Value of Thai export has declined 3.4 per cent year on year over the past 11 months.

The central bank expected the Thai economy to grow 2.5 per cent this year.

Next year, it estimated an economic expansion of 2.8 per cent, based on an assumption that export will grow 0.5 per cent in line with an expected improvement of the global economy.

The value of merchandise exports continued to contract, mainly due to the economic slowdown of trading partners, consistent with deterioration in merchandise imports, manufacturing production and private investment indicators.

Public spending also contracted from both current and capital expenditures as private consumption indicators edged up amid the government’s economic stimulus measures.

However, the tourism sector continued its expansion during the month.

On the stability front, headline inflation edged up from the previous month on the back of higher core inflation and lower contraction in energy prices.

The seasonally adjusted unemployment rate slightly increased while the number of employed persons was unchanged. The current account remained in surplus while the capital and financial accounts posted a deficit from the asset position.

Details of economic conditions in November:

The value of merchandise exports, excluding gold, contracted by 7.7 per cent from the same period last year.

The contraction of exports in almost all categories was due to 1) the economic slowdown of trading partners; 2) the non-obvious recovery in electronic cycle; and 3) the contraction of global crude oil prices, coupled with the temporary maintenance shutdown of some oil refineries, leading to the contraction of petroleum-related products exports, both in terms of prices and quantity.

Additionally, structural changes in production and global trade as a result of trade tensions caused some Thai export items being replaced by Chinese products in the Asean market.

However, exports of agro-manufacturing products continued to expand. As a consequence of the merchandise exports contraction, manufacturing production continued to decline.

The value of merchandise imports contracted by 13.9 per cent from the same period last year, excluding gold while imports value contracted by 15.4 per cent.

The contraction of imports in almost all categories, consistent with softening economic activities, was attributable to 1) imports of raw materials and intermediate goods especially in crude oil, partly due to the maintenance shutdown of some oil refineries; 2) imports of capital goods mainly from turbo-jets and telecommunication equipment; and 3) imports of consumer goods particularly in fishery products due to the high base effect last year.

Private investment indicators continued to deteriorate from the same period last year as a result of weak domestic and external demands and the low rate of capacity utilisation in the manufacturing sector, causing businesses to delay investment.

Consequently, investment in machinery and equipment continued to contract from imports of capital goods, domestic machinery sales, and the number of newly-registered motor vehicles.

Meanwhile, investment in construction declined from permitted construction area for residential purposes, consistent with subdued activities in the real estate sector. However, the permitted construction area for manufacturing purposes continued to grow while the permitted construction area for commercial and other purposes expanded in November.

Public spending, excluding transfers, contracted from both current and capital expenditures. Current expenditures contracted due to purchases of goods and services from disbursement of some national security authorities.

Meanwhile, central government’s capital expenditures continued to contract as the FY2020 budget has yet to be enforced. State enterprises’ capital expenditures contracted slightly, mainly among energy-related agencies.

Private consumption indicators expanded at a slightly higher pace from the same period last year but continued to be on a decelerating trend relative to the first half of the year, in line with softening non-farm income and consumer confidence, together with financial institutions’ tightening of credit standards for auto-leasing loans after a deterioration in credit quality. Meanwhile, the government’s economic stimulus measures continued to support households’ purchasing power to a certain extent.

In November, spending on non-durable goods and services decelerated, after accelerating in the previous month due to the government’s economic stimulus measures. Nevertheless, spending on semi-durable and durable goods continued to contract, especially in vehicle sales.

The number of foreign tourist arrivals continued to expand at 5.9 per cent compared with the same period last year from 1) the exemption of the visa on arrival fee, encouraging more visitors from China, India, and Taiwan; 2) the recovery of the Russian economy and an increase in airline route from Russia to Thailand, supporting more Russian tourists; and 3) the continued expansion of other Asian tourists from Laos and Japan etc.

The number of foreign tourist grew at a slower pace from the previous month while the low base effect from the tour boat incident in Phuket last year fades out.

On the stability front, headline inflation stood at 0.21 per cent, accelerating from last month on the back of lower contraction in energy prices due to higher domestic retail petroleum prices from the previous month, and a slightly increase in core inflation.

The seasonally-adjusted unemployment rate slightly increased while the number of employed persons was unchanged. The current account remained in surplus. The overall capital and financial accounts registered a deficit from the asset position as a result of Thai Direct Investment (TDI) especially in equity, and portfolio investment in debt securities of Thai investors.

Thai Bankers’ Association chairman Predee Daochai said association members and related parties, including the National Interbank Transaction Management and Exchange, have prepared to ensure that digital banking services and related systems have sufficient capacity to cater to the expected rise in transactions during the celebration period.

