global inflation and a continued rise of energy prices, fluctuations in food prices, rising interest rates that affect business costs, and the possibility of recession and trade war among major economies.

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January fuel tariff hike will raise product prices by 5-12%, warns JSCCIB

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https://www.nationthailand.com/thailand/economy/40024113

Thailand investment privileges jump 39% driven by FDI in EV, data centres

WEDNESDAY, JANUARY 18, 2023

The Thailand Board of Investment (BOI) provided investment privileges for 2,119 projects worth 664.63 billion baht last year, said government spokesman Anucha Burapachaisri on Wednesday.

The number of projects rose 41% from the previous year while the worth of privileges rose 39%.

The BOI attributed the jump in investment privilege applications to the improving Covid-19 situation that had restored economic activities and investments to almost pre-pandemic level.

The government also rolled out measures to promote key industries, including electric vehicle (EV) manufacturing, power generation, and data centre businesses, said Anucha.

The BOI said foreign companies accounted for 65% of investment privileges, worth a total 433.97 billion baht – a 36% rise from the previous year.

China was Thailand’s biggest foreign investor with 158 projects worth over 77.38 billion baht, or 15% of total foreign investment. Japan was second with 293 projects worth 50.76 billion baht, while the US was third with 33 projects worth 50.29 billion baht.

Industries attracting most foreign investment last year were electrical appliances, electronics, petrochemicals, chemicals, and automotive components.

“Prime Minister Prayut Chan-o-cha is confident that Thailand’s economy will continue to grow this year based on increasing confidence among Thai and foreign investors,” said Anucha. “The government is committed to upgrading the country’s industrial infrastructure and improving regulations to facilitate investment across various industries in a bid to recover our economy, promote employment and enhance the quality of life of all citizens.”

Related Stories

BOI provided investment privileges worth over Bt481 billion in 2020

BOI lures investors with 9 new measures to build ‘new economy’ in Thailand

BOI frames new 5-year investment promotion strategy to pave way for new economy

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https://www.nationthailand.com/thailand/economy/40024110

Thailand reveals tourism strategy to beat Covid at World Economic Forum

WEDNESDAY, JANUARY 18, 2023

Finance Minister Arkhom Termpittayapaisith revealed Thailand’s successful formula for reopening the country to tourists while preventing the spread of Covid-19, at the World Economic Forum on Tuesday.

Arkhom was speaking at the “Travelling Again, Differently” seminar hosted by CNN’s Richard Quest during the annual four-day forum in Davos, Switzerland.

Arkhom told Quest that Thailand had launched the Phuket Sandbox as early as July 2021, to pilot the reopening of borders to international visitors in a controlled area.

The tight restrictions were gradually lifted as the pandemic receded, allowing larger numbers of foreign tourists to enter the country.

Meanwhile, the government supported the tourism sector with subsidies to boost domestic travel, and promoted tourism in secondary provinces to distribute income to small businesses and local communities.

Arkhom also highlighted Thailand’s “5F strategy” of Food, Fashion, Festival, Fighting, and Film. The strategy is designed to lure tourists to other provinces and reduce crowding in major cities. Tourism infrastructure has been prepared in these areas, especially facilities targeted at retiree travellers who have high spending power, he said.

Arkhom mentioned that Thailand is also considering measures to promote the use of sustainable aviation fuel to fulfil the country’s environmental goals.

Also joining the session were Clare Akamanzi, CEO of the Rwanda Development Board; John Holland-Kaye, CEO of Heathrow Airport Holdings Limited; and Jeffrey Katz, CEO of Journera, a travel technology platform.

The World Economic Forum runs until Friday.

Related Stories

Nearly 12 million foreign tourists visited Thailand last year

Thailand opens door to Phuket Sandbox for 63 countries and 3 territories

Why Thailand’s tourism sandbox programmes failed

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https://www.nationthailand.com/thailand/economy/40024095

1,500 jobs up for grabs for Thais on three US cruise ships

TUESDAY, JANUARY 17, 2023

Labour Minister Suchart Chomklin on Tuesday urged Thais who can communicate in English to apply for 1,500 jobs available on three US cruise ships, which could pay up to around 87,000 baht a month.

Suchart said CTI Group Worldwide Services Inc has 1,500 job vacancies in 37 positions for Thais who are at least 21 years old.

The vacant posts include chefs, waiters and waitresses, beverage staff, electricians, maids and garbage collectors.

Suchart said successful applicants would work on one of three cruise ships for six to nine consecutive months and would be paid between 19,618 to 87,176 baht per month, plus tips. They also will get free accommodation and food.

Applications can be submitted from January 18 to February 16, the minister added.

“Thai workers are naturally pleasant-mannered and polite and have a smiling face at all times, so they are in high demand by foreign employers,” Suchart said.

