Thailand's economy grew 2.7 percent in the first quarter of the year, thanks to a recovery in tourism and higher agricultural output, the country's economic planning agency has said.

This marked a sixth consecutive period of expansion, accelerating from 1.4 percent growth in the final quarter of 2022, according to the data released by the Office of the National Economic and Social Development Council (NESDC).

The improvement was attributed to the constant expansion of the service sector, driven by the country's growing foreign arrivals, and the agricultural sector due to higher yields, the NESDC said in a statement Monday.

The NESDC maintained its gross domestic product forecast this year in the range of 2.7 percent to 3.7 percent, boosted by a further recovery in tourism and steadily expanding private consumption.

It also forecast that the country's headline inflation would slow this year, ranging between 2.5 percent and 3.5 percent year-on-year.

The Southeast Asian country's economy expanded 2.6 percent in 2022, recovering from 1.5 percent growth in 2021 as its vital tourism picked up pace.

Source : Xinhua

Consumer confidence in Thailand has risen for the 11th consecutive month, reaching its highest level in 38 months, with experts saying the increase is driven by factors including a reduction in COVID-19 infections, the recovery of domestic tourism, and lively election campaigns across the country.

The University of the Thai Chamber of Commerce (UTCC) reported that the consumer confidence index rose from 53.8 in March to 55 in April. Despite consecutive increases in the confidence index, the indicator remains below 100 points due to weak purchasing power and concerns about high inflation and interest rates.

According to UTCC President Thanavath Phonvichai, the government’s economic stimulus measures, such as the "We Travel Together" hotel subsidy and state aid programs, led to an increase in consumer confidence. Additionally, the rise in tourist arrivals during the Songkran Festival, the decreasing gasoline and diesel prices in the country, and the baht’s slight appreciation against the US dollar helped boost consumer confidence in April.

Despite the increase in consumer confidence, concerns remain about the high cost of living, including expensive electricity bills, and the global financial situation. The UTCC president warned that the economic slowdowns in the US and EU, the Russia-Ukraine conflict, and increasing interest rates could create pressure on the global economy, potentially leading to a recession that could impact Thai exports and purchasing power.

The UTCC also released the TCC Confidence Index, which measures the sentiment of the business sector and members of the Thai Chamber of Commerce in every province. The index rose to 51.9 in April, up from 50.5 in March, driven by a recovery in tourism and higher farm product prices. However, business operators are concerned about factors that keep affecting confidence, such as the PM2.5 situation, which affects the tourism industry, as well as rising electricity costs and minimum wage hikes proposed by some political parties.

Source : NATIONAL NEWS BUREAU OF THAILAND

The Lao Department of Agriculture (DoA) led the celebration of International Tea Day in Laos. This year, the three-day event aims to enhance the reputation of Lao tea as a high-quality product and establish a strong image of tea in Laos as well as encourage friendly competition and recognition among the local tea community.

The Mekong Tea Project implemented by DOA – leads the organization of the Fair, gathering together tea farmers, producers, industry professionals, consumers, and other stakeholders from around the country.

This is to recognize the importance of tea in the daily lives of Lao people and the potential it has to reduce poverty and create economic opportunities in the country. Lao teas can be a source of environmental sustainability, economic development, and a way to build resilient communities.

By celebrating the Lao tea industry, and its specific links to environmental preservation, we can promote its potential to have a positive impact on people and the planet.

To officially open the Fair, the Minister of Agriculture and Forestry, Dr. Phet Phomphiphack made an opening remark. Alongside Dr. Phomphipack was Siv-Leng Chhuor, Ambassador of France to Laos, who spoke about the French government’s continued support of Lao sustainable agriculture value chains.

Participants at the fair included representatives of the Agence Française de
Développement (AFD), which is funding the Mekong Tea Project, the European Union Delegation to Laos and national and international organizations.

“Despite favorable growing conditions and market proximity in China, to reach its full potential, the tea sector faces many challenges. In particular, farmers have still limited knowledge and skills about tea processing, and they’re not promoted enough to export tea. Through this event, we aim at bringing all tea value chain actors together to promote Lao tea’s image and sales” by Dr. Phet Phomphiphack, Minister of Agriculture and Forestry.

