CEOs voice concerns for 2024
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CEOs voice concerns for 2024

Head honchos from key sectors highlight the biggest challenges and risks in the year ahead

Thailand is projected to post slow economic growth in the near future compared with pre-pandemic rates. Several public and private agencies have GDP forecasts for 2024 ranging from 3-3.4%, excluding implementation of the government's digital wallet scheme.

Crucial factors to consider this year are: slower growth in exports, subdued Chinese demand for consumption and tourism, interest rate volatility, high household debt, impacts from the El Niño phenomenon, geopolitical risks, a shortage of skilled workers and ageing demographics.

The Business section of the Bangkok Post interviewed a group of executives on the biggest challenges and risks for this year.

What are their concerns? What is the business outlook for this year? And how will they navigate an uncertain business climate?


Yol Phokasub, chief executive of Central Retail Corporation Plc, the country's biggest retailer, foresees substantial challenges for the economy in 2024, especially during the first half.

Mounting geopolitical tensions and the unpredictable dynamics of elections in various countries contribute to a climate of uncertainty that could potentially hamper global economic progress, he said.

In addition to these global concerns, Mr Yol said domestic factors that warrant close scrutiny include ageing demographics; the recovery trajectories of key sectors such as tourism, consumption and exports; prolonged elevated interest rates; a surge in household and business debt, leading to widening income disparities; and a decline in purchasing power.

Yet he expressed optimism, or a "new hope", for the latter half of the year.

Mr Yol has a 'new hope' for the latter half of the year.

"In the second half, there is potential for a fresh economic outlook driven by government budget allocation and higher investment from both the public and private sectors, injecting funds directly into the economy. The prime minister's efforts to improve confidence among international investors is expected to yield positive results in the latter part of the year," said Mr Yol.

"There are also promising signs from stimulus policies as the government attempts to address economic issues through the digital wallet handout, easing of living costs and promoting of businesses."

Measures such as Easy E-Receipt, which offer tax relief for purchases of goods and services of up to 50,000 baht, should significantly contribute to stimulating the economy, he said.

However, the stimulus benefit might be short term, prompting the government to consider longer-term efforts such as a focus on improving tourism, a key driver of the economy, by increasing the number of arrivals and reducing the lifestyle import tax to maximise tourist spending, said Mr Yol.

In addition, he proposed the government develop second-tier cities as another means of attracting tourists and helping to elevate the provincial economy, while supporting small entrepreneurs in the area.

"Doing business in 2024 is likely to remain filled with challenges and vulnerabilities," said Mr Yol.

"Central Retail is confident in Thailand's potential and believes the economy this year will recover at a faster pace than the previous year. We are ready to support the government in collectively resuscitating Thailand, driving the economy forward with strength and sustainability."


Kattiya Indaravijaya, chief executive of Kasikornbank (KBank), said the economy will post higher growth in 2024 than last year, though there are high risk factors and uncertainties both locally and globally.

Ms Kattiya says she believes the majority of customers can access KBank's loans.

The bank's research unit, Kasikorn Research Center (K-Research), predicts GDP growth of 3.1% in 2024, up from an earlier estimate of 2.5%, attributed to a recovery in exports, tourism and the government's stimulus measures.

If the digital wallet scheme is successfully launched, K-Research expects the economy to grow by 3.6% in 2024.

However, an uncertain global economic outlook will continue to weigh on the nation's economic recovery, noted the research house.

In light of this scenario, Ms Kattiya said the bank would monitor both internal and external factors as part of its business operations this year.

KBank plans to alert and help customers if risks arise, she said.

The key risk factors for this year include a global economic slowdown, rising geopolitical tensions and the Fed's monetary policy direction, which could cause significant baht volatility against the US dollar, said Ms Kattiya.

Furthermore, swelling household debt and business balance sheet deterioration could impede consumer spending and hinder economic growth, she said.

"Higher operating and financial costs will be a key challenge for business operators in 2024. Operating costs should have a greater impact on businesses than financial costs," said Ms Kattiya.

"Despite higher interest rates, financial costs represent around 5% of the total expenses of businesses, with the larger portion coming from raw materials and labour costs."

