A year of milestones
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A year of milestones

The past 12 months have been marked by challenges and controversies

As 2023 concludes, the year stands out for a multitude of noteworthy events and news.

The Business section of the Bangkok Post has taken the opportunity to reflect on the past 12 months, highlighting major issues that captured media attention throughout 2023, aiming to learn lessons or insights from these events to better prepare for challenges in the upcoming year.

Mr Srettha at his first press conference on Aug 22, 2023. (Photo: Wichan Charoenkiatpakul)


Disenchanted after nearly a decade of a royalist military government following a coup in 2014, voters delivered a strong mandate for change in the general election held on May 14.

The progressive Move Forward Party -- formed in 2020 as the successor to the Future Forward Party, dissolved by the Constitutional Court on Feb 21, 2020, for violating election donation laws -- declared a historic and surprising victory.

However, the conservative Senate blocked the winning party from forming a new government as the upper house, packed with military appointees, was strongly opposed to Move Forward's proposed reform of a law banning criticism of the monarchy, among other issues.

After two failed attempts to win a majority in a combined vote of the House of Representatives and the Senate, Move Forward decided to hand over the lead in forming a new government to the second-biggest party in its coalition, Pheu Thai.

Almost four months after the general election, the populist party formed a broader coalition without Move Forward and was able to win Senate support.

But Pheu Thai, closely linked to former premier Thaksin Shinawatra, succeeded only by including pro-military parties from the last government, reneging on a campaign pledge not to do so.

Shortly after assuming office in September, the new administration, led by 61-year-old Srettha Thavisin, a prominent real estate developer who officially entered politics last year, rolled out a raft of measures designed to ease the rising cost of living and help the economy, including lower electricity and diesel prices, a debt moratorium for farmers and small and medium-sized enterprises, and fortnightly salaries for state officials.

Despite mounting criticism over public debt concerns, Mr Srettha remains committed to moving ahead with the controversial 10,000-baht digital money handout, Pheu Thai's signature pledge during the election campaign.

A woman holds a placard with a message supporting the government's 10,000-baht digital wallet scheme. The government insists on implementing the project to invigorate the economy. (Photo: Somchai Poomlard)


The government's flagship populist initiative, the digital wallet scheme, is estimated to cost 500 billion baht and has become a focal point of discussion.

Though it remains popular with voters, the scheme faces growing scrutiny from scholars and economists. Central bankers, aligning with academics and economists, have called on the government to scrap the plan, citing worries about potential inflation, lack of fiscal discipline and instability.

The National Economic and Social Development Council said amid an economic recovery, significant expenditure to boost domestic consumption is unwarranted and poses a potential risk of raising inflation.

The agencies that oversee the economy, comprising the Bank of Thailand and the Finance Ministry, do not support the government's plan to enact a royal decree to borrow 500 billion baht to fund the scheme.

The government's controversial plan to introduce a bill to borrow 500 billion baht under Section 53 of the 2018 State Fiscal and Financial Discipline Act has drawn criticism from the opposition, contending that it violates the fiscal discipline law. Section 53 allows loans outside the public debt law only in urgent cases or for an economic crisis.

Despite opposition, the government insists on implementing the digital wallet project to invigorate the economy, claiming the move is needed because the Thai economy has expanded by an average of 1.9% per year over the past decade, one of the lowest rates in the region.

The administration said stimulus measures are essential because the economy exhibited an uneven recovery following the pandemic, while the population is termed "aged", straining welfare and public health budgets.

Moreover, household debt is ballooning, accounting for 91% of GDP. Most of the debt does not generate income nor is it used for investment, but rather for daily expenses.

According to the government's medium-term fiscal plan, public debt is projected to be 64% of GDP in 2024, 64.7% in 2025, 64.9% in 2026 and 64.8% in 2027.

However, these figures do not account for the planned 500-billion-baht loan to finance the digital wallet project. Borrowing this amount would push the public debt perilously close to the 70% ceiling, creating a higher interest burden for the government.


In the first quarter of this year, household debt surged to 16.1 trillion baht, constituting 90.7% of GDP, a level that has remained constant through the year. The increase was attributed to a rise in debt levels and the Bank of Thailand's redefinition of national household debt during that period.

The central bank revamped the definition of household debt, leading to a significant jump in the debt-to-GDP ratio from 68.9% in the fourth quarter of the previous year to 90.7% in the first quarter of 2023.

The revised definition now encompasses student loans, loans to agricultural cooperatives, housing loans and microfinance provided by both traditional banks and non-banking institutions.