“We hope that this fair will help promote the Lao tea culture and the quality of teas across the country. The specificities of Lao tea, often produced in forested ecosystems by small-scale farmers, are to be preserved and scaled-up. We are convinced that the development of the tea value chain has a great potential to empower smallholder farmers, shed light on Lao culture, while preserving the environment,” he added.

Tea producers and exporters are coming from all-over Laos celebrate this important day. Producers and companies from Bokeo, Xayabouri, Phongsaly, Champasack, Houapanh Provinces display their products, representing the diversity and uniqueness of their tea terroirs. Amongst these was the Meung Tea Producers Cooperative, based in Meung District, in Bokeo.

With the support of the Mekong Tea Project, the Cooperative recently obtained the Organic EU Certification, which will allow its members to produce certified tea aiming at reaching the European markets. DOA and the French Development Agency handed-over the newly obtained certification during the Opening Ceremony.

“I am confident that the tea promotion events like this one today will encounter the same success. I wish the International Tea Day would soon be registered as one of the annual main events of the domestic and international promotional agenda of the Laos,” said Siv-Leng Chhuor, Ambassador of France to Laos.

More than 1000 public visitors joined over the 3-days event and discovered different tea blends from various provinces of Laos. During the Fair, visitors also enjoyed an artistic photo exhibition that depicted tea cultivation systems across Laos.

AN AUTOMOBILE is the sum of its parts. From the battery and radiator to the headlights and upholstery, the average vehicle manufacturer sources these parts from over 18,000 suppliers across the world. Even after the automobile has been assembled, it must then be shipped to the various markets. Indeed, the supply chain of the automotive industry is a vast and complex one – and therein lies the challenge.

The Covid-19 pandemic highlighted how easily global supply chains can be disrupted by economic, environmental, and geopolitical forces. In 2021, the world witnessed how a single poorly positioned cargo ship in the Suez Canal could cause US$9.6 billion-worth of daily losses in maritime traffic.

As a result, many in the automotive industry have chosen to strengthen their supply chain through nearshoring, or moving their manufacturing operations closer to customers.

Amid the global rise of nearshoring, South-east Asia has emerged as an attractive option for such operations. What are the key considerations automotive businesses must make when relocating to or expanding their footprints in the region?

The case for South-east Asia

Nearshoring presents a number of key benefits for businesses with complex supply chains. Specifically, it can help businesses reduce labour and operating costs, facilitate better communication and collaboration due to time zone proximity, and access a larger pool of skilled labour that may not be available in the home country.

While nearshoring is becoming prominent in markets across the world, especially in Mexico, South-east Asia is an especially popular port of call – and for good reason too.

For one, South-east Asia is home to 634 million people, notably a young demographic and a growing middle class. It is also economically vibrant, boasting the world’s fastest-growing growth of 5.5 per cent as a region in 2022. The region also has multiple free trade agreements between nations and loosened tariffs, which in turn is attracting large amounts of foreign direct investments and cross-border trade.

Regulations and policies in the region are also favourable for nearshoring. Governments there continue to reform legal and trade frameworks to improve the ease of doing business, all while investing in relevant infrastructure and manufacturing capabilities. Incentives such as tax holidays and cash grants are also available for companies seeking to relocate their manufacturing or supply chain hubs to South-east Asia. For example, in Singapore, there is the SG+ twinning model that leverages the business advantages of setting up dual production locations in the country and its neighbours, such as Johor in Malaysia and Batam, Bintan, and the Karimun islands in Indonesia. This allows businesses to launch manufacturing bases and diversify supply chains in the region.

Then there is also the diverse talent pool, from lower-skilled workers to skilled manpower in Indonesia, Vietnam, the Philippines, Malaysia and Singapore. This talent diversity will help companies keep up with increasing demand across South-east Asia.

Key nearshoring considerations

With such favourable conditions, South-east Asia is already forming a core part of many nearshoring strategies in the automotive industry. However, before automotive businesses pack up and relocate or expand into the region, there are some considerations of note.

For instance, while nearshoring can help automotive businesses save costs on labour, transportation, and logistics, it would be wise to balance these savings against additional costs, such as taxes, cultural barriers, and custom duties.

Also, as diverse as the region’s talent pool is, the automotive industry is built on manpower with expertise in design, engineering and manufacturing. As such, nearshoring in countries with an established automotive industry, or at least expertise in the abovementioned fields, would be wise.

