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Mega Trends: โอกาสและความเสียงของธุ

รกิจไทย

โอกาสและความเสี่ ยง

เศรษฐกิจไทย 2020
ฟื้ น หรือ ฟุบ?
ดร. กิริฎา
เภาพิจติ ร
23 ธ.ค. 2562
• The latest IMF forecasts indicates that global growth this year is the lowest since the US subprime crisis and will recover next year.
• While most major economies (US, China, and Japan) will grow slower next year, growth in EU and large emerging markets will be
higher next year, supported by expansionary monetary and fiscal policies.
• Higher growths of emerging markets will provide external demand for other countries.

WORLD 2.3 1.7 1.7

Growth in 2019 2020
ADVANCED ECONOMIES
2018
%
Growth in 2019

%
2020

%
RUSSIA
Growth in 2019 2020
3.6 3.0 3.4 1.1 1.9
(1.8%) (1.7%)
EURO AREA
2018
% %
(3.3%)
% EMERGING MARKET AND
(3.6%) DEVELOPING ECONOMIES
Growth in 2019 2020s Growth in 2019 2020
+ External demand
regain from emerging
2018
2.3% %
(1.6%) (1.7%)
% JAPAN Growth in 2019 2020
2018
4.5% 3.9% 4.6%
(4.4%) (4.8%)
2018
1.9% 1.2 1.4%
(1.3%)
markets
% - Brexit uncertainty
(1.5%) CHINA
2018
0.8% 0.9 0.5 %
(1.0%) (0.5%)
%
Growth in 2019 2020 - Consumption tax rate

Growth in 2019
USA
2020 - Trade war
MIDDLE EAST
AND CENTRAL ASIA
2018
6.6% 6.1 5.8 %
(6.3%)
%
(6.1%)
increase
- Exports to China &
- Trade war S.Korea declines
2.9%
2018
2.4 2.1 %
(2.3%)
%
(1.9%)
+ Policy rate
cuts 2018
1.9%
Growth in 2019

0.9 2.9 %
2020

%
- Regulatory strengthening + Revenues from 2020
Olympics
(1.8%)
+ Oil GDP stabilizes
(3.3%)
INDIA
Growth in 2019 2020
ASEAN
LATIN AMERICA Growth in 2019 2020
AND THE CARIBBEAN + Accommodative
Growth in 2019 2020 monetary policy in Brazil
+ Solid momentum in the
non-oil sector continues
- US sanctions in Iran
2018
6.8% 6.1 7.0%
(7.3%) (7.5%)
%
2018
5.2% 4.6 4.7 %
(5.0%) (5.1%)
%
2018
1.0% 0.2 1.8 %
(1.4%)
+ Recovery in Mexico,
% Argentina, and Venezuela
(2.4%)
- Weak global oil market + Monetary policy easing - Trade slowdown from China
+ Corporate income tax cut + Stronger demand from emerging
- Weak in domestic demand markets
+ Relocation to ASEAN from trade war
Note: shows increase/decrease compared to previous year; Number in bracket is forecast in April 2019; Size of circle is the size of economy;
sign +/- shows positive/negative factors for growth in 2020
Source: World Economic Outlook (October 2019), International Monetary Fund and TDRI calculation 2
 Global crude oil spot prices & Oil balance
Crude oil, WTI Crude oil, Brent Oil balance (right axis)
130 4
• With weakening global growth and EIA Forecast

Oil balance (Million barrel per day)

Crude oil spot price (USD/barrel)
(as of Dec 2019)
115 3
increased production in US shale oil, Brent 100 2
spot price is forecasted to average 85 1
US$63.9/barrel in 2019 (down 10% from 70 0

2018) and US$60.5/barrel in 2020 (down 55 -1

5.3% from 2019) 40 -2

25 -3
• Brent spot prices will average US$61.6/b
Nov
2014 2015 2016 2017 2018 2019 2020 2021

in Q4/2019 (-9%yoy) and then fall to Note: Oil balance = Production - Consumption
US$57.7/b by Q2/2020 (-16.3%yoy) as Global oil Supply
45 EIA Forecast
Qatar's exit from OPEC
global oil inventories rise during 1H2020 40 OPEC
Saudi oil attack
(as of Dec 2019)

Million barrels per day

35
• Brent spot price will start to rise in 30 Other Non-OPEC
2020H2 to US$62.5/b as balances tighten 25
20 USA

