Jetro optimistic about Thai economy in 2nd half of 2024


February 09, 2024

The Japan Chamber of Commerce and Industry Bangkok (JCCB) conducted an economic trend survey of Japanese joint venture companies in Thailand at the end of last year to gain a comprehensive understanding of business conditions.

However, the survey, conducted between November 28 and December 20, with 1,646 JCCB members, and 539 responding companies (32.7%), indicated a negative economic trend reflected by the Diffusion Index (DI). The DI stood at -10 in the first half of 2023 and further decreased to -16 in the second half of the year. However, it is expected to improve to 10 in the first half of this year, the Japan External Trade Organisation (Jetro) Bangkok office chief, Kuroda Jun, revealed this week.

The negative DI for the second half of 2023 is attributed to various factors, including sluggish durable goods consumption, the global economic slowdown, and reduced exports due to monetary policies, despite positive impacts from the recovery of inbound tourism and decreased energy costs.

Regarding exchange rates for business planning (Thai baht per US dollar), most companies specified using rates ranging from 35.0 to just below 35.5 baht to the US dollar. Some businesses have adjusted their exchange rates, with the baht being relatively weak compared to the dollar. The yen has also been adjusted to be weaker against the baht.

When asked about demands to the Thai government, respondents emphasised regulatory compliance and enforcement related to customs and tariff procedures. Other priorities include the development of basic transportation infrastructure and support for economic stimulus measures, such as consumer stimulation and the uncertain expectations regarding digital wallet measures, according to Kuroda Jun.

The economic trend is forecast to improve in the first half of this year, turning positive due to increased tourism and economic stimulus measures, especially consumer stimulation and tax-related measures. The expectations for the first half of this year are positive, with hopes that it will continue to support the recovery of inbound tourism and business promotion, Kuroda Jun said.

However, there are still issues with various regulations and regulations perceived as burdensome by business operators. These processes are time-consuming and rely heavily on the discretion of officials. Improvements in transportation infrastructure, particularly traffic, have been observed but remain challenging.

Regarding the Thai government’s invitation for Japanese investment in the land bridge project, investors are currently studying and gathering more information. However, there is no clear stance as yet, and opinions will be provided based on future evaluations, according to Kuroda Jun.

Source: The Nation