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» The Business Confidence Index slightly increased 2 point In the Fourth Quarter of 2022.

31st January 2023, Siam Ratings Agency Company Limited (SRA) announced the result of the survey about WVB Business Confidence Index in the Fourth quarter of 2022.

SRA Co., Ltd. conducts the survey quarterly. The main objects of the survey are companies which have the most well-known brand, the largest number of Total Assets, Total Revenues, and Employees. Being performed from the early of January 2023 to the late of January 2023, the survey attracted 150 Companies which active in many different fields in Thailand, such as Agriculture, Automotive, Construction, Technology, Energy, Electronics, Telecommunications, Services… In particular, large and medium enterprises accounted for over 97% of total enterprises participating in this quarter.

According to the survey, the Business Confidence Index (BCI) in the Fourth quarter of 2022 reached 131 points, slightly increased by 2 point compared to the Third quarter of 2022 (129 points), This index shows that companies in Thailand have a slightly positive perspective on the current economic situation, which most companies also say they are still confident that the Thai economy will improve in the next phase. Besides, there are also many enterprises that believe the current economy has many fluctuations and it is difficult to predict due to the volatility of the global economy and especially the Covid-19 situation variable in 2022.

Summary of investigation results of 6 components building Business Confidence Index (BCI) in the Fourth quarter of 2022 as follows:

On the general economic situation of Thailand today:

Only 37.33% of enterprises participating in the survey said that Thailand's overall economy is now better than 12 months ago, 46.00% of enterprises said that the economic conditions of Thailand remained the same. 16.67% of enterprises said that economic conditions were somewhat worse than 12 months ago.

According to the Shareholder Newsletter from Kasikorn Research Center (KResearch), World’s leading central banks continue to press ahead with their monetary policy tightening and major economies are set to enter a technical recession, pressuring global demand.

Accelerated interest rate hikes by the US Federal Reserve (Fed) to tame soaring inflation since early 2022 (the US policy rates were recently raised to 3.00 - 3.25 percent, over the 0.00 - 0.25 percent in January 2022) have triggered a technical recession in the US economy, i.e., the US GDP in 1Q2022 and 2Q2022 recorded a QoQ contraction. Although the impact on the US economy was limited, it could have repercussions for the US labor market and consumer spending, going forward. Presently, the US inflation rate has begun to decline slightly, standing at 8.3 percent YoY in August 2022, but it is still above the Fed’s target of 2 percent, suggesting that the Fed will continue to raise its interest rates over the near term. It is expected that the US Fed funds rate will stand at 4.4 percent at the end of 2022. Meanwhile,
Europe is grappling with a massive energy crisis, which is expected to intensify during the upcoming winter after Russia announced the suspension of its natural gas supply via Nord Stream 1 to Europe in early September 2022, driving up inflation within the Euro zone to 10 percent in September 2022. Inflation rates in many European countries such as Germany and Italy have surged to a record high in several decades, prompting the European Central Bank (ECB) to steadily tighten its monetary policy. We at KResearch are of the view that the US and Europe will likely enter a technical recession in late 2022 through to 2023.

Prediction of Thailand general economic situation in the next 12 months:

72.00% of enterprises believed that Thailand’s economy would be better in the next 12 months, 28.00% said that the economy would remain unchanged, and 0.00% of businesses are worried about Thailand’s economy in the future.

According to the Shareholder Newsletter from Kasikorn Research Center (KResearch), Therefore, the only factor that will help steer the Thai economy is tourism, while flooding will present another risk although its impact on the Thai economy may be limited.

In 4Q2022, Thailand’s tourism is projected to experience steady growth. According to the latest report, the number of international tourist arrivals in Thailand totaled 6,018,943 during 9M2022. The number of foreign tourists visiting Thailand has exceeded 1 million for the third consecutive month, with tourists coming largely from ASEAN and South Asia. More foreign holidaymakers are expected to arrive in Thailand at the end of the year, thanks to the high season. KResearch has therefore revised our forecast for the number of foreign tourist arrivals in Thailand during 2022 to 9.75 million, versus our prior estimate of 7.2 million in June 2022. Meanwhile, the export sector is likely to slow down in line with the direction of the global economy. Although the Baht has depreciated substantially against the US dollar, the positive effect on Thai exports in terms of value will likely to be limited, as other regional currencies have also softened against the greenback. In September 2022, the Thai currency tumbled to its lowest in more than 18 years (it weakened to Baht 38 per USD at the end of September 2022) due to the Fed’s accelerated interest rate hikes. KBank expects that the Baht will stand at Baht 37.5 per USD at the end of 2022.

Private consumption has yet to fully recover amid increased inflationary pressure. However, the government’s decision to open the country to foreign tourists will likely help support domestic employment and household income.