Higher loan interest rates in line with policy rate hikes would weaken the debt repayment ability of some customers, she said.

The bank stands ready to help vulnerable segments with debt restructuring, in line with the Bank of Thailand's responsible lending guidelines, said Ms Kattiya.

Despite a tighter monetary policy, she said the majority of customers can access KBank's loans, while the business sector should have no difficulty raising funds.

However, the situation could affect the rollover of high-yield bonds, though it would not affect investment-grade bonds, said Ms Kattiya.

As a result of the uneven economic recovery and global uncertainties, the bank has been prudent with its loan expansion, using a selective strategy, she said.

KBank plans to maintain loan-loss provisions to prepare for unexpected circumstances amid the uncertainty, said Ms Kattiya.


Amid a promising tourism recovery, Tassapon Bijleveld, executive chairman of Asia Aviation, the holding company of Thai AirAsia, said the industry will be the growth driver this year as the fragile economy still requires government help to curb risks, as witnessed last year.

Mr Tassapon says tourism can drive the economy. 

Mr Tassapon said one of the most important tasks for the government is to handle baht volatility, which severely affected business operations, particularly for companies involved with international trade, during the third quarter of 2023.

The export sector remains the most important engine of the economy and should not be neglected if more stable GDP growth is to be achieved in 2024, he said.

The weak Chinese market might be a critical concern for tourism operators, but Mr Tassapon said airlines will eventually adjust their plans and pivot to other potential markets as they are expected to bring back all idled jets to their fleets, meaning they will have to plan new routes to other countries.

He said this represents an opportunity to balance the market, instead of overreliance on the Chinese market.

"We're diversifying from China to other countries after experiencing a drop of almost 30%. Thai AirAsia could offset the decrease with the Indian market, as that market has climbed to 50% of the Chinese market," said Mr Tassapon.

"Thai AirAsia X will expand to new destinations, with Kazakhstan the most likely choice, though we're also studying Saudi Arabia."

He said he believes Thai tourism could generate 3 trillion baht, as targeted by the Tourism Authority of Thailand (TAT), assuming key markets don't face any negative impacts.

Other than China, every market is poised to travel more than last year, including European markets, said Mr Tassapon.

The factor that could help the TAT accomplish its revenue goal is airline capacity, which should return to normal in the second quarter, he said.

Last year maintenance facilities in Asia-Pacific were limited and could not accommodate all aircraft, creating a long queue after being parked for three years during the pandemic, said Mr Tassapon.

"The financial struggle of small and medium-sized enterprises [SMEs] is also a concern," he said.

"The government should take care of this segment, injecting more budget to help stabilise their businesses, which will consequently drive overall consumption."


The residential market in 2024 is expected to slow because of an unfavourable economy, reduced purchasing power, high interest rates and increased development costs, said Uten Lohachitpitaks, group chief executive of SET-listed developer Pruksa Holding.

Mr Uten says residential developers face several challenges in 2024.

"Compared with 2023, the residential development business in 2024 will face greater challenges based on declining purchasing power amid a sluggish economy and high interest rates," he said.

The economy faces various risks, such as rising electricity bills, higher oil prices, geopolitical conflicts, slower trade and the pronounced impact on large economies such as the US, Europe and China, said Mr Uten.

"Initially last year, there was hope about the Chinese market, but that did not bear out," he said.

"Looking ahead to 2024, it will not be an easy year, but it's not devoid of hope, even though the growth rate might not equal 2023."

Pruksa sees an opportunity in the low-priced housing market, with healthy demand for residences after missing out on opportunities the past two years because of strict bank lending conditions, said Mr Uten.

While not all developers made products that met demand last year, there is a chance for developers that can introduce products tailored to specific target groups, he said.

"In the first nine months of 2023, the housing market expanded, but developers had lower profits than in 2022, primarily because of higher competition," said Mr Uten.

"Many developers were willing to reduce prices because of decreased purchasing power."

Rising interest rates, increased construction material costs, higher labour costs and the uneven economy all affected purchasing power, he said.

However, some buyers had many new products to choose from at more affordable prices, said Mr Uten.

"The stricter credit measures adopted by both commercial banks and the Bank of Thailand weakened the purchasing power of potential buyers," he said.