This surge in household debt breaches the Bank for International Settlements' standard, which recommends the household debt ratio should not exceed 80% of GDP.

Mr Srettha emphasised the government's commitment to address informal debt, aiming to revitalise the economy. The state strategy involves collaboration with administrative organisations and law enforcement to curb unregulated lending, with a focus on debt restructuring and preventing unnecessary debt accumulation.

To enhance loan quality in the financial system, the central bank is set to implement responsible lending guidelines starting on Jan 1, 2024.

The regulator is committed to addressing household debt by offering debt solutions for non-performing loans (NPLs), providing repayment options for debtors with persistent debt, ensuring new debt meets high credit standards and facilitating formal credit access for borrowers with informal debt.

The National Credit Bureau (NCB) expressed apprehension regarding the upward trajectory of NPLs and special mention (SM) loans, with a specific focus on the housing, auto and hire-purchase sectors. This unease stems from the heightened levels of living costs and interest rates.

In the third quarter, NPLs from member financial institutions totalled 1.05 trillion baht, down by 3.6% year-on-year from 1.09 trillion baht, but up by 1.7% from the previous quarter.

SM loans, characterised as payments overdue from 30 to 90 days, reached 493 billion baht, marking a substantial 21.4% year-on-year rise, according to data from the NCB.

The bureau noted SM loans could become NPLs because of the weakened repayment ability of borrowers.

The Federation of Thai Industries has called for a long-term plan to adjust the energy price structure, controlling the power tariff.


Electricity bills remained high throughout the year despite the Pheu Thai government imposing a cap on the power tariff, which is used to calculate power bills, at 3.99 baht per kilowatt-hour (unit).

The rate, applicable between September and December, was approved by the cabinet, which initially agreed to cut the tariff from 4.45 to 4.1 baht a unit, before resolving to cut it further to 3.99 baht a unit.

The Energy Regulatory Commission (ERC) initially suggested the 4.45-baht rate, a decrease of 5.3% from 4.7 baht a unit imposed from May to August.

Authorities attributed the drop to various factors, notably lower gas prices, though it was partly determined by public opinion, surveyed by the ERC in July.

The Srettha administration said a lower rate was needed to curb energy costs for businesses and help households deal with the high cost of living.

The cabinet's resolution pressured the Electricity Generating Authority of Thailand (Egat).

A portion of electricity bills is paid to Egat to help it settle a huge loss after it subsidised electricity bills between September 2021 and May 2023, easing the impact of higher fuel prices for households and businesses.

With a tariff rate of 4.45 baht per unit, Egat was forecast to clear its losses by April 2025. A lower tariff means the period to reimburse Egat is extended.

Regularly extending the payback period is a poor idea because it affects Egat's cash flow and credit rating, which could lead to higher loan rates, said former Egat governor Boonyanit Wongrukmit.

During the first four months of 2023, businesses paid 5.33 baht per unit, up 13% from the previous record high of 4.72 baht per unit, while households paid 4.72 baht per unit.

The Federation of Thai Industries (FTI) wants the government to develop a long-term plan to adjust the energy price structure, controlling the power tariff.

An appropriate rate would be between 2.7 and 3.3 baht a unit, similar to neighbouring countries, to better entice foreign investors, noted media reports citing FTI chairman Kriengkrai Thiennukul.

Chinese arrivals in the first half were sluggish, tallying only 1.44 million. (Photo: Wichan Charoenkiatpakul)


One of the new government's first policies was a 30-day visa exemption for high-potential tourism markets, starting with China and Kazakhstan from Sept 25 until Feb 29, 2024, followed by Taiwan and India from Nov 10 until May 10, 2024.

The policy is regarded as aggressive as previous measures waived visa fees for travellers from some countries, but tourists still needed to apply for a visa to enter Thailand.

After the pandemic, China reopened its borders on Jan 8 for individual travellers, which helped revive the Thai tourism industry's hopes for a healthy recovery this year. The Thai government wanted the level of foreign arrivals this year to reach 80% of the 2019 level, before reaching 100% in 2024.

Beijing lifted a ban on outbound tour groups to 20 countries including Thailand on Feb 6.

However, Chinese arrivals in the first half were sluggish, tallying only 1.44 million. As of Dec 17, the total was 3.3 million, in stark contrast to the 10 million recorded in 2019.

The Chinese market may only total half of the Thai government's prediction of 7 million arrivals for this year.

The Association of Thai Travel Agents (Atta) noticed the trend and warned the government in June about reduced confidence in Thai tourism.

