Thailand 20240809: Dissolved, Trustworthy, Sincere
Thailand 20240809: Dissolved, Trustworthy, Sincere
Mekong Memo Thailand Weekly: Business, politics, finance, trade & legal news.
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Here is your Mekong Memo Thailand for this week.
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Headlines:
Move Forward Dissolved by Constitutional Court
Cannabis Policy Reversal Averted
Government Assures Security of Digital Wallet App
Electric Vehicle Sales Surge in Thailand
Policy Rate Expected to Hold Steady
Bangkok Bank Explores Virtual Banking
Foreign Investment in Thailand to Increase
New Water Management Plan
Health Worker Recruitment Plan Announced
Serious Aviation Incidents Rise Post-Covid
Thai Truckers Face Chinese Competition
Economists Warn of Potential 'Lost Decade'
Condo Launches Below Projections
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Move Forward Dissolved by Constitutional Court
Thailand's Constitutional Court unanimously ordered the dissolution of the progressive Move Forward Party for advocating reform of the lèse majesté law. The ruling bans party executives from politics for 10 years but allows MPs to join a new party. This decision has revived concerns about democratic regression and political stability. Move Forward, which won the most seats in the 2023 election, plans to regroup under a new banner and continue its reform agenda through peaceful means.
Read more: CBC (court decision), Reuters (party response), Asia Times (analysis)
Cannabis Policy Reversal Averted
Thailand's government backtracked on plans to recriminalize cannabis after widespread protest from the industry and activists. The country legalized cannabis in 2022, becoming the first in Asia to do so. The new administration first sought to reverse the policy but has now agreed to regulate rather than ban the substance. This decision will preserve and protect a rapidly growing industry estimated to be worth over $1 billion by 2025.
Read more: Salon
Government Assures Security of Digital Wallet App
The Ministry of Digital Economy and Society insists that personal data registered via the Thang Rath application, used for the digital wallet handout program, is for sure 100% totally secure. The app was developed with “high-security protection against cyberattacks” and complies with Personal Data Protection Commission standards. Authorities say they are watching for potential cybercrime activities and countering misinformation related to the program. You should definitely trust in their competence.
Read more: Bangkok Post
Electric Vehicle Sales Surge in Thailand
Thailand's electric vehicle market is booming, with EV sales skyrocketing to 76,000 units in 2023 - a nearly eight-fold increase from the year before. This surge pushed EVs to 12% of all vehicles sold, with the market share rising to 14% in Q1 2024. The Electric Vehicle Association of Thailand is forecasting 2024 sales to double again to 150,000 units, 20% of the market. This quick growth is being driven by government incentives and an influx of Chinese automakers like BYD, Great Wall Motor (GWM), and Hozon establishing local production facilities.
Read more: Bangkok Post (Economic Impact), Business Korea (Tesla), PRNewswire (Market Growth)
Policy Rate Expected to Hold Steady
Analysts are saying that the Bank of Thailand will likely maintain its policy rate at 2.5% in its upcoming meeting. Inflation is slowly returning to the target range, with July's headline inflation at 0.83% year-on-year, up from 0.62% in June. The central bank's target range is 1-3%. Maybank sees a rate cut to 2.25% next year, maintaining GDP growth projections of 2.4% in 2024 and 2.8% in 2025. Economists are calling for more government stimulus.
Read more: Bangkok Post (Rate Forecast), Bangkok Post (Inflation)
Bangkok Bank Explores Virtual Banking
Bangkok Bank is considering virtual banking opportunities as it shifts towards digital services. The Bank of Thailand will begin accepting virtual bank license applications in September. Three business consortiums have already expressed interest in applying. VGI, an advertising and financial service arm of BTS Group, is also exploring virtual banking through partnerships. The moves come in a time of changing customer behavior and increased adoption of digital finance solutions.
Read more: Bangkok Post
Foreign Investment in Thailand to Increase
CIMB Thai says that increased foreign direct investment in Thailand due to global manufacturing relocation trends. The bank is engaging with large corporate companies seeking $300-500 million in financial support for Thai investments. Main investment themes include sustainability, artificial intelligence, food security, and consumer behavior. Thailand remains attractive for foreign investors using it as a production base for re-exports, despite lower GDP growth compared to regional peers.
Read more: Bangkok Post
New Water Management Plan
The Thai government has announced a 548.4 billion baht water management plan for the next three years. The plan is expected to provide 4.5 million households with clean water access, connect 12 million rai of non-irrigated land to irrigation channels, and increase total water reserves to 4.7 billion cubic meters. Major projects projects include constructing new dams, improving rural irrigation channels, and developing water retention zones. The initiative will help mitigate flood risks and also improve drought resilience.
Read more: Smart Water Magazine
Health Worker Recruitment Plan Announced
The Public Health Ministry will submit a 10-year plan to increase the number of domestic healthcare workers. The plan is to add 31,074 doctors, 124,558 nurses, 9,800 pharmacists, 18,169 Thai traditional medicine practitioners, and 36,993 public health workers over the next ten years. Strategies include increased nurse recruitment, better work benefits, and the return of retired teaching nurses back to work. The initiative is much needed as there is a healthcare worker shortage that isn’t exactly befitting Thailand's ambitions as a wellness and medical hub.
Read more: Bangkok Post
Serious Aviation Incidents Rise Post-Covid
Thailand reported 11 "serious incidents" involving aircraft in 2023, up from two in 2021 and six in 2022. The increase comes along with the post-pandemic surge in air travel demand. Most incidents involved commercial aircraft, with birdstrikes being the most reported incident. Despite the rise in serious incidents, the number of aircraft accidents dropped to two in 2023 from four in 2022, continuing a downward trend since 2018.
Read more: Bangkok Post
Thai Truckers Face Chinese Competition
Local freight truck operators in are claiming that business is suffering due to an influx of Chinese trucks and operations of Chinese warehouses using Thai nominees. The Land Transport Federation of Thailand estimates Chinese trucks account for 1% of total trucks in Thailand, with numbers expected to increase annually. The federation is seeking government intervention to protect local operators from “price dumping” and “unfair competition.” It is not clear what any of those words mean in this context.
Read more: Bangkok Post
Economists Warn of Potential 'Lost Decade'
SCB EIC, a research center under Siam Commercial Bank, warns that Thailand's economy might be entering a "lost decade" similar to Japan's experience in the 1990s. The center is pointing to prolonged low economic growth and a loss of confidence from the public as indicators. Thailand's post-pandemic economic recovery ranks 162nd out of 189 economies, with GDP growth expected to be around 2.5-3% this year, compared to higher averages in previous years.
Read more: Bangkok Post
Condo Launches Below Projections
New condo launches in Greater Bangkok are expected to fall short of projections due to weak demand and an economic slowdown. Only 8,674 units were launched in the first half of 2024, a nearly 50% drop from the same period last year. Developers found sales in the second quarter were not as strong as expected, leading to revised projections of no more than 25,000 new units for the year, down from earlier estimates of 30,000-35,000 units.
Read more: Bangkok Post
That’s it for this week, thanks for reading!
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