Finally, the regulatory and political environments are also critical. The automotive industry, in particular, must comply with a host of regulations and standards, especially those related to safety and emissions. As such, nearshoring in a country that already has similar regulatory environments to the home country will make it easier on the compliance front. Furthermore, while South-east Asia as a region is politically stable, the stability is uneven across countries. Automotive businesses thinking of nearshoring there must consider a country that provides a fairly reliable, stable supply chain in the long term.

Technology that facilitates visibility and transparency

Nearshoring is a viable supply chain strategy for automotive businesses looking to better manage cost, increase agility, and reinforce resilience. However, even the best-laid supply-chain strategy is only as robust as the technology that drives it. In fact, accurate, real-time data across the supply chain allows automotive businesses to forecast demands, adapt to disruptions, and gain greater visibility and control over the entire supply chain network.

One example of this in action is Mazda Australia. The company imports, stores, and distributes automotive parts, accessories, and vehicles from multiple overseas locations to more than 140 authorised dealers in Australia. As such, it needs a scalable supply chain solution with high visibility. This calls for specialist proprietary technology that can streamline load prioritisation, lock in below-market ocean rates, and uncover customs reclassification opportunities. Doing so would result in substantial savings on import costs, including a reduction in air freight costs from suppliers in South-east Asia to Australia.

Furthermore, considering the lessons that the pandemic has taught us, technology allows automotive businesses to maintain visibility and flexibility, all while making agile adjustments to the supply chain in case of unforeseen circumstances.

Ultimately, the only certainty is uncertainty. In order to find steadier footing in this ever-changing environment, automotive businesses would be wise to invest in an end-to-end solution that integrates all requirements across the supply chain and provides real-time insights. An efficient and agile supply-chain management system can make all the difference between surviving an upheaval and thriving in the years to come.

The writer is vice-president, South-east Asia, at C H Robinson

Source: The Business Times. Link Here.

Asean governments should aim for every public dollar funded for infrastructure development to translate to an “early double-digit” amount in financing mobilised from the private and institutional sectors, said the Asian Development Bank (ADB) in a new report.

That ratio would be a “tipping point” for public, private, and institutional capital to provide enough resources to close the region’s significant infrastructure investment gap, said the development organisation.

Currently, the governments’ fund sourcing averages three dollars for every one dollar invested. “They should aim for early double-digit ratios if not at least doubling fund sourcing,” said ADB.

ADB launched the report on Tuesday (May 2) as it kicked off its 56th Annual Meeting, a gathering of finance ministers, central bank governors and other stakeholders representing the regional development bank’s 68 member economies at Incheon, South Korea.

The 129-page document took stock of the latest innovative financing approaches deemed as key to private sector participation, with inputs from finance ministers and central bank governors of Asean+3 economies. Asean+3, or the Association of Southeast Asian Nations Plus Three, refers to the 10 Asean member states plus China, Japan and South Korea. 

Second Finance Minister Indranee Rajah was referred to as a key partner in ADB’s collaboration with Asean+3 in coming up with the report, titled Reinvigorating Financing Approaches for Sustainable and Resilient Infrastructure in Asean+3.

Challenging gap

With this being the first time in three years that the meeting was held in person, the lingering effects of the pandemic were in sharp focus. ADB said financing the infrastructure gap has gotten more challenging than before, as debt levels are up, tax revenues down and public spending has ballooned.

The situation severely limits direct public funding for infrastructure, it stressed.

In developing countries alone, the funding gap is US$2.5 trillion a year, as public and private financing of United Nations (UN) Sustainable Development Goals (SDGs) remained around US$1.4 trillion, it said.

The UN Conference on Trade and Development had estimated that US$3.3 trillion to US$4.5 trillion a year is needed for these countries to achieve their SDGs.

Public resources may close to a third of the gap, but private capital needs to cover at least 70 per cent, ADB stated.

Its own assessment of its 45 developing member countries from Asia and the Pacific found that US$26 trillion is needed to meet SDGs by 2030. This translates to about US$1.7 trillion per year, but only about US$880 billion is invested in infrastructure annually, it pointed out.