Although inflation in Thailand may have peaked during 3Q2022 as headline inflation for September 2022 fell to 6.41 percent YoY, from the 7.8 percent YoY reported in the previous month due to the decline in energy costs, it is expected that prices of various necessities will remain high due to the increased and broad-based cost transfer from manufacturers to consumers.

Given this, KResearch expects that the Thai economy will grow 2.0 percent in 4Q2022 and 2.9 percent in 2022, supported mainly by tourism, while the export sector will slow down in line with the global economy.

Plans to use employees:

In the survey: 45.33% of enterprises expected to raise human resources; 52.67% of enterprises planned to remain and 2.00% of enterprises will reduce the number of employees in the future.

According to The National Economic and Social Development Council of Thailand (NESDC), Labor in the Social Security System: The total number of insured persons in social security system continued to increase for the sixth consecutive quarter. The unemployment rate among insured persons under article 33 was lower than the previous quarter and the same quarter of the previous year.

The total number of social security beneficiaries continued to increase for the sixth consecutive quarter by 3.3 percent. This was mainly attributed to (i) an increase of compulsory insured person under article 33 by 3.9 percent, accelerating from 1.9 percent in the previous quarter. This was in line with the increase of insurers in the industrial and service sectors (such as manufacturing, wholesale and retail trade; repair of motor vehicles and motorcycles and construction sector), (ii) an increase of voluntary insured persons under article 40 by 3.9 percent, decelerating from a 199.4-percent increase in the previous quarter as weaker momentum of the government's incentives to encourage workers to enter the social security system, while voluntarily insured persons under article 39 fell by 2.9 percent. The unemployment rate among insured person under article 33 in the quarter was at 2.0 percent, lower than 2.2 percent in the previous quarter and 2.5 percent in the same quarter of the previous year. The average number of unemployed was at 2.28 hundred thousand people lower than 2.45 thousand people in the previous quarter and 2.47 hundred thousand people in the same quarter last year.

Investment plans for fixed assets:

72.00% of surveyed businesses planned to invest more costs for fixed assets, 26.00% of these still have no plan and 2.00% planned to reduce the cost for fixed assets in the next 12 months.

The belief in revenue growth:

76.00% of participating enterprises were confident of an increase in sales, 23.33% of enterprises said that the revenue would remain and 0.67% business is concerned about the number of sales going down in the next 12 months.

The belief in profit growth:

76.00% of enterprises believed that profit would rise in the following year, 23.33% of enterprises believed that profit would remain and 0.67% business is concerned about the number of Profit going down in the next 12 months.

According to The National Economic and Social Development Council of Thailand (NESDC), The Thai Economic Outlook 2023.

The Thai economy in 2023 tends to improve continually from 2022, mainly supported by the recovery of the tourism sector, continued expansion of domestic demand in both consumption and investment, and the favorable condition of agricultural production. However, the economic recovery could be experienced with some downside risks and limitations, including the volatility and global economic slowdown trend, weakening financial conditions of households and businesses regarding debt burden, and the uncertainty of the emergence of new COVID-19 variants that may cause the Thai economy to expand less than expected.

The recovery of the tourism sector due to the demand for traveling that tends to return to normalcy after fully relaxing international travel restriction both in Thailand and major tourism origin countries since the middle of 202228, together with the increasing trend of inbound flights. As a result, in October 2022, the number of international tourist arrivals was 1,437,841 persons, or 46,382 persons per day, the highest level since the outbreak. which notably increased from 17,387 people per day and 39,218 people per day in the second quarter and the third quarter, respectively. Meanwhile, it is expected in the baseline scenario that the Chinese government will continue to ease the containment measures and start to fully lift the entry restrictions within the last quarter of 202329, resulting in a significant increase in the number of foreign tourists. This is in line with the United Nations World Tourism Organization (UNWTO) forecast that the number of global tourists in 2023 will be around 1 billion, representing a 71 percent increase compared to 2022. Besides, domestic tourism is likely to return to normalcy and support the recovery of the tourism sector.

About World Vest Base

Established in 1985 in Chicago, USA, World' Vest Base (WVB) has become the world’s leading global provider of financial fundamentals serving the research and analytic needs of thousands of top companies in the financial services, media and corporate markets. The WVB global database is the financial industry’s premier source of detailed and transparent financial statement data on public companies. The database universe spans over 50,000 public companies over 130 countries from Asia, Africa, Australia, Europe, Latin America and North America. WVB Regional databases also cover hundreds of thousands of private companies in Thailand, Vietnam, Laos, Cambodia, Malaysia and Egypt. WVB also provides databases with Insider & Major Shareholders Transactions, specialized End-of-Day pricing for emerging markets and worldwide credit risk and business risk scoring

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Website: http://www.siamcr.com
Tel: (+66) 38 397 457.