Thailand 20240906: Outlay, Linchpin, Perfidious
Thailand 20240906: Outlay, Linchpin, Perfidious
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:
Newly Minted PM Calls for Patience
Parliament Greenlights $111 Billion Budget
Casinos Reportedly See Widespread Support
Critics Decry Big Biz Policies Over Public Interest
Major Rail Expansion Over Nine Projects
Tourism on Track for Record Year
August Inflation Edges Up
Pattaya Approves Monorail Project
Koh Chang and Southern Land Bridges
Gov’t Committed to B400 Minimum Wage Hike
Chinese Goods Influx Hamstrings Local Industry
Thaksin's Economic Vision Misses the Mark
Baht Weakens on Regional Economic Concerns
Production Pivots to Streaming As TV Revenue Drops
New Logistics Hub Launches at Suvarnabhumi
Porsche to Build Ultra-Luxury Residential Tower
Langham Returns with $165M Riverside Hotel
Study Ranks Local Husbands Most Unfaithful
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Newly Minted PM Calls for Patience
Paetongtarn Shinawatra is asking for public understanding as she finalizes her administration's policies. Her first statement was largely a continuation of predecessor Srettha Thavisin's agenda, including investment and trade initiatives, although adjustments are planned for the digital wallet scheme. Despite cabinet criticism, she says that she remains focused on delivering results.
Read more: Thai PBS World (PM Request), Bangkok Post (Policy Continuity)
Parliament Greenlights $111 Billion Budget
Thailand’s parliament approved a 3.75 trillion baht ($111 billion) budget for the upcoming fiscal year which is expected to boost state spending and stimulate an economic recovery. The budget includes a controversial $14 billion cash handout program and funding to address sluggish exports and household debt. More than 300 billion baht in government spending is expected to enter the economy in the final quarter of 2024, with investments in the digital wallet scheme and Vayupak Fund supporting growth projections of 2.7%-3%.
Read more: Yahoo Finance (Budget Approval), Bangkok Post (Spending)
Casinos Reportedly See Widespread Support
Thailand is advancing plans for entertainment complexes featuring casinos, backed by 80% public support from a recent hearing. The government wants to boost state revenues and better compete with neighboring countries like Cambodia and Singapore. Companies vying for licenses must meet high capital requirements and pay significant fees. The plans, designed to attract local and foreign gamblers, face regulatory hurdles but would be a major shift in Thailand's stance on gambling and are not without their detractors.
Read more: Bangkok Post (Govt Plan), AGBrief (Public Approval), Nation Thailand (Economic Impact), Thai PBS (Counterpoint)
Critics Decry Big Biz Policies Over Public Interest
A recent Bangkok forum cast light on concerns that current economic policies disproportionately benefit the largest corporations at the expense of SMEs and the general public. Critics argued that close ties between political and corporate leaders develop monopolies, stifling free and fair competition. The digital wallet scheme, in particular, is under the microscope for potentially favoring big firms unless explicitly directed towards supporting smaller businesses.
Read more: Bangkok Post
Major Rail Expansion Over Nine Projects
The Ministry of Transport is set to propose nine railway projects, requiring a total investment of 661 billion baht, to the cabinet next month. Initiatives include the second phase of the Thai-Chinese high-speed train system, extending 357 km from Nakhon Ratchasima to Nong Khai, and six double-track rail routes. The proposal also includes two suburban Red Line extensions in Bangkok. Construction on the high-speed rail portions are expected to finish by 2028.
Read more: Bangkok Post
Tourism on Track for Record Year
The Tourism Authority is projecting 35.6 million foreign arrivals in 2024, generating an estimated 1.8 trillion baht in revenue. A surge in visitors is expected in the fourth quarter, with 12.22 million tourists forecast to contribute more than 650 billion baht. Despite regional competition, sustained international demand and increased flight capacity are helping the sector meet its potential.
Read more: Khaosod English (Projections), Nation Thailand (Revenue), Travel and Tour World (Tourism Recovery)
August Inflation Edges Up
August saw a 0.35% year-on-year inflation increase, mostly driven by rising prices of fresh produce due to flood damage. The uptick in food costs, particularly for rice and ready-to-eat meals, contributed significantly to the rise. With core inflation averaging 0.44% for the first eight months of 2024, analysts expect further pressure in September due to rising diesel prices and ongoing impacts of the flooding.
Read more: Bangkok Post
Pattaya Approves Monorail Project
Pattaya City has approved an 11-kilometer monorail project from Thap Phraya intersection to Nong Mai Kaen. The 12-station system, spaced 800-1,000 meters apart, should go a long way to alleviating traffic congestion and boosting urban development. Despite the high cost, officials view the monorail as the most efficient solution to improve city transportation infrastructure while minimizing environmental impact. Construction is expected to begin in 2027, following public-private partnership arrangements and land expropriation.
Read more: Bangkok Post
Koh Chang and Southern Land Bridges
Two major infrastructure projects are gaining momentum. The Koh Chang bridge project, connecting the mainland to the island, has received broad public support with four potential routes under consideration. the government is also in the process of drafting legislation for the 1-trillion-baht Land Bridge megaproject to link the Andaman Sea and the Gulf of Thailand.
