“We expect more than five groups to propose their respective plans on January 14 with the winner to be announced in February 2019,” he said.

The contract will be signed in March for construction to start in May.

The project requires an investment of up to Bt30 billion in the development of infrastructure and service facilities,

The local economy has for now passed its peak growth of 4.9 per cent enjoyed in the first quarter this year, says Don Nakornthab, the Bank of Thailand (BOT)’s senior director.

Phipat Luengnaruemitchai, assistant managing director/head of Private Wealth Management Research at Phatra Securities, agrees that the Thai economy will grow at a slower pace in 2019 and 2020.

Meanwhile, next year’s GDP growth is forecast at 4.3 and 4.4 per cent by Kasikorn Research Centre (KResearch) and the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) respectively.

At 3.7 per cent, Moody’s Investors Service predicted the lowest GDP growth rate for next year among those surveyed, while BOT has forecast just 4 per cent, and Siam Commercial Bank (SCB)’s Economic Intelligence Centre (EIC) predicts 4.2 per cent.

“The decline in Thai exports in the second half of this year is the key factor behind the expected slowdown in economic growth next year,” said Phipat of Phatra Securities.

Export is a key driver of the Thai economy, contributing up to 75.21 per cent of the Kingdom’s GDP in 2018, according to KTB Securities (Thailand) (KTBST).

Thai export growth is predicted to fall to a mere 4.3 per cent in 2019 compared with an estimate of 7.5 per cent this year, according to SCB’s EIC. KResearch offers a similar view, saying export growth will slow to 4.5 per cent, compared to this year’s forecast of 7.7 per cent.

Meanwhile, Thailand’s Ministry of Commerce is presenting a rosier picture, maintaining its ambitious 8 per cent growth target for exports in both 2018 and 2019 despite the concerns of other economic institutions.

The economists agree that the most significant contributor to the withering export growth prediction is the ongoing US-China trade war.

“The impacts of the trade war have already begun to show signs in Thailand, and we expect the negative effects on our exports to continue in 2019,” said Finance Minister Apisak Tantivorawong.

Yunyong Thaicharoen, first executive vice president and head of SCB’s EIC, says: “Thai export growth is expected to slow down in 2019 mainly as a result of uncertain trading conditions stemming from the US-China trade war.”

The trade war damages the Thai economy in two ways, according to Don. First, Thai exports will falter as the country is part of the supply chain affected by the tariffs imposed by the two economic powerhouses. Second, uncertainty from the superpower conflict halts business expansions and investment.

“Thailand is deeply entrenched in the global supply chain, and the tariffs imposed by the US on China will have a direct harmful impact on Thai exports,” concurred Matthew Circosta, an analyst for Moody’s Investors Service (Singapore).

“China imports various Thai goods such as computer parts and integrated circuits, which they then develop and export to the US. The tariffs imposed by the US on Chinese goods targets electronic goods, and we have subsequently seen a sharp fall in Thailand’s exports of computer parts and integrated circuits to China,” said Don.

For example, Thai exports of computer parts and integrated circuits to China fell by 18.4 per cent in October, according to the Trade Policy and Strategy Office of the Commerce Ministry.

“The key threat from the trade war is the uncertainty that comes with it and its impact on investors and businesses,” said former World Trade Organisation chief, Supachai Panitchapakdi.

“Investors are holding off their investments, exporters are unsure about the prospects for their businesses, and manufacturers are holding off expansionary plans in Southeast Asia as they wait to see whether the 90-day halt will lead to a settlement of the conflict,” Don added.

The Federation of Thai Capital Market Organisations’ (Fetco) Investor Confidence Index (ICI) reported in November that investor confidence was expected to fall from November this year through to the beginning of 2019 by up to 7.23 per cent, down to 113.73 points from 125 in October.

“This is mainly due to the uncertainty caused by the trade war. Investors are concerned about the extent to which US and Chinese manufacturers can cope with the rising tariffs, as well as the impact on Thai manufacturing and exports,” said Fetco chairman, Paiboon Nalinthrangkurn.

“The trade war will likely escalate in 2019 as Trump loses control of the House of Representatives after the midterm elections,” warned director of the Thailand Development Research Institute (TDRI)’s Economic Intelligence Services (EIS), Kirida Bhaopichitr.

Kirida explained that this was because Trump was likely to use the trade war to increase his approval ratings from his previous supporters, which are mostly low-income earners.