“Working abroad will widen your vision and provide you working experience while helping earn foreign currency for the country,” he said.

Pairoj Chotikasathien, director-general of the Employment Department, said the CTI Seafarer Recruitment (Thailand) Co Ltd has submitted an agreement for recruiting services and a letter from CTI Group to the department, stating the need for 1,500 staff.

Pairoj said applicants must have at least six months of experience in the positions they apply for and must have good command over English.

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https://www.nationthailand.com/thailand/economy/40024089

Cabinet extends diesel excise cut for four more months to control cost of living

TUESDAY, JANUARY 17, 2023

The Cabinet on Tuesday extended the diesel excise relief of 5 baht per litre for four more months, Deputy Finance Minister Santi Promphat said.

Speaking to reporters after the weekly Cabinet meeting, Santi said the Cabinet reached the resolution to extend the cut from January for four more months to help reduce the cost of living and to prevent consumer product prices from rising.

The latest round of diesel excise cut would cost the Excise Department around 40 billion baht in lost revenue, or about 10 billion baht a month.

The latest round is the sixth one since February last year. Combined with revenue loss in the latest round, the government would lose about 140 billion to 150 billion baht in diesel excise revenue.

Santi said the cut would not affect the financial situation of the government as it had received an extra 33 billion baht income from the auction of mobile phone and radio bandwidths as well as tax fines on imported goods following court rulings. He did not elaborate.

Santi added that revenue received by the Finance Ministry during the first two months of fiscal 2023 was 55 billion baht higher than the target and the ministry was confident of receiving 2.6 trillion baht in revenue at the end of the fiscal year in September.

“For fiscal 2023, the government would borrow about 695 billion baht to offset the budget deficit while the projected spending would be 3.1 trillion. It is expected that at the end of the fiscal year, there would be a cash balance of 710 billion baht with the treasury,” Santi said.

“So, the government’s financial status is stable and it would not be affected by the excise cut,” he reiterated.

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https://www.nationthailand.com/thailand/economy/40024084

JP Morgan upgrades Thai equities on rebound in Chinese tourism

TUESDAY, JANUARY 17, 2023

Visitors to Thailand from China could rebound to two-thirds of pre-pandemic levels and contribute to tourism receipts worth 6 % of Thai GDP in 2023, the bank says

J.P. Morgan has upgraded its rating of Thailand’s stock markets to “overweight” from “neutral” on the prospect of a return of Chinese visitors to the country, the firm said on the sidelines of the annual J.P. Morgan Thailand Conference held in Bangkok this week.

According to the bank, a recovery in Chinese tourism for Thailand – which was the most popular destination for Chinese outbound travellers after Hong Kong and Macau in 2019 – will have a positive impact on local business sentiment and consumer confidence, as well as offset the effects of a global economic slowdown.

“China’s earlier-than-expected reopening is a key catalyst to our bull-case scenario for Thailand equities,” said Marco Sucharitkul, Senior Country Officer of J.P. Morgan Thailand. “With about 11 million tourists in 2019, China accounted for around 29 % of Thailand’s incoming visitors before the pandemic. We now forecast up to 26 million Chinese tourists arriving in Thailand in 2023, which is 65 % of 2019 levels and slightly higher than the government projection of 25 million.”

“This would translate into US$ 39 billion worth of tourism receipts this year, doubling the amount in 2022 and equivalent to 6 % of the country’s GDP,” Sucharitkul added.

The pickup in non-resident spending will in turn boost consumer confidence, which remains at “way below” the long-term average levels, the bank says. “In addition, the government recently approved the ‘Shop Dee Mee Khuen’ tax rebate scheme – which offers up to 40,000 baht in tax deductions for goods and services purchased between Jan 1 and Feb 15, 2023 – will further boost spending in the short term,” said Kae Pornpunnarath, head of Thai equity research for J.P. Morgan.

J.P Morgan has a base target of 590 for MSCI Thailand and a 1,800 target for the SET (Stock Exchange of Thailand) in 2023. In terms of sectors, the bank remains overweight on Thai consumer staples, consumer discretionary, and healthcare.

“We think there is significant pent-up demand for outbound travel from the Chinese population,” said Sucharitkul. “Our baseline forecast expects the resumption of cross-border travel with the rest of the world to start by the late first quarter, and resumption of large-scale international travel to start around mid-year and international flights steadily recovering to 50 % of the pre-pandemic level going through the second half of 2023.”

Cooling inflation, baht and elections boost

Aside from a boon provided by Chinese tourists, J.P. Morgan expects other factors to bolster Thai stock markets’ performance in 2023, including slowing inflation due to lower energy prices and tame wage growth that could improve profit margins for Thai corporates.

