WVB's News Content

» The Business Confidence Index slightly decreased 2 point In the Fourth Quarter of 2023.

1st February 2023, Siam Ratings Agency Company Limited (SRA) announced the result of the survey about WVB Business Confidence Index in the Fourth quarter of 2023.

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 2024 to the late of January 2024, 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 95% of total enterprises participating in this quarter.

According to the survey, the Business Confidence Index (BCI) in the Fourth quarter of 2023 reached 127 points, a slight decrease of 2 points compared to the Third quarter of 2023 (129 points). This index shows that companies in Thailand have a negative perspective on the current economic situation. However, despite this sentiment, most companies express confidence that the Thai economy will improve in the upcoming phase. Furthermore, there are several enterprise that believe the current economy is highly volatile and challenging to predict due to the fluctuations in the global economy.

Summary of investigation results of 6 components building Business Confidence Index (BCI) in the Fourth quarter of 2023 as follows:

- On the general economic situation of Thailand today:
Only 50.00% of enterprises participating in the survey said that Thailand's overall economy is now better than 12 months ago, 40.00% of enterprises said that the economic conditions of Thailand remained the same. 10.00% of enterprises said that economic conditions were somewhat worse than 12 months ago.

According to the Shareholder Newsletter from Kasikorn Research Center (KResearch), Economies of the US and Eurozone will likely be affected further by their tightened monetary policies while the ongoing slowdown in China represents another risk to the global economy.

The US economy continues to show robust growth after it was able to expand during 1H2023 even as the US Federal Reserve (Fed) has raised its policy rates 11 times since March 2022. As expected, the Fed resolved to maintain its policy rate at 5.25 - 5.50 percent during the latest Federal Open Market Committee (FOMC) meeting in September 2023. Meanwhile, the US inflation rate has increased steadily since July 2023 due to the rising energy costs. The Fed’s “higher for longer” approach to interest rates has led banks in the US to tighten their lending criteria. Soaring public debt may also restrict the US government’s budgetary disbursements.

Meanwhile, global oil demand has recovered, while oil supply has been limited in line with the policies of both Saudi Arabia and Russia to cut their oil production, as well as ongoing geopolitical issues, particularly the Israeli-Palestinian war. If the conflict spills over across the Middle East, global oil supply will likely become tighter, thus driving up global oil prices and in turn pressuring inflation rates in the US and Eurozone to decline at a slower pace. Given this, the impacts of interest rate hikes on the US and Eurozone will clearly be.

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

 48.67% of enterprises believed that Thailand’s economy would be better in the next 12 months, 51.33% 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), Thai economy continues to bounce back, supported by tourism, particularly during the high season towards the end of 2023, and government measures

The Thai economy is still on the path towards recovery during the final quarter of 2023 as tourism is helping shore up domestic consumption and employment, particularly in tourismrelated industries such as services. Foreign tourists are still interested in traveling to Thailand. As of October 1, 2023, the number of international tourist arrivals in Thailand reached approximately 20 million. Looking into the rest of 2023, Thai tourism is set to thrive, thanks to the high season for long-haul travelers from Europe and the US, plus the Thai government’s visa exemption scheme for Chinese and Kazakhstani tourists (effective from September 25, 2023 to February 29, 2024). However, as Thailand’s major inbound travel markets, including China, Germany and Japan, are still reeling from economic challenges, the number of international tourist arrivals in Thailand in 2023 may be lower than prior estimates. Moreover, the positive impacts of the Thai government’s visa exemption scheme may be seen more explicitly during 2024 rather than in 2023. Given this, KResearch is of the view that the number of international tourist arrivals in Thailand in 2023 may reach roughly 27.6 million, which would be lower than our previous forecast. Meanwhile, the
government’s measures, aimed at reducing the cost of living for households, including electricity and diesel fuel subsidies, caused the inflation rate in Thailand to slow to 0.30 percent YoY in September 2023. However, such measures may face challenges from volatile commodity prices, especially crude oil, in the future.

In summary, the Thai economy in 4Q2023 continues to recover from that seen in the previous quarter, supported by tourism and various measures implemented by the new government. However, numerous risks, including the global economic downturn, precipitated by the sluggish Chinese economy, may cause the Thai economy to grow at only 3.0 percent, which would be lower than our prior estimate.