Asean economies, in particular, need at least US$2.8 trillion in total infrastructure investment by 2030, or US$184 billion annually.

Why banks can’t fill in

While the financial sector in other parts of the world could step in to meet the infrastructure financing requirements, in Asean+3 the sector is too “narrow” to do so.

Banks dominate the space in the region, while pension funds and insurance companies remain small, ADB said. 

“Since banks can provide only short-term financing as they are constrained by their liabilities (deposits), any allocation to long-term investments leads to a maturity mismatch,” it added.

And as Asian banks are largely risk averse to infrastructure projects because of tightening regulations on credit lending, including credit risk measurement as stipulated by the Basel Committee on Banking Supervision, private sector participation becomes key, it said.

But even as more than US$200 trillion of private capital is invested in global capital markets currently, ADB said a major bottleneck lies in the lack of a bankable, investment-ready pipeline of infrastructure projects. The risks and low rate of return are also not attractive.

One leads to 12

Blended finance – an area of focus for the Monetary Authority of Singapore – is among the 12 innovative financing approaches covered in the report. 

The model shows promise, especially as one of its case studies, development finance institution GuarantCo, was able to mobilise as much as $12 for every public dollar put in using it.

GuarantCo is funded by various governments including the United Kingdom, Switzerland, Australia and Sweden through trusts and facilities. Its blended finance solution de-risks investments by providing partial credit guarantees for infrastructure projects in developing countries and receiving first loss equity contributions from public funds.

The 1:12 ratio was possible as GuarantCo designed a funding model that lets it provide guarantees up to three times the value of the equity contribution which, in turn, can, on average, mobilise up to four times private sector investment into infrastructure projects. 

For blended finance to be successful, ADB suggested that it should address market failures to minimise the risk of market distortion or crowded out of private finance. Crowding out takes place when development funders invest in a project that could have secured complete private sector financing without any assistance from the public sector.

Three steps

Offering three practical steps on how to scale infrastructure investments, Indranee, speaking at the report’s launch event, said governments will have to first build capacity in structuring bankable projects.

When that is done, the public sector should connect demand and supply by linking investors to bankable projects, she said.

Finally, the sector should enhance investor confidence, by creating awareness around innovative financing approaches.

The awareness will be key to encouraging greater investments in marginally bankable projects via these platforms, she added.

Source: The Business Times. Link Here.

Inbound Chinese visitors to Thailand are on track to reach 1 million per month beginning in October, a level seen before the COVID-19 pandemic, due to demand during peak season and higher airline capacity.

The Tourism Authority of Thailand (TAT) has reported a growing number of travelers from the Chinese mainland, with arrivals increasing from 91,898 in January to 285,000 recorded in April, as flights resumed between the two countries.

Chinese visitor arrivals are likely to surpass 5 million this year given the over 6 million available airline seats connecting China to Thailand between April and October, according to Chuwit Sirivejkul, TAT regional director of marketing for East Asia.

Depending on the number of flights allocated during the high season between October and March, the annual arrivals could soar as high as 7 million, Chuwit added.

Starting next month, the Civil Aviation Authority of Thailand expects flights from China to reach 430 per week, up from over 100 currently.

Chuwit noted that daily Chinese arrivals peaked at 18,000 to 20,000 during the Labor Day holiday earlier this month and will range between 8,000 and 10,000 a day in May.

This figure is a significant increase from the average of 2,500 visitors per day recorded in February before group travel was allowed from the Chinese mainland following China's optimization of its COVID-19 policy.

According to the TAT, Thailand welcomed 8,596,452 foreign tourists between January and April, with 843,920 coming from the Chinese mainland.

The surge in tourist numbers is a positive sign for the Southeast Asian country's vital tourism industry, which has been hit hard by the pandemic.

In 2019, nearly 40 million international tourists were recorded entering the kingdom, with Chinese tourists accounting for more than a quarter of the total arrivals.

Source Xinhua

The Tourism Authority of Thailand (TAT) wants to attract high-spending visitors from the Middle East in the second half of this year, aiming to use the market as a new tourism growth engine.

According to Apichai Chatchalermkit, deputy governor for tourism products and business at TAT, the authority has been ramping up its efforts to entice high-spending tourists from the Middle East since Thailand restored full diplomatic ties with Saudi Arabia early last year.

