All the economic engines appear to have stopped functioning rendering Thailand’s economic outlook the worst in 40 years, said Mr Thanawat Polvichai, director of the Economic and Business Forecast Centre of the University of Thai Chamber of Commerce.
The contraction of economic growth, the shrinking of export and domestic consumption, farm price slump and delayed disbursement of government’s spending budget have combined to make the private sector feel not confident with the state of the economy, he explained.
Q1 2015 data show economic recovery is not moving as quickly as expected.
At the outset of the year, there were few signs of a pickup in domestic demand. In January, monthly data indicated that both private investment and private consumption remained sluggish.
Exports were also weak in January, suggesting that external demand is still lackluster.
Total export of the whole year which was earlier projected to grow by 4.1 percent has been revised down to 0.4 percent with 3.2 percent expansion of the industrial sector, 1.8 percent of consumption expansion and 3.6 percent growth of private sector’s investment.With the exception of tourism sector which is projected to grow 13.7 percent with 28.8 million tourist arrivals.
Weak exports to hamper growth
Since economic growth is dependent on exports, the centre has painted three scenarios:
if exports grow by 0.4 percent, the growth rate will be 3.2 percent;
if export growth is zero, the economic growth rate will be 2.9 percent ;
if export growth rate registers minus 1 percent, the economic growth rate will be 1.9 percent and if export growth is 1.5 percent, the GDP will be 4.1 percent.
Mr Thanawat said however that there is a slim chance that exports will pick up because Thailand’s major trading partners such as the European Union and Japan are experiencing economic slowdown.
Political climate remains tense
Recently, Thailand’s Supreme Court announced that it would proceed in prosecuting former Prime Minister Yingluck Shinawatra over her rice subsidy scheme. If found guilty, the former premier could face up to ten years in prison, which may well bring an end to her family’s political dominance, or trigger another cycle of demonstrations and street riots.
Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)
What measures has SET taken to support listed companies’ compliance with ESG standards?
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.
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 Bachelor Japan Season 4 showcases Thailand
Bangkok, 2 December, 2021 – The Tourism Authority of Thailand (TAT) is pleased to report that Thailand features as the...
ASEAN commemorates Youth in Climate Action and Disaster Resilience Day 2021
An intergenerational dialogue titled ‘Teaming up with You(th) for a Disaster-Resilient and Climate-Friendly ASEAN’, was moderated by the ASEAN Youth...
Thai Cabinet reverses CCSA relaxation of on-arrival Covid testing protocol
The Center for COVID-19 Situation Administration’s approval of the relaxed testing requirement has been overturned by the Cabinet in light...
Insights into the impact of COVID-19 on Thailand’s households
In April 2020, the Thai government passed a 1 trillion baht borrowing decree to address health needs, provide relief, and...
COVID-19 vaccine guide for travellers to Thailand
International travellers, including returning Thais and foreign residents, who are above 18 years of age should get fully vaccinated for...