The Department of Foreign Trade yesterday announced a total value of Bt1.27 trillion in border and cross-border trades for the first 11 months of the year, up 5.81 per cent from the same period last year.

The department has also set a target of Bt1.6 trillion for 2019.

Adul Chotinisakorn, director general of the Department of Foreign Trade, said Thai exports to neighbouring countries in border and cross-border trades reached Bt713.90 billion in the first 11 months of this year, down 0.39 per cent from the same period last year, while Thailand’s imports from those markets reached Bt563.69 billion during the same period, up 14.87 per cent. As a result, Thailand still enjoys a trade surplus of Bt150.21 billion.

Regarding the four border-trade markets – Malaysia, Laos, Myanmar, and Cambodia, trades reached Bt1.03 trillion in total value in the first 11 months this year, up 4 per cent from the same period last year. Thai exports to the markets reached Bt596.79 billion, down 0.38 per cent, while Thailand’s imports from those markets reached Bt434 billion, up 10.68 per cent, resulting in a trade surplus of Bt162.79 billion.

AIA Thailand Launches new online commercial

AIA Thailand has launched its latest online commercial entitled “Little Changes” to convey the concept of “Healthier, Longer, Better Lives” the company’s new slogan in Asia Pacific to augment the success of “What’s Your Why?” campaign last year.

This new online commercial features David Beckham as AIA global ambassador, together with 27 Thai children, aged between 5 to 11 years who sent in video clips on ways to change daily habits for a healthier and better live.

The new advertising campaign aims to inform Thai parents on how little changes can make a big difference to improve health and wellbeing through the meaningful questions from children.

Aekkaratt Thitimon, chief marketing officer of AIA Thailand said, “We achieved tremendous success with “What’s Your Why?” advertising campaign and gained an overwhelming positive feedback with over 44 million views of the accompanying film. And now we have David Beckham to push our new message across the region.

We also conducted a survey on what and who motivated them to live healthier and found that 80 per cent of the respondents mentioned their kids. The insight led us to the concept of the “Little Changes” advertising campaign.

Additionally, we organised a public engagement event and invited children upcountry to send in video clips to share their views on living healthier. We finally selected 27 children who are bold and expressive to be the copresenters with David Beckham.

The content of this advertising campaign is different from previous ones as we offered a great opportunities to children to ask David Beckham any questions they are concerned with and most of questions they raised were their parents’ health, habits and lifestyle, reflecting their love and care of their parents. David Beckham gave them clear answers and advice.

While in Japan, consumption tax hike, scheduled to take effect in October next year, is a major risk that could bring down the world’s third largest economy into contraction in the last quarter next year.

In China, adverse impact of trade war has yet to be felt in 2018 as exporters brought forward shipments to avoid the upcoming tariff increase. But fulfilling next year’s orders so far in advance could lead to a sharp slowdown in exports, and hence China economy, in 2019.

While further US tariff hikes have been put on hold to until end-February under US-China truce agreement, but the prospects for a permanent trade deal remains elusive with the recent detention of Huawei’s CFO in Canada foreshadowing upcoming trade negotiations.

Political events around Brexit, and France’s yellow vest protest could disrupt and severely harm economic growth in Europe. And in emerging economies, many countries have suffered sharp currency depreciation which will inevitably suppress demands going forward.

Central banks, on the other hand, are likely to continue to withdraw monetary policy support to rebuild headroom to stimulate economy before the next downturn arrives. The Fed is expected to raise policy rate at least twice next year. While the European Central Bank has decided to terminate its long-running QE programme at the end of this year. The Bank of Thailand also raised interest rate for the first time in 7 years despite slowing economic growth and falling inflation.

The combination of slower growth and less supportive policy is, to say the least, not market-friendly. The US S&P500 stock index has declined by more than 12% in the fourth quarter to the lowest level in 14 months.

While the SET index has breached the all-important 1,600 point level last week. Though we do not expect significant downside risk to the market at this level,but the market volatility will likely to stay 2019.

We remain cautious and like defensive sectors such as global healthcare stocks as they offer proven earning resilience to withstand economic downturn. And in the long run, the growth of healthcare sector is underpinned by the mega-trend of an aging global population.

Contributed by KOMSORN PRAKOBPHOL, Head of Tisco Economic Strategy Unit (ESU)