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We monitor and curate business news for informed decision makers who need to know what is happening in the Mekong subregion of Southeast Asia. Cambodia (Monday), Myanmar (Tuesday), Laos (Wednesday), Vietnam (Thursday), and Thailand (Friday).

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Thailand

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Mekong Memo Thailand Weekly: Business, politics, finance, trade & legal news.

Oct 27, 2023

We monitor and filter the very best and most insightful stories from Southeast Asia directly to your inbox every weekday.

By reviewing a wide variety of media including legal, financial and other relevant industries along with government and NGO sources, we are able to sift through the noise and bring you only what we believe to be relevant to an informed observer of Thailand business news.

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Here is your Mekong Memo Thailand for the week of October 27, 2023:

Headlines:

China's Economic Growth a Boon for Thailand

Thailand Revs Up to Become the EV Hub of Asia

National Shipping Line to Boost Maritime Trade

LNG Boom Imperils SE Asian Green Transition

Ministry to Raise Minimum Wage by December

TG Sees Full Bookings to Europe and Aus, China Lags

Aviation Market to Welcome 5 New Players

Top 5 Thai Fintech Startups to Watch

Bangkok Single Detached House Market Strong

Is the “Green Economy” a Greenwash?

Race Against Time to Address Aging Crisis

Young Entrepreneurs Preserving Ancestral Homes

China's Economic Growth a Boon for Thailand

China's Q3 GDP growth of 4.9% exceeded market expectations, signaling a robust economic rebound that could benefit Thailand and other Asian economies. Analysts anticipate additional stimulus measures from Beijing later this year to sustain this momentum. While global financial institutions have upgraded China's growth estimates, the IMF has slightly downgraded its outlook due to challenges in the property sector. Nevertheless, the ripple effects of China's economic performance could positively impact sectors like manufacturing and petrochemicals in Thailand.

Read more: Bangkok Post

Thailand Revs Up to Become the EV Hub of Asia

Thailand is aggressively courting Chinese electric vehicle (EV) makers as part of its broader strategy to attract 1 trillion baht (US$28 billion) in foreign investment by 2027. A newly established Special Operation Centre is working to secure high-potential investors in strategic industries, including EVs. The nation has already seen a 347% increase in foreign direct investment in the automotive sector, reaching nearly 100 billion baht (US$2.8 billion) in 2022. New incentive packages, dubbed "EV 3.5," are in the pipeline to maintain this momentum.

National Shipping Line to Boost Maritime Trade

The Transport Ministry is exploring the creation of a national shipping line to enhance maritime trade. A feasibility study has been conducted, and options for running the company as a state enterprise or a public-private partnership are under consideration. The focus will initially be on eight domestic routes, three of which are not currently served by private companies. The venture is expected to handle about 2% of Thailand's export and import trade value, starting with four container ships.

Read more: Bangkok Post

LNG Boom Imperils SE Asian Green Transition

Thailand has surged to eighth place globally in liquefied natural gas (LNG) imports, with a 25% increase compared to 2022. This growth contrasts with declines in other major LNG importers and has implications for Southeast Asia's energy transition. Natural gas accounts for 67% of Thailand's electricity generation, significantly higher than the regional and continental averages. While the country has reduced coal emissions, the gains have been offset by increased emissions from gas-fired power, raising alarms for climate advocates.

Ministry to Raise Minimum Wage by December

Thailand's Ministry of Labour is contemplating an increase in the daily minimum wage to a cap of 400 baht, up from the current range of 328-354 baht (depending on province). The final rate will depend on economic conditions and inflation in individual provinces. The move aims to balance competitiveness with other ASEAN countries while considering the Pheu Thai party's electoral promise of a 600 baht/day minimum wage within four years.

TG Sees Full Bookings to Europe and Aus, China Lags

Thai Airways reports full bookings on its European and Australian routes for Q4, defying concerns over global economic slowdown and the Israel-Hamas conflict. However, the Chinese market lags, filling only 60% of capacity, possibly due to economic issues and recent security incidents in Thailand. The airline's financial performance is improving, with a current cash flow of 51 billion baht, and it expects to exit its rehabilitation plan by next year.

Read more: Bangkok Post

Aviation Market to Welcome 5 New Players

Thailand is set to launch five new airlines in 2024, capitalizing on its growing aviation market estimated to be worth 320 billion baht. The airlines—Really Cool Airlines, P80 Air, Pattaya Airways, Siam Seaplane, and Landarch Airlines—have received Air Operating Licenses and are awaiting final approval. They aim to serve niche markets, from secondary cities to high-end seaside resorts. Really Cool Airlines plans to offer door-to-door luggage delivery, while P80 Air will focus on secondary cities in China. Pattaya Airways aims to meet the rising cargo demand from e-commerce operators and Siam Seaplane is focusing on water landings.

Top 5 Thai Fintech Startups to Watch

Thailand's fintech sector is booming, thanks to supportive government policies and a growing digital ecosystem. The Bank of Thailand has recently introduced a licensing framework for virtual banks, and several startups have made significant strides. Ascend Money aims for half of the Thai population to use its services by 2025. Opn has expanded its reach to multiple countries and secured $120 million in funding. Roojai has become a full digital insurance company, Rabbit Care focuses on Buy Now, Pay Later plans, and Finnomena reached $1 billion in assets under management.

Bangkok Single Detached House Market Strong

The market for single detached houses in Greater Bangkok has shown remarkable resilience, with a consistent increase in the price index for five consecutive quarters. Despite a slight dip in sales in the first half of 2023, the demand remains strong, outperforming other low-rise housing options. Factors such as rising construction costs have influenced the price index, but promotional tactics like free add-ons and expense waivers have been effective in boosting sales.

Read more: Bangkok Post

Is the “Green Economy” a Greenwash?

Thailand's green economy initiatives are facing backlash from environmentalists who argue that the government's plans disproportionately benefit major industries, often the biggest polluters. Critics claim that the focus on carbon credits and green finance serves to perpetuate existing environmental issues rather than address them at the root. The government's approach is also criticized for sidelining local communities and small farmers, who are most affected by environmental degradation. These concerns come as Thailand prepares its environmental policies for the upcoming COP28 conference.

Race Against Time to Address Aging Crisis

Thailand faces a demographic challenge as it ages before achieving economic prosperity. With 14% of its population already over 65 and a GDP per person of just $7,000, the country is grappling with a dwindling labor force and rising healthcare costs. To mitigate this, Thailand needs a multi-pronged approach that includes optimizing its labor force through education, fostering innovation in specialized industries, and possibly opening doors to immigration. The country also needs to invest in healthcare infrastructure and community-based programs for the elderly.

Young Entrepreneurs Preserving Ancestral Homes

In a bid to preserve Thailand's architectural heritage, and maybe make a buck, young entrepreneurs are converting their ancestral homes into chic hotels and restaurants. These innovative projects range from a century-old general store in Chiang Mai turned into a restaurant, to a beachfront vacation home in Hua Hin transformed into a luxury resort. The trend not only revitalizes historic buildings but also introduces modern amenities, creating a unique blend of the old and new. This movement is seen as a creative solution to the country's limited conservation expertise and funding.