What is Thailand 4.0?

by Daryl Lum | Mar 14, 2019 | News

We get this question once in a while. There is word going around about Thailand 4.0 and here is a brief explanation of what this is.

The Thai government has been progressively improving and progressing the Thai economy. Like all economic plans, these are conceptual ideas and a general direction of where the government would like the economy to be headed.

Thailand 1.0: Agriculture
Thailand 2.0: Light Industry
Thailand 3.0: Heavy Industry

The Thai government is aware of the economic challenges that have resulted from past economic models which have driven Thailand forward to date. If Thailand were to continue with previous economic models focusing on agriculture, light and heavy industries, they will not be able to overcome challenges like “a middle-income trap”, “an inequality trap” and “an imbalanced trap”.

Thailand 4.0: Innovative and Value-based Industry. High Income Country.

Four objectives of Thailand 4.0:

1. Economic Prosperity:
   – To create a value-based economy which is driven by innovation, technology and creativity.
   – To increase research and development expenditure to 4% of GDP.
   – To increase GDP growth to 5-6% within 5 years.
   – To increase income per capita GDP from USD$5,470 (2014) to USD$15,000 by 2032.
2. Social Well-being:
   – To create an inclusive society.
   – To reduce social disparity from 0.465 (2013) to 0.36 by 2032.
   – To develop at least 20,000 households into “Smart Farmers” within 5 years.
3. Raising Human Values:
   – Raise Thailand’s Human Development Index (HDI) from 0.722 to 0.8 or within the top 50 countries within 10 years.
   – Ensure that at least 5 Thai universities are ranked among the world’s top 100 higher education institution within 20 years.
4. Environmental Protection:
   – To become a livable and low carbon society.
   – To develop at least 10 cities into the world’s most livable cities and reduce terrorism risk.

As mentioned before. These are general guidelines. It is important to note that it will require a lot of political clout from the government at that point in time to enforce such policies. It is, however, good to note that these are the general policies moving forward for Thailand.

Yours sincerely,

The Invest Bangkok Property editorial team

Thai baht soars to post-coup high

by Daryl Lum | Mar 3, 2019 | News

When investing in overseas properties, the fluctuations in foreign exchange come to play. For the past few years, the Thai Baht has been on an upward trend against most major currencies. Recently, the Thai Baht hit a post-coup high against the US Dollar. Here are some reasons for this.

To understand the flow of money, we have to understand how interest rates work. High-interest rates incentivise savers and discourage borrowing. Interest rates for savings and borrowers more in tandem. There cannot be a situation whereby one rate was set for savers and another for borrowers. The central bank sets the key interest rate and the banks base their rates off that key interest rate.

In December 2018, the Thai central bank raised the key interest rate for the first time in seven years. This is in contrast to the US where the Federal Reserve has been signalling that it will adopt a slower pace of normalising interest rates. This caused money to flow into Thailand as money would earn a higher rate of return if it were placed in Thailand as Baht rather than in the US as the US Dollar. One of the main reasons why the Thai central bank has to raise interest rates is due to the strong economic growth in Thailand. GDP growth has been robust for the past two years, clocking in at just around 4 per cent per annum (Source: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=TH and https://www.bangkokpost.com/business/news/1612202/world-bank-trims-thailand-2019-gdp-growth-to-3-8-) and unemployment has been very low less than 1 per cent (Source: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2129rank.html). As the economy becomes stronger, the residents get wealthier and they take on more debt as they invest in assets like real estate or take on loans to start a business. In fact, the local resident demand for Thai real estate has been so strong that the Thai government has had to step in and place loan curbs on the locals when purchasing property.

Moving forward, an overly strong Thai baht is not good for Thai exports as they will become more expensive to purchase. It may cause Thailand to be seen as a less affordable tourist destination and thus see fewer travellers. My take on this would be that as Thailand progresses, it will invariably be faced with such a dilemma. As its people get wealthier, it will have to cope with a stronger baht. London is the second most travelled city in the world behind Bangkok and the UK Pound is not exactly cheap when compared to the region. In fact, when the pound was strong, London was still one of the most visited cities in the world. Thailand is faced with, in my opinion, a good problem. A growing middle class, interest from foreign investors like the Chinese, it is located in the centre of South East Asia and earmarked to be a transportation hub. All these factors, barring any major shock to the system, will contribute to Thailand’s growth.

I wrote an article narrating about the strength of the Thai baht previously. You can find my article here: My views on the Singapore and Bangkok property markets.

This article is in response to this article: Thai baht soars to post-coup high, threatening local business.

Yours Sincerely,

Daryl Lum
On behalf of InvestBangkokProperty.com

Residential designer Yoo sets up office in Bangkok

by Daryl Lum | Mar 1, 2019 | News

According to a report by Bangkok Post, London-based residential design studio Yoo is opening an office in Bangkok. Yoo has 80 projects in 34 countries and one of the projects which we are familiar with is Khun by Yoo in Thonglor, Bangkok. Khun by Yoo is a freehold condominium in the heart of the upmarket Thonglor district and is developed by Sansiri. It is the highest price per square meter in Thonglor.

Yoo’s Bangkok office will complement its current one in Hong Kong. The Bangkok office will focus more heavily on projects in Southeast Asia. What Yoo does is that it partners with celebrity designers and work with developers to create a brand residence for property buyers. These developments are usually more premium due to higher end materials being used as well as due to their unique designs.

Yoo plans to open a hotel in Phuket called Yoo2 by 2020. According to Savills, Yoo has the largest market share in non-hotel branded residences and has the largest number of branded projects, even more than Marriot’s Ritz-Carlton and Four Seasons. Yoo holds 13 per cent of the total branded-residence projects worldwide.

The company is also currently working on projects in Kuala Lumpur, Malaysia and Hong Kong.

Yours Sincerely,
The Invest Bangkok Property editorial team