15
Russia
10

Apr

Apr

Apr
Mar
May

Mar
May

Mar
May
Nov

Nov

Nov
Aug
Sep

Dec

Aug
Sep

Dec

Aug
Sep

Dec
Feb

Feb

Feb
Jan

Jun

Oct

Oct

Oct
Jul

Jan

Jun
Jul

Jan

Jun
Jul
2018
2018 2019
2019 2020
2020

Source: EIA 3
 Balance of Payment
• The Baht has strengthened against the US dollar by more 12
than 6% in 2019Q4 compared to the end of 2018, the 9
Thailand
strongest among ASEAN-5 currencies as net capital flows

Billion US dollar
6

into Thailand has risen the most so far this year. 3

Philippines
0
• Next year, the baht is forecasted to be stronger than this -3 Malaysia Indonesia

year’s and will remain stronger than ASEAN-5 currencies -6

Q1 Q2 Q3 Q4 Q1 Q2 Q3
2018 2019
Source: CEIC
Index of Local Currencies to US dollar
Thailand Japan Indonesia Philippines India Malaysia Singapore China EU UK
(-6.4%) (-4.8%) (-4.5%) (-2.7%) (-2.3%) (-0.1%) (0.0%) (1.5%) (2.6%) (4.3%)
92

94 Actual Consensus forecast

Q1-19 Q2-19 Q3-19 Q4-19 2020

Strong
96
Index (Q4-2018 = 100)

98

100
100

102

Weak
104

106
Source: CEIC and Consensus Economics Inc. (as of Dec 2019) with TDRI calculation
Note: Number in brackets are %changes in exchange rate in Q4/2019 from Q4/2018; - = appreciate (strong), + = depreciate (weak) 4
• Baht has been moving in line with net capital inflows.
• Current account surplus has dominated capital inflows this year with net flows into the capital markets more visible only since
June.
• Baht strengthened by almost 7.5% from December 2018 to November 2019 (Bt32.7/USD to Bt30.2/USD).
• Baht is forecasted to depreciate slightly to Bt30.3/USD next year as current account surplus next year will be less than this year’s.

Thai Baht Movement Drivers

Current Account Net Direct investment SET Foreign Netbuy BEX Foreign Netbuy THB/USD (Right axis)
8 33.5
Consensus Economics Forecast
6 (as of Dec 2019) 33

Exchange rate (Baht / US dollar)

4 32.5

2 32
Billion US dollar

0 31.5

-2 31

-4 30.5

-6 30
Feb

Sep

Feb

Sep
Jan

Apr

Jun

Jul

Nov

Jan

Apr

Jun

Jul

Nov

Q4F

Q1F

Q2F

Q3F

Q4F
Oct

Oct
May

Aug

Aug
Mar

Dec

Mar

May
2018 2019 2020
Source: SET, ThaiBMA, Bank of Thailand and Consensus Economics Inc. (as of Dec 2019) with TDRI calculation
Note: Current account data for Nov 2019 and Net direct investment for Oct-Nov 2019 are not yet released 5
6
• Upcoming US president election will be held in
Trade war VS
November 2020. To gain votes, Pres. Trump Tariffs
unlikely to reduce confrontation with other Tech. war VS
Huawei
nations
Investment war VS
• Impeachment is unlikely as the ‘guilty’ dictation Chinese direct investments
& listed companies in US
requires two-thirds majority of the senators.
• Fears of threats from China’s rise – politics,
economics, and technology – run deep in both Trade war
Tariffs
VS
Republican and Democrat upcoming
presidential candidates.
• Multiple wars are likely to continue next year:
Trade, Tech, Investment, and Currency wars.
• In Nikei’s survey in September 2019 of 1,000
Japanese companies involved in business with Currency war VS
Policy rate, Dollar value
China, half of respondents said trade war is
likely to last for over 10 years.
7
 LIST VALUE OF IMPORTS EFFECTIVE DATE TARIFF RATE
July 6, 2018 25%
ROUND 1 US$34 billion
October 15, 2019 (Postponed) 30%
August 23, 2018 25%
ROUND 2 US$16 billion
October 15, 2019 (Postponed) 30%
September 24, 2018 10%
USA