Mentions of unsafe travel issues in Thailand spread like wildfire on the Chinese internet, stemming from incidents of Chinese being abducted and fuelled by the movie No More Bets -- a box office hit -- about human trafficking in Southeast Asia.

Atta president Sisdivachr Cheewarattanaporn singled out the safety issue as the cause of the downturn in the Chinese market this year, a problem which cannot be immediately fixed by a visa exemption.

However, he said the visa policy is a good initiative that should be extended beyond February as the Chinese market has the potential to revive at a much faster pace if tour groups return or confidence about travel safety is restored next year.

Foreign investors were net sellers for a 10th straight month in November with a net of 21.1 billion baht.


The Stock Exchange of Thailand (SET) slumped this year, dampened by global and domestic factors. As one of the worst-performing bourses globally, the SET index contracted by 17.3% in the first 11 months of the year with thin trading value as foreign investors fled amid unfavourable market conditions.

Foreign investors were net sellers for the 10th straight month in November with a net of 21.1 billion baht.

The average trading value of the SET and the Market for Alternative Investment (MAI) was down 28.9% from a year earlier to 45.8 billion baht (US$1.3 billion), with the 11-month trading value of both markets averaging 54.4 billion baht daily.

According to Kasikorn Securities, foreign investors have sold 200 billion baht worth of Thai stocks this year, in contrast to their net purchases of 190 billion in 2022, when the SET was one of the best performers globally.

This year the collapse of several US banks, which later spread to Europe, shook investor confidence throughout the world. High global interest rates also prompted investors to shy away from risky assets such as stocks, turning to the bond market, especially in the US.

The Federal Reserve maintained interest rates at the 22-year high of 5.25-5.50%, although it recently signalled three rate cuts in 2024.

The slowing Chinese economy was weighed down by a lingering debt crisis in the property sector, pressuring the market.

The Israel-Hamas conflict, which erupted in early October, caused some investors to reduce stock investments, turning to safe-haven assets such as gold.

In addition, the Thai bourse was plagued by fraud cases, while economic proposals from the new government shook investor confidence.

The government was slow to provide clear details for its planned 10,000-baht digital wallet scheme, including funding sources, as the estimated budget of 500 billion baht could exacerbate public debt.

The fiscal 2024 budget has been delayed to probably May next year, affecting the administration's capacity to spur economic growth.

Meanwhile, foreign tourist arrivals came in below projection because of a weak Chinese rebound.

The SET started to recover in early December, helped by the launch of Thailand ESG Funds and the Fed's clear signal about rate cuts next year.

However, analysts note there is limited upside as the rebound was driven by sector rotations and the country's economic prospects remain dim.


The baht ranks third in terms of volatility against the US dollar compared with other regional currencies in 2023, attributed to external factors.

The baht hit a 10-month high of 32.57 to the dollar on Jan 23, following the yuan's appreciation after China's reopening.

The greenback also weakened compared with other currencies after investors assumed the Fed would end its hawkish monetary policy.

However, the baht fell from February to September as investors changed their view of US interest rate trends and China's economy continued to slow down.

Moreover, political uncertainty stemming from the delay in forming a Thai government and the Srettha administration's fiscal policy were attributed for a weaker baht versus the dollar.

The Thai currency fell to an 11-month low of 37.24 baht per dollar in October. In the final quarter, the baht has appreciated compared with the greenback.

The stronger baht was supported by the plunging US bond yield as investors anticipate the US's fed funds rate has reached its peak.

In addition, record-high global gold prices buttressed the baht's appreciation in the fourth quarter this year.

The baht ranks third in terms of volatility at 9.2% year-to-date, compared with 9.9% for the yen and 10% for the won.

Kanjana Chockpisansin, head of research at Kasikorn Research Center (K-Research), forecasts the baht to remain volatile in the first quarter of 2024 based on uncertainty about the Fed's policy rate direction and China's dim economic outlook.

"If the Thai economy shows continual recovery, it will support the baht's appreciation against the dollar. If the spread between the Fed and the Bank of Thailand's policy rate is narrower, it will strengthen the baht," Ms Kanjana said.

As a result, K-Research expects the baht to strengthen to 34 to the dollar by the end of 2024.


El Niño, a recurring climatic phenomenon characterised by abnormally warm Pacific temperatures, significantly influences global weather patterns. The occurrence happens every 2-7 years and scientists declared 2023 an El Niño year.

In Thailand, the consequences of this weather pattern are becoming increasingly apparent, manifesting in persistent hot and dry conditions, despite the Meteorological Department declaring the rainy season commenced on May 22.