"It's necessary to strike a balance, which the government and relevant agencies must carefully consider."

Mr Uten applauded the government for extending the property incentives, including a reduced transfer fee from 2% to 1%, and a lower mortgage fee, from 1% to 0.01%, to bolster the housing market this year.


Thailand's electric vehicle (EV) market will continue to enjoy bullish sales in 2024, with sales of battery EVs (BEVs) expected to soar to 130,000 units thanks to ongoing incentive packages, said Narong Sritalayon, managing director of Chinese automaker Great Wall Motor (GWM).

Mr Narong says momentum for electric vehicles should continue.

The company expects BEV sales to tally 80,000 units in 2023, a year-on-year increase of 600%, which was mainly driven by the entry of Chinese brands into the Thai market.

The popularity of EVs should gain momentum this year, he said.

Mr Narong attributed the increase to the EV3.0 and EV3.5 government incentive schemes, launched to promote the EV industry.

EV3.0 was approved in 2022 by the Prayut Chan-o-cha government, offering tax cuts and subsidies to promote EV consumption and production between 2022 and 2023.

A similar package called EV3.5 was passed by the Srettha Thavisin cabinet last month and covers 2024 to 2027.

EV makers participating in the schemes are committed to investing in EV manufacturing facilities in Thailand.

"The schemes not only stimulate investment, but their subsidies and tax cuts are also attractive," said Mr Narong.

The success of EV3.0 was evident during the 40th Bangkok International Motor Expo, which draw huge interest from EV technology enthusiasts.

People booked 3,524 EVs from GWM during the 12-day event, held late last year.

GWM is among the EV manufacturers that plan to launch locally-made EVs this year. The company plans to offer the EV model "Ora Good Cat" from its factory in Thailand.

GWM subsidiary Svolt Energy Technology is projected to start supplying batteries to the plant in the first quarter, he said.

"Passenger car EVs and electric sport utility vehicles have high potential to grow because prospective buyers have strong purchasing power and the cars suit their lifestyles," said Mr Narong.

He said he predicts total vehicle sales of 850,000 units in Thailand this year, covering both EVs and internal combustion engine cars, an increase of 6% year-on-year.


The economy should continue to grow this year, with tourism the main contributor, as global crude oil prices are expected to decline, said Chaiwat Kovavisarach, group chief executive of energy conglomerate Bangchak Corporation.

Mr Chaiwat says Bangchak plans to allocate 50 billion baht for expansion. 

The government's stimulus measures such as the 10,000-baht digital wallet handout will play a key role in fuelling economic activities, he said.

In the petroleum sector, global oil prices should decrease this year because of a glut from key producers and exporters, said Mr Chaiwat.

Bangchak must ensure good management of oil stocks, he said.

Last year, the economic slowdown, particularly in Europe, was a factor that pressured global crude oil prices, said Mr Chaiwat.

Bangchak plans to allocate 50 billion baht for expansion this year, focusing on upstream petroleum, oil refineries and power generation from clean resources, he said.

Budget planning must be done carefully, considering risks and returns for investment to ensure the healthy growth of the company in 2024, said Mr Chaiwat.

This year Bangchak aims to rake in 500 billion baht in revenue, up 39% from a projection of 360 billion in 2023.

A portion of the revenue will come from Bangchak's acquisition of Esso Thailand last year, strengthening its oil refinery and trade, he said.

2024 should bring more changes at Esso, ranging from executives to work culture, said Mr Chaiwat.

Bangchak previously announced a plan to change the name of Esso-owned petrol stations to Bangchak in November last year.

As for Esso petrol stations operated by local investors, they can choose whether to operate the business under the Bangchak brand or another retailer.

Bangchak is also working to develop sustainable aviation fuel (SAF), which can replace jet fuel because their properties are similar, while the former has a smaller carbon footprint.

The company is building a 10-billion-baht SAF production facility adjacent to its oil refinery in Bangkok's Phra Khanong district.

The factory is scheduled to commence commercial operation in late 2024 or early 2025.


State budget spending and foreign direct investment will be key factors driving the economy in 2024, said Jareeporn Jarukornsakul, group chief executive of WHA Group, the parent of WHA Industrial Development Plc.