ROUND 3 US$200 billion May 10, 2019 25%

October 15, 2019 (Postponed) 30%
September 1, 2019 (1st part)
ROUND 4 US$300 billion 15%
December 15, 2019 (2nd part) (Cancelled)

ROUND 1 US$34 billion July 6, 2018 25%

ROUND 2 US$16 billion August 23, 2018 25%
September 24, 2018 5-25%
ROUND 3 US$60 billion
June 1, 2019 5-25%
CHINA

September 1, 2019 (1st part)

ROUND 4 US$75 billion* Add 5-10%
December 15, 2019 (2nd part)
AUTO-PARTS December 15, 2019 5-25%
Source: TDRI from various source
Note: * $75 billion includes products that tariffs have been raised in previous rounds as well as new products.
** In October & December 2019, China agrees to buy US$40-50 billion farm products (mostly soybeans) from US annually, which is unlikely given the limited
supply of soybean exports from US. 8
TECH WAR

• More than 100 subsidiaries of Huawei are currently on the US entity or ban list – US
companies are not allowed to sell goods and services to companies on the entity list
without prior approval.
• US has announced extension until the full ban
• Huawei phones not covered by the extension are now affected – Huawei Mate 30
series launched in September 2019 are not able to access Google Mobile services.
• Pres. Trump has issued an executive order banning imports from countries that pose
national security threats to the US; the order did not name countries but is understood
to target China, specifically Huawei.

POTENTIAL INVESTMENT WAR

• Restrictions on Chinese companies’ access to US finance and de-listing Chinese
companies from listing in US stock exchanges may be future measures.
• Yet, the U.S. Treasury has clarified that it has no active plans to force wholesale
financial decoupling or pursue a mass delisting of Chinese companies.
9
• Exports to China been contracting since the middle of last year, while those to ASEAN contracted sharply this
year as the slow down in China has affected their economies.
• Exports to other major markets have also contracted this year with the exception of the US, which has somewhat
benefited from trade diversion.

Thai export growth by destination

%YoY Growth %Share
Destination
Q4-18 Q1-19 Q2-19 Q3-19 Aug-19 Sep-19 Oct-19 2017 2018 2019YTD 2019YTD
Japan 8.2 -1.8 -2.3 2.9 -1.2 2.4 0.5 7.7 13.0 -0.3 10.0
EU 28 -3.3 -6.0 -6.2 -5.2 -6.6 -8.3 -7.5 8.0 5.2 -6.0 9.6
ASEAN 9.6 -4.5 -5.9 -13.9 -23.8 -6.7 -9.3 8.9 14.9 -8.4 25.4
ASEAN-5 9.3 -7.8 -8.7 -12.1 -24.6 0.6 -8.9 6.1 13.6 -9.5 14.5
CLMV 9.9 0.0 -2.0 -16.2 -22.7 -15.3 -9.9 12.9 16.7 -6.8 10.9
USA 6.8 32.1 3.3 7.7 5.8 7.8 4.8 8.5 5.5 13.1 12.7
Middle East -6.6 -0.3 -5.6 0.9 4.2 -5.6 5.2 -5.0 -0.1 -0.9 3.4
Australia -6.5 -12.3 -9.5 14.0 18.9 -1.8 -8.7 1.9 2.6 -3.4 4.3
China -4.8 -10.4 -9.1 2.8 -2.7 6.1 -4.2 24.0 2.7 -5.5 11.5
Total exports 2.0 -2.1 -3.8 -0.5 -4.0 -1.4 -4.5 9.9 6.9 -2.4 100.0
Source: Bank of Thailand with TDRI calculation
10
 THAI EXPORT TO US These sector account for 5.3% of total Thai exports in 2019
Jan-Aug 2017 Jan-Aug 2018 Jan-Aug 2019
3.0
2.5
Sectors with exports to US
Billion US dollar

2.0
1.5
>US$300 million and
1.0 grew >8% since trade war
0.5
0.0
Disk drive Tires Motor Compressor Canned Polymer Air
vehicles tunas and conditioning
and parts plastics and freezers
0.30
0.25
Sectors with exports to US
Billion US dollar

