Thailand 20240920: Riveting, Engrossing, Avant-garde
Thailand 20240920: Riveting, Engrossing, Avant-garde
Mekong Memo Thailand Weekly: Business, politics, finance, trade & legal news.
Business stories from Southeast Asia directly to your inbox every week.
The Mekong Memo is proudly presented by:
Horton International is your premier partner for executive search in Southeast Asia. Whether you're a small startup or a global corporation, our reliable and effective recruiting solutions are tailored to meet your unique needs. With extensive experience and offices across the region, we excel at overcoming recruitment challenges and securing top talent for your organization.
Click here to learn how Horton can make your life easier.
Here is your Mekong Memo Thailand for this week.
As a reminder, you can adjust which country versions of The Memo you would like to receive by adjusting your settings in here.
Headlines:
Public Confidence in Government Tests Lows
Industrial Sentiment Declines
Concerns Grow as Baht Strengthens
Competition Heats Up for Virtual Bank Licenses
High Electricity Prices Tied to Monopoly Issues
Mortgage Rejections Slow BKK Condo Launches
Drone Research and Training Center for South
Costs Push Restaurants to Adapt for Survival
U.S. and China Bipolarity Stabilizes Asia
Spending to Surpass Pre-Pandemic Levels in 2024
Infrastructure: Rail, Smart Cities, and Transit
Pattaya’s Growth Stifled by Half-Hearted Policies
The Changing Face of Commercial Real Estate
Pet Humanization Drives Big Gains
Aviation: India-Phuket, New Phattalung Airport
Tourism Looks to Diversify and Innovate
Woman Survives 2-Hour Python Battle
Refer three friends and receive a full paid subscription to The Memo for one month absolutely FREE:
Public Confidence in Government Tests Lows
A recent Nida poll shows that the majority of Thais have little confidence in the government led by Prime Minister Paetongtarn Shinawatra. Of those surveyed, 35.4% expressed low confidence, and 22.5% had no confidence at all. Main concerns include the government's ability to keep political promises, the prime minister’s lack of experience, and fears of excessive influence from her father, Thaksin Shinawatra. Many respondents also voiced worry about corruption, mismanagement, and political instability.
Read more: Bangkok Post
Industrial Sentiment Declines
Industrial sentiment index dropped to 87.7 in August from 89.3 in July, driven by weak domestic demand, high production costs, and flood damage. The Federation of Thai Industries (FTI) reported a 24% year-on-year decline in car sales, made worse by tightened bank lending. The rise of the baht to a 19-month high has also put a crimp on exports. The FTI asked for government support to address the impact of flooding and stimulate economic growth.
Read more: Bangkok Post
Concerns Grow as Baht Strengthens
The baht has pushed to an 18-month high, raising concerns about its impact on exports, which are expected to be hampered. Commerce Minister Pichai Naripthaphan called for the central bank to cut interest rates and boost liquidity, another complaint in a prolonged disagreement with the Bank of Thailand. The government wants more action, while the central bank remains cautious, projecting only 2.6% growth for 2024.
Read more: Reuters (Strong Baht), Bangkok Post (Baht Appreciation), Thai Examiner (Commerce Minister’s Critique)
Competition Heats Up for Virtual Bank Licenses
With the Bank of Thailand's application deadline for virtual bank licenses approaching, five major business groups have expressed interest. Gulf Energy, in partnership with Krungthai Bank and PTT Group, has already applied, wanting to target underbanked and unbanked customers using new technology. Other contenders include Bangkok Bank, CP Group’s TrueMoney, and SCB X, each with their own strategies for expanding digital banking services.
Read more: Bangkok Post
High Electricity Prices Tied to Monopoly Issues
Thailand’s electricity market is dominated by a state-controlled monopoly, which includes the Electricity Generating Authority of Thailand (EGAT). This centralization, along with inflexible power purchase agreements (PPAs), has led to high prices for consumers. Contracts guarantee profits for power companies, while consumers bear the brunt of rising costs, especially from natural gas dependency. Calls for reform focus on renegotiating PPAs, reducing guaranteed purchase volumes, and using more renewable energy to improve efficiency and lower costs by 10-20%.
Read more: Bangkok Post
Mortgage Rejections Slow BKK Condo Launches
A high mortgage loan rejection rate in the first quarter of 2024 has caused a slowdown in new condominium launches in Greater Bangkok. Developers have reduced new launches by 39% year-on-year as household debt continues to pressure the housing market. Home loan approval ratios remain low, recovering slightly to 25% in Q2 2024. As a result, total new condo units launched in 2024 are expected to fall below 20,000, well below the pre-pandemic average of 50,000-60,000 units.
Read more: Bangkok Post
Drone Research and Training Center for South
Prince of Songkla University (PSU) will open the South's first-ever drone research and training center next month, led by PSU's Faculty of Engineering. The center, known as PSU-UAV, will offer training on unmanned aerial vehicles (UAVs), promote drone applications in agriculture, healthcare, and infrastructure, and conduct UAV research and development. The center will partner with external organizations like PSU Science Park and Aero Technology Industry Co Ltd, and will offer certification courses for drone pilots.
Read more: Bangkok Post
Costs Push Restaurants to Adapt for Survival
The restaurant industry is battling rising costs of raw materials, rent, and operations. Weakened consumer purchasing power has stalled market growth, and operators are looking for government stimulus measures to provide relief. To stay competitive, restaurants are using online marketing tools and focusing on unique customer experiences to try and stand out. Clear branding, storytelling, and adaptability are the main strategies being used to try and navigate market conditions.