To head off rising inflation, the Bank of Thailand has raised interest rates by 75 basis points since August 2022, bringing the benchmark rate to 1.25 %. J.P. Morgan expects two more 25 basis-point hikes this quarter, bringing the terminal rate to 1.75 %.  

As result, inflation has begun to cool, with J.P. Morgan expecting the headline consumer price index to fall to 3.3 % by the end of 2023 from 6.3 % in 2022. “The falling input costs are expected to particularly help Thailand’s food and beverage producers and utility companies, which had limited avenues in 2022 to pass through rising costs,” said Sucharitkul.

Meanwhile, the strength in the Thai baht – supported by an improvement in tourism receipts and reduced freight costs that helped Thailand’s current account move into surplus last year – is expected to continue in tandem with a recovery in tourism. “Our view is that strong currency should enhance returns for equity investors,” said Pornpunnarath.

According to J.P. Morgan, Thailand’s general elections in May could provide a short-term boost to the stock markets. Based on the bank’s historical analysis, median returns for Thai equities in the three-month run-up during the past 12 Thai elections were approximately 5 %, with the electronics, energy, food & beverage and commerce sectors tending to outperform the broader market.  However, the gains have tended to normalize in the medium term.

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https://www.nationthailand.com/thailand/economy/40024045

China’s reopening lifts Thai export sector but recovery is fragile: experts

MONDAY, JANUARY 16, 2023

The reopening of China will benefit Thailand’s key export sector but the recovery remains fragile, experts say.

China, Thailand’s second-largest export market after the US, lifted border restrictions on January 8, spurring hopes of economic and trade recovery.

Trade Policy and Strategy Office (TPSO) director Poonpong Naiyanapakorn expects the country’s reopening to boost Thailand’s export sector, led by shipments of fruit, food and beverages, and fashion items.

Thai exports to China fell 6.5% in the first 11 months of last year, according to the Commerce Ministry.

However, Poonpong expressed concern over the possibility of another lockdown in China, where infections are surging after the zero-Covid policy was scrapped following mass protests last month.

Thai exports of durians, cassava, rubberwoods and chemicals would be affected if Beijing reimposes lockdown measures, he said on Monday.

On the positive side, Thailand’s medical exports could benefit if China’s borders remain open, he added.

Poonpong also cautioned that Chinese consumer demand could be dampened by rising inflation and strict monetary policies.

Nevertheless, he expects reduced tariffs under the Regional Comprehensive Economic Partnership to help boost Chinese imports from Thailand.

He advised Thai exporters to reduce risk by expanding their markets to other countries, diversify by creating a variety of new products, and make sure they had solid financial plans.

The Thai Chamber of Commerce (TCC) meanwhile cautions that slow growth in China would contribute to Thai exports shrinking in the first two quarters this year before rebounding as global demand recovers. The TCC said current strengthening of the baht could hit the competitiveness of Thais exports.

Related stories:

• Demand for Thai durian rising in China despite new Covid-19 wave
• Thai exporters warned new EU deforestation edict could lead to bans
• New, expanded markets may see Thai rice exports cross 2022 target

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https://www.nationthailand.com/thailand/economy/40024043

Gold rush to become trickle this Chinese New Year as Thais cut spending

MONDAY, JANUARY 16, 2023

The Gold Traders Association (GTA) expects gold sales to rise by only 5% to 10% during the Chinese New Year festival this coming weekend.

Chinese New Year usually brings a gold rush in Thailand with consumers queueing at gold-shop counters seeking gifts for their loved ones.

However, this year Chinese-Thai people will prefer to buy smaller trinkets weighing one or two salung, rather than one-baht pieces, GTA vice-president Pichaya Phisuthikul said.

One salung is 3.81 grams, or one-quarter of a baht.

He added that many gold consumers were still watching their spending as they had not yet paid off debts built up during the Covid-19 crisis.

Many gold shops meanwhile have reopened after their business was severely hit during the Covid-19 crisis, Pichaya said. However, some were still suffering staff shortages and many operators were unable to pay bonuses.

“It will take some time until businesses recover,” he said.

He advised investors to buy gold when the price drops to between 28,000 and 28,500 baht per baht-weight, and sell when the price approaches 30,000.

He also warned investors to be cautious when using gold-saving services as they risked becoming victims of criminals aiming to steal their cash.

Worachai Tangsitpakdee, director of the Chin Hua Heng chain of gold shops, also expects gold sales to rise over Chinese New Year, which falls on Sunday, January 22.

However, he expects Chinese-Thais to prefer gold pendants or rings to large necklaces as people would be reluctant to spend big on gold amid the economic recovery.

Related stories:

• AURA sees glittering future for its Thong Ma Ngern Pai gold shops
• Amid looming recession, investors advised to give greater weightage to bonds over equities
• Tourist dollars drive surge in Thai gold consumption

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https://www.nationthailand.com/thailand/economy/40024038

Carbon credit trading opens on FTIX platform tomorrow

SUNDAY, JANUARY 15, 2023

The Federation of Thai Industries will allow registration for trading carbon credits on its FTIX platform on Monday, a senior federation official said on Sunday.