0.20
0.15 <US$300 million and
0.10
0.05
grew >8% since trade war
0.00
Iron and steel Canned fruit Wooden Chemicals Paper products Man-made
and fruit juice furniture staple fibers
Source: Trademap
Note: * Disk drive presented slow exports growth in 2019 but export value was higher than 2017 because of slowdown of global demand for personal computers and
changing in SSD technology that will pressure overall HDD shipments to decrease. 11
 THAI EXPORT TO CHINA These sector account for 3.9% of total Thai exports in 2019
Jan-Aug 2017 Jan-Aug 2018 Jan-Aug 2019
1.6
1.4
Sectors with exports to China
Billion US dollar

1.2
1.0
0.8
>US$300 million and
0.6 grew >8% since trade war
0.4
0.2
0.0
Electrical and Polymers and Chemicals Mineral fuels Frozen fruits Mechanical
electronics plastics and oils and nuts appliances

0.30
0.25
Sectors with exports to China
Billion US dollar

0.20
0.15 <US$300 million and
0.10
0.05
grew >8% since trade war
0.00
Copper and Textile and Jewelry and parts Motor vehicles Medical
articles thereof clothing parts and instruments
accessories
Source: Trademap
12
• To circumvent tariffs levied by the US, many companies in
China that export to US have relocated to ASEAN
• Vietnam has received the majority of the relocation in
labor-intensive to high-tech industries
• Thailand is the second highest recipient of the
relocation, with Japanese companies being the
majority, particularly in automotive parts and electrical
appliances

Source: TDRI EIS from various sources

Note: Automotive & Parts Computer & Parts Electrical Appliances Petro-chemical Products Footwear Machinery
are Japanese, American, South Korean, Chinese and Taiwanese companies, respectively 13
14
 %
%
• Thai real GDP growth will slow down from last year’s 4.1% to 2.5% this year and 2.5-3% next year.
• This year, contraction of net exports were a drag to growth, while household consumption, private Investment, and
Government spending all grew slower than last year’s.
• Next year, the slightly faster growth will be supported by a modest expansion of net exports as both exports of goods and
tourism receipts accelerate, while Government spending will speed up as the FY2020 budget is carried over to next year.

GDP growth contribution (%YoY) Growth contributions of net exports (%YoY)

C: Private C: Government I: Private Exports of Goods Exports of Sevices
I: Public Change in Inventory Net export Imports of Goods (neg.) Imports of Sevices (neg.)
(Goods & Services)
Residual GDP GDP (QoQ,SA) Net Exports (Goods & Services)
12 12
9 9
6 6
3 3

Percent
Percent

0 0
-3 -3
-6 -6
-9 -9
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2017 2018 2019 2017 2018 2019
Source: NESDB with TDRI Calculation 15
 % %
YoY Growth of Thai Export by Major Products
Agriculture Manufacturing Arms & ammunition
Gold Other exports
• In 10M2019 exports contracted by 2.4% yoy (5.2% excluding 16
Total exports Total exports (excl. gold, Arms & ammunition)

gold and ammunitions), largest contraction in 4 years. 12

• Exports that high contracted: Rice, petroleum products, 8
chemicals, computer parts, rubber products and 4
integrated circuits & parts,

Percent
0
• Exports that expanded: Fruits, toiletries & cosmetics, -4
air-conditioners, electrical appliance parts, pick-up -8
trucks, and food products -12

Feb
Q1

Jun
Jul

Oct
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Jan

Apr

Aug
Sep
Mar

May
• For the entire 2019, exports could contract by 2%, a little 2017 2018 2019
less contraction than the first 10 months, as there are more
orders from trade diversion in Q4 coupled with lower export YoY Growth of Thai Export Value
Total exports Total exports (excl. gold, Arms & ammunition)
base in 2018Q4 compared to previous quarters. 15
• Next year, goods exports could grow by 1% from its very 10
low base this year, trade diversion and relocation increase, 5

Percent
as well and recovery of emerging markets. 0
-2.4
-5 -5.2
-10
2012 2013 2014 2015 2016 2017 2018 10M2019

Source: Bank of Thailand with TDRI calculation

16
 %
Contribution to growth of tourism receipts
15
• Number of international tourists rose by 4.3% 12
Other
India
yoy in the first 10 months led by Indian 9 Russia

Percent
tourists which grew by 26.7%; tourism 6 Korea
receipts rose by 4% yoy. 3 Japan
0 CLMV
• Tourism arrivals and receipts growth in 2019 -3 ASEAN5
will be around 4% higher than that in 2018, -6 Europe
partly from a low base last year and the

