At ‘Thailand Focus 2022: The New Hope’, the annual flagship event recently organized by the Stock Exchange of Thailand (SET), Minister of Finance Arkhom Termpittayapaisith, Bank of Thailand Governor Dr. Sethaput Suthiwartnarueput, and leading business executives took the stage to create confidence in Thailand’s economy. The event was attended by 154 international investors from 71 institutions.
SET President Dr. Pakorn Peetathawatchai said in his welcome remarks that this year’s event demonstrated the resilience of the Thai economy and capital market in withstanding challenges, successfully recovering from the pandemic, and adapting to new opportunities. New businesses for the new economy and global trends are created as all have learned lessons and adapted with sustainability principles in mind.
In the opening speech titled “Thailand’s Economic Reopening and Enhancing Competitive Advantage”, Minister Arkhom stressed Thailand’s economic resilience despite the COVID-19 pandemic and geopolitical tensions that push up commodity prices.
“Despite fears of world recession, our economy will remain strong with stability, both fiscal and financial,” he said, adding there is an ample room for more stimulus measures and transform the economy in the post-pandemic era.
As of June, Thailand’s public debts stood at 61.06 percent of GDP, well below the 70 percent ceiling. As a plus, borrowing cost remains historically low, facilitating the government in financing the debt.
Minister Arkhom pointed out the opportunities to adjust policies to address social disparity and climate change impacts. More focus has been put to transform the economy to be more inclusive, balanced, and environmental-friendly, with Bio-Circular-Green Economy (BCG) and commitment to achieve net zero emissions by 2065 at the center.
To create more growth in the future, the government will emphasize four areas: 1) continuous investment in physical and non-physical infrastructure; 2) acceleration of Eastern Economic Corridor (EEC) with private sector participation; 3) green growth in all sectors; and 4) financial resources mobilization.
In his keynote address “Normalizing Policy to Ensure a Smooth Take-off”, Governor Sethaput stressed the need for “gradual and measured” approach based on holistic and integrated monetary and financial policies, under the policy objective to ensure a smooth takeoff and prevent risks that come along the way.
“By “gradual”, we don’t see the need to undertake aggressive role or large rate hike in policy meetings. It doesn’t fit with our circumstances. It doesn’t fit with our conditions. “Measured” means policy decision will be calibrated given the economic conditions that prevail at the time,” he said.
Meanwhile, inflation is high and expected to remain well above the target until the middle of next year.
Governor Sethaput said that the monetary policy is not behind the curve. Specifically, the Monetary Policy Committee (MPC) raised the interest rate even when the economy had not yet returned to the pre-COVID level earlier than most countries. Moreover, inflation was totally driven by supply side constraints not demand side pressure, indicating a low chance of wage price spiral.
“Aggressive rate hikes, rapid normalization might make senses in some countries. But the right policy response is country specific and should reflect the nature of inflation in the country, the cyclical position of the country, where you are in the economic cycle, and the structural features of the economy,” he concluded.
Bangkok Governor Dr. Chadchart Sittipunt gave a speech on “Reopening Bangkok”, where he elaborated the policies that will make the capital city more attractive for both residents, investors and visitors.
He said that Bangkok is a wise choice to locate businesses, given its low cost of living compared to some Asian cities, greater mobility, multicultural society and long history that will support work-life balance, as well as other supporting facilities. He vowed to increase green space and deal with corruption and problematic business procedures. New towns linking Bangkok and EEC are envisioned to reap EEC benefits.
“Strengthening Thailand Investment Opportunities in Strategic Industries” panel
Dr. Ratchanee Wattanawisitporn, Executive Director of Foreign Investment Marketing Division, Board of Investment, elaborated more on BCG model designed to be Thailand’s main economic base that will create unlimited opportunities and generate USD 120.81 billion (THB 4.4 trillion) over the next 6 years. Electric vehicle (EV) is another focus area, with the 30:30 EV Vision to achieve 30 percent of EV production in 2030.
Federation of Thai Industries (FTI) Vice Chairman Wiwat Hemmondharop said that the FTI eyes strengthening the economy by leveraging industrial knowhow to lift the agricultural sector to another level. The sector contributes 10 percent of GDP but employs 22 percent of labor force, while the industrial sector contributes 32 percent of GDP and employs 30 percent of labor force.
He said that agricultural products accounted for only 6 percent of Thailand’s exports but the sector shows opportunities thanks to plant varieties, while Thai manufacturers are crossing over to next-gen industries that include S-Curve, BCG and those dealing with climate impacts.
Thai industrialists are also eager to see Thailand as the center of EV production and see huge
opportunities arising from BCG, electronics, medical tourism and robotics.
Frasers Property (Thailand) Country Chief Executive Officer Thanapol Sirithanachai said that due to the Zero-COVID policy in China, Chinese investors are moving out to find location that can support their supply chain. Thailand comes third in terms of warehouse location after Singapore and the US, and co-chain facilities that incorporate robotics and house canteen and sport facility are drawing these investors.
“Dynamic Growth in the Global Food Tech Industry” panel
Charoen Pokphand Foods pcl (CPF) Chief Executive Officer Prasit Boondoungprasert emphasized the need for food companies to embrace technology and innovation, as that will redefine the industry and ensure sufficient food for global population.
“The only way to remain competitive is to adopt all technology and innovations available…. Personally, I think we can feed them all because of technological and genetic improvement,” he said.
Betagro pcl Chief Executive and President Vasit Taepaisitphongse said that his business group has adopted IoT in the upper value chain and robotics in various stages, which supports production, ensures safety and prevents disease transmission. Betagro is exploring new applicable technology and anticipates the application of more agricultural biotechnology that supports molecular markers, molecular diagnostics and others.
“All consumers want food safety and transparency. And blockchain and other innovations can add value to our value chain,” he said.
Mega Lifesciences pcl (MEGA) Chief Executive Officer Vivek Dhawan pointed out that all consumers’ concerns about climate and food especially when global population lives longer and non-communicable diseases remain life-threatening as ever. As consumers are concerned about animal health and their own health, that paves way for plant-based food and other products that will make them healthy and are better for the environment. (NNT)
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