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https://www.nationthailand.com/thailand/economy/40020719

Baht expected to strengthen

WEDNESDAY, OCTOBER 05, 2022

THE NATION

The baht opened at 37.40 to the US dollar on Wednesday, strengthening from Tuesday’s close of 37.60.

The Thai currency will likely move between 37.25 and 37.50 against the greenback during the day, Krungthai market strategist Poon Panichpibool predicted.

He said the baht is strengthening and even exceeding its support level as the market is in a risk-on state and pressuring the dollar while affecting the gold price.

If US economic data on Wednesday is worse than expected, the market might feel the US Federal Reserve will not increase the interest rate as it might pressure the financial market into a risk-on state, Poon said.

Also, it might pressure the dollar while supporting the baht to strengthen or swing sideways near its support level of 37.30 to 37.40, the level that importers are waiting for to purchase the US currency, he added.

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https://www.nationthailand.com/thailand/economy/40020715

Arkhom briefs PM on volatility in financial markets and their impact on Thailand’s recovery

TUESDAY, OCTOBER 04, 2022

THE NATION

The government is closely monitoring factors that could affect economic recovery, including in financial markets, government deputy spokesperson Traisuree Taisaranakul said on Tuesday.

She was speaking after Finance Minister Arkhom Termpittayapaisith reported to Prime Minister Prayut Chan-o-cha that many factors were pressuring financial markets.

She explained that uncertainty over decisions at the US Federal Reserve meeting on Monday had caused the Stock Exchange of Thailand (SET) Index to drop by 31 points in opening trade on Tuesday.

“However, the SET Index rebounded by almost 20 points at the end of the morning session, as there was no signal on changes in interest rate,” she said, adding that this negative sentiment would not affect Thailand’s economic recovery.

She said the Finance Ministry and Bank of Thailand are monitoring international factors and capital flow closely.

She also confirmed that the government would continue to monitor factors that affect economic recovery.

The SET Index closed at 1,578.00 on Tuesday, up 19.95 points, or 1.28 per cent. Transactions totalled 64 billion baht with an index high of 1,584.57 and a low of 1,567.48.

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https://www.nationthailand.com/thailand/economy/40020712

PTT expects energy prices to fall next year, easing pressure on economy

TUESDAY, OCTOBER 04, 2022

THE NATION

National energy conglomerate PTT expects oil prices to fall next year, boosting Thailand’s economic recovery.

PTT president and CEO Auttapol Rerkpiboon forecast that the price of a barrel of oil would fall from US$90-$100 this year to $85-$100 in 2023, easing pressure on the economy.

He also expects the LNG price to drop from early next year as demand declines after winter in Europe. A falling LNG price would cut electricity generation costs, as natural gas is used to fuel power stations.

Auttapol told the “Thailand Economic Outlook 2023” seminar held by Krungthep Turakij, that PTT must strike a fine balance between ensuring sufficient oil and gas to meet demand, minimising environmental impacts, and keeping prices as low as possible. He added that PTT is focusing on maximising refinery and transport efficiency and using carbon capture storage technology to reduce environmental impacts.

The energy giant is also switching its focus to cleaner energy such as natural gas as oil consumption is expected to drop over the next decade, he said.

However, PTT will diversify investment to avoid dependence on a narrow range of energy sources.

“We must not bet on a single horse. We have changed our vision from ‘Thai premier league multinational energy company’ to ‘powering life with future energy and beyond”, Auttapol said, highlighting the English terms in quotes.

As part of the change in direction, PTT would focus on future energies such as hydrogen.

The CEO said the conglomerate was focusing on future energies by dividing its investment into six areas:

– New energy

– Life science

– Mobility and lifestyle

– High value and businesses

– Logistics and infrastructure

– AI & Robotics Digitalisation.

Auttapol added that all companies under the PTT Group were committed to achieving net-zero carbon emissions by 2050, 15 years ahead of Thailand’s national goal. As such, PTT would increase its solar electric generating capacity to 12,000 megawatts and double its tree-planting mission to two million by 2050.

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https://www.nationthailand.com/thailand/economy/40020705

Despite recovery trajectory, Thailand’s economy expected to face challenges next year, experts tell seminar

TUESDAY, OCTOBER 04, 2022

Nongluck Ajanapanya

Economists, high-ranking officials and business leaders together shared their perspectives on the best practical strategies and solutions for Thailand’s economy to survive and thrive.

