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Update October 2016

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Update by Natrakorn Paewsoongnern

Update October 11, 2016

Northern Region’s Economic Conditions in August 2016

In August 2016, general economic activity in the northern region was slightly slower, due mainly to weakness of consumption on necessitate goods and cross-border exports to Myanmar. However, government spending and tourism have been a key driver. Meanwhile, main agricultural productions was higher at the beginning of harvesting period which helped slightly improve of farm income and production of processed agricultural products, except for the lower prices. Meanwhile, underperforming sectors have been on the export of electronic parts and private investment, particularly on real estate activities. On the economic stability, key indicators such as unemployment rate and headline inflation were somewhat benign. At end-July, 2016, commercial bank’s deposits grew at same pace last month but credits growth eased off.

Government disbursement especially investment expenditure accelerated by 30.7 percent ahead of fiscal year ending to support payment schedule on various infrastructure projects such as road, campus and hospital buildings as well as transfers to those of local government.

Tourism sector continued its momentum despite of coming the ‘green season’. This was attributed to an impressive number of domestic tourists attending special events and seminars while the Chinese tourists slightly eased off. Most key indicators were satisfactory such as air passengers, hotel occupancy rate and Value Added Tax (VAT) collected from hotels and restaurants. Direct flights and foreign tourists passing through Chiang Mai International Airport slightly declined.

Private consumption was up by 1.8 percent reflected mainly by an increase of auto sales as a result of stimulating sales campaign earlier. Meanwhile, high household debt and tight credit condition have been deterring consumer sentiment and spending including lower fuel consumption despite an improving farm income this month.

Export value dropped by 2.7 percent, as exports of electronic components to China, Singapore and Philippines as well as declining exports to the Lao PDR and the southern China. Meanwhile, cross-border exports growth to Myanmar was lower. Import value, by contrast, expanded by 14.7 percent, owing to imports of electricity from Lao PDR, and vegetables and fruit from southern China.

Private investment fell by 2.0 percent contributing to sluggish construction and real estate activities which coincided with slower credits to construction and real estate business. However, marginal investment was only observed in hotel business. Key private investment indicators have been declining which were the construction area permitted in municipal zone, sales of construction materials and import value of machinery and equipment, except for a temporary increase of registration of commercial vehicles.

Manufacturing production shrank by 11.9 percent, despite of improvement in processed agricultural products including rice mill, processed production of vegetables and fruit from less drought impact. However, due to slackening demand from trading partners abroad and severe competition, key exports on electronic components, optical lenses and hard disk drives remained underperformed. Productions of beverages also dropped after acceleration in the earlier period for new bottle and packaging design.

Agriculture sector declined but showed an upward direction in terms of output and prices. Major crop production posted smaller decline to 6.4 percent, with increased production of rice and livestock, including swine, broilers, chicken eggs and chicken following higher domestic and external demand. However, output of maize and longan have fallen. Agricultural price edged up by 2.0 percent, mainly from increased prices of rice and longan as well as swine and eggs. Farm income, thus, decreased by 4.5 percent, but improved from previous month.

On the stability front, economic stability remained sound. Headline inflation rate was up slightly to 0.1 percent, basically from higher prices of eggs, vegetables and fruit, in contrast, price of gasoline sold locally has dropped. Unemployment rate was at low level of 1.0 percent, significantly increased in non-agricultural sector. However, number of unemployed persons who claim for unemployment benefits tended to increase.

In the banking sector, at the end of July 2016, the outstanding of commercial banks’ deposit grew by 5.0 percent to 635,268 million baht, slowing down from the previous month, due to withdrawal of public entities to state-initiated projects and somewhat seek for higher yield. Meanwhile, credits eased by 1.7 percent to 578,629 million baht following low household and manufacturing confidence. None-performing loans (NPLs) also rose slightly. Loan to deposit ratio was at 90.8 percent, closed to that of previous month. (BOT)

Update October 5, 2016

Seminar on hotel investment to be held October 15 by Modern Property

Wasan Kongjan announces the upcoming seminar for people interested in investing in small hotels in Chiang Mai, to be held on October 15 at Chiang Mai Grand View Hotel.

Nopniwat Krailerg

The booming hotel business in Chiang Mai will be the topic if a seminar to be held on October 15 by Modern Property Consultant Co. Ltd the Managing Director, Wasan Kongjan, announced recently. 

The seminar, which will be held at the Chiang Mai Grand View Hotel from 8:30 a.m. to 5 p.m. will suit those interested in investing in, or who already own, small size hotels, guesthouses, boutique hotels and others in that size range.  

The seminar will discuss such issues image, room rate adjustments, and improving professional management. Also under discussion will be the appropriate forms of investment, target group trends, location relating to main targets, and expansion of purchasing power.  

The seminar registration fee is 10,000 baht and will cover two people. The Managing Director said that already have over 200 applicants. At the event attendees will meet successful owners of hotels which have full occupancy for the whole year, such as Bed Prasingh, Bed Nimman, S-Trip Poshtel, and Sleepbox. The owners and managers will reveal ideas and tips for project operation including location selection, design, target customers, marketing methods. A marketing team from Agoda will also be attending the event to offer tips for using Agoda. 

Wasan Kongjan noted that Chiang Mai has a great potential for investing in tourism and as the hub of economic activity for the North it links Thailand with China and the AEC. The GPP of Chiang Mai has grown at about 8 percent per year for the past 10 years. GPP was 184,132 million baht in 2014 and was the highest in the North. 

Tourism in Chiang Mai has grown from 3 million people in 2010 to 7.4 million in 2015, a 146 percent increase in five years.  Chiang Mai International Airport has also seen tremendous passenger growth during this period and in 2015 reached 8.3 million passengers with 982 flights per week. The Airports of Thailand predicts passenger numbers will reach 14.6 million by 2025 and has plans for expansion to handle 18 million passengers a year. 

The government is also putting for the high speed Bangkok – Chiang Mai train route, an MOU was signed with Japan to start on that on August 6th and construction is expected to begin in 2018. Other infrastructure projects include linking Chiang Mai – Chiang Rai with a better road, outer ring road, and electric train in Chiang Mai.

The government will promote Chiang Mai to be a center of international tourism and service provider; MICE City and Wellness City, the center of commerce, investment, and transportation : Northern Land Port, city of safe agriculture : Northern Food Valley, Center of international education to universal : Education Hub, and nice place to live : Eco-Town Eco-Village.

He said that investors should take care as it requires care and to ensure that one falls within laws such as land titles, licensing, and building modifications. 

Mr. Wasan also noted that new businesses must have good marketing and an understanding of their target groups, for example Thai tourists like to visit in the winter.  Interested people can make reservations at [email protected] , or call 02-294-9368-9, 081-424-3683 Fax: 0-2294-3358,  Official Line: @m-property, for additional information at Facebook: Modern Property Consultants or website:

HEADLINES [click on headline to view story]y]

Northern Region’s Economic Conditions in August 2016

Seminar on hotel investment to be held October 15 by Modern Property


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