Industrial Situation and the competition

Thai economy in 2018

Thai economy in the fourth quarter of 2018 expanded by 3.7 percent, accelerating from 3.2 percent growth comparing to the previous quarter. After adjusting the seasonal affecting, Thai economy in the fourth quarter of 2018 expanded more than that the third quarter of 2018 at 0.8 percent. About the expenditure, there were supporting factors from the accelerated expansion of private sector consumption, private sector investment and better improvement of exports of goods and services while the expenditure in government sector was decelerated. For manufacturing in the industrial sector, wholesale & retail trade, renovation, hotels and restaurants and transportation, they had accelerated up in expansion but the agricultural production and accommodation construction sector, they had decelerated down.

Overview of the year 2018,

the Thai economy expanded by 4.1 percent, accelerating from 4.0 percent growth in 2017

and this was the highest expansion in 6 years.

The export value increased by 7.7 percent. Private sector consumption and total investment grew by 4.6 percent and 3.8 percent accordingly. Average general inflation was at 1.1 percent and current account was surplus 7.4 percent of GDP.

Thai economic trend for year 2019

Thai economic outlook for 2019 is expected to grow by 3.5 - 4.5 percent, with significant support consisting of

  1. Household Expenditure which is likely to expand well.
  2. Improving private sector investment following an increase in capacity of utilization rate of raw materials for manufacturing and an increase in the value of applying for investment promotion.
  3. Acceleration of government sector investment according to the progress of major infrastructure investment projects.
  4. The increase in the driving force from the tourism sector according to the adjustment to normal conditions of the amount and income from tourism.
  5. Changing the direction of trade, production and international investment which will help reduce the impact of the global economic slowing down.

Expected that the export value of goods will grow by 4.1 percent. Private sector consumption and total investment increased by 4.2% and 5.1% respectively. The average headline inflation is in the range of 0.5 - 1.5 percent and the current account is in a surplus of 6.2 percent of GDP. Issues for economic policy management in 2019, the government should focus on;

  1. Exporting for the whole year to be able to expand not less than 5.0% by focusing on the following issues:
    1. To drive the export of products having good opportunity to get benefit from trade barriers and to assist the exporters be affected, including tracking changes in important imported products.
    2. Compliance with the rules of the world trade, terms and practices in the counterparty countries.
    3. To expand trade cooperation, especially in the region, continuously. And
    4. To support for exporters to manage risks from exchange rate fluctuations and cost reduction & export facilitation.
  2. To support the recovery and expansion of the tourism sector by focusing on maintaining peace, country security, facilitating and reducing tourist congestion, sales promotion in the long-haul market and high income tourists, income distribution into secondary cities and communities, establishing tourism in Thailand linking with countries in the region and campaigning for Thai tourists return to popularize tourism in the country.
  3. Maintaining the driving force of economic growth from expenditure and investment of government sector by paying attention to the disbursement of capital expenditures for the fiscal year 2019 with a disbursement rate not less than 70.0 percent and disbursement of state enterprise investment funds in 2019 not less than 80.0 percent. Disbursement rate of overlap year not less than 75.0 percent and disbursement of non-disbursement loans of 12,858.1 million baht.
  4. Support for expansion of private sector investment by; (i) Drive export to increase capacity utilization and stimulate industrial investment (ii) Supporting entrepreneurs affected by barriers trade to increase domestic production capacity including convincing investors affected by measures trade barriers to move production bases to Thailand and (iii) driving investment projects of the government sector continuously.
  5. Caring for farmers and low-income people and strengthening small and medium scale enterprises including economy base.
  6. Preparation of labor force and labor quality be sufficient to support the expansion of the manufacturing and investment sectors as well as industrial groups that having the opportunity for expansion due to relocation of international production bases.

Impacts and factors on growth of the Thai economy in 2019

External factors are still unclear in many aspects, including the trade war between the United States and China still being an outstanding issue, the Brexit situation still has a risk that England will leave the EU without agreement while the Chinese and the European Union economies have signs of slowing down more than assessed. Domestic factors will remain at the general election that will take place on March 24, 2019. As a result, the economy will have distribution of money from election activities. But on the other hand, investors are still waiting to see the situation after the election in order to get clearer point of view. Which, if passed through the said period, the above factors should have a positive effect on the Thai economy in the second half of 2019.

Source: Fiscal Policy Office, National Economic and Social Development Board, Kasikorn Bank Research Center

Situations and trends of the electricity generation industry

The Ministry of Energy together with the Electricity Generating Authority of Thailand establish a draft electricity development plan of Thailand to provide sufficient electricity to meet the demand and to support the country's economic growth. The electricity development plan of Thailand has a timeframe for the duration of the plan to be in line with 20 - year national strategic plan (2018-2037). The highlights of the electricity development plan are;

  1. Providing electricity generation system, electricity transmission system and electricity distribution system with stability in the area, creating a balance of electrical systems by region.
  2. Considering the power plant for stability at an appropriate level to support the event of an energy crisis including increasing the flexibility of the electrical system (Grid Flexibility).
  3. Promoting low-cost electricity production to reduce the burden of electricity users and not an obstacle to long-term national economy and society development.
  4. Prepare the electricity system to support electricity competition which will help increase power generation efficiency in the whole country and electricity production that reflects the true cost.
  5. Reduce environmental impacts.
  6. Promote the production of electricity from renewable energy and increase efficiency in the electricity system (Efficiency) in both electricity generation and electricity usage.
  7. Develop the grid system (smart grid) to support the trend of the "Prosumer" power users.