Economics
Thailand’s economic growth of 4.5% or more
Three economic agencies have unanimously affirmed Thailand’s economic growth will not be less than 4.5 per cent this year.
Three economic agencies have unanimously affirmed Thailand’s economic growth will not be less than 4.5 per cent this year.
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Expansion of 4.5% or more
The tourism sector worldwide and in Thailand is likely to grow modestly next year
The medium-term outlook is sobering, with growth expected at 3.5 percent in 2010 and likely remaining below potential for the next three years. Because the Thai economy is largely dependent on final demand in advanced economies, a return to pre-crisis rates of economic growth (a full recovery vs. a rebound to pre-crisis levels) will require a combination of (a recovery of demand from advanced economies and a rebalancing of the sources of growth to reduce Thailand’s dependence on demand from advanced economies. Neither process is likely to be swift. Recovery from a financial crisis is a lengthy process that involves the rebuilding of balance sheets, and the IMF estimates that half of the losses in the financial system in advanced economies are yet to be recognized.
The domestic content of automotive output in Thailand varies between 50 and 90 percent and averaged about 62%. For Isuzu (the largest pickup producer), domestic value-added is probably closer to 90 percent. Electronic and computer components are largely imported (from Japan), as are most transmissions (from the Philippines and India). Electronic components are of high value added and are used globally by the producers. Moreover, their development requires substantial R&D expenditures. Car manufacturers, as a result, prefer to concentrate the production of these electronic components in their home country – notably Japan – limiting technological spillovers. Only Toyota has a local transmission plant, with the remainder imported from India and the Philippines.
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Against the backdrop of a weakening US dollar and mounting trade surpluses, East Asian currencies and Thai baht have appreciated only modestly
Most of the infrastructure development in Thailand has been responsive to demand rather than forward-looking. Availability and accessibility appear to no longer be a challenge. The next step for Thailand is to put more emphasis on quality of service delivery, management, and sound regulation.
What measures has SET taken to support listed companies’ compliance with ESG standards?
PAKORN PEETATHAWATCHAI:
PAKORN: When we first began promoting ESG-compliant investments, we were met with little interest. We attributed this to a lack of clear data to showcase the economic benefits of ESG investment, and perhaps limited clarity as to what constitutes a sustainable or ESG-compliant investment. The launch of the THSI list and, subsequently, the SETTHSI Index, was designed to address this. Our most recent data, comparing returns for the SETTHSI Index with the broader SET and SET100 indices from April 2020 to April 2021, underscores the economic benefits of these investments: the group compliant with ESG standards outperformed the other two indices on every data point.
As of May 2021 Thailand was home to CG and ESG assets under management totalling BT54.8bn ($1.7bn) across 50 funds – up from 23 funds in 2019. Meanwhile, of the BT187.1bn ($5.9bn) raised in green, social and sustainability bonds since 2018, BT136.4bn ($4.3bn) was raised in 2020 – 83% from the government and the remainder from development banks and private players. This rising demand, in a move to manage risk and generate returns, has been complemented by growing supply and promotion: supply from ESG-compliant businesses aiming for resiliency and sustainable growth, as well as promotion from regulators highlighting investment opportunities with good CG and SD practices. Indeed, the pandemic has been a catalyst in shifting the view of ESG compliance from a luxury to a requirement in the new normal.
In what ways can enhanced standard-setting and regulatory mechanisms overcome the remaining barriers to improved ESG performance?
PAKORN: A multi-stakeholder approach is crucial for enhanced ESG performance – not only in Thailand, but around much of the globe. This can also help to address the standout incumbent challenge: access to reliable, wide-ranging ESG data. For example, the 2020 update to the 56-1 One Report established clear ESG standards and triggered online and offline capacity-building programmes to support listed firms’ compliance. SET is developing an ESG data platform with a structured template to promote the availability of comparable data, maximise value added from corporate sustainability disclosures, and foster collaboration between the business value chain and stakeholders. This is expected to support Thai companies along their ESG journey in an economically sustainable way, result in a greater number of sustainability-focused products and services, drive sustainable investing in the Thai investment community and ultimately “make the capital market work for everyone”, as outlined in the SET’s vision.
Economics
Youth unemployment hits new highs in Thailand due to COVID-19 restrictions
BANGKOK, Thailand (ILO news) – Joblessness among young men and women in Thailand has reached a level unseen in recent years due to the impact of the COVID-19 pandemic, according to a new brief from the International Labour Organization (ILO).
The Thailand labour market update found that youth employment fell by 7 per cent in the first quarter of 2021 (from the fourth quarter 2019). The youth unemployment rate increased by 3 percentage points for both men and women, reaching a high of 6 per cent and 8 per cent, respectively.
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