2019

Feb
2016
2017
2018

Sep
Jan

Apr

Jun
Jul

Oct
Aug
May
Mar
China
reasons below: Annual YTD 2019 Total
• Chinese tourist arrival has rebounded Number of Chinese Destination of Chinese
since July partly from diversion from Hong tourists in Thailand tourists in 2019
Kong, after contracting in the first half of 2017 2018 2019 No. of Chinese tourists Growth (YoY, Right axis)
2019 1.3 2.0 80

• Waiver of visa-on-arrival fees for Chinese, 1.2

1.5 40
Indian and Taiwanese tourists have also 1.1

Million persons

Million persons
facilitated their arrivals. 1.0

Percent
1.0 0
• Next year, tourism arrivals is forecasted to 0.9

rise to 41.7 million from 39.9 million this year, 0.8 0.5 -40
a 4.5% increase. 0.7
0.6 0.0 -80

Aug
Oct

Aug
Oct

Aug
Oct

Aug
Oct

Aug
Oct
Jan

Jan

Jan

Jan

Jan
Jun

Jun

Jun

Jun

Jun
Feb
Mar
May
Jul
Sep

Feb
Mar
May
Jul
Sep

Feb
Mar
May
Jul
Sep

Feb
Mar
May
Jul
Sep

Feb
Mar
May
Jul
Sep
Apr

Apr

Apr

Apr

Apr
Feb

Nov
Oct
Jan

Apr
Jun
Jul
Aug
Mar

Dec
Sep
May
Hong
Hong Kong Macau
Macau Thailand
Thailand Japan
Japan Vietnam
Vietnam

Kong
Source: Ministry of Tourism and Sports and CEIC 17
 Private consumption growth (%YoY)
Restaurants & Hotels Purchase of Vehicles • Household consumption has grown slower
Miscellaneous Goods & Services
Food
Recreation & Culture
Other
this year than last year, especially from the sharp
Private consumption in Thailand Private consumption deceleration in passenger car purchases in 2019H2.
(excl. foreign tourist)
8
• Next year, as uncertainties in incomes rise and
6
consumer confidence falls, household consumption is
4
expected to slow down further, but will grow at around
Percent

2
3%.
0
-2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2017 2018 2019 Consumer Confidence Index
100
Private consumption index (PCI, Seasonal Adjusted)
116 90
PCI
112 80
Non-Durables Expected
70 (in next 6 month)
108
Jan 2018 = 100

Semi-Durables
60
104
Durables 50
100 Present
Durables: 40
Passenger Cars

Mar-18

May-18

Dec-18

Mar-19

May-19
Jun-18

Aug-18
Sep-18

Jun-19

Aug-19
Sep-19
Jan-18
Feb-18

Apr-18

Jan-19
Feb-19

Apr-19
Oct-18
Nov-18

Oct-19
Nov-19
Jul-18

Jul-19
96
Services
Apr-18

Oct-18

Apr-19

Oct-19
Feb-18

Feb-19
Nov-18
Dec-18

May-19
Jul-18

Jul-19
Mar-18
May-18

Mar-19
Jun-18
Aug-18
Sep-18

Jun-19
Aug-19
Sep-19
Jan-18

Jan-19

Source: UTCC Note: 100 = unchanged

Source: NESDB, BOT with TDRI Calculation 18
 YoY growth of employment
Agriculture Industrial Services Total
• Employment has contracted yoy in Q2 and Q3 this
6
year. 4
• In Q3, employment in all sectors contracted yoy, 2

Percent
with the largest decline in the industrial sector by 0
4.4% yoy. -2
-4
• Contraction in Q3 of 2.1% is the largest in 11 -6
quarters. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

• However for those who are employed, wages have 2017 2018 2019

risen by 1.4% yoy in Q3 YoY growth of average wage

Agriculture Industrial Services Total
• Largest increases in Q3 are in agricultural sector
8
(4.2% yoy) followed by the industrial sector (2.2%
6
yoy) 4

Percent
• Nevertheless, the reduction in employment creates 2
worry and reduces consumer confidence going 0
-2
forward.
-4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2017 2018 2019
Source: National Statistical Office and Bank of Thailand 19
 YoY Growth of Thai Farm income
Price Production Farm Income
• Farm incomes from the first 10 month of this year 8
increased by a modest 1% yoy, driven by higher
4
prices of livestock, rubber, and fruits; income from
0
rice farming, which hosts 40% of agriculture