Read more: Bangkok Post
U.S. and China Bipolarity Stabilizes Asia
Asia's balance of power is uniquely bipolar, dominated by the U.S. and China. The Lowy Institute’s Asia Power Index shows that the U.S. is still stronger in the region but has lost primacy to China’s economic influence. As China continues to grow, U.S. alliances—such as AUKUS and partnerships with Japan and the Philippines—have grown, but the effectiveness of these alliances in a potential conflict with China remains uncertain. Bipolarity is stabilizing for the time being, but the future remains murky.
Read more: Lowy Institute
Spending to Surpass Pre-Pandemic Levels in 2024
Consumer spending in Thailand is expected to grow beyond 2019 levels for the first time this year, driven by strong foreign tourist arrivals and expected interest rate cuts. Fitch Solutions sees a 28.3% year-on-year rise in tourist numbers and 2.6% GDP growth for 2024. Despite concerns over high household debt, easing monetary policy from the Bank of Thailand is expected to alleviate debt servicing costs, lifting consumer spending to 9.2 trillion baht this year.
Read more: Bangkok Post
Infrastructure: Rail, Smart Cities, and Transit
Transport Minister Suriya outlined a plan to build out Thailand’s transport infrastructure, focusing on seamless connectivity and private sector involvement. The State Railway of Thailand (SRT) has been given a March 2025 deadline to complete the Sino-Thai high-speed railway’s second phase. The Samyan Smart City project is moving forward with underground power lines and smart energy systems. Ministries are exploring concessions to cap Bangkok’s train fares at 20 baht, with potential state ownership of seven key rail lines under review.
Read more: Bangkok Post (Transport Infrastructure), Bangkok Post (High-speed Rail), Bangkok Post (Smart City), Bangkok Post (Train Fare Concessions)
Pattaya’s Growth Stifled by Half-Hearted Policies
Pattaya, a popular tourist destination, faces limitations due to outdated zoning laws and rigid control by the central government. Despite being designated a special autonomous region, the city struggles with enforcing regulations, managing public spaces, and attracting high-profile investments. Local leaders and business operators argue that true decentralization is needed to improve infrastructure, tourism, and quality of life for residents, or else Pattaya risks being outpaced by global cities.
Read more: Prachatai English
The Changing Face of Commercial Real Estate
Frasers Property Limited anticipates a demand boost for Bangkok’s office and industrial real estate, driven by US-China trade tensions. However, the market faces headwinds as tenants upgrade from Grade B to Grade A offices, leaving a 75% occupancy rate for lower-grade spaces. On the upside, Thailand’s booming electric vehicle (EV) industry is projected to drive demand for commercial real estate, with growth of $6.5 billion by 2030.
Read more: Bangkok Post (US-China Tensions), Bangkok Post (Office Relocations), RETalk Asia (EV Sector Growth)
Pet Humanization Drives Big Gains
Thailand’s pet market is expected to reach 75 billion baht in 2024, with 12.4% growth driven by the trend of "pet humanization," where pets are treated as family members. This shift has led to higher spending on pet care, from food to wellness services. Pet-related businesses like hotels, cafes, and grooming salons are also expanding. With 20 million pets nationwide, the market continues to attract investment, particularly in premium pet healthcare and specialized services.
Read more: Nation Thailand
Aviation: India-Phuket, New Phattalung Airport
AirAsia Thailand is launching direct flights from Hyderabad to Bangkok and Chennai to Phuket starting in October 2024. Separately, a new airport has been greenlit in Phatthalung province, southern Thailand, with the 1,496-rai site set to become a hub for regional transport and tourism. The project will also complement other infrastructure developments in the region, improving connectivity for Phatthalung, Songkhla, and Nakhon Si Thammarat.
Read more: Travel and Tour World (India-Phuket Routes), Bangkok Post (Phatthalung Airport)
Tourism Looks to Diversify and Innovate
Thailand is planning to introduce a 300-baht tourism tax to fund infrastructure development and safety improvements. Chinese tourist numbers are being lifted through targeted marketing efforts. While man-made attractions like water parks and cultural museums are gaining traction to complement Thailand's natural beauty, tourism leaders are concerned about rising costs, infrastructure gaps, and competition.
Read more: Bangkok Post (Tourism Tax), VnExpress (Tourism Challenges), Nation Thailand (Chinese Tourist Strategy), Bangkok Post (Man-made Attractions)
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. Eyebrow raising stories this week include a harrowing baby swap at a Bangkok hospital,a baby hippo that is taking the world by storm,a bit of Thai superstition, and news about the Department of Land Transport’s introduction of a new “QR Licence mobile app.” We’ll finish with another serpentine tale, however, as they are always a hit:
Woman Survives 2-Hour Python Battle
A 64-year-old woman in Samut Prakan, Thailand, narrowly escaped death after being ambushed by a 4-meter python while washing dishes at her home. The snake wrapped around her midsection and leg, and after two hours of struggling, rescue workers finally arrived, broke down the door, and freed her from the python’s grip. Although she survived, the incident has left locals fearful, especially following similar deadly encounters with pythons in other Southeast Asian countries.
Read more: Khaosod English
That’s it for this week, thanks for reading!
How are we doing?
We love hearing from readers, and we are always looking for feedback. How are we doing with the Mekong Memo? Is there anything you'd like to see more of or less of? Which aspects of the newsletter do you enjoy the most?
Your voice matters to us. Feel we're missing something? Have additional sources to suggest? Don't hold back— hit reply and help us get better. We'd love to hear from you!
If you value the Mekong Memo, please consider buying (or gifting!) a paid subscription, sharing it on social media or forwarding this email to someone who might enjoy it. Please also “like” this newsletter by clicking the ❤️ below, which helps us get visibility on the Substack network.
Thank you!