Suwit Torraninphanit, chief of the federation’s climate change committee, said the FTIX had been developed through cooperation between the federation and the Climate Action Leading Organization (CALO). It will be operated by the federation’s Climate Change Institute.

The institute will on Monday start allowing companies to register for trading carbon credits from the Thailand Voluntary Emission Reduction Program (T-VER).

Suwit said the FTIX would help Thai exporters reduce pressure from importing countries to comply with carbon emission reduction standards by allowing them to buy carbon credits.

He said the FTIX platform would make it more convenient for Thai businesses to shop for T-VER carbon credits. Currently, they are restricted to over-the-counter trade.

The FTIX platform will be supervised by a committee and managed by a joint committee of members from the federation and CALO.

This will ensure transparent trading as well as creating an effective alternative for businesses to reduce carbon commissions to increase their competitiveness, Suwit explained.

The FTIX will be connected to the online system of CALO for trading T-VER carbon credits and will also trade 100% renewable energy (RE100 energy).

Suwit said the FTIX would register about 12,000 companies from 45 sectors.

CALO announced that 319 projects had been registered under the T-VER programme from the beginning of fiscal 2014 to the first quarter of fiscal 2023.

However, only 141 of the registered projects have been certified to trade 13.97 million tonnes of carbon dioxide equivalent (CO2e) and only 2.019 million tonnes of CO2e credits have been traded for a total of 152.95 million baht, according to CALO. In the first quarter of fiscal 2023 (from October to December 2022), nine projects were registered and eight of them have been certified to trade 460,600 tonnes of CO2e carbon credits, it said.

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https://www.nationthailand.com/thailand/economy/40024033

Satellite auction raises 806 million baht from sale of three slots

SUNDAY, JANUARY 15, 2023

Only three of five packages of satellite orbital slots were sold to three bidders for a total of 806 million baht in an auction held by the National Broadcasting and Telecommunication Commission on Sunday.

None of the three qualified companies bid for packages one or five, while the commission auctioned off the other three for a combined 806.076 million baht, it said.

Last week, three companies were given approval by the commission to participate in the auction: Space Tech Innovation, a subsidiary of satellite service provider Thaicom, Prompt Technical Services, a company registered in 2000 as an electrical installation service firm, and state-run National Telecom.

The five packages, which Thailand had received from the International Telecommunication Union, are:

● Package 1: 50.5 degrees East slot with C1, N1 and P1R networks and 51 degrees East with 51 network. Bidding started at 374 million baht.

● Package 2: 78.5 degrees East with A2B and LSX2R networks. Bidding started at 360 million baht.

● Package 3: 119.5 degrees East with IP1, P3 and LSX3R networks and 120 degrees East with 120E network. Bidding started at 397 million baht.

● Package 4: 126 degrees East with 126E network. Bidding started at 8.06 million baht.

● Package 5: 142 degrees East with G3K and N5 networks. Bidding started at 189 million baht.

Representatives of the three companies arrived at the commission’s head office at 7am to start preparing for the auction. Bidding started at 10 am after commission chairman Sarana Boonbaichaiyapruck made a speech to launch the auction.

The auction was held in the so-called sequential ascending clock method with each round of bidding lasting 20 minutes. Interested bidders had to tap to raise the price of a package, with each limited to 5% of the starting price.

Lots were drawn to arrange the order of the bidding to prevent collusion. Packages were auctioned in the following order: 4, 3, 5, 2 and 1.

The commission has yet to announce the names of the winning bids for the three packages.

Reporters said Package 4 was auctioned in two minutes, with one tap from one bidder. A satellite on the slot of Package 4 can be used for both broadcasting and telecommunications in the Asia-Pacific region. It was sold for 9.076 million baht.

The auction for Package 3, which can be used for broadband telecommunication over Southeast Asia, North Asia, Australia and Indochina, started at 10:15am and ended at 10.21 am with one tap from one bidder. It was sold for 417 million baht.

The IT department suspended the bidding for 10 minutes due to a system error. The auction resumed at 10:40 am with the auction of Package 5, which covers the Asia-Pacific region. The bidding ended at 10:46 am with the “unsold” sign announced on the system’s board.

Bidding for Package 2 began at 11am. The slot can be used for a broadcast satellite and there are already two satellites in the area, which are Thaicom 6 and Thaicom 8.

The first round of Package 2’s auction ended at 11.05am with two bidders competing. The second round started at 11.10am and ended at 11:16am with one bidder getting the package for 380 million baht.

Bidding for Package 1 started at 11:30am and ended at 11:36 am with no bids.