They expressed their opinions during the “Thailand Economic Outlook 2023” event hosted by Krungthep Turakij newspaper on Tuesday in Bankgok to commemorate its 36th anniversary.

The dialogue began with a keynote speech from Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput, who stated that despite the global economic slowdown and high volatility in the financial market, Thailand’s economy is gradually recovering due to a strong rebound in the tourism industry and domestic consumption.

However, he noted that high inflation and the US central bank’s monetary policy were still factors that Thailand needed to monitor closely.

He also defended the BOT’s monetary policy, claiming that it is on the right track because Thai economic conditions differ from those of other countries, hence Thailand did not need to adopt the same measures.

“Thailand’s economy requires a smooth takeoff rather than a smooth landing,” said Settaput.

Jon Penrice, president Asia Pacific of Dow Chemical Company, pointed out the possible strategies for the new world order in the coming year and beyond.

He predicted that volatility and uncertainty would become a normal part of doing business, so companies and agencies must be much more alert and resilient in the short term while still focusing on their long-term vision.

“None of the events are predictable,” he explained. “In this new world order, companies should focus on four key strategies: customer centricity, resilience and agility, a disciplined financial approach, and diversification.”

He warned businesses to brace themselves for several headwinds in 2023, such as the European energy crisis, the ongoing war in Ukraine, China’s slowdown, rising global inflation, and currency depreciation.

He advised businesses to invest in people and Environment, Social, and Governance (ESG) in order to sustain their growth because these two factors will help businesses reduce risk and costs in the long run.

Overall, Thailand’s economy will face more severe challenges in the coming year, particularly for monetary and fiscal policy, three economists from major banks and financial institutions said.

They attributed the situation to the US Federal Reserve’s commitment to bring down high inflation regardless of the risk of a hard recession.

Supavud Saicheua, economist and adviser at Kiatnakin Phatra financial group, pointed out that although the country’s economy is showing positive signs of growth, Thailand needs to improve its foundation and infrastructure, including embracing rapid changes in innovation and technology and caring more for the environment, in order to thrive in the long run.

Meanwhile, Bangkok Bank economist Kobsak Pootrakool is concerned about the country’s reserves, which needed to be increased to improve efficiency but not so much that the country cannot move forward. He urged both the public and private sectors to become more competitive.

Kiatipong Ariyapruchya, the World Bank’s senior economist for Thailand, added that the government should relax some finance and investment regulations.

Thailand has one of the toughest investment laws in the Southeast Asian region, he added, urging the government to amend the law, which would aid in unlocking Thailand’s manufacturing and services potential.

He also suggested that the Thai government develop a strategic plan to address the effects of extreme weather conditions, specifically water management and drought.

Despite the country’s difficult circumstances, two private-sector representatives were optimistic that Thailand’s economy will be able to handle and survive because Thailand’s private sector is capable and strong.

Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said that what is needed now is to find new business models — other than export and tourism — to drive Thailand’s economy.

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said that their federation focuses on seven new S-curve industries, including Bio Circular Green economy and climate change.

He insisted that S-curve will open up new opportunities for Thai businesses and help attract foreign investment in the coming years.

Sanan and Kriengkrai also had a message for the next government. They assured that regardless of which party forms the new government, the private sector is always willing to collaborate and work with them. They urged the next government to pay close attention to what businesses need, to change some outdated regulations, and to be consistent.

The fierce competition between Thailand and Vietnam was a frequent topic of discussion in today’s debate. While most speakers lauded Vietnam’s rapid growth, Jareeporn Jarukornsakul, chairman and group CEO of WHA Corporation, stated that Thailand is still in a better position than Vietnam.

Thailand, she claimed, had the most advanced infrastructure in the region. Many foreign investors continue to prioritise Thailand. Hence, the country must continue to invest and develop, particularly in mega-trends such as electric vehicles, renewable energy, and green economy.

Siam Piwat Group chief executive officer Chadatip Chutrakul revealed the company’s 63-year secret to achieving exponential growth and surviving every crisis to become the country’s No. 1 retailer and real estate developer.