Percent
employment, contracted slightly yoy from less -4

production due to droughts. -8

2017 2018 2019 Jan Feb Mar Apr May Jun Jul Aug Sep Oct
• In the last quarter of the year, global prices of rice, YTD 2019
rubber, and sugar will increase yoy, but domestic Source: Office of Agricultural Economics with TDRI calculation

prices may not rise much the baht is stronger than Global agriculture prices
last year’s level. 0.9
Rice Sugar Rubber (Right Axis)
2.8
• For 2020, world rice and sugar prices will rise 0.8 2.4

Thousand USD / metric ton

Thousand USD / metric ton

slightly by 1-2%, while future rubber prices for 0.7 2.0
0.6 1.6
2020Q1 increased by 2% yoy;
0.5 1.2
• Farmers will also receive various transfers from 0.4 0.8
the government in 2019Q4 and 2020 0.3 0.4
0.2 Nov
0.0
2014 2015 2016 2017 2018 2019
Source: World Bank 20
 YoY Growth of Private investment
and BOI certificates issue (%YoY) • Indicators of private investment point to a slower expansion of
Private investment Promotion Certificates Issued (Right axis) private investment in 2019 and 2020 yoy.
12 160 • BOT’s private investment index has been slowing down since
9 120
6 80
2019Q1 which is in line with the low manufacturing capacity
3 40 utilization of less than 70% and the decline in FDI.
0 0
• BOI’s certificates issued, a leading 12-18 months investment

Q4-17
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17

Q1-18
Q2-18
Q3-18
Q4-18
Q1-19
Q2-19
Q3-19
-3 -40
-6 -80 indicator, have slowed down since 2018Q3 although certificates
-9 -120 issued for FDI has risen, especially for Japanese, Chinese, and
-12 -160 ASEAN FDI.
Net Foreign Direct BOI’s FDI Applications
Investment and Certificates Issued Capital utilization rate (Seasonally adjusted)
350 250 100
Other Cap U
300 90
200 S.Korea Motor vehicles
250
USA 80 Refined petroleum
200 150 products
Billion baht

Billion baht

Percent
150 Hong Kong 70 Computer &
100
100 Electronic Products
Europe
50 50 60 Electrical equipment
China
Basic metals
0 0 50
ASEAN Rubber & Plastic
-50 9M-18 9M-19 9M-18 9M-19
Products
Net Certificates Japan 40
-100
Source: OIE

Jan-17
Apr-17

Jan-18
Apr-18

Jan-19
Apr-19
Jul-17
Oct-17

Jul-18
Oct-18

Jul-19
Oct-19
9M-18 9M-19 Applications Issued
Source: Bank of Thailand and BOI with TDRI calculation 21
 Housing Transferred in Bangkok Metropolitan
• Real estate sector will continue to be weak for the High-rise Low-rise
90
remaining months and next year as the factors following

% yoy growth
60
below: 30
0
NEGATIVE FACTORS

Q2-18
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18

Q3-18
Q4-18
Q1-19
Q2-19
-30
• Oversupply: As a take-up rate is still low, CBRE forecasts that the
-60
new supply launched in 2020 will drop by 20% yoy.
• Condominium and house prices not increasing as fast as before. 8
Construction Areas Permitted Nationwide
• LTV: BOT likely to continue this measure into next year, which 4

% yoy growth
discourages demand. 0
• High household debt: limited the purchasing power of buyers.

Q1-19
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Q2-18
Q3-18
Q4-18

Q2-19
-4
• Rising SMs & NPLs in housing loans and uncertainty in clients’ -8
incomes discourages banks to increase loan extension. -12
• Land and buildings tax: Starting 1 January 2020, this will increase -16
cost of inventory and land bank. House Price Index
Single-detached house Town house Condominium
• Chinese buyers: Purchase expected to continue declining due to (including land) (including land)
further slow down in Chinese economy and yuan depreciation. 12
9

% yoy growth
POSITIVE FACTORS 6
3
• Hong Kong’s protest rallies: Hong Kong and Chinese buyers 0
relocate from Hong Kong to SE Asia.

Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Q2-18
Q3-18
Q4-18
Q1-19
Q2-19
-3
• Government stimulus measures
Source: Bank of Thailand 22
• Government spending, particularly for new public investments, will be delayed to next year as the implementation of FY2020 will likely
start in March 2020; Hence, spending this year will grow by less than last year’s, but will rise considerably next year.
• FY2020 Budget of Bt3.2 trillion is 6.7% higher than FY2019’s with current expenditure (excluding principal and interest expenditure)
rising by 2.3% to Bt2,076 billion and capital expenditure by 1.0% to Bt656 billion.
• FY2020 capital expenditure disbursements which are delayed from this year to next year is around Bt66 billion or 0.37% of 2020
nominal GDP
• In FY2020 the Central Fund, which can be used for unplanned projects, increased from FY2019 by 10.8% to Bt519 billion (16.2% of the
Budget)
• If needed (though not easy to be passed by Parliament), the Government could issue a mid-year supplementary budget next year
(maximum allowed by Budgetary Procedure Act for FY2020 is Bt303 bn or 1.7% of 2020 nominal GDP).

Current Expenditure Capital Expenditure

2012 2018 2019 Average (excl. 2012) 2012 2018 2019 Average (excl. 2012)
450 80
400
350 60
Billion baht

Billion baht
300
40
250
200 20
150
100 0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Source: Fiscal Policy Office Source: Fiscal Policy Office
23
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% %

TARGET BENEFICIRIES IMPLEMETATION

PROGRAMS & PROGRAM DETAILS BUDGET IMPACTS PERIOD
Transfer for purchases 10 million people who has More than Bt10 Builds consumer enthusiasm October-November 2019
(Chim-Shop-Chai) Phase 1 smartphone and internet billion and increases purchasing power
Bank credits to farmers Bt50 billion Increase purchases by farmers Within 2019
affected by drought
SME Loan and Housing • SMEs and retail Bt200 billion Depends on borrowers’ credit Bt170 bn in 2019 and Bt30
Loan borrowers (for worthiness bn in 2020
housing loans)
Public Welfare Card 14.5 million people with Bt40 billion Increase purchasing power of Oct 2019 -Sep 2020
incomes below (Same as last the poor • Evenly distributed
Bt100K/year FY)
Subsidizing cost of main 4.31 million households Bt25 billion Increase purchasing power of Dec 2019-April 2020
crop rice production • Bt500/rai and not rice farmers by at most • 98.7% disbursed by Dec
exceeding 20 Rai/HH Bt10,000/HH 2019
• 1.3% (rice in the South) by
Apr 2020
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% %
TARGET BENEFICIRIES
PROGRAMS & PROGRAM DETAILS BUDGET IMPACTS IMPLEMETATION PERIOD
Palm oil price 260,000 households Bt13 billion Raising farmers’ income • Palm oil: 21.6% for 2019Q4
Guarantee • Bt4/Kg. and not over 25 Rai/HH; • Average oil palm price in last FY = Bt2.45/Kg; and the rest in 2020
Not over Bt11,987.25/HH guaranteed price is 63.3% higher • Rice: 78.7% for 2019Q4 and
• Average paddy rice price in Last FY = the rest in 2020
Bt7,794.4/ton; guaranteed price is 28.3% higher

Rubber Price • 1.4 million rubber farmers Bt24 billion Raising farmers’ income Oct. 2019 – Mar. 2020
Guarantee • 300,000 rubber-tappers • Average sheet rubber price in last FY = Bt42.2 • 62% for Oct-Dec 2019 &
(Sheet rubber Bt60/Kg) /Kg; guaranteed price is 42.2% higher • 38% from Jan-Mar 2020
Transfers to new- • 560,000 new- borns in households Bt1.67 billion Increase purchasing power 2019
borns up to 6 years old with average income not over • The program will continue
Bt100,000 household member/year next year but the budget not
(Bt600/new-born/ month) announced yet
Thailand Campaign 40,000 people Bt116 million Stimulate consumer enthusiasm Within Dec 2019
Tour 100 Baht
Source: TDRI from various sources

• The programs total Bt300.7 billion in 2019 (1.8% of GDP) and Bt84 billion in 2020 (0.5% of GDP)
• Excluding SME and housing loans in 2019 and 2020, the total will be 0.8% of GDP for 2019 and 0.3% for 2020.
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THANK YOU