ถอดรหัสหนี้ครัวเรือน ‘ใน-นอกระบบ’ ทะลุ 100% GDP ซ้ำภัยคุกคามจากสงคราม | Morning Wealth 28 เม.ย. 69

Today's program discusses various economic and financial topics, including household debt, the Middle East war's impact, government stimulus measures, and the automotive industry. It also covers AI development in China, electricity tariff restructuring, Nike's layoffs, and the implications of central bank meetings on financial markets. A report from Chulalongkorn University indicates that by the end of 2023, Thai household debt, including both formal and informal loans, exceeded 100% of GDP. While formal debt saw a slight decrease, the actual debt amount remains high, with informal debt rising to 14% from 12% the previous year. TTB Managing Director Thakorn Piyaphan attributes the soaring debt percentage partly to a shrinking GDP, but believes the situation has peaked as large loans like mortgages and personal loans have slowed their growth. He notes that the increase in informal debt is a normal cycle during an economic downturn. A more significant concern is the prolonged Middle East conflict, which directly impacts Thailand's economy due to its reliance on oil imports. Soaring oil prices, exceeding $120 per barrel, will increase raw material and transportation costs, putting pressure on consumer goods prices and potentially leading to a financial crisis. Businesses may reduce production or cut overtime to sustain operations, while consumers face tight cash flow, potentially leading to minimum debt payments. If the crisis extends into the third or fourth quarter, job losses and a domino effect of non-performing loans (NPLs) are anticipated. The biggest concern is how people and businesses will adapt to rising costs without raising prices, as prolonged inability to bear costs will eventually lead to product price increases and soaring inflation. This will directly undermine purchasing power, as consumers will spend less. The Bank of Thailand is preparing measures like lowering minimum credit card payments and extending repayment periods to help debtors, which Thakorn views as preparation for potential debt quality deterioration. Despite the bleak outlook, there's hidden purchasing power among those with savings, reflected in the demand for electric vehicle (EV) loans and solar panel installations. The real estate sector is also offering promotions, including solar roof installations, to attract customers. Regarding monetary policy, the Monetary Policy Committee is expected to maintain tight policy and keep interest rates unchanged, as raising them would worsen business costs during an economic downturn. The current interest rate policy aims to manage exchange rates and maintain balance. The "Half-Price Plus" government scheme is expected to benefit over 20 million people, providing a 60% subsidy from the government and requiring beneficiaries to pay 40%, with a limit of 4,000 baht per person or 1,000 baht per month. Registration opens in May, with payments starting in June. This measure is intended to mitigate the energy crisis. The funding for this project and additional payments to state welfare cardholders (an estimated 14 million people, each receiving an additional 4,000 baht gradually, or 1,000 baht per month) will come from budget cuts for the year 2569 and unspent procurement contracts. The overall relief package is called "Thai Helps Thai Plus." In the automotive sector, the proposal to trade in old cars for new ones in 2026 is seen as beneficial. This initiative, which has been proposed for years, aims to reduce PM2.5 levels and boost domestic car sales, which have been declining for three years. The conditions are still being finalized, but it's expected to target cars 20 years or older. There are approximately 1.8 million passenger cars and 2.5 million pickup trucks that could be eligible. The industry group suggests including hybrid cars and other gasoline-powered vehicles that use B20 fuel, which helps the agricultural sector and reduces carbon dioxide emissions. Boosting pickup truck sales is particularly important, as they have seen a significant decline, impacting the entire supply chain and employment. Increased car sales would also generate more tax revenue for the government, stimulating the economy and creating jobs. The automotive industry hopes for a swift presentation and approval of the 2027 budget to accelerate investment and economic growth. China's AI development is rapidly catching up to the US despite limitations in advanced chip access and investment budgets. Chinese developers like Deep Seek and Alibaba Group Holding are focusing on developing cost-effective and efficient AI models that use fewer computing resources. They employ techniques like "mixture of expert knowledge," allowing systems to use only a portion of their neural networks, saving energy and costs. For example, Seek's new model uses less than 3% of parameters per task, making it a more attractive alternative for