A challenging, but not impossible, 2024: Thai CEOs

Krungthep Thurakij media surveyed the opinions of CEOs from eight corporations regarding the 2024 direction of the Thai economy, along with the global economy which significantly affects business strategies.

Suphachai Chearavanont, CEO of Charoen Pokphand Group, predicted highly volatility and constant directional change in the global economy in 2024, particularly among the group of world power-axis countries. Adjustments in the global economic system have already been impacting Thailand’s economy, prompting necessary adaptations.

Moreover, numerous challenging factors are impacting the global economy, including sustainability, drought, flooding, the effects of climate change, and geopolitical divisions worldwide. There is the possibility for escalation in the Russia-Ukraine and Israel-Hamas conflicts, which may expand but are unlikely to reach the severity of a third world war, Supachai suggested.

Simultaneously, the Thai economy continues to face challenges on all fronts. If the economy does not improve in 2024, it would cause continued stagnation across all sectors of business and industry.

The growth of per-capita income in Thailand remains low. Therefore, short-term, medium-term, and long-term economic stimulus policies must be implemented simultaneously to facilitate better recovery of the Thai economy compared to other countries — or at least growth within the ASEAN region.

Building a foundation for a robust economic system, including continuous investments in education and infrastructure, is imperative, said the CP leader.

Although the overall economy in 2024 may not show immediate results, it would instill confidence in foreign investors to bring global capital back to Thailand.

“Ensuring confidence that Thailand is progressing on fundamental aspects such as increasing income, transportation, agriculture, irrigation, high-speed railways, and land bridges, even if the economy may not grow significantly next year, these investments will bolster short-term and long-term investor confidence,” he said.

Suphachai added that effective efforts in the agricultural and irrigation sectors would significantly propel economic growth. Additionally, there should be a push for technological transformation in both the public sector (e-Government) and industries, and especially regarding AI, to develop concurrently and support each other.

Uncertainty remains high: PTT

The uncertainty in the Thai economy remains high, noted

PTT Plc’s president and CEO, Auttapol Rerkpiboon. This year’s economy is in a situation where all parties must handle it with caution, he emphasised. There is a likelihood of expansion, but there are still uncontrollable factors and uncertainties. Therefore, he said, it is essential for both business operators and policymakers cautiously conduct business, including policy precautions for operations in 2024.

For the Thai economy in 2024, several challenges need to be observed, comprising:

1. Global economic situations affecting the Thai economy

2. Geopolitical tensions impacting the global economy, especially those that have intensified closer to Thailand, like the ongoing situation in Myanmar, the escalation of which cannot currently be predicted

Energy price fluctuations

As for the energy pricing policy, which is a crucial government policy, particularly the electricity tariff set at 4.10-4.20 baht per unit for January-April 2024, Prime Minister Srettha Thavisin has indicated a gradual approach to managing this, along with the readiness to listen to input from all relevant parties. PTT is prepared to cooperate, said Auttapol.

Jareeporn Jarukornsakul, the group CEO and chairman of the executive committee of WHA Corporation Plc (WHA), said the economy going into 2024 shows signs of improvement but faces significant challenges.

The government’s major challenge is how to progress with policies to stimulate better economic expansion to overcome the crisis point, she noted.

“Thailand has passed through the COVID-19 period, but now the big challenge for the government is how to make policies that drive economic growth in 2024 for significant change.

“Otherwise, if the Thai economy remains stagnant like this, neighbouring countries might surpass us entirely”, she added.

Key issues include:

1. Attracting the highest foreign direct investment (FDI) into Thailand

2. Stimulating investments in the Thai capital market.

3. Managing the grassroots economy, particularly handling household debts exceeding 90%, supporting small businesses, and fostering the growth of small and medium enterprises (SMEs).

Jareeporn pointed to the ongoing negotiations with foreign investors, particularly from China, Japan, and the United States. This primarily involves the electric vehicle and automotive parts groups, along with consistent support for the electronics and semiconductor sectors.

“The effort to attract pro-active foreign investors, with Prime Minister Srettha Thavisin leading the delegation, instills confidence in global-level corporations. The private sector is ready for new investments.”