The tactic, she explained, is simply to be mindful and sincere with customers, employees and business partners. Besides, she suggested that thinking outside the box, creating new possible business paths, and expanding network and connections would be useful strategies in this new business context.

Nongluck Ajanapanya

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https://www.nationthailand.com/thailand/economy/40020700

FTI identifies 7 risks and offers 6 solutions for Thailand’s economic recovery

TUESDAY, OCTOBER 04, 2022

THE NATION

The Federation of Thai Industries (FTI) pinpointed seven risk factors for economic development in 2023 and offered six solutions to ensure recovery in the post-Covid era.

Speaking at the “Thailand Economic Outlook 2023” seminar hosted by Krungthep Turakij newspaper on Tuesday, FTI president Kriangkrai Thianukul said the Thai economy would face several risks next year due to the uncertain global situation, fluctuating finances and digital disruption.

“In 2023, Thailand’s industrial sector will be facing a ‘perfect storm’ fuelled by these seven risk factors, most of which are consequences of the Russia-Ukraine conflict,” he said.

The seven risk factors are:

• Inflation: Expected to continue rising next year. Thailand’s highest inflation in 17 years was recorded in August 2022 at 7.86 per cent

• Raw material shortage: Supply of products like microchips, animal feed, fertilisers, chemicals, etc, expected to drop.

• Rising energy cost: Cost of electricity rose 17 per cent this year, while the price of fuel hit a new high in eight years and the price of LPG rose 28 per cent year on year.

• Rising daily minimum wage: Daily minimum wage was raised by an average of 5 to 8 per cent nationwide.

• Weaker currency: The baht fell to its lowest in 16 years at 38 to 39 baht to the US dollar.

• Rising interest rate: The rate has been increased to 1 per cent with a tendency to rise further.

• Rising transport cost: 45 per cent hike in freight fees.

“These challenges could hinder the efficiency of our industrial sector. Meanwhile, our neighbour Vietnam has lower industrial costs and can be viewed by corporations as a better investment destination,” Kriangkrai said.

However, he said, industrial and private sectors could embrace these six solutions to gain a competitive edge globally. They are:

• Use BCG (bio, circular, green) economy as a framework for development

• Pre-empt implementation of new technology and innovation to avoid disruption.

• Enhance supply chain security to ensure uninterrupted production.

• Use renewable energy across all operations to reduce the cost of energy.

• Develop necessary skills among employees.

• Tackle climate change issues.

“The private sector may find it difficult to survive even after applying the six solutions without continued support from the government in driving economic growth in key areas,” Kriangkrai said. “We urge the authorities to ensure the continuity of economic policy implementation during the transition of power after the general election, which is scheduled in May next year. The survival of the industrial sector depends mainly on how well the public and private sectors work together for mutual goals.”

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https://www.nationthailand.com/thailand/economy/40020691

BOT governor reaffirms Thailand taking ‘gradual and measured approach’ to economic recovery

TUESDAY, OCTOBER 04, 2022

Bank of Thailand Governor Sethaput Suthiwartnarueput said on Tuesday that unlike many other countries, Thailand is taking a gradual and measured approach to the economy.

Speaking at the “Economic Outlook 2022” event held by Krungthep Turakij in Bangkok, the BOT governor said the Thai economy is in continuous recovery and the country’s monetary policy is on the right track.

He said Thai economic conditions differed from those in other countries, so Thailand did not need to adopt the same measures.

Sethaput also dismissed concerns that the BOT was raising the interest rate too slowly to rein in inflation, insisting “we are not behind the curve”.

He added that while Thailand has yet to recover to pre-pandemic levels, certain other countries had already met their economic targets.
 

Kobsak Pootrakool, chairman of the Federation of Thai Capital Market Organisations, said he was worried about the country’s exports.

Sanan Angubolkul, president of the Thai Chamber of Commerce, said China’s economic recovery next year would have a positive impact on Thailand apart from the return of Chinese tourists. He said Chinese tourists would definitely return as more than 90 per cent of China’s population has been vaccinated against Covid.
Although the number of foreign tourists has not reached the pre-Covid level, revenues at shopping malls of the Siam Piwat Group have exceeded 2019 numbers, group CEO Chadatip Jutrakul said.
Jareeporn Jarukornsakul, president and CEO of WHA Industrial Development, said Thailand still has plenty of investment opportunities although political changes could happen in the general election next year.

