The Energy Ministry will also brainstorm with state agencies under its aegis as soon as possible to come up with measures to boost the economy, he added.

He also vows to manage energy prices so that consumers will not be burdened.

He also quashed fears about plans to increase the daily minimum wage to Bt400, saying this needs to be considered by many parties first, including the national tripartite daily wage committee and the business sector to ensure the wage hike does not hit businesses.

He added that it is unlikely the wage hike will be implemented next year, saying it was a target to be achieved in the next four years. He also said that along with boosting wages, the government will also upgrade the skills of the workforce.

Meanwhile, Auttapol Rerkpiboon, chief operating officer for PTT’s downstream petroleum business group, said PTT plans to invest Bt300 billion over three years on projects that have passed its final investment decision. The investment will be divided into Bt100 billion per year starting from this year.

Manpong Senanarong, senior executive vice president and head of the exchange’s issuer marketing division, said about a dozen companies are readying their shares for public offerings on the SET, with some having have just submitted their filing reports to the Securities and Exchange Commission (SEC). The procedure for most of them began in May and the applications should be nearing the approval stage now. The new entrants would help contribute to a more vigorous IPO market compared with that seen in the first half of the year.

“Apart from the new local companies, we are also expecting more foreign corporations to enter the SET,” he said. “Usually foreign companies will consider market conditions before investing in the local stock market, and currently there are no negative factors in Thailand. The SET and the SEC have already had discussions with several foreign companies to help them get ready in terms of data preparation and regulatory compliance. However, it usually takes longer for foreign companies to be listed on the SET, compared with their Thai counterparts, since local companies are already familiar with the rules and regulations of the SET and the SEC.”

Somphop Sakphanphanom, chairman of Asset Pro Management Co., Ltd. (APM), said that another factor helping to boost the IPO market is the government’s support for small and medium-sized enterprises – especially those in the transport, energy, construction and food and beverage sectors. He said that by the end of the year the company will bring in more Cambodian companies from the Phnom Penh Special Economic Zone to the SET under the dual-listing scheme.

The gains followed a revision by Fitch Ratings on its outlook for Thailand’s long-term foreign currency issuer default fating (IDR) to positive from stable. It also affirmed the rating at BBB+.

Foreign and individual investors recorded net purchases of Bt869.55 million and Bt1.71 billion, respectively.

Meanwhile, other stock markets in the region also enjoyed gains, with Singapore’s Straits Times Index closing at 3,377.96 points, up 16.91 points from Thursday.

Hong Kong’s Hang Seng Index closed at 28,765.4 points on Friday, ahead by 303.74 points from Thursday.

Bursa Malaysia’s KLC Index finished at 1,658.19 points, up by 9.26.

The Nikki index ended at 21,466.99 points on Friday, up 420.75 from Thursday.

Upon assuming the industry portfolio for the fourth time, Suriya said another pressing issue was to help operators of small and medium-sized enterprises, especially those who have paid off debts but remain on the Credit Bureau’s blacklist. This status prevents them from getting new loans.

He will schedule talks with the Small and Medium Enterprise Development Bank of Thailand (SME Bank) to formulate remedies, along with ensuring that more money is injected into SME operators via the Industry Ministry’s SME Fund.

“As for the Eastern Economic Corridor (EEC) project, we will continue according to the original plan,” he said. “However, a development campaign focused heavily on a certain area may cause economic disparity in the region. For example, workers in the EEC areas will have a higher per capita income than those in Bangkok. It is therefore advisable to extend the EEC’s development model to other regions of Thailand, especially those with high economic disparities, like the Northeast. I will bring this into discussions with Deputy PM Somkid Jatusripitak later to explore the possibilities.”

The Industry Ministry also plans more help for SMEs in the EEC areas, such as setting local content requirements to urge those behind mega-projects and investors to source materials and products from local manufacturers.

“I am positive that we will be able to restore the confidence of foreign investors especially in the EEC areas after the new government unveils tangible policies regarding industrial development and an economic boost. I have discussed matters with several Japanese entrepreneurs and they still see Thailand as Asean’s most promising investment destination,” Suriya said.

Suphachai Phattharaphisutthana, the union head at the state-owned bank, said about 5,000 jobs at both banks could be lost.

He said that although executives at both banks has vowed not to lay off any staff, he feared this would just a usual tactic and that they would apply pressure on those at risk by imposing much stricter appraisals on their performances.

“Through tougher appraisals, the staff at risk of being laid off will become anxious and depressed,” he said, adding that he thought that those to be laid off would find it very difficult to find new jobs in the same industry, due to the current economic environment.

Suphachai said he had formally submitted the wages request to the Finance Ministry, a major shareholder in the TMB.

Ronadol Numnonda, a deputy Bank of Thailand (BOT) governor, said that while the banks were committed to making the merger work some employees were already highly prone to disruptive behaviour and needed to adjust their attitudes.

Thanachart CEO Praphan Anupongongarch said that after the merger the bank would seek to reassign some staff to different tasks, instead of laying them off.

He rejected the union’s demand for the banks to publicise their plans, saying the central bank first needed to conduct due diligence in relation to the merger.