markets prioritizing cost over peak performance. China's strategy also involves open access to AI model parameters for developers, universities, and small businesses, fostering widespread innovation. Alibaba's Mod Quent, for instance, has surpassed 1 billion uses and generated over 200,000 sub-models. The Chinese government plays a significant role in supporting AI development by investing in electricity production, especially from cheap renewable energy sources in areas like Mongolia, which lowers AI development costs. China is also focusing on AI adoption in manufacturing and logistics, unlike the US, which focuses on the service sector. This national strategy aims to drive economic growth rather than just high profits, with government support for private companies. China is expanding its AI influence globally by exporting affordable cloud-based AI platforms and related infrastructure to Southeast Asia, the Middle East, and Africa. While security and privacy concerns limit Chinese companies in US and European markets, cost-conscious users may turn to Chinese alternatives if they offer 90% efficiency at a much lower price. The Chinese government recently suspended a $2 billion acquisition deal for an AI startup, indicating a tightening of regulations around technology transfer, particularly concerning US geopolitical competition. Regarding electricity tariffs, the Ministry of Energy is working to adjust the structure to reduce the overall cost for the public. A key issue is the burden of purchasing electricity from past renewable energy projects that received a price premium (adder). Over 4,000 megawatts of such contracts, at 3-5 baht per unit, contribute approximately 20 satang per unit to the variable electricity cost (FT). The Ministry plans to terminate contracts if private power producers do not negotiate lower rates, aiming for solar power generation not to exceed 2.10 satang per unit. This renegotiation is deemed fair as these producers have recouped their investments. Resolving this could save about 10% on electricity costs. If negotiations fail, legal action may be pursued. A new tiered electricity tariff structure is planned for 23 million households, starting in June. The first 200 units will be priced at no more than 3 baht per unit, while 200-400 units will be at a normal or slightly lower rate. Users consuming 401 units or more will face a new, higher tiered rate, potentially exceeding 5 baht per unit. This restructuring aims to reflect consumption patterns and reduce reliance on imported natural gas for electricity generation, which currently accounts for over 60% of fuel and 30% of LNG imports. Reducing LNG imports by 5-10% could lower the FT charge by approximately 10 satang per unit. Nike is undergoing a global restructuring, including laying off approximately 1,400 employees, less than 2% of its workforce, to improve efficiency and flexibility amidst sluggish sales and increased competition. These layoffs, the second round since January, reflect a push for automation and a shift back to focusing on core sports products like running and football. Despite new product launches, overall sales are weak, with a projected 2-4% decrease in the current quarter and a sharp contraction in the Chinese market. Analysts suggest the layoffs indicate deeper underlying problems than anticipated, possibly due to an overload of employees from previous expansion. The financial markets are heavily influenced by the Middle East conflict and upcoming central bank meetings. The war has significantly impacted the Thai baht and crude oil prices, with the correlation between oil prices and the Thai baht rising from 25% to 78% since March. The US dollar index also shows a stronger correlation with oil prices, as concerns about inflation push bond prices up and strengthen the dollar. While the market is becoming accustomed to these risk factors, the Thai baht is expected to fluctuate within a range of 31.90 to 33 per US dollar in the short term. The possibility of the Thai baht breaking above 33 is low unless the conflict escalates significantly and oil prices surge above $110, which is deemed unlikely due to global efforts to stabilize oil prices and increase supply. The Monetary Policy Committee in Thailand and the US Federal Reserve are both expected to keep interest rates unchanged this week. Thailand's central bank is likely to maintain rates due to weak domestic demand and negative inflation (-0.08%), suggesting less aggressive inflationary pressure compared to 2022. The energy crisis, being a supply-side problem, cannot be solved by monetary policy alone. Maintaining interest rates by both central banks could ease market anxiety and stabilize bond markets, potentially leading to a return of capital flows to emerging markets. However, concerns about Thailand's fiscal situation and limited borrowing capacity, as well as lingering market concerns about government borrowing, could still hinder the baht's appreciation.