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Trying to find a pulse in Thailand’s economic health

The Thaiger

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Trying to find a pulse in Thailand’s economic health | The Thaiger

Thailand’s economy is south-east Asia’s wounded soldier as the newly elected Thai government tries to boost confidence and stimulate the economy after five years of military rule. Certainly the past 12 months have been the most challenging.

GDP growth hit a four-year low of 2.8% for Q1 2019 and exports remain weak.

Despite having unlimited power for half a decade, PM Prayut and the NCPO have done little to improve Thailand’s economic situation or the plight of the average Thai.

Going after the previous premier and the elected Pheu Thai government as soon as they came to power over a rice pledging scheme (subsidies for rice farmers), the NCPO have used the same blunt tool of agricultural subsidies to keep the northern and north-east farmers ‘happy’. After all, that was Prayut’s big promise after seizing power in 2014, “bringing happiness back to the people”.

Big infrastructure promises and spending have made good headlines but are yet to show any economic gain for most Thai people. It hasn’t really made Thai people ‘happy’ yet.

Of the ASEAN 5 economies (Indonesia, Malaysia, Vietnam, Philippines and Thailand), the Land of Smiles has performed the worst over the fast five years averaging 3.6% growth against the average of the other four nations of 5-6.2% GDP growth.

For 2019, Thailand’s National Economic and Social Development Council, responsible for calculating the official GDP figures, has set growth at 3.3-3.8%, down from 4% estimated at the start of the year.  If the tourist tap stops gushing and slows to a trickle and the export figures keep trending down, the estimates may have to be revised down further again.

Trying to find a pulse in Thailand's economic health | News by The Thaiger

SOURCE: Global Economic Data, Indicators, Charts & Forecasts

Following the election and the (soon) completed formation of the new government it would appear that political stability abounds for Thailand but the fragile 19-party coalition is not predicted to last long. It’s also considered unlikely the new PM, who is the old PM from the five years of military rule, will be a fan of lengthy discussions, public consultation and parliamentary debate. Some of the smaller parties, who threw their weight behind the pro-junta coalition initially, are now getting flakey and looking to cross the floor and take their place in the back-benches of the opposition side of the new parliament.

Public debt has also steadily risen under military rule, climbing to 34% of GDP last year from 30% when they came to power. But international credit rating agencies are not ringing alarm bells just yet and Thailand’s public debt levels remain lower than Vietnam, Malaysia or Indonesia.

Thailand’s two largest infrastructure projects will surely continue to manifest, though the next phases of the contract will now be subject to debate in the new parliament. These include the 225 billion baht high-speed rail link between Suvarnabhumi, Don Mueang and U-Tapao international airports, and the China-backed high-speed line between Bangkok and the Thai-Laos border with a proposed budget of 300 billion baht.

And the Eastern Economic Corridor (EEC), the expansion of industry for the areas from Bangkok’s east to Rayong, will remain a showcase for economic growth for the new government.

Thailand will now have to choose whether it’s sufficient to keep surfing along as the wounded soldier of south-east Asian economies or whether it can muscle its way back to a position of regional economic prominence.

Trying to find a pulse in Thailand's economic health | News by The Thaiger

SOURCE: National Economic and Social Development Council

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Bank of Thailand sends a ‘warning shot’, but little impact

The Thaiger & The Nation

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Bank of Thailand sends a ‘warning shot’, but little impact | The Thaiger

PHOTO: Chiang Rai Times

“The Bank of Thailand’s move to curb the rising baht is simply a “warning shot” and will have little impact on the currency’s value or on the bond and stock markets.” This is the response from Thai economists following Friday’s BOT tweaking of the economic dials.

On Friday the BOT adjusted down the amount of baht accounts held by foreign investors and called on financial institutions to provide reports on foreign investors holding debt securities issued in Thailand.

The Stock Exchange of Thailand reacted on Friday and closed at 1,731.59, down 8.86 points or 0.51% from trading on Thursday. The baht also weakened by about 20 to 30 satang, depreciating to 30.90 from 30.60 baht to the US dollar.

Pipat Luengnaruemitchai, assistant managing director at Phatra Securities says there has been very little reaction to the change.

“I think this was just a warning shot and it implies that the central bank doesn’t really want to lower interest rates.”

If the US Federal Reserve cuts its policy rate later this month, then the baht is likely to move up against the dollar, Pipat said, adding that BOT’s last resort will be to cut the policy rate.

The fast-rising value of the baht has worried both exporters and policymakers as it could further impact Thai exports, which have already suffered from the global economic slowdown. Some economists have called on the central bank to lower the interest rate to prevent the baht from rising further as it could erode the competitiveness of Thai exports as goods from countries with weaker currencies will be cheaper in the global market.

