Making a business wish list

The fourth quarter is typically regarded as a last-ditch attempt for businesses to accelerate or improve their performances, which may have been hampered by negative factors throughout the first three quarters, to avoid the red on their balance sheet.
The situation this year was challenging for the private sector and they are concerned the magic of the festive season might not be enough to lift sentiment as in previous years because purchasing power remain stagnant.
With less than two months left this year, companies are wishing for an early New Year’s gift from the government to help them close the year strongly.
Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, proposed government stimulus measures totalling 250 billion baht from late this year through the middle of next year to generate upward momentum for the Thai economy.
He said the 10,000-baht handout to 14.5 million people in vulnerable groups only slightly affected the economy. More stimulation is necessary because the economy is in deeper decline than we think, said Mr Thanavath.
He recommends tax relief measures during the New Year period such as Easy E-Receipt, which were utilised in the past, with a budget of about 50,000 baht per person. This would result in tax revenue loss of 10-15 billion baht, but would generate at least 50 billion baht circulating in the economy, said Mr Thanavath.
Combined with increased spending during the New Year period, improved export performance and relatively low oil prices, the new stimulus measures should help stimulate the economy in the fourth quarter, he said.
For early next year, Mr Thanavath suggested an additional 50 billion baht be allocated for the “half-half” co-payment subsidy programme from January to March, helping to stoke the economy during that period.
The economy is expected to revive by April and the Songkran festival, potentially generating around 100 billion baht in circulation, he said. This would support Thai economic growth of more than 3% in 2025, said Mr Thanavath.
“If the first phase of the half-half subsidy programme is insufficient to stimulate the economy, the government can implement a second phase in the second quarter of 2025, resulting in an additional 200 billion baht in circulation in the first half of the year,” he said.
“These stimulus measures, combined with upward economic momentum next year from interest rate cuts, debt restructuring, credit expansion, and improved exports and tourism, could significantly benefit the economy.”
According to Mr Thanavath, although the Bank of Thailand shows no inclination to reduce interest rates further after a recent cut of 25 basis points, if the Federal Reserve announces a significant trim next year, narrowing the interest rate gap and strengthening the baht, the local central bank may need to follow suit to stimulate the economy in the first quarter next year.
However, he said the central bank need not lower the policy rate if it instead relaxes lending criteria for financial institutions.
Regarding exports, Mr Thanavath said next year is fraught with uncertainty because of the ongoing trade war, which may prompt businesses to stockpile goods if they fear a Donald Trump presidency would mean an additional 10% import tax.
Sorathep Rojpotjanaruch, head of the Restaurant Business Club, said the country’s economy is shouldering a high level of household debt, reducing consumer purchasing power, particularly for low-income earners.
According to data from the central bank, total household debt tallied 16.3 trillion baht as of the second quarter of 2024, representing 89.8% of GDP.
He said he is also concerned about the government’s plan for a daily minimum wage hike to 400 baht nationwide.
The wage hike would slightly affect the restaurant industry as the majority of Thai workers are already paid more than 400 baht per day, though foreign workers are still paid minimum wage, said Mr Sorathep.
“Raising the minimum wage could impact the restaurant business for establishments that hire foreign workers” he said.
As the economic sentiment for restaurants weakens, he proposed the government introduce a tax deduction scheme for people eating out.
Mr Sorathep also urged the government to relaunch the “We Travel Together” co-payment scheme as soon as possible. There is no need to wait until the tourism low season, from May to September, to lift the country’s economy, he said.
Regarding the tourism subsidy scheme, Nattakit Tangpoonsinthana, chief marketing officer at retail and property developer Central Pattana Plc (CPN), said he fully supports the revival.
Implemented during the Prayut Chan-o-cha administration, the scheme provided subsidies of up to 40% on accommodation, airfares and dining at local establishments, which encouraged spending among Thai travellers, supporting the recovery of the tourism sector post-pandemic.
For foreign tourists, he said the Tourism Authority of Thailand is on the right path by targeting independent travellers with high purchasing power, instead of focusing solely on the number of foreign arrivals.
“We support the agency continuing in this direction, emphasising tourists with high spending power,” said Mr Nattakit.
