Despite the challenge of soaring inflation rates and development costs, property developers should prepare for a post-pandemic boom, according to economists.
Kobsak Pootrakool, senior executive vice-president at Bangkok Bank, said Thailand is entering a new economic phase in 2022-2024 following a two-year stumble.
"We are getting close to the end of the tunnel," he said. "It is a transitional period with fluctuations. If we can make it through, we should be able to ride Asia's economic growth wave, which can be prominent in the global economy after 2024."
The challenges in the new phase will be different from those two years ago, said Mr Kobsak. They comprise a fluctuation in the global trade and financial system, geopolitical conflicts, technological disruption and competition in the age of the Asian century.
"It's time to reinvest in the property sector," he said on Thursday at a property seminar. "The new Omicron variant will likely ease by the end of next month because of mass vaccination."
The Thai economy showed good signs at the end of last year, with improving indices on key drivers such as manufacturing production, export and industrial investment, but excluding the tourism sector, said Mr Kobsak, also a former minister to the Prime Minister's Office.
"Earlier this year, the mobility index improved," he said. "Traffic increased, homebuyers visited project sites and car sales rose."
Mr Kobsak said the Thai economy should perform well for two years. The key driver should be tourism, rebounding by the end of 2022, he said.
During Feb 1-17, 2022, the number of air passengers rose 134% year-on-year, driven primarily by international passengers, which increased by 688% to 230,000.
The positive figures continued from January 2022, which saw 450,000 passengers, up 572% year-on-year, with the largest source market Germany.
"A target of 5 million travellers this year is possible, with the potential of reaching 20-25 million next year," said Mr Kobsak.
The pace of inflation in Thailand remains lower than in other countries and should slow in the second half of the year, according to the central bank.
Sakkapop Panyanukul, senior director in the economic and policy department at the Bank of Thailand, said inflation is forecast to rise by more than 2% in the first half of the year, up from an earlier prediction of 1.7%.
"Economic growth at a level similar to before Covid appeared will take at least three years as we are heavily dependent on the tourism sector," he said. "We are in a recovery cycle helped by exports, which grew 25%."
Mr Kobsak said the inflation was caused by oil prices, which will affect the cost of property development, while the prices of construction materials gained rapidly since last year.
"Before the crisis ends, which will bring a post-pandemic boom, developers should grab an opportunity in the final stretch," he said. "They should digitise and improve their business, reduce costs and lock in interest rates for financial costs."
Mr Kobsak said opportunities could be huge after the pandemic as the Asian economy could make up 53% of global GDP, up from 33% in 2020. Asian highway networks should also be fully utilised, he said.
"With new mass transit lines, Bangkok will be an Asean hub, with new business districts in several areas such as Wireless Road, Makkasan, Bang Sue and Charoen Nakhon," said Mr Kobsak.
