Thailand Weekly Economic Update

The cabinet has approved a draft fiscal 2024 budget and a mid-term financial plan, with an estimated annual GDP growth of 5.3%. The World Bank and ADB have revised Thailand’s economic growth forecasts for 2023, downgrading it from 3.4% to 2.5% due to export contraction, reduced government spending, and lower investment. Thai workers’ daily minimum wage is set to increase from 2 to 16 baht starting Jan 1, 2024, with varying rates across provinces, representing an average increase of 2.4%. Thailand’s Industry Sentiment Index (TISI) increased to 90.9 points in November, largely due to tourism recovery and state measures to alleviate financial burdens.

Thailand’s headline inflation rate fell to 0.25% in November, largely due to lower energy and food prices. The Thai Bankers Association has maintained steady prime interest rates, while consumer confidence rose to 60.9 from 60.2 in October. However, home buyer confidence in the index for 2023 fell due to a weakened financial status among locals. The latest registration data for informal debt shows a total debt of 3.31 billion Baht, with 68,651 debtors signing up for the visa exemption scheme.

Thailand’s Digital Competitiveness ranking for 2023 surged by five places, landing the country at 35 among 64 economic territories, indicating progress in this domain. Despite economic challenges, Thailand’s exports showed resilience, with October 2023 witnessing exports amounting to US$23.58 billion (828.22 billion Baht), marking an 8% increase.

The Thai Digital Economy and Society Ministry has announced a major initiative to promote smart city development, offering a 50% corporate tax reduction for three years. Unveiled by DES Minister Prasert Chanthararuangthong at the “Thailand Smart City 2024” seminar, this policy aims to transform provincial hubs into smart cities focusing on areas like transport, energy, and the environment. Companies investing in these projects will benefit from the tax break and additional incentives like tax waivers on digital purchases in smart cities. This move is part of Thailand’s broader strategy to drive economic growth and sustainable urban development, leveraging technologies like the Internet of Things and Big Data.

The Cabinet sanctioned financial aid of up to 20,000 baht for farming families while economic indicators showed mixed trends: the Thailand Industry Sentiment Index hit a low of 88.4, and the Commerce Ministry targeted a 1.99% export growth for 2024, aiming at around US$288 billion. Credit card users will see higher minimum payments in the coming year, while labor demand surged by 10.8%, particularly in the recovering travel sector. The Bank of Thailand’s reserves dipped slightly from $214.1 billion to $212.8 billion by November 10

Prime Minister Srettha Thavisin announced plans for a May launch of a digital wallet scheme, granting a one-time 10,000-baht benefit to eligible citizens aged 16 or older with specific income and bank account criteria, to be spent within six months.

Coming Soon.

Coming Soon.

As part of the government’s Quick Win program, Phumtham Wechayachai, Thailand’s minister of commerce, has announced price reductions of up to 87% for more than 150,000 goods and services. The price cut will be available on a variety of goods and services until the end of December.

During its weekly meeting on September 26, 2023, the cabinet resolved to allocate 1.024 billion baht to support measures and promote the purchase and manufacturing of electric vehicles in Thailand. The fund will be funded from the central budget’s “emergency or necessary expenditure.” Under the EV 3.0 policy, EV importers receive tax incentives, and the cost of electric vehicles is subsidized by up to THB 150,000 per vehicle. This policy will expire on December 31, 2023.