The Thai government plans to stimulate the economy by increasing government spending and boosting consumption, thereby boosting the sluggish real estate market. However, this plan has attracted the attention and concerns of analysts and investors. Although some are optimistic about this move, there are also voices that believe it is only a short-term solution.
Thai Prime Minister Sreta Tavisin plans to stimulate the economy to boost the weak real estate market, but the market's response to this has been mixed. Sreta was the CEO of developer Sansiri Plc before joining the Thai Party and being elected as the political leader of Southeast Asia's second largest economy.
He has been working hard to reduce debt and energy costs, and has promised to distribute 10000 Thai baht (approximately 1980 RMB) per person to Thai citizens aged 16 and above, with an estimated government loss of up to 560 billion Thai baht. This plan has raised concerns among many investors, including the former governor of Thailand's central bank.
The source of funding has become the main issue. According to Bangkok, the government plans to increase borrowing by 8% this fiscal year, and the budget deficit may reach 693 billion baht, as the expected expenditure is 3.48 trillion baht. The Bank of Thailand has warned that under this plan, the ratio of public debt to GDP will reach 64%, exceeding the government's set limit of 60%.
The head of research at Taigang Securities in Bangkok said, "Although the situation seems to improve in the short term, people still have doubts about the government's next strategy." He further pointed out, "The market generally believes that this plan may only be a short-term solution, which is also why foreign investors are cautious towards Thailand
He expects Sreta to act cautiously regarding measures in the real estate market, as this may be seen as favoritism towards his previous industry. He also stated that for the government, a better choice is infrastructure projects that have a long-term impact on boosting the economy and the real estate market.
Foreign buyers play an important role in the Thai economy. According to data, in 2019, the contribution rate of international tourists to Thailand's GDP reached 11.5%. Official data shows that from 2018 to 2022, foreign buyers accounted for one fourth of Thailand's total real estate sales, with Hong Kong buyers accounting for one-third of all purchases.
The head of research and consulting at CBRE Thailand stated that "the multiple policies announced by the government are expected to have a positive impact on the real estate industry." He also pointed out that if the subsidy of 10000 Thai baht is implemented to all Thai nationals, local retail enterprises across the country will benefit. He believes that the government's focus on stimulating the economy is a positive sign for the housing market.