Ms Jareeporn says the country needs government investment.

The lengthy process to form a new government after the general election in May last year was blamed for a delay in budget planning for fiscal 2024, but with money allocated to state agencies and various development projects such as infrastructure, economic activities will increase this year, she said.

Fiscal 2024 started on Oct 1, 2023 and ends on Sept 30 this year.

"The government must speed up budget allocation, which is expected to be postponed until April or May this year," said Ms Jareeporn.

"Thailand needs investment from the government in megaprojects, which should stimulate the economy upcountry."

More economic activities will play a key role in strengthening the economy. According to the Bank of Thailand, GDP in 2024 should grow by 4.4%.

She said she believes foreign direct investment will increase this year, especially in the EV industry, mostly from Chinese automakers.

Chinese automakers are not only building EV factories in Thailand, but also bringing in supply chains for the EV industry, said Ms Jareeporn.

She said industrial estates will benefit from the growing EV industry as prospective investors buy more industrial land.

Last year WHA Industrial Development signed a deal to sell 250 rai of industrial land in Rayong to Chinese EV maker Changan Automobile.

The Chongqing-based firm said it plans to buy another 300 rai from WHA for the second phase of EV production facility development.

In 2022, WHA sold 600 rai in Rayong to BYD, a Shenzhen-based EV manufacturer.

Parts of Rayong, Chon Buri and Chachoengsao form the Eastern Economic Corridor (EEC), which is set to become Thailand's high-tech industrial hub hosting 12 targeted S-curve industries, including next-generation cars.

Infrastructure in the EEC requires further development.

Ms Jareeporn said she believes the global economy, which slowed last year, will become healthier, improving exports.


Thomas Wilson, president and chief executive of Allianz Ayudhya Assurance, said economic challenges this year are driven by global insecurity and the potential for energy and food price inflation, all of which are likely to dampen consumer and investor confidence as well as international tourist flows.

Mr Wilson says Thais recognise the need for security through insurance.

These factors will also affect demand for insurance at a high level, said Mr Wilson.

Potential inflation caused by a weakening baht and the increasing cost of medical services may weigh on profitability in the insurance industry, he said.

Yet Thailand still holds tremendous potential, especially in terms of foreign investment driven by the realignment of global supply chains, though regional peers such as Vietnam and Indonesia are competing for similar investments, said Mr Wilson.

"The government appears to recognise this potential and we are optimistic that it will promote investment in the manufacturing sector to drive economic and export expansion, as well as further the wealth accumulation of Thais," he said.

Alliance Ayudhya Assurance plans to continue to work with banks and financial service partners to effectively service the insurance needs of their customers, said Mr Wilson.

"People recognise the need for security that comes from insurance," he said.

"The government can support these needs by engaging in predictable, business-oriented fiscal and monetary policies, giving consumers and international investors the confidence they need to ensure that Thailand and its insurance industry lives up to its full potential."


Somchai Lertsutiwong, chief executive of Advanced Info Service (AIS), said cooperation, mindfulness and prudence based on fundamentals would be core factors to help all parties deal with challenges in 2024.

Mr Somchai says cooperation and mindfulness are key to adapting to challenges.

It will likely be a difficult year in terms of business operations and people's daily life because of lower purchasing power, inflation, high debt, and the impact on the capital market of interest and the governance of several SET-listed companies, he said.

Mr Somchai said global risk factors could have a broader impact, comprising the risk of war arising from geopolitical conflicts, international trade barriers, energy, inflation and the environment.

"We passed our most difficult time during the Tom Yam Goong crisis decades ago," he said.

"The situation in 2024 is very different, but we must have hope for each other."

Mr Somchai said all enterprises should run their operations with more prudence, utilising the correct foundations based on solid fundamentals.

Consumers may have to exercise more caution and better planning in their daily lives, he said.

Mr Somchai said AIS believes its telecom network is more than a system. Intelligent features can always be added to networks to deliver more benefits and create enhanced value for customers, he said.

AIS has invested around 1 trillion baht on network expansion over the past 30 years.