He also proposed the government revive the “Shop Dee Mee Kuen” (shop and pay back) programme to stimulate domestic spending, which would pump up the economy towards the year-end.
In 2023, the scheme offered a tax rebate of up to 40,000 baht. In 2024, it was renamed Easy E-Receipt, offering a rebate of up to 50,000 baht.
This programme would increase sales opportunities for entrepreneurs and businesses that issue e-tax invoices and e-receipts, said Mr Nattakit.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said the group wants ongoing government stimulus measures apart from the 10,000-baht cash handout to vulnerable groups.
Regarding measures to stimulate tourism in areas affected by flooding, the government should speed up the rehabilitation of various tourist attractions and important commercial areas, he said.
Related agencies should help by publicising these areas through various media channels to build confidence among both local and foreign tourists, especially during the upcoming high season for tourism, said Mr Sanan.
The Joint Standing Committee on Commerce, Industry and Banking also called for more stimulus measures to raise consumer purchasing power, especially in early 2025 such as the Easy E-Receipt scheme as well as other tax incentives.
“The chamber, the Commerce Ministry and related agencies will coordinate with local manufacturers to offer discount campaigns and seasonal promotions to reduce the cost of living, as GDP is projected to expand by 2.6-2.8% in 2024,” he said.
The government also needs to continue with efforts to restore investor confidence among both locals and foreigners, as this can lift business confidence and increase economic growth, said Mr Sanan.
Thailand’s GDP is estimated to grow by 3.5% in 2025 with an inflation target of 2-2.5%, according to the chamber.
The government can improve consumer purchasing power by launching new measures to reduce household debt in addition to stimulus during year-end festivities, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries.
He said the government should clarify how it will deal with the high level of household debt, which requires measures for the short, middle and long term.
“In the short term, authorities need to find ways to ease the financial burden of debtors. Once these people have more money to spend, a better economy will follow,” said Mr Kriengkrai.
Reducing household debt can increase consumer purchasing power, he said.
Mr Kriengkrai suggested the government launch new stimulus measures to increase tourism in the North during the high season, which just started, following severe flooding in those provinces, notably Chiang Rai.
Measures launched during the Prayut administration can be brought back, such as the co-payment scheme, he said. The co-payment scheme had the government pay for 50% of food, drink and general goods purchases of up to 150 baht per person daily, capped at 3,000 baht per person.
Collaboration with the business sector is needed to successfully implement the government’s stimulus measures, said Mr Kriengkrai.
“The government must work closely with the finance, manufacturing and retail sectors,” he said.
A gradual shift towards clean energy should be part of the government’s energy policy, following the revised power development plan (PDP) scheduled for implementation by the end of 2024, said Pongtham Danwungderm, head of strategy at Asia Green Energy Plc, a local bituminous coal trader and logistics service provider.
The new PDP, covering 2024 to 2037, promotes greater use of renewable energy, however efforts to adopt alternative energy should done gradually and carefully as Thailand still depends on fossil fuels, he said.
Rather than stimulus, Mr Pongtham wishes the government would be more flexible in its policy to shift from fossil fuels to clean energy for the sake of the economy.
Using clean energy will increase production costs for businesses with mass production, including food processing, building materials and cement. Many companies in these industries use coal, which is the cheapest fuel, to generate heat.
If these firms adopt clean energy quickly, they may not be able to shoulder the higher costs, which could eventually cause them to shut down their businesses, said Mr Pongtham.
“A quick change to renewable energy poses a risk to the economy as many industries depend on fossil fuels,” he said.
Asia Green Energy is gradually restructuring its business by focusing more on cleaner energy, especially the production of biomass-derived fuel.
The company expects the revenue proportion from its coal business to decrease in the future, said Mr Pongtham.
Somchai Lertsutiwong, chief executive of Advanced Info Service (AIS), said stimulating the economy requires more targeted assistance, especially for small and medium-sized enterprises (SMEs) and low-income earners as they could quickly drive the economic cycle.
He said while there are signs of a domestic economic recovery, it seems big corporations are reaping the benefit much more than SMEs.
Mr Somchai said the government should strengthen SMEs by helping them reduce the burden of operational costs.