Manufacturing Property Market 2023 H2

Economic Overview

According to the world bank Thailand, the Thai economy is forecast to grow by 2.5% in 2023, which is below the 3.2% forecast announced at the beginning of the year.

In the first nine months of 2023, Thailand maintained a positive trade account, due to a 1.0% increase in exports of goods and services, which surpassed a 4.6% decline in imports. Private consumption remained robust, growing by 7.3% due to a resilient job market and the continued recovery of international tourism, despite falling short of targets for Chinese visitors. Fixed capital investment also experienced moderate growth of 1.7%, driven by investments in private construction and machinery. Meanwhile, government expenditure contracted by 6.2% as COVID-19 relief measures and stimulus packages were phased out. Moreover, the delay in the FY2024 budget expenditure Act approval is likely to decrease government investment until Q1 2024.

The faltered recovery of Thailand's economy caused it to diverge further from ASEAN peers, including Indonesia, Malaysia, the Philippines, and Vietnam, by approximately 10% in terms of accumulated GDP growth since 2019. However, price pressures eased as headline inflation turned negative for the first time in two years, primarily due to diesel and electricity bill subsidies and lowered food prices. This marks Thailand's inflation rate as one of the lowest globally during the second half of the year.

In November 2023, Thailand's manufacturing productivity index (MPI), after seasonal adjustment, dipped to 90%, marking a 4% decrease from the mid-year figure. This downturn was due to lower production in specific sectors such as automotive - particularly in conventional private vehicles and pickup trucks - and raw sugar. Conversely, production of various petroleum products, including diesel, fuel oil, gasohol, and biofuels, experienced an increase within the same timeframe.

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