The high baht has also been blamed as one of the main reasons for tourist numbers to cool off in the past four months.

Some analysts have forecast that the baht could edge up to 29 or 28 baht to the dollar by the end of this year should the Fed lower its interest rate twice this year.

Read the rest of the story HERE.

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Phuket accommodation pipeline – 55 new hotels under development

Bill Barnett

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Phuket accommodation pipeline – 55 new hotels under development | The Thaiger

by Bill Barnett from c9hotelworks.com

PHOTO: Horizon Beach Resort Hotels Phuket

One of Asia’s leading resort destinations Phuket looks set to weather a perfect storm as soaring hotel supply is forecast to be challenged by declining tourism demand. New research from consulting group C9 Hotelworks in their Phuket Hotel Market Update Mid-Year Edition has revealed an island development pipeline of 15,348 keys set to enter the market over the next five years, which represents an 18% push in total supply.

During the first four months of 2019 which is ranked as high season, year-on-year international passenger arrivals at Phuket International Airport slipped by 3%, while the domestic segment was down 6%. Looking into the data, the first half of 2018 had been a record-setting tourism period, as the succeeding six months experienced a sharp decline due to the retraction of the Mainland China market.

Mainland China remains at the forefront of any discussion about Phuket and the segment remains volatile with a 19% decrease registered this year from January through May. Russian arrivals have yet to fully recover. On the upside, fast-growing Indian arrivals tripled their tourism trajectory during the same period, versus 2018.

Hotel performance has mirrored the current trend, according to STR data this reflects a 12% retraction of RevPAR (revenue per available room), driven largely by lower market-wide occupancy. While May and September are the two lowest months for Phuket hotels, July and August are projected to experience a boosts in occupancy. But the reality remains that non-high season attracts significantly lower room rates and this factor will undoubtedly suppress overall rate growth during the year.

The C9 Hotelworks report also highlights the growing influence of hotel branded residences on the Phuket accommodation market. Over 50% of the incoming pipeline, or 8,337 units, are being developed.  Majority of these products are condominium properties with many being affiliated to international hotel groups via management or franchise agreements. Despite the drop in Chinese tourists, a number of Mainland real estate conglomerates have entered the island property sector.

Summarising, Phuket’s forecasted tourism market conditions, C9 Hotelworks view is that with the development of the new Greater Phuket airport by AoT in Southern Phang Nga, the long- term forecast remains positive. It’s probable that current hotel sector will experience a similar cycle that Bali saw between 2014-2018 and that new supply will eventually be absorbed on a medium-term basis, but in the shorter term, demand remains a key risk factor impacting operators and owners.

To read and download C9 Hotelworks full report click HERE.

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Amari Pattaya has a dramatic makeover

The Thaiger

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Amari Pattaya has a dramatic makeover | The Thaiger

“Dramatic changes have taken place to the entire property, which has transformed the legendary hotel into a new paradise along the northern end of Pattaya Bay.”

Today’s Amari Hotel in Pattaya has its roots back in the early 1070s when it was constructed as the Orchid Lodge. But now there’s been a major make-over under the Amari brand.

Amari Pattaya’s redevelopment program is now complete, as they unveil new accommodation offerings in two distinct buildings – Amari Tower and Amari Suites.

They have extensive free-form swimming pools with a treehouse-themed slide and aqua waterpark, kids’ club with animation team, restaurants, ballrooms, meeting facilities, fitness centre and spa.

New stylish rooms and suites are offered in two buildings: Amari Tower and Amari Suites. There are 297 refurbished guest rooms and suites, including the 19th floor executive lounge in Amari Tower, just steps away from the beach. The Amari Suites, tucked away in an exclusive building, offers a collection of 49 one- and two-bedroom suites, perfect for families and friends travelling together, the company said.

All suites offer ocean views, a dedicated living area with large dining space as well as furnished balconies. The suites are especially suitable for both short and longer stays.

New, inspired dining experiences with multiple cuisine options including Thai, Asian, Indian, Italian, Chinese, among international fare are on offer at Amaya Food Gallery. Aqua Eatery & Bar is another new dining venue for guests to enjoy poolside cool breezes, refreshing cocktails and a diverse menu of informal selections, the company added.

Amari Pattaya is located at the northern end of Pattaya Beach, less than 90 minutes by car from Suvarnabhumi Airport.

SOURCE: Amari Pattaya

Amari Pattaya has a dramatic makeover | News by The Thaiger Amari Pattaya has a dramatic makeover | News by The Thaiger

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