The department forecast a decrease in total rainfall across the country during the rainy season compared with 2022, estimating a 5% decline below the annual average.

The reduced rainfall would lead to prolonged dry spells in various regions, heightening the risk of water shortages.

The department suggested the El Niño pattern could persist until February 2024.

A study sponsored by Thailand Science Research and Innovation revealed the high likelihood of an extended period of below-average rainfall from June 2023 through 2028. The study predicts severe drought in the South in 2025 and extensive drought affecting large areas in 2028.

Commerce Minister Phumtham Wechayachai, who chairs the committee addressing El Niño and La Niña, acknowledged the expected persistence of these phenomena for an extended period -- up to three years -- with severe impacts on the population and all sectors.

A study by the Trade Policy and Strategy Office under the Commerce Ministry underscores concerns about potential damage to the agricultural sector and a decline in income from agricultural and agro-industrial exports.

The adverse weather conditions also negatively impact the mining and livestock industries. The study predicts drought will contribute to higher consumer goods prices, energy prices and inflation, while concurrently raising international shipping costs.

Sugar manufacturers are uneasy with state intervention in the market.


A dispute over a hike in sugar prices emerged in late October, ending with the government agreeing to partial control of domestic prices, though the resolution was not completely welcomed by sugar manufacturers.

The cabinet initially approved the regulation of sugar prices to mitigate the impact on consumers after the Cane and Sugar Board's announcement of an increase in ex-factory sugar prices by 4 baht per kilogramme, effective from Oct 28.

The board cited higher production costs for manufacturers as cane prices rose because of the drought.

The cabinet based its approval on the decision of the Central Committee on the Prices of Goods and Services, chaired by Mr Phumtham, to make sugar a controlled product.

The committee agreed to issue measures to cap ex-factory prices for granulated sugar at 19 baht per kg and refined sugar prices at 20 baht per kg, while tightening sugar exports.

The move drew fierce opposition from cane farmers and sugar manufacturers, who warned the government against violating World Trade Organization (WTO) rules for free competition in the sugar trade.

Thailand may be dragged into another dispute with major sugar producers and exporters such as Brazil, which previously filed a complaint with the WTO over Thailand's measures to subsidise cane farming and sugar manufacturing, putting other sellers in the global market at a disadvantage, said a sugar factory operator who requested anonymity.

Mr Phumtham believes Brazil is unlikely to have a dispute with Thailand over reclassifying raw sugar as a controlled product, as the Thai government is merely helping domestic consumers.

But with growing disagreement over the price control, the cabinet reconsidered its resolution and came up with a decision to approve a two-baht increase to better align with higher production costs, but blocked another two-baht rise for the Cane and Sugar Fund, which was targeted for environmental purposes.

The government said consumers should not bear the additional burden of the second two-baht hike.

However, sugar manufacturers, who face low profit margins, remain uncomfortable with what is viewed as state intervention in the market.


Thailand's e-commerce sector had big news in January when e-marketplace operator JD Central announced it was discontinuing operations in the country, effective March 3.

The decision marked the end of JD Central's presence in Thailand, following its establishment in 2017. The closure underscores the intense competition in the e-marketplace segment.

JD Central was a joint venture between China's e-commerce giant JD.com and Thai retailer Central Group.

JD Central booked a net loss of 1.9 billion baht in 2021, a downturn of 40.3% year-on-year.

According to the company, major shareholders approved shutting down.

JD.com plans to focus on its supply chain and cross-border business.

JD Central initially gained momentum in its early days by emphasising the authenticity of products and timely delivery through its own fleet. This approach created a competitive environment that influenced other players, namely Lazada and Shopee.

These strategies led to average higher spending per customer, with electronic devices the best-selling category.

Competitors responded quickly by enhancing the availability of their authentic products and establishing their own logistics services.

While JD Central remained relatively conservative in its marketing and advertising expenditure, Lazada and Shopee have continued to adopt aggressive strategies, subsidising marketing and promotions, including free delivery, to attract online shoppers.

The marketplaces continue to thrive, accounting for 51% of the total e-commerce market worth 770 billion baht.

Thailand's e-commerce is moving towards vertical category-specific marketplaces that cater to specific consumer needs.

Lazada Group in Thailand posted accumulated losses over the past 11 years of 15.9 billion baht, while Sea Group, which includes Shopee, accumulated losses over the past eight years worth 17.7 billion baht.

JD Central posted accumulated losses over the past six years of 7.7 billion baht.

Now Lazada and Shopee are the dominant e-marketplace players, with social commerce platform TikTok Shop rising fast, poised to spark live commerce competition in the sector.

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