Read more: Bangkok Post (Koh Chang Bridge), Bangkok Post (Southern Land Bridge)
Gov’t Committed to B400 Minimum Wage Hike
The administration remains steadfast in its plan to implement a 400-baht minimum wage across select sectors by October 1, 2024, making good on a key election promise. Initially targeting industries such as tourism and hospitality, the policy (as planned) will gradually increase wages to 600 baht by 2027. Despite industry pushback about negative impacts on small businesses, the government is moving forward with the plan, saying it is necessary to improve workers' livelihoods and stimulate consumer spending.
Read more: Bangkok Post
Chinese Goods Influx Hamstrings Local Industry
Growth in cheap Chinese imports is causing headaches for local businesses, reportedly leading to the closure of nearly 2,000 factories in 2023. While Chinese investments have helped grow sectors like electric vehicles and e-commerce, many other domestic enterprises are fighting to remain competitive. In response, the government is introducing measures like minimum local component requirements. Concerns are also rising about Thailand being used as a transshipment hub to circumvent U.S. and European tariffs.
Read more: VOA News
Thaksin's Economic Vision Misses the Mark
Former PM Thaksin Shinawatra's recent economic proposals, while bringing attention to necessary reforms, overlook structural challenges facing the economy. Traditional stimulus measures like fiscal and monetary policies are considered inadequate to drive significant growth. Notably absent from his vision were major initiatives such as the Land Bridge and Eastern Economic Corridor, which could boost long-term development. His ideas on restructuring household debt and legalizing the underground economy, while intriguing, need further refinement to be effective.
Read more: Bangkok Post
Baht Weakens on Regional Economic Concerns
The Thai baht fell 0.5% against the U.S. dollar, leading regional currency declines due to concerns over China's sputtering economy. Analysts say they foresee further depreciation as the U.S. Federal Reserve may cut interest rates less than anticipated. Both Kasikorn Research and Tisco Economic Strategy Unit are projecting the baht to weaken to 34.5 by year-end, with potential for further decline if Donald Trump wins the U.S. presidential election, potentially strengthening the dollar.
Read more: Bangkok Post
Production Pivots to Streaming As TV Revenue Drops
With TV advertising revenue dropping 2% in the first half of 2024, Thai production companies are increasingly turning to streaming platforms to try and diversify income streams. Ad spending on TV now accounts for 50% of budgets, down from 65% a decade ago. Companies like The ONE Enterprise and TV Thunder are exploring global content distribution and co-production deals. Original content, including LGBTQ-focused programming, is being developed to capture new audiences and compete internationally.
Read more: Bangkok Post
New Logistics Hub Launches at Suvarnabhumi
Airports of Thailand Ground Aviation Services (AOTGA) has unveiled a “Multimodal Transportation Centre” at Suvarnabhumi Airport to facilitate logistics across Cambodia, Laos, Myanmar, and Vietnam. The facility integrates land, rail, sea, and air transport with centralized customs clearance. AOTGA expects the centre to handle 40,000-50,000 tonnes of cargo in fiscal 2025, generating 80 million baht in revenue, with growth driven by rising e-commerce demand.
Read more: Bangkok Post
Porsche to Build Ultra-Luxury Residential Tower
Porsche has unveiled plans for the Porsche Design Tower Bangkok, a 21-storey luxury residential building in the Sukhumvit area. The project, in partnership with Ananda Development, will feature 22 high-end Sky Villas priced between $15 million and $40 million. Amenities include private car garages, a spa, pool, gym, and social lounges. Scheduled for completion by 2028, this development follows similar projects in Stuttgart and Miami, blending Porsche's iconic design philosophy with functional luxury living.
Read more: Euronews
Langham Returns with $165M Riverside Hotel
Langham Hospitality Group plans to open a 6-billion-baht luxury hotel along Bangkok’s Chao Phraya River in 2026, marking a return after its 12-year hiatus. The 78-room Langham Customs House will occupy a heritage building in Bangkok's Bang Rak district nearly opposite IconSiam. LHG wants to compete with other luxury riverside hotels, with room rates expected to range from 20,000 to 30,000 baht nightly.
Read more: Bangkok Post
And now for something completely different.
While the focus of The Memo is on news for business, we often wrap up with a less business-focused article. Watercooler talk this week was on a review from one of Thailand’s newer airports serving new beach hotspots, good news as a popular tourist hotspot reopens for visitors, and a rising trend of Chinese parents opting out of the competitiveness of Chinese schools for a Thailand-based education. We close with this interesting cultural piece:
Study Ranks Local Husbands Most Unfaithful
According to the World of Statistics, Thai husbands rank as the most unfaithful globally, based on various studies on sexual behavior and infidelity. The findings draw from academic journals, surveys like those conducted by Durex, and media reports. Infidelity is a leading cause of 20-40% of divorces, with men reportedly being less likely to divorce after an affair. While the study is demonstrative of trends, the article stresses that these numbers should be viewed as a broad overview and experts caution against treating these figures as definitive.
Read more: Nation Thailand
That’s it for this week, thanks for reading!
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