EEC megaproject spending to give boost to overall economy: TMB study

04.12.17

Construction, tourism, health, digital, and environmental sectors will be the rising stars of business in the year 2018, according to TMB Analytics research. The research found that the government’s planned investment of up to Bt770 billion between 2018 and 2022 would provide a big benefit boost for construction and related businesses over that period.

Meanwhile, the government’s policy to drive the Eastern Economic Corridor (EEC) will also drive the demand for construction, promising strong sectoral growth related to residential, manufacturing and office building. The sector would benefit from the government’s spending in the years 2018 through 2020, the research suggested. TMB Analytics also forecast that the number of foreign tourists visiting Thailand would top 37 million in 2018, up 5.7 per cent from this year. This will boost the demand for tourist facilities in major destinations including Bangkok, Phuket, Chonburi, Chiang Mai, and Chiang Rai. Benefitting from the rise in tourists are hotel, restaurant, and logistics businesses such as aviation, bus, train, and boat transportation. Local economies would benefit from a tourism boost, the study said.  Meanwhile, the country’s population is ageing, with the number of senior citizens reaching from the current 10.5 million, or about 16 per cent of Thailand’s population, to some 12.3 million in the year 2022. This will drive rising demand for health and agerelated products, including hospital and fitness spending.

The research also adds confidence to previous indications that the global economy was increasing, paralleling Thailand’s 9.7 per cent growth in exports in the first 10 months of this year. That will level out to an 8 per cent rise in exports by yearend, with another 4.9 per cent export growth in 2018, said TMB Analytics. Exports will be particularly strong in food processing, auto, and agricultural products industries throughout 2018. An acceleration of online shopping is the trend to watch in the coming year as Thais move even further into the digital economy and boost e-commerce business. TMB Analytics sees strong growth in online business through 2022, starting as the “rising star of business” in 2018, the report said.

Meanwhile, the Business Development Department of the Commerce Ministry has forecast Thailand’s ecommerce market will achieve Bt5 trillion in value before 2021 as customers change their purchase behaviour, said department director-general Kulanee Issadisai recently. That’s double the 2016 figure of Bt2.5 trillion in 2016, she said. Taxes will accompany the rise in e-commerce spending, with the Revenue Department of the Finance Ministry planning to collect taxes from ecommerce businesses starting in 2018. “We are going through the process to revise the Tax Act to collect taxes on the revenues of both local and international firms who do e-commerce business in Thailand,” said the Revenue Department’s directorgeneral Prasong Poontaneat recently. “This is a part of ensuring fairness for all businesses in the country.”