Thailand Microeconomic Weekly Update #49

THAILAND MACROECONOMICS WEEKLY UPDATE

In November, Thailand’s headline inflation dropped to 0.25%, attributed to lower energy and food prices like diesel, pork, and chicken. The Thai Bankers Association plans to keep prime interest rates steady in line with the Bank of Thailand’s Policy Rate, while the US Federal Reserve is expected to start cutting rates next year. Consumer confidence increased to 60.9 due to reduced living costs from government energy and gasoline price cuts, alongside economic stimulus, but further stimulus may still be necessary.

Homebuyer confidence in 2023 declined due to locals’ weakened financial status and hesitancy to invest in high-value items. Informal debt registration data revealed a total debt of 3.31 billion Baht with 68,651 debtors signing up for the scheme. The JSCCIB projected Thailand’s GDP to grow between 2.8-3.3% in 2024, an improvement from the estimated 2.5%-3% growth in 2023. Capital market conditions for the next three months are at 98.60 in the neutral zone, with investors closely monitoring fund flow, the FED policy rate, and government stimulus.

INDUSTRY 

The market is anticipating a key Central Bank Meeting from the FED next week

Tourism

Dusit Thani Public Company Limited (DUSIT)

 Dusit International’s plans to open over 10 new hotels overseas in the next year, leveraging the improving travel demand. Siradej Donavanik, Vice-President of Global Development, highlighted the tourism industry’s recovery post-pandemic with increased international flights and projected cheaper airfares for 2024. Dusit aims to diversify its portfolio by entering new markets in Asia, Europe, and Africa. The group has plans for properties in Japan, Malaysia, Indonesia, Germany, France, and Greece, and intends to expand in Africa, building on its presence in Nairobi, Kenya. Additionally, despite a sluggish economy in China, Dusit has seen benefits from strong domestic tourism there. The company plans to sign five hotels on the mainland next year, on top of 10 existing hotel properties and another 10 in the pipeline.

Thai Airways International Public Company Limited (THAI)

Thai Airways International (THAI) is integrating Thai Smile’s 20 Airbus A320 aircraft into its fleet and continuing operations on nine domestic routes.Thai Smile, a subsidiary of THAI since its inception in 2013, specialized in domestic and short-haul international flights. This integration is part of Thai Airways International’s business restructuring plan. Thai Smile’s passenger services and reservations will transition to Thai Airways from December 16. The Thai Smile ticket and call centers will remain operational until December 31, after which Thai Airways will assume these services. The complete takeover and cessation of Thai Smile operations is scheduled for January 1, 2024.

BANKING 

The Hong Kong Monetary Authority and the Bank of Thailand launched the FPS x PromptPay Link for cross-border QR payments between Hong Kong and Thailand. This service enables travelers to make retail payments using mobile apps by scanning QR codes, providing a fast, secure, and accessible payment method. It’s designed to enhance convenience for travelers and support tourism and economic activities in both regions. The initiative involves collaboration from various stakeholders and is expected to be a catalyst for further financial innovations in the region

SECTORAL UPDATE 

 SET closed the week at 1,380.99 points, up 2.26 points (0=16%) trading value 34,760.77 million baht ($US 984.60 million)

Thailand’s November saw a drop in headline inflation to 0.25%, credited to reduced energy and food prices like diesel, pork, and chicken; meanwhile, the Thai Bankers Association plans to maintain prime interest rates in line with the Bank of Thailand’s Policy Rate, as the US Federal Reserve anticipates rate cuts next year.

Consumer confidence rose to 60.9 due to lower living costs from government initiatives, yet further stimulus might still be necessary, while homebuyer confidence in 2023 declind amid locals’ financial concerns and reluctance to invest in high-value items. Informal debt registration revealed a total of 3.31 billion Baht in debt with 68,651 participants, and the JSCCIB projected Thailand’s GDP growth between 2.8-3.3% in 2024, marking an improvement from the estimated 2.5%-3% growth in 2023. The capital market conditions for the upcoming three months remain neutral at 98.60, with investors closely monitoring fund flow, the FED policy rate, and government stimulus.

Local institutions has been net buyers in this week’s supporting index from foreign selling presure 

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