The Ministry of Finance has proposed reviving the Department of Defense and Labor Welfare Central Forum with the aim of boosting the economy. Additionally, they have requested the acceleration of security management to instill confidence in foreign tourists during the peak season.
During the October 2023 meeting of the joint committee of three private sector organizations (FTI), Mr. Sanan Angubolkul, Chairman of the Thai Chamber of Commerce, assessed the Thai economy for 2023. It is expected to grow between 2.5% and 3.0%, with the introduction of visa-free measures to support tourism during the peak season. These measures are also expected to attract more Chinese tourists, resulting in an increase of 340,000 inbound arrivals and a total of 29 – 30 million foreign tourists this year. In order to ensure the confidence of foreign tourists, security and emergency management measures will be implemented during the entry period into the tourism season.
Worldwide, the global economy continues to slow down and recover at a slower pace than anticipated. The OECD estimated a growth of approximately 3.0% in 2023 and only 2.7% in 2024. China’s economic problems have had an impact on the economies of Asian countries, as well as the United States and Europe, which are also trending towards slower growth. Thai exports are at risk due to the slow recovery of foreign demand.
The Thai baht has been depreciating, however, it is still in line with other regional currencies such as the US dollar. The depreciation is largely a result of the strengthening of the US dollar due to the Federal Reserve’s decision to maintain high interest rates for a longer period than expected. China’s weakened economy has also contributed to the depreciation of regional currencies. Moreover, concerns have been raised regarding the implementation of the government’s economic stimulus policy, which requires a significant amount of money and has increased the fiscal deficit.
Mr. Phayong Sriwanich, president of the Thai Bankers Association, expressed support for the 560 billion baht economic stimulus project. However, he suggested limiting it to target groups that meet specific needs and areas of use to achieve double economic results. He emphasized the importance of supporting expenditure on domestic products and allocating appropriate funds for water management in order to avoid interference with the growth of the Thai economy next year.
Mr. Thawee Piyapattana, Senior Vice President of the Federation of Thai Industries (FTI), revealed that the FTI meeting aimed to prepare economic proposals for the new government. They also requested the revival of the joint public-private committee, the Central Government Savings Bank, chaired by the Prime Minister, to address economic problems. It was proposed that the government hold meetings every three months to facilitate dialogue between the government and the private sector, as well as prioritize the resolution of obstacles in existing laws.
Furthermore, the FTI discussed several key issues, including the need for SMEs to have access to credit. They suggested expanding credit guarantees for small and medium businesses, increasing the guarantee rate and integrating the use of funds from the Office for the Promotion of Small and Medium Businesses. The FTI also highlighted the importance of adjusting the national minimum wage rate using the tripartite committee mechanism to consider the economic situation in each state.
The FTI recommended expediting negotiations on free trade agreements (FTA) between Thailand and foreign countries. They urged completion of ongoing FTA negotiations, such as Thailand – EU, Thailand – Sri Lanka, and Thailand – EFTA. They also proposed initiating negotiations with important and emerging markets in the Middle East, South Africa, and Latin America. Simultaneously, the FTI called for support and investment in infrastructure in the Eastern Economic Corridor (EEC) to attract continued investment and ensure sufficient water management, particularly in the EEC area.
Lastly, the private sector stressed the urgency of the government’s water management plan due to the anticipated repercussions of El Niño and a lower amount of usable water in 2023. They called for the development of important reservoirs, the establishment of a water management committee in the EEC area, and a review of the 20-year water resources plan to focus on developing new water sources in the north, northeast, and eastern regions. They also requested that a budget be allocated for water management in the short and long term, potentially utilizing funds from the economic stimulus project.
In parallel, the private sector encouraged the implementation of carbon credit methods to promote sustainable practices and stimulate economic growth.
The Ministry of Finance is proposing to revive the Department of Defense and Labor Welfare Central Forum to help drive the economy. and request speeding up of security management Build the confidence of foreign tourists during the peak season
Mr. Sanan Angubolkul, Chairman of the Thai Chamber of Commerce Chaired the meeting of the joint committee of 3 private sector organizations or the FTI for October 2023, considering the overall picture of the Thai economy in 2023, which is expected to expand in the range of 2.5 – 3.0 %, with the expected visa-free measures. It will support tourism during peak season. Helping to attract Chinese tourists Inbound arrivals increased by 340,000 people, making the total number of foreign tourists this year likely to reach 29 – 30 million, under security and emergency management to build confidence among foreign tourists in during the entry period into the tourism season
As for the global economy, it continues to slow down and tends to recover more slowly than expected. The OECD recently estimated that world GDP will only grow by around 3.0% in 2023 and only 2.7 % in 2024, with China’s economic problems creating an economic impact ■ The economy of countries in the Asian region The economies of the USA and Europe tend to remain in a slowing direction. Reflected from the Purchasing Managers’ Index for the service and manufacturing sectors. As a result, Thai exports during the rest of this year face risks of a slow recovery of foreign demand
As for the case where the value of the baht continues to depreciate during this period, the FTI judges that although the baht will depreciate relatively quickly, But in general, it is still consistent with the regional currency. Following the direction of the US dollar that strengthens After the Federal Reserve It is likely that interest rates will be kept high for a longer period than expected. In addition, China’s economy has weakened during this period. As a result, the Yuan and other currencies in the region continued to depreciate. Although the value of the baht There are also factors in the country. Of concerns about implementing the government’s economic stimulus policy That requires a lot of money. and the fiscal deficit increased.
