กกร. ยินดีตั้งรัฐบาลเร็ว เตรียมยื่นสมุดปกขาวเร่งแก้ ศก.Joint Private Sector Committee Welcomes Swift Government Formation, Prepares White Paper for Economic Solutions

On Wednesday, September 4, 2024, Mr. Payong Srivanich, Chairman of the Thai Bankers' Association, presided over a meeting of the Joint Private Sector Committee of Three Institutions (JPS), with Mr. Tavee Piyapattana, Senior Vice President of the Federation of Thai Industries (FTI), and Mr. Sanan Angubolkul, Chairman of the Thai Chamber of Commerce, participating in a press conference.

The JPS meeting expressed satisfaction that the government has been able to form a cabinet swiftly and is ready to address the country’s economic issues. The Thai Chamber of Commerce, the Federation of Thai Industries, and the Thai Bankers' Association have had the opportunity to meet with the Prime Minister to present solutions for economic challenges amid a slowdown, which has seen an increase in factory closures, with over 757 factories shutting down in the first seven months, accompanied by high household debt levels.

The global economy shows a continuous trend of slowdown. The PMI Manufacturing index for August in major countries, including the United States, Europe, Japan, and China, has all contracted. The U.S. has signaled its readiness to lower policy interest rates due to potential recession risks, while freight rates remain three times higher than normal, posing a negative impact on global trade. Nonetheless, Thailand's exports in July grew by 15.2% backed by a global electronics cycle, and it is expected to grow by 1.5-2.5% over the year, surpassing the previous estimate of 0.8-1.5%. However, this growth remains concentrated in the electronics sector and is not widespread.

Domestic demand in Thailand remains weak, reflecting the levels of investment. Although the government has expedited budget disbursements for investments, resulting in an average inflow of over 20% from May to July, the economy in the second quarter has also slowed down, particularly private sector investments which decreased by 6.8%, significantly affected by a 24% drop in automotive sales. Future investment trends appear to be slowing down, reflecting continuous declines in consumer and business confidence.

The ongoing flood situation adds further pressure to the Thai economy, with damage estimated between 6-8 billion baht or 0.03-0.04% of GDP for the period from August to early September, severely impacting the agricultural sector. In the coming period, authorities must monitor potential storms that may affect the region between September and October, which could threaten further flood situations that might impact the Thai economy.

Economic projections by the JPS for the year 2024
(as of July 2024) Year 2024
GDP 2.2 to 2.7
Exports 0.8 to 1.5
Inflation 0.5 to 1.0

(as of August 2024) Year 2024
GDP 2.2 to 2.7
Exports 0.8 to 1.5
Inflation 0.5 to 1.0

(as of September 2024) Year 2024
GDP 2.2 to 2.7
Exports 1.5 to 2.5
Inflation 0.5 to 1.0

The JPS expressed concern over the flood and water conditions in the northern and upper central regions, thus resolving to establish a sub-working committee to formulate proposals on water management to submit to the government. The focus is on long-term planning to increase efficiency in water management to prevent a recurrence of flood situations like those in 2011, emphasizing the development of water sources and linking national water management infrastructure to ensure effective water management, reduce flood risks, and enhance water retention capabilities. Furthermore, a suggestion has been made to link water demand with water supply, allowing for appropriate water management. Although the current flood situation is not as severe as in 2011, it is anticipated that there will be two more storms passing through Thailand in 2024, which may impact the northeastern and northern regions during September-October 2024, thus necessitating vigilance against flash floods and runoff, particularly in high-risk areas of Ang Thong and Phra Nakhon Si Ayutthaya, which could be affected by the Chao Phraya River dam's water discharges. Additionally, the JPS proposes that relevant agencies provide clear information on water movement for businesses to prepare for water situations promptly and includes measures to assist businesses affected by flooding in recovering, such as tax measures, relief from production costs, and financial measures.

The JPS supports enhancing measures to combat financial fraud in the banking sector, intensifying the management of 'ghost accounts' by categorizing individuals at risk into black, gray, and brown ghost accounts. This entails sharing information among banking sectors and linking to databases of the Anti-Money Laundering Office (AMLO) and the Central Fraud Registry (CFR) to manage existing ghost accounts and prevent new ghost account openings. Individuals identified as high-risk will have all accounts suspended and will not be allowed to open new accounts. Moreover, this will expand to corporate accounts that are linked to numerous ghost accounts. The Thai Bankers' Association and the Bank of Thailand have collaborated with all relevant parties from upstream to downstream, including the National Broadcasting and Telecommunications Commission (NBTC), mobile network operators, the banking sector, government officials, and cryptocurrency service providers, to enable effective management of ghost accounts.

The JPS meeting expressed satisfaction that the government has been able to swiftly form a cabinet and is ready to move forward in addressing the country’s economic issues. The Thai Chamber of Commerce, the Federation of Thai Industries, and the Thai Bankers' Association have previously had the opportunity to meet with the Prime Minister to present solutions for economic challenges amidst a slowdown, reflected in an increase in factory closures with over 757 establishments shutting down in the first seven months and high household debt levels. The informal economy is also substantial. Therefore, the JPS has expedited the preparation of a white paper to present opinions and proposals to the government for consideration as a guideline to energize the economy in the forthcoming period.