The company has 46,590 cell sites nationwide, with fibre cables extending 254,000 kilometres.

"Mobile phone service is now a basic need of daily life, used for work and the digital lifestyle," said Mr Somchai.

The growth of mobile service business has grown by single digits year-on-year, while the cost of operations soared at double-digit rates, he said.

The telecom sector, especially mobile phone service, faced a hefty financial burden with fixed costs such as licence auctions for the 3G, 4G and 5G networks, in addition to several mandatory fees to be paid to the regulator annually.

However, Thailand's mobile tariffs are very low compared with other countries, said Mr Somchai.

He said he expects the mobile market in 2024 to see more reasonable pricing tariffs after major operators competed using heavy promotional packages the past few years.

The major operators helped the government by subsidising mobile broadband tariffs during the pandemic when all activities outside households were curtailed and most employees worked from home.

Mr Somchai urged the government and the telecom regulator to provide further help to the mass market during these difficult times.

For example, the National Broadcasting and Telecommunications Commission should consider reducing some annual fees for telecom operators as they have to reduce tariffs to help consumers, he said.


Yod Chinsupakul, chief executive of Line Man Wongnai, said the food industry must adapt to rising ingredient costs, resulting in higher prices for consumers.

Mr Yod recommends adopting efficient inventory management technology.

He said one effective option is adopting efficient inventory management technology.

Restaurants should improve their planning through ordering and maintaining their inventory based on real-time data, said Mr Yod.

This is an example of how technology can help deal with ingredient costs, he said.

In 2023, on-demand services such as food delivery were still important parts of daily life for people, even as food costs increased, affecting online order sizes, said Mr Yod.

To address this shift, Line Man pledges to run plenty of deals and discounts all year long, he said.

"We're improving our services for food and grocery delivery, messenger service and transport to match people's lifestyles," said Mr Yod.

The company is also developing digital ecosystem synergy on its platform in order to digitise local businesses, making them more competitive in the upcoming years, he said.


Varanit Athijaratroj, managing director of HP Inc Thailand, said the company sees growth opportunities in Thailand, propelled by the growth of micro and small businesses, which are the backbone of the economy.

Ms Varanit says HP Thailand sees opportunities for small businesses.

For these small firms, their agility in adapting to changes in a tepid economic climate is essential, she said.

Ongoing digitisation across various sectors and the pervasive adoption of hybrid lifestyles also present opportunities for innovation and growth, Ms Varanit said.

"At HP, our approach revolves around a deep understanding of consumer lifestyles, as well as business needs and challenges," she said.

"These insights guide the development of solutions tailored to meet the dynamic demands of our customers, ensuring adaptability in the face of market movements and new hybrid trends."


The Stock Exchange of Thailand (SET) expects the economy will recover in 2024, allowing for a rebound of the Thai bourse by attracting foreign fund inflows, pushing the SET index to hit 1,600 points this year.

Mr Pakorn says the Thai bourse was hampered by external factors last year.

The recently launched Thailand ESG (TESG) Fund should be another factor driving the improvement of the SET this year, said Pakorn Peetathawatchai, the SET president.

"However, we still need to monitor risks from the Fed's policy interest rate outlook, geopolitical conflicts and oil price trends," he said.

Most analysts expect Thai GDP this year will exceed the 2023 level, while the Fed is expected to cut interest rates in 2024.

If inflation moderates in Thailand, it should help lower costs for listed companies, said Mr Pakorn.

In 2023, the Thai stock market was hampered by external factors, including high interest rates and geopolitical tensions, while slow economic growth resulted in a drop in listed company profitability, he said.

Trading liquidity on the SET fell significantly, which was a similar problem for other bourses in Asia and Europe, as many lost around 15-30% of liquidity.

"When those factors are resolved, it should give the Thai economy a chance to recover quickly and the stock market, a leading indicator of the economy, should also rebound," said Mr Pakorn.

"Moreover, investors tend to invest more in risky assets such as stocks to obtain higher returns."

Once the policy interest rate is clearly on a downward trend, more money will flow into the stock market, he said.

The TESG Fund should not only help attract foreign fund flows to the Thai stock market, but also investment from local institutional investors, said Mr Pakorn.

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