The other speakers are Jon Penrice Dow’s Asia-Pacific president, Kriengkrai Thiennukul Chairman of The Federation of Thai Industries, Arthid Nanthawithaya Chief Executive Officer SCBXNapat Jatusripitak, co-founder and CEO of ViaLink and managing director of Siametrics Consulting Co Ltd, Korawad Chearavanont, CEO and Founder of Amity Co Ltd, a social cloud company, Dermphan Yoovidhya, CEO and founder of Rapid Group, Pratthana Leelapanang. Chief Consumer Business Officer at Advanced Info Services Plc, Jirayut Srupsrisopa, founder and Group CEO of Bitkub Capital Group Holdings Co Ltd, Phichet Rerkpreecha, CEO at Line Company (Thailand)

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https://www.nationthailand.com/thailand/economy/40020688

Baht bounces back against dollar on Tuesday

TUESDAY, OCTOBER 04, 2022

THE NATION

The baht opened at 37.80 to the US dollar on Tuesday, strengthening from Monday’s close of 38.08.

The Thai currency will likely move between 37.70 and 38.00 against the greenback during the day, Krungthai market strategist Poon Panichpibool predicted.

Poon said that the market is in a risk-on state, which might slow the baht’s weakening if foreign inflows rise.

Also, the baht may gain short-term support from gold sales if the price exceeds its resistance level at $1,700 per ounce, he added.

He said the baht could swing sideways or strengthen in the short term, as daily and weekly graphs show signs of bearish divergence.

He also advised watching for weak liquidity in the market that could drive baht fluctuation and sideways swings in a wide range.

Poon predicted a support level of 37.50 to 37.70, when importers would buy dollars. He expects a resistance level of 38.20 to 38.30, when exporters would sell the dollar.

He also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.

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https://www.nationthailand.com/thailand/economy/40020687

Thai economy to expand at least 3% for next 2 years but election a potential disruptor: Fetco

TUESDAY, OCTOBER 04, 2022

THE NATION

The Thai economy will defy global recession to expand at least 3 per cent both this year and next year, the Federation of Thai Capital Market Organisations (Fetco) forecast on Monday.

Thai growth will come from a recovery in tourism and foreign direct investment after the Covid-19 pandemic, Fetco chairman Kobsak Pootrakool predicted. The World Bank forecasts Thai growth of 3.1 per cent in 2022 and 4.1 per cent in 2023.

Kobsak, who is also executive vice president of Bangkok Bank, said this year’s repeated raising of policy rate by the US Federal Reserve to combat inflation is creating a global recession that could last until next year. He said this recession, the fifth in the past 50 years, would cause mass layoffs by US and European corporations as well as liquidity problems in emerging markets, which would need International Monetary Fund assistance.

“As for Thailand, exports in 2023 will not expand sharply like in the past one or two years as most of our trade partners will still be suffering from the economic downturn,” he said. “However, rising tourism and foreign direct investment will help Thailand’s economic expansion surpass 3 per cent this year and next year.”

Kobsak pointed out that Thai tourism industry is on an upward trend with around 1.5 million foreign visitors per month since August. He estimated that total foreign arrivals this year exceed 10 million and grow to 20-25 million in 2023. These visitors would generate significant circulating capital for the Thai economy.

Kobsak added that foreign investors also favour Thailand as a top choice in Asean, along with Vietnam.

“The fact that China’s electric car manufacturer BYD is establishing a plant in Rayong proves that Thailand can still attract foreign direct investment to strengthen our economy,” he said.

Possible blocks to economic expansion include political transition after the general election due in May 2023, Kobsak said. The government transition could disrupt continuity of economic policy and investor confidence, he said.

He also urged the government to provide data on the strengths and opportunities in Thailand’s economy to maintain investor confidence through the recession. This could be done via domestic and international marketing campaigns and roadshows. “The government must also make sure that mega projects such as expressways, high-speed railways, and infrastructure in the Eastern Economic Corridor and Southern Economic Corridor progress as planned to attract foreign investment in facilities,” he said.

THE NATION