He said Middle Eastern consumers have a positive perception about the quality of health and wellness businesses in Thailand.

According to TAT, the number of Middle Eastern tourists travelling to Thailand tallied 314,882 last year, with nearly 100,000 visitors from Saudi Arabia and around 66,000 visitors from the United Arab Emirates (UAE).

Travellers from the Middle East are regarded as a high-spending group that has relatively long stays in Thailand, said Mr Apichai.

In 2019, travellers from the UAE were in Thailand for an average of 11.4 days and spent more than US$220 per day.

In a move to promote Thai tourism in the Middle East, the TAT recently participated in the 30th Arabian Travel Market, which was held from May 1-4 in Dubai.

The TAT expects tourism revenue to reach 2.38 trillion baht this year, about 80% of the pre-pandemic level in 2019. Of the total, 1.5 trillion baht will come from foreign visitors, with the remainder from local tourists.

The authority predicts 25-30 million foreigners will visit Thailand this year.

According to Mr Apichai, the TAT is planning marketing events to encourage travel to Thailand, including tastings of tropical fruit and fruit buffets in Rayong and Chanthaburi.

The authority is also drawing up a schedule to promote durian in Hua Hin.

The TAT joined forces on Wednesday with Central Food Retail, the operator of Tops, to promote "Thailand Amazing Durian & Fruit Fest 2023", which is being held until May 15.

The event showcases Thai fruit in a bid to stimulate tourism among both domestic and foreign tourists.

The festival has three highlights: a Monthong durian buffet, a durian café zone and a fruit market zone.

Tops expects the event to generate more than 200 million baht in sales.

Apart from promoting fresh fruit, the TAT has talked with retail chain stores about helping fruit farmers process their products to sustain their long-term income.

The TAT also pledged to provide fruit farmers with markets to sell their produce.

Source Bangkok Post

The Tourism Authority of Thailand (TAT) hopes the Chinese market can surge to 1 million arrivals per month in October, as occurred in 2019,

thanks to increasing flight capacity and an influx of demand during high season, with e-visa issues resolved by that time.

Chuwit Sirivejkul, TAT regional director of marketing for East Asia, said the agency is confident that Chinese tourist growth is on track to surpass 5 million arrivals this year, generating 446 billion baht.

Flight slots between Thailand and China total 6 million available seats from April to October, an average of 600,000 to 900,000 seats per month. An estimated 840,260 seats are available in October.

Roughly 10,000 Chinese people are visiting Thailand each day, peaking at 18,000 to 20,000 per day during the Labour Day holiday earlier this month.

Airports of Thailand plans to increase ground handling services for two existing providers, Thai Airways International and Bangkok Flight Services, which should help facilitate growing demand, said Mr.Chuwit.

He said Thailand should expect a huge number of Chinese tourists in the second half, especially family trips between June to August during school holidays, followed by incentive business groups in September.

China's National Day, a seven-day holiday in October, should also accelerate travel demand through the end of the year, with more chartered flights, said Mr Chuwit.

Regarding the limited capacity for visa applications for Chinese tour groups, he said TAT will discuss the matter with the Foreign Affairs Ministry next week. The e-visa application system for Chinese tour groups allows 84,000 applications per month.

Following negative comments about safety in Thailand circulating on Chinese social media last month, Mr Chuwit said it resulted in a slowdown in secondary Thai tourist cities. The impact is short-term should not affect overall growth this year, he said.

At the end of May, Mr Chuwit said the TAT plans to invite Chinese influencers to Thailand to increase their confidence in tourism safety, via a press conference co-hosted by the Royal Thai Police.

He said despite promising growth, challenges include a lack of Chinese-speaking staff and financial tech development to cater to Chinese spending behaviour. Of the 8.5 million foreign tourists from January to April, Chinese tourists tallied 843,920.

TAT recently launched an ad campaign titled "Unboxing Thailand" targeting Chinese millennials, tallying 2 million views since April.

Source Bangkok Post

Milieu Insight, Southeast Asia’s foremost consumer research company, recently surveyed 2,500 working individuals aged 20-65 in Indonesia, Thailand, Vietnam, Philippines, and Malaysia to gauge their travel plans for the upcoming summer. The results provide a positive outlook for the region’s tourism industry, with nearly 80% of respondents expressing a willingness to travel domestically.

