Surging oil price and high inflation continue to challenge Bangkok property market

• According to the National Economic and Social
Development Council (NESDC), the Gross Domestic
Product increased by 2.2 per cent in Q1 2022
compared to a 1.8 per cent increase in Q4 2021. This is
due to the government’s economic stimulus measures,
the relaxation of travel restrictions domestically and
internationally, and improved domestic production
particularly in the agricultural sector.

• Private final consumption expenditure rose by 3.9 per
cent, expanding from a 0.4 per cent increase in Q4There was an increase in spending on durable
goods, semi-durable goods, and net services at 3.8
per cent, 0.4 per cent, and 4.4 per cent, respectively.
The expenditure on non-durable goods (food and nonfood
items) increased by 4.1 per cent in Q1 2022.

• Government final consumption expenditure increased by
4.6 per cent , decelerating from an 8.1 per cent increase
in Q4 2021. The deceleration stems from the contraction
in compensation of employees, purchases of goods and
services at 2.6 per cent and 3.8 per cent, respectively.

• Private investment increased by 2.9 per cent,
improving from a reduction of 0.8 per cent in Q4 2021.
The increase stemmed from an increase in machinery
investment. Public investment decreased by 4.7 per
cent, slowing down from a 1.7 per cent increase in
Q4 2021.

• Exports of goods and services continued to increase
by 12.0 per cent, compared to the 17.6 per cent
increase in Q4 2021.

• As prices have continued rising, the consumer price
index (CPI) rose by 4.7 per cent in Q1 2022, higher
than the 2.4 per cent recorded in Q4 2021.

• The NESDC has projected the Thai economy to grow
by 3 per cent this year and 3.7 per cent next year,
driven by exports, increased domestic demand,
and a recovery in tourism. Exports, a key driver of
growth, still had momentum despite the impact of
Russia’s invasion of Ukraine on the global economy.
However, the structural changes in geopolitics are
likely to create more risks for the Thai economy next
year, especially when there are disruptions to global
supply chains which would affect Thai manufacturing.
The NESDC expressed the opinion that the ongoing
war in Ukraine is expected to become more complex
and unpredictable, potentially becoming a greater
geopolitical risk in 2023.

• The cabinet approved extending the existing measures
scheduled to expire at the end of June 2022 to the
end of September this year to alleviate the hardship
experienced by low-income earners from the surge
in oil prices. The energy prices remain relatively high,
attributed to the war in Ukraine and some countries
curbing exports of commodities.

• The Labour Ministry revealed that the minimum daily
wage would be increased this year. However, the wage
increase will not be sharp since businesses are still
reeling from the impact of Covid-19. The minimum
daily wage was last increased in January 2020, from
THB313 to THB336. According to the Labour Ministry,
the new minimum daily wage will be determined by a
national tripartite committee on wages, and will take
effect on 1 January next year.

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