Mr Phayong Sriwanich, president of the Thai Bankers Association, said that the FTI supports the 560 billion baht economic stimulus project, but suggested that it should be limited to target groups that meet the needs. and a limited area of use to create double economic results (Multiplier) more By supporting expenditure on products produced within the country. If you can manage the amount appropriately There will also be a limit of money to invest in water management. which is urgently important So that the growth of the Thai economy next year will not be interfered with.
Mr. Thawee Piyapattana, Senior Vice President of the Federation of Thai Industries or FTI said that the FTI meeting was preparing economic proposals for the new government. and asking for a revival in the meeting of the joint public-private committee to solve economic problems, or the Central Government Savings Bank, chaired by the Prime Minister. It is proposed that the government hold a meeting every 3 months to serve as a forum for presenting opinions and guidelines for moving closer between the government and the private sector. and speed up action to resolve laws that are obstacles and are not consistent with the current situation. by prioritizing In order to get results quickly
In addition, the FTI also discussed additional important issues, including:
1. Helping SMEs to get credit is more necessary than preventing debt because SMEs are affected by COVID-19. Still recovering slowly and still not having full access to credit. This can be seen from the amount of SME loans which are still shrinking and a survey of the opinion of SMEs by the Office for the Promotion of Small and Medium Businesses (OSMEP) which found that they wanted access to credit rather than a moratorium on debt payments. It should support and push small and medium businesses to be ready to support opportunities from the economy which starts in the high season of the tourism sector at the end of this year. and the government’s massive economic stimulus totaling 560 billion baht at the start of next year. The committee meeting proposed that the government use a mechanism The Small Industry Credit Guarantee Corporation (TCG) expands credit guarantees for small and medium businesses, increasing the guarantee rate from 30% to 50-60% by integrating the use of OSEP funds as a whole, helping to support loan guarantee fees. to reduce costs and help increase opportunities for SMEs to access sources of finance.
2. Adjusting the national minimum wage rate should use the tripartite committee mechanism to set the guidelines. In order to be in accordance with the suitability of the economic situation in each state. Because the context and potential of each state is different. The minimum wage adjustment should be in accordance with labor law (Section 87 of the Labor Protection Act which determines factors when considering the increase in the minimum wage, such as inflation, living costs, production costs, etc.)
3. Push forward as much as possible to negotiate FTA free trade agreements between Thailand and foreign countries. By speeding up the effort to complete currently ongoing FTA negotiations within the timeframe, including Thailand – EU, Thailand – Sri Lanka, Thailand – EFTA, and opening negotiations to create FTA free trade agreements in important markets and emerging markets. and open negotiations for FTA free trade agreements in important and emerging markets such as the Middle East, South Africa, and Latin America, as well as FTAs currently being negotiated for rapid completion. Including the establishment of the FTA Fund to promote and provide relief to those affected by trade liberalisation. Expand trade opportunities and increase Thailand’s competitiveness with neighboring countries.
4. The EEC meeting agreed that the government should support and invest in EEC infrastructure to attract continued investment. There are important issues that must be continually navigated. According to the draft general plan for the development of the EEC, Stage 2, the context of the changes affecting the EEC, grouping specific target industry clusters (2023 – 2027) according to 5 guidelines, which include 1) promote investment in target industries and services of the future; 2) Increase the efficiency and use of infrastructure and public utility systems 3) Raise the skills of workers to be ready for changes in technology and innovation 4) Develop the city to be modern, lively and suitable for occupations, and 5 ) Linking the benefits of investment with the sustainability of the community. Especially water management in the EEC area to ensure that it is sufficient for use in the industrial sector and to ensure readiness for foreign investors.
5. Accelerate the government’s water management plan to produce concrete results. In 2023, the amount of water that can actually be used in October 2023 is at the level of 54%, which is lower than the level in the same period of 2022 at the level of 66% Lnino is violent The amount of rain that falls will be even lower than usual. This will mean that the amount of usable water will be even less and cause the damage from drought to become more serious and will have a wide impact Therefore, the private sector is asking the government to integrate the operations of mechanisms relevant government. So that water management is in the same direction. Water can be allocated for drinking, especially in important target areas such as the EEC and the north-eastern region.
• Request to speed up the development of important reservoirs. To store reserves for the eastern region, such as the Wang Tanod Canal Reservoir Project. Including establishing a water management committee in the EEC area and reviewing the 20-year water resources plan which places importance on developing new water sources in the northern region. Northeast and eastern region
• In summary, the private sector agrees that water management issues are of urgent importance. The government should therefore focus on allocating a budget for water management, in the short and long term. You might consider using some of the budget from the economic stimulus project. To ensure that the growth of the Thai economy next year is uninterrupted and in line with the target.
6. Push the Carbon credit method forward so that it can be linked to international standards. and can carry out concrete trade with foreign countries The joint private sector committee of 3 institutions (SEC) will determine the role of the private sector in preparation. By the Chamber of Commerce Focus on the trade sector Agriculture and services Federation of Thai Industries Focus on the manufacturing sector And the Bankers Association of Thailand will come to support the financial sector. Create a clear format and be able to drive Carbon credit measures and be able to solve the problem of the European Union’s pre-border carbon adjustment measures (CBAM) on the spot. Minimize the impact on exporters to the EU.
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