According to the survey, almost half of the respondents plan to take two to three domestic trips this year, with 40% of Thai respondents planning four or more trips, the highest across the region for domestic travel intent. This suggests that travel companies should consider offering packages and promotions that cater to multiple trips to boost the frequency of travel.

Furthermore, the survey revealed that concerns about COVID-19 safety have diminished in most countries surveyed, except for the Philippines, which recorded the highest level of concern, likely due to the rise in cases in the country.

Regarding key considerations for domestic travel, travel spots and sceneries are top priorities for Indonesia, Thailand, and Vietnam, while safety tops the list for the Philippines. Regarding preferred destinations, Boracay in the Philippines, Bali in Indonesia, Da Nang in Vietnam, Sabah in Malaysia, and Phi Phi Island in Thailand are the top choices among respondents.

In addition, national carriers such as Philippine Airlines, Garuda Indonesia, and Vietnam Airlines are favoured by respondents from the Philippines, Indonesia, and Vietnam. In contrast, low-cost carrier AirAsia is the airline of choice for travellers in Malaysia and Thailand.

When planning activities, Southeast Asians proved to be foodies, with many planning food trips. Beach holiday activities were prevalent in the Philippines, while touring was a favourite activity for Thai respondents. Museum visits were also popular in Vietnam and Malaysia.

Overall, the survey highlights the importance of offering packages that cater to travellers’ preferences and the need for the tourism industry to focus on promoting domestic travel. With a diverse range of activities and destinations, the region has much to offer, and travel companies must take note of these trends to remain competitive.

To read more about the survey, visit the Milieu Insight website.

Source DESTINATION THAILAND NEWS

Chinese car manufacturer SAIC Motor has started construction of a new energy industrial park in Thailand, which is expected to focus on localized production of key auto parts for the company’s new energy vehicles (NEVs).

According to the carmaker, the Phase I construction of the park is estimated to be completed this year, while the complete construction of the park will be finished in 2025.

The new energy park, located in Chon Buri province, will cover 120,000 square meters and boast standard workshops, a container yard, and a logistics warehouse, as well as complete facilities including drainage systems and a parking lot. Several upstream NEV core and key component enterprises have expressed their intention to settle in the industrial park in the future.

As early as 2013, SAIC teamed up with Charoen Pokphand Group to found SAIC Motor-CP, a joint venture, in its bid to develop the vast ASEAN market.

SAIC’s MG brand, which entered the Thai market in 2013, has become an increasingly popular brand among Thai customers. As of April, MG brand’s total sales in Thailand notched up more than 173,000 vehicles. Last year alone, SAIC Motor-CP manufactured and sold about 32,000 whole vehicles - making it one of SAIC’s major overseas production and sales bases.

In 2022, SAIC saw its sales in overseas markets reach over 1 million vehicles, ranking top among Chinese carmakers for the seventh consecutive year and marking the company becoming the first domestic automaker to achieve this milestone.

Source NATIONAL NEWS BUREAU OF THAILAND

Chinese nationals have been seeking out property purchases in Thailand since Beijing opened its borders this year.

Many Chinese are reportedly eager to invest in a residence overseas, keen for a safety net in case of another pandemic, and also to hedge against economic risks.

Data from website Trip.com showed that Thailand was the most popular outbound destination for Chinese travelers during the May Labor Day holiday, followed by Japan and South Korea.

The kingdom’s reputable international schools and quality medical facilities are also drawing increasing numbers keen to acquire a second home.

Thailand expects at least 5 million Chinese visitors this year, with some set to buy property, although the figure is still a far cry from pre-pandemic levels when they made up nearly a third of the 40 million arrivals.

Mesak Chunharakchot, President of the Thai Real Estate Association, said: "There is definitely demand from China for properties in Thailand."

He added that topping buyers’ lists are locations in major cities such as the capital, Bangkok, along with Chiang Mai in the mountainous north, the east coast beach resort of Pattaya, and the northeastern region of Isan.

Although Thai rules limit foreign ownership to just 49% of the units in any condominium development, prospective buyers are pouring in, bringing business to real estate agents who target Chinese buyers.

Source : NATIONAL NEWS BUREAU OF THAILAND