- Plans to use employees:

In the survey: 44.00% of enterprises expected to raise human resources; 50.67% of enterprises planned to remain and 5.33% 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 number of insured people in the social security system continued to increase for the tenth consecutive quarter. The unemployment rate among insured persons under article 33 decreased from the previous quarter, and lower than the same quarter last year.

The total number of social security beneficiaries increased for the tenth consecutive quarter by 1.7 percent. This consisted of compulsory insurers under article 33 which continuously increased for the eighth quarter by 3.3 percent, in line with an increase in insured persons in the manufacturing and service sectors (such as construction, accommodation and food service activities, and manufacturing sector), and voluntarily insured persons under article 40 which increased by 0.9 percent. Nevertheless, voluntarily insured persons under article 39 continued to decline for the fifth quarter by 3.9 percent. The unemployment rate among insured person under article 33 in this quarter was 1.93 percent, lower than 2.13 percent in the previous quarter and lower than 1.99 percent in the same quarter last year. The average number of unemployed was 2.29 hundred thousand people, lower than 2.50 hundred thousand in the previous quarter but higher than the number of 2.28 hundred thousand people in the same quarter last year.

- Investment plans for fixed assets:

59.33% of surveyed businesses planned to invest more costs for fixed assets, 38.00% of these still have no plan and 2.67% planned to reduce the cost for fixed assets in the next 12 months.

- The belief in revenue growth:

74.00% of participating enterprises were confident of an increase in sales, 25.33% 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:
74.00% of enterprises believed that profit would rise in the following year, 25.33% 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 2024.

The Thai economy in 2024 is expected to improve continually from 2023, mainly supported by a rebound of exports, a favorable expansion of private investment both in consumption and private investment, and the continued recovery of the tourism sector. However, economic recovery still has crucial risks and limitations that may cause the Thai economy to expand lower than expected, including the diminishing impetus from fiscal support, a high debt burden of households and businesses, impacts from the drought on agricultural production, and the lower-than-expected economic growth of trading partners, amid risks from geopolitical conflicts and high volatility in global economic and financial system.

Key components of Economic growth;

Rebound of Exports, in September 2023, the recent data indicated a resurgence in exports, showing a growth of 1.0 percent. This marks the first expansion in the 12 months, reaching a total export value of 23,195 million dollars, the highest level in the past six months. In addition, it is observed that the export volume index in September showed a deceleration in the decline. While, the product categories that had satisfactory expansions include electronic appliances, passenger cars, pickup trucks, telecommunications equipment, rice, and fruits. Simultaneously, exports to major markets, especially the United States, China, and Japan, are starting to expand again. Therefore, it is anticipated that the trend of export expansion will gradually resume, aligning with the ongoing global economic recovery. Together with the global trade volume in 2024, which is projected to exhibit a positive recovery, as reflected in the improvement of PMI for Manufacturing New Orders in several countries and the upward trajectory of the electronics product cycle that have become more pronounced since the latter half of 2023. Besides, part of this recovery is attributed to the comparably low expansion base in the previous year.

The continuous expansion of domestic consumer spending, is underpinned by several key factors including: (i) The inflation rate is expected to be stabilized at a low level under the inflation-targeting framework. This expectation is likely to engender a relaxation of the monetary policy, particularly following a sequence of interest rate adjustments implemented since August 2022. (ii) Improvement in labor market conditions, as seen in the sustained increase in non-agricultural employment, particularly in the tourism-related service sector, such as the transportation and accommodation and food services categories. This tendency aligns with a low unemployment rate, comparable to the pre-COVID-19 period, and (iii) Consumer confidence has risen significantly, with the Consumer Confidence Index reaching 60.2 points in October 2023, marking the highest level in 44 months.

--- END ---

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

Further information can be reached at the company’s official website:    
http://www.siamcr.com

Execution unit:
Siam Ratings Agency Company Limited.
78/11-12 Moo 5, Sub-District Angsila,
District Meuang Chonburi 20000, Thailand.

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