In Focus : 3 Top Picks of the Thai Economy in 2019

In Focus: 3 Top Picks of the Thai Economy in 2019

Despite the These include continuing government mega investment projects, new groups of Chinese tourists in Thailand, and positive sides of trade war which would yield opportunity for Thai businesses. Thus, these 3 issues are the EIC’s top picks in 2019 so we can see arising opportunities as well as be prepared for what awaits us in this year.


Pick 1: Government mega projects to spur economy and spark pri-vate investment

Public investment is expected to expand significantly In 2019. EIC estimates that public construction in 2019 will reach THB 810 billion, increasing approximately 9%YOY from the 2018 forecast. This rapid expansion continues from the year before. The investment value that will drive the economy mainly comes from the progress of ongoing projects that started construction last year. These projects are Bangkok-metropolitan rail line, dual-track railway, motorway, and airport expansion. EIC forecasts that the construction cost of these projects will worth THB 160 billion, accounted for 87% of the total infrastructure construction estimated cost and 0.9% of nominal GDP in 2019. The rest of investment will be the new projects, including the High-Speed Rail Linked 3 Airports project, the extension of city train, and the new routes of dual-track railway. However, when considering the progress, these projects will have limited impact in terms of investment value as, in the first half of 2019, most of the projects are in the bidding and other preparation processes such as land expropriation. EIC expects the construction, worth THB 8 billion, to begin construction in the late 2019.

Pick 2: Chinese tourists to rebound back to a positive growth within the second quarter 

Chinese have been the world’s largest group of tourists and the biggest spenders since 2012. In 2017, the number of Chinese outbound tourists was approximately 130 million, increasing 7%YOY, and their total spending reached USD 115 billion, making the highest amount for the 6 consecutive years. Thailand is the number 1 traveling destination for Chinese tourists. In 2017, Thailand was able to attract 9.8 million Chinese tourists, which increased 11%YOY and accounted the largest share of 28% of the total foreign tourists in Thailand. Additionally, Chinese tourists are one of the biggest spenders in Thailand with average spending of THB 53,480 per head per trip. In the first half of 2018, the number of Chinese tourists in Thailand rapidly rose 26%YOY to 5.9 million.

Trend 3: Opportunity for Thai business in the US-China 

The US-China trade war has caused uncertainty in the global trade, which could change trade routes and disrupt global manufacturing supply chain and investment plans of businesses. On the other hand, it might open opportunities for Thailand to take advantages amid conflicts between the two largest economies. Trade protectionism measures might force the US and China to change trade routes to avoid higher manufacturing and export costs from the new import tariffs. Particularly, China is losing its competitiveness in exporting products to the US. China is Asia’s important manufacturing center, which plays a crucial role in global supply chain network. Thai exports, which are highly connected to China’s trade, have been indirectly affected in the same supply chain. Moreover, investment plans for business tend to be impacted due to trade policy uncertainty in the US and China. Amid negative impacts on trade and investment, Thailand might still be able to benefit from the trade war.

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