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Bangkok Q4 2021

Bangkok Q4 2021

The easing of movement restrictions spurred market optimism and new launches

• According to the National Economic and Social
Development Council (NESDC), the Thai GDP in Q3
contracted by 0.3 per cent stemming from the adverse
impacts of the Covid-19 outbreak on economic activities.
• Private final consumption expenditure decreased
by 3.2 per cent, in contrast to an increase of 4.8 per
cent in Q2, attributed to the decrease in spending
on durable, semi-durable, and net service items.
Concurrently, spending on non-durable items had
a slow increase over Q2. The rise in compensation
of employees and social transfer in-kind bolstered
the government final consumption expenditure to
increase by 2.5 per cent, expanding from an increase
of 1.0 per cent in Q2.
• Private investment increased by 2.6 per cent, slowing
down from 9.2 per cent in Q2. Public investment
decreased by 6.0 per cent, in contrast to a 4.1 per cent
rise in Q2, due to a decrease in government investment.
• Private construction decreased by 0.5 per cent,
compared to a decrease of 0.1 per cent in Q2. This was
mainly caused by the decrease in residential building
construction influenced by the decline in construction
permitted area for all types of residential buildings in
Bangkok and metropolitan area, municipal area, and
sub-district municipal area. However, non-residential
building construction increased by 2.8 per cent,
improving from a 5.1 per cent decrease in Q2.
• Exports of goods and services grew by 12.3 per cent, a
slower rate compared to 27.7 per cent in Q2.
• The consumer price index (CPI) increased by 0.7 per
cent to 102.25 (NSA), above the optimal level of 100
points, reflecting better consumer sentiment.
• The NESDC projected the Thai economy in 2021
to grow in the range of 0.7 – 1.2 per cent this year.
Meanwhile, private consumption expenditure and
private investment are expected to increase by 4.3 per
cent and 4.2 per cent, respectively. Headline inflation is
estimated to be in the range of 0.9 – 1.9 per cent. Key
factors that will drive economic growth in 2021 include:
1) the recovery in domestic demand and manufacturing
production; 2) the government efforts to boost
domestic tourism; 3) the expansion of export of goods;
and 4) the support from government disbursement.
• The Bank of Thailand projected the GDP growth to be
higher in 2022, with a full recovery not taking place until
2023, due to the Omicron variant being a dominant
factor that the country needs to be cautious of.
• The government will spend around THB1 trillion
in 2022 to cushion against the volatility that can
arise from the Omicron variant. They are balancing
between keeping the economy stable and taking
precautions against the virus.
• According to the Federation of Thai Industries
(FTI), the Thailand Industry Sentiment Index (TISI)
in November 2021 rose to 85.4 points, improving
from 82.1 points in October. The index recorded the
highest in eight months attributed to the reopening of
the country, the ongoing stimulus packages, and the
export expansion. These factors boosted confidence
among large and small manufacturers. Nonetheless,
negative factors like Covid-19, high energy costs,
expensive freight rates, and a shortage of workers
in the manufacturing and construction sectors are
still concerns. Business leaders are monitoring the
new variant and want the government to tighten
preventive measures in anticipation of the possible
negative impact of the virus.

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