Jurin cited the worrying decline in exports as a reason for this move, saying the new committee will comprise of several associations, such as the Chambers of Commerce and Board of Trade of Thailand, the Federation of Thai Industries, the Thai Bankers’ Association and the National Shippers’ Council of Thailand.

He added that this committee will act as a forum for the exchange of ideas and suggestions to tackle the problem of dampening exports.

“The Commerce Ministry plans to hold a meeting with the committee every month, with the first one to be held next week,” the minister said.

At the meeting, private sector representatives will be able to voice their problems and offer potential solutions to the trade officials. This will allow the ministry to implement measures to address problems faced by Thai exporters, coordinate with other ministers or submit their requests to the Cabinet.

Thai exports have been dropping due to the US-China trade war, global slowdown and the appreciation of the baht. Furthermore, increasing the minimum daily wage to Bt400, as proposed by the Phalang Pracharat Party, will also adversely affect small and medium enterprises who rely on exports.

The Commerce Ministry has set the year-on-year growth target for exports this year at 3 per cent.

Income guarantee for farmers will be another measure to help the agriculture sector, Jurin said, adding that income will be guaranteed for maize, cassava, palm-oil and rubber growers.

“Guaranteeing income for farmers will help boost their income, because the government will compensate farmers who make less than the amount insured by the state. For instance, if the price for rubber is set at Bt60 per kilogram and the farmer is only able to sell it at Bt50 per kg, then the government will pay the difference,” Jurin added.

The agreement between the exchange and the think tank will see an exchange of knowledge and will involve using Big Data to sustainably enhance the business sector and society as a whole.

SET president Pakorn Peetathawatchai said that SET realises the importance of research studies and has joined forces with academic, public, and private organisations to conduct research work to further support the goal of sustainable development of the Thai capital market and the economy. Pakorn said this was in line with the vision “To Make the Capital Market Work for Everyone”.

The MoU focuses on conducting research to help businesses and the public be well-prepared to cope in an ever-changing landscape. The collaboration will make use of Big Data for sample sizes, as well as the in the exchange of human resources and knowledge.

IPPD managing director Sorapop Kiatpongsan said: “We are delighted to take part in this project in research studies for the benefit of the economy and society towards sustainability. The first phrase will focus on savings, investment, business and social sectors’ sustainability, with an aim to enhance savings and investment literacy, develop skills, while raising public and listed firms’ participation in various dimensions by using information and evidence from the analyses and experiments.”

In addition, the SET and the IPPD organised a capital market research forum on the “Disappearing Workforce”, at the SET building in Bangkok. The honorary guest was Stefano Scuratti, regional director of APAC Public Policy Consulting. The Economist Intelligence Unit presented a special report on “The disappearing workforce? Why countries in Southeast Asia need to think about fertility rates before it’s too late”. Guest speakers from the government and private sectors exchanged opinions on trends.

He added that it depended on Prime Minister General Prayut Chan-o-cha whether an economic cabinet would be set up or another approach adopted to manage the economy.

He added that the economic cabinet could help move economic development faster as it would be the first to screen economic plans before forwarding to the Cabinet for consideration.

Somkid said that the FTI on Friday proposed to the government that it provide a tax deduction in relation to the planned Innovation Fund, which will be jointly set up and operated by private companies.

Moreover, the FTI representatives should be allowed to take part in the government’s development of the ease of business doing report.

With the government’s policies likely to be officially announced by the end of next week, Uttama declined to disclose the details of the expected economic stimulus policy at a press conference at the Finance Ministry on Friday.

Economists from commercial banks predict that the new government’s stimulus package will inject around Bt100 billion into the economy to stimulate consumer spending.

The strategy of the new government, Uttama said, will focus on the domestic economy and ways to boost the grassroots economy amid uncertain external factors dampening the Kingdom’s exports.

The minister plans to increase the benefits under the Pracharat welfare card to stimulate spending by low-income earners.

Agricultural sector will be another key focus of the government, he said. Uttama said that efforts to increase the capabilities and wellbeing of those in the agricultural sector must involve a number of government ministries.

“We have to make sure that the agricultural policies directly impact the farmers and increase their income in a sustainable way,” he said. “One such policy which we aim to improve on is promoting e-commerce in the agricultural sector.”

This, he said, will empower the sector with new technology and increase its competitiveness.

“The challenge, however, lies in the extent to which farmers will adopt the e-commerce platform into their business models,” he said.

The government will also continue to maintain the level of financial discipline in the country, he said, suggesting that the government will not overspend to jeopardise the long-term financial stability of the country.

Uttama went on to clarify that the Palang Pracharat Party did not campaign to reduce income tax for all. Instead, the government will be looking at changing the current tax structure to reduce income inequality. This involves increasing taxes for some and lowering taxes for others, he said.

Ekniti Nitithanprapas, director-general of the Revenue Department, cautioned that a 10 per cent tax cut for all would cost the country and the government dearly.

The outlook revision on Thailand’s IDRs reflects increasing confidence that lingering political risks are unlikely to derail sound macroeconomic management, Fitch said.