Accelerating investment, stimulating measures

The Thai economy relies somewhat reasonably on the global economy, noted Kongkrapan Intarajang, the chairman of PTT Global Chemical Plc (GC). “However, there’s significant uncertainty in 2024. Therefore, both investment and economic stimulus policies need to be fully implemented to drive the country’s economy forward.”

He said the challenges to watch out for in 2024 include:

1. Geopolitical tensions

2. Energy price fluctuations, with oil prices still expected to fluctuate significantly

3. The recovery of various economies worldwide, which remains uncertain in terms of improvement.

2024 growth will not be as easy as before

“Business growth this year will not be as straightforward as before,” said Piyabut Charuphen, the managing director of BIG, Thailand’s leading industrial gas and climate technology firm, as well as the president of the Hydrogen Thailand Club.

“moving forward, businesses must consider sustainability. While many view it as a cost, BEC World sees it as an opportunity.”

Moreover, he noted, that Thailand has previously grown through mass production in industries, aiming for low costs and high volumes. Now, however, Thai products face price competition from Vietnam, Indonesia, and China.

Still, if Thailand’s strengths were highlighted in a sustainable context, he believes ample opportunities would remain.

Piyabut said the challenges to keep an eye on in 2024 include:

1. The possibility of energy prices rising again

2. Geopolitical conditions between countries

3. Changes in weather patterns, which need to be turned into opportunities rather than being seen as a threat.

Adjusting export portfolios

Rak Vorrakitpokatorn, the president of The Export-Import Bank of Thailand (EXIM), recommends that exporters expedite portfolio adjustments, shifting exports from major markets towards the Southeast Asian markets. This adaptation could counter the political tensions among powerful countries, tensions that affect purchasing power.

Thai exporters need new markets, particularly in Southeast Asia, where India alone has a population of up to 2 billion, said Rak. Meanwhile, ASEAN markets encompass around 700 million people. Indonesia, currently with a booming economy, holds a population of approximately 200 million.

“Rather than relying on conflicting old markets, focus on emerging markets with purchasing power. Thailand’s team in these new markets would provide information and guidance, urging Thai exporters to seek out new markets themselves.”

Preparing for the crypto rise

Jirayut Srupsrisopa, the founder and CEO of Bitkub Capital Group Holdings Co Ltd, said the organisation aims in 2024 to be the digital economy infrastructure service provider for Thailand.

Development not follow the traditional startup format. Instead, it would serve as the digital asset hub for Thailand.

Hence, Bitkub’s subsidiaries, totalling five companies, and another two joint capital ventures, must have roadmaps and KPI success metrics within the first six months of 2024 to align with the recovering market’s movements.

This includes preparing office expansions to accommodate employees.

“Certainly, Bitkub has seen success in the past 1-2 years, but the ongoing goal is sustainable growth,” says Jirayut. “It aims to be the pillar for investors and everyone in the country as a knowledgeable entity in digital assets, potentially leading to consistent returns.”

Bitkub is using the market’s downturn to refine and revamp the organisation for stable growth. Any business expansion in 2024 would be amidst intensified competition.

Uthai Uthaisangsuk, Sansiri Plc’s, chief operating officer and executive director, pointed to the various uncertainties ahead this year. Part of the GDP’s expansion relies on the digital cash flow of 10,000 baht, having an effect of 5.5 times. If this digital currency is not introduced, GDP might remain at 2.6-3.0%, but its introduction could increase to 3.5%.

GDP significantly affects real estate growth, said Uthai. Proper stimulation could prompt direct foreign investment (FDI), aiding in economic recovery. Additionally, tourism plays a pivotal role; the return of Chinese tourists post-COVID would substantially bolster the real estate sector, given that Chinese individuals comprise the largest foreign property buyers.

Critical negative factors include increased domestic interest rates amid an unstable economy, as well as geopolitical issues like the Russia-Ukraine conflict or the Israel-Hamas conflict, all negatively impacting the global and Thai economies.

“On the positive side, an improvement in tourism, especially if the 10,000 baht digital currency is introduced, could invigorate economic circulation, sustaining smaller companies and bolstering purchasing power.”

Navigating through 2024’s economy requires cautious quarterly monitoring, ensuring precise and accurate investment data before launching projects at suitable prices due to reduced purchasing power.