He added that all related parties have monitored the situation before New Year will continue to do so after that.

He believes that next year all banks will continue to boost their digital banking services as more people prefer to carry out banking transactions online.

Meanwhile, Roengchai Khongthong, Electricity Generating Authority of Thailand (Egat) deputy governor, Transmission System, said Egat, together with the Metropolitan Electricity Authority and the Provincial Electricity Authority, are prepared to deal with any situation this New Year.

He spoke in his capacity as chairman of the committee tasked to improve electricity-system reliability of the three state electricity agencies.

Three of them have also prepared backup plans for any emergency and have staff ready to solve any service disruption on a 24-hour basis, he added.

Business leaders also predict increased challenges in the year ahead with 25 per cent expecting an increase in challenges hiring foreign workers, 26 per cent saying the same for providing or receiving services across borders and 24 per cent saying moving data will become even more of a challenge in 2020.

This finding comes from the latest survey by PwC of more than 1,000 business leaders from all 21 Asia-Pacific Economic Cooperation (APEC) member economies.

Business leaders also had a clear message to Asia Pacific policymakers. When asked which one change to policy would have the most impact on their ability to grow their business, 44 per cent said a reduction in tariffs or more directly a resolution to US-China trade tensions would be the greatest help.

Despite concerns about tariffs and the trade tensions between the US and China, business leaders remain positive about prospects for their own organisations, with 34 per cent “very confident” of revenue growth in the year ahead, little changed from 35 per cent in 2018.

Vietnam continues to top the list for an increase in foreign investment with Australia taking the second position and Singapore third. For the first time since 2015, when PwC began analysing net future investment targets across borders in Asia Pacific, neither China nor the US make the top three.

“Uncertain trade conditions have impacted the relative attractiveness of the US and China in this year’s survey,” said Bob Moritz, PwC’s global chairman. “While countries like Vietnam and Australia are benefitting as companies begin to rethink their footprint and look closely at the increased risks of new trade rules.”

There is also relatively good news on the impact of automation on jobs. More businesses (36 per cent) are creating jobs as a result of automation than are reducing headcount (24 per cent) but the gap is narrower than last year. More businesses also say they are redefining roles and responsibilities as a result of automation.

But while business leaders are creating more jobs they are also struggling to fill them, with 23 per cent saying they are finding it hard to recruit the talent they need. Faced with increasing barriers to movement of labour in some markets, business leaders are now ramping up their investment in upskilling their workforce with 86 per cent saying they will increase the budget allocated to digital skills development in the year ahead.

“Providing the skills to ensure that no one is left behind as technology revolutionises the workplace is one of the biggest challenges we face,” said Moritz.

“Business, policymakers, NGOs and educators must come together as we look to reskill people on a massive scale across industries, the public and private sectors and the whole Asia Pacific region.”

In other findings from the survey a majority of business leaders across Asia Pacific say additional regulation is needed to enhance public trust in the areas of artificial intelligence (72 per cent), cyber security (76 per cent) and privacy (70 per cent).

“Business leaders don’t often call for more regulation but companies are acutely aware of the risk that disconnected or ineffective policies in areas such as AI, cyber security and privacy protection can have on their plans for investment and the trust that consumers have in business,” Moritz added.

“With regulation of AI at an early stage there is a real opportunity for policy makers across Asia Pacific to develop standards that support innovation but also promote inclusive and responsible AI. But the time to act is now and we must ensure that fragmented AI policies don’t become a new digital barrier to progress in the Asia Pacific region.”

The need to move quickly on a coordinated policy framework is reflected in how business leaders are now viewing advanced automation and AI. Thirty seven per cent of business leaders across Asia Pacific say AI and automation is a C-suite priority for them with another 49 per cent saying it is a priority at a division or IT level. Only 12 per cent of Asia Pacific business leaders are not viewing AI and automation as a key factor for their business in the next two years.

“Like other peers in the Asia-Pacific region, Thai businesses will continue to face many challenges in 2020, whether it be ongoing concerns over the US-China trade dispute, political unrest in many parts of the world and the impact of the baht’s continued appreciation on exports and tourism,” Sira Intarakumthornchai, CEO for PwC Thailand, commented.

“Even so, next year we expect to see even greater adoption of technologies such as advanced automation, cloud computing and AI. It’s more important than ever for Thai companies to look at upskilling their workforce, which is a priority for many CEOs and business leaders around the world.”

Find the full report “Doing business across borders in Asia Pacific 2019-2020” at www.pwc.com/apec.