This is demonstrated by the sustained strength of external and public finances over the past several years, which has resulted in greater resilience to macroeconomic and financial shocks.

A major political hurdle has been passed with the formation of a new civilian-led government following elections in March. Nevertheless, a degree of political uncertainty remains in the context of the stability of the new coalition government, Fitch added.

“Thailand’s robust external position is a core credit strength, exemplified by the economy’s insulation from recent bouts of global risk aversion toward emerging markets, when the country’s financial markets continued to exhibit safe-haven characteristics,” according to Fitch.

The baht has been one of the strongest performing emerging-market currencies against the US dollar in 2019, appreciating by over 4.5 per cent as equity and debt inflows have increased, particularly in June.

Fitch forecasts external finances to remain robust. It expects the current account surplus to remain high relative to peers at 5.6 per cent of GDP in 2019 and 4.9 per cent in 2020, supported by tourism inflows and a goods surplus, despite slowing exports.

Fitch estimates that the large current account surplus along with portfolio inflows will facilitate an increase in official reserves to about $216 billion (7.9 months external payments coverage) at end-2019, from $205.6 billion at end-2018. Thailand’s net external creditor position of 43 per cent of GDP in 2019, under Fitch’s forecast, would be well above the BBB median net debtor position of 7 per cent of GDP and the A median net creditor position of 9.7 per cent of GDP.

The rating agency forecasts general government debt-to-GDP to rise to 40.7 per cent by the fiscal year ending September 2023, from 36.3 per cent in FY18, as the government uses its fiscal space to boost infrastructure investment, before trending downward thereafter.

Fiscal deficits remain low relative to peers. Fitch forecasts a general government deficit (on a government finance statistics basis) of 0.2 per cent of GDP in fiscal year 2019 from a surplus of 0.1 per cent in the previous fiscal year. Fitch expects continued implementation of the economic plan under the 20-year national strategy and the focus on development of the Eastern Economic Corridor (EEC).

The broad policy contours and sustained infrastructure investment should be supportive of near- and medium-term growth prospects, according to Fitch. However, the stability of the new coalition government under Prime Minister Prayut Chan-o-cha, with its disparate 19 parties led by the Phalang Pracharath Party, is uncertain and its ability to implement its policy agenda could be constrained by its thin majority. Protracted negotiations over the formation of the new government have already led to a three-month delay in the budget process and the approval of new infrastructure projects.

The BBB+ IDR also reflects the following key rating drivers:

Fitch forecasts growth to slow, as with other trade-dependent countries in the region. It expects Thailand’s GDP growth to ease to 3.3 per cent in 2019 from 4.1 per cent in the previous year.

Merchandise export values contracted by 2.7 per cent year on year through May 2019 and Fitch forecasts full-year export growth to remain flat. It expects investment to moderate slightly in 2019 due to approval delays of new infrastructure projects and lower investment by export-oriented firms. Consumption is likely to receive some support from government transfers to low income households, but may be constrained by high household debt levels.

Fitch forecasts growth to rise to 3.5 per cent in 2020 as the drag from declining exports subsides. Investment should accelerate in 2020 as public investment ramps up and helps to crowd in private investment. A further escalation in the US-China trade war is a downside risk for the economic outlook, but could be somewhat offset by gains from trade diversion and investment flows away from China.

It expects the Bank of Thailand (BOT) to keep rates on hold at 1.75 per cent during 2019, taking into account its focus on financial stability, in the context of low inflation and slowing growth.

The divergence of the BOT’s monetary policy stance compared with other global central banks has contributed to a broad appreciation of the baht. The baht’s strength relative to regional peers could weigh on Thailand’s export competitiveness, but it is unclear that this has manifested itself yet, with recent export declines broadly in line with peers.

The BOT has voiced concerns about the strength of the currency and in July took steps to reduce short-term flows, such as a lower ceiling on non-resident local currency accounts for securities and greater non-resident reporting requirements on holdings of debt securities.

Medium-term growth prospects are dampened by structural challenges from an ageing population. The government’s economic agenda and the EEC have the potential to boost productivity by improving infrastructure and incentivising foreign investment.

Foreign direct investment has been resilient over the past several years and new FDI applications jumped sharply in the first quarter. However, it remains to be seen whether Thailand can address risks of a middle income trap associated with ageing demographics and human capital constraints.

Fitch believes financial sector risks are well contained, but there are pockets of vulnerability. Household debt as a share of GDP has begun ticking up after a couple years of moderate declines, reaching 78.7 per cent in the first quarter, due to rising mortgage and auto loan credit. Debt ratios as a share of income have risen steadily, posing risks for debt servicing if economic growth slows sharply or interest rates rise rapidly. However, banks are well-capitalised and have sound liquidity, providing a buffer against potential shocks, particularly for low income households. The BOT tightened its loan-to-value ratio measures for mortgages on April 1.

Weak structural factors relative to BBB and A rated peers constrain Thailand’s rating, Fitch said. Thailand’s World Bank Governance score stands at the 44th percentile, compared with the BBB median in the 58th percentile. GDP per capita of $8,059 in 2019 is below the BBB median of $11,595 and A median of $22,914.