Economics Factor
Before we get deeper into our topic, I would first like to show the big picture of Thailand’s economic status as this will affect the purchasing power of our target customers and our project’s cost. The following are factors in the macro economy:
Before we get deeper into our topic, I would first like to show the big picture of Thailand’s economic status as this will affect the purchasing power of our target customers and our project’s cost. The following are factors in the macro economy:
GDP (In 2010) : Expands at 7.8%
Interest rates : Thai policy rate is currently 2.5%
Exchange rates : US/TB 30.32 (3.34 p.m. Mar 9, 2011)
Inflation rate (February 2011):
Core Inflation = 1.45 %
Headline Inflation = 2.87 %
From data above, we can conclude that Thai Economy in 2010 has improved considerably (expanding at 7.8%) from last year’s contraction of 2.3 percent.
The positive factors are attributed to:
Higher exports in terms of US dollars that followed the economic recovery of major trading partners, combined with a revival in private domestic consumption and investment. Thailand is also still strong with a current account surplus of 4.4 percent of GDP in 2010.
Interest rates have gone up from 1.25% (since crisis in 2008) to 2.5% as of the 9th of March, 2011 but when compared to the regional (ASEAN), Thailand’s interest rates are still low.
Thai Baht exchange rates have also appreciated since 2001 to 2010 by more than 30% (From US/TB 45 to US/TB 30). This has been a great advantage for importers in Thailand.
Thailand inflation rate (consumer price) is now around 3% and trend to increase due to the increase in oil prices. And the core inflation is around 1.45 %. This is a factor for Bank of Thailand to evaluate the Thai policy rate.
The factors mentioned above have had major impacts on how businesses have operated and decisions made. For example, interest rates affect our total project's cost and therefore affect the breakeven point. Another example is changes in exchange rates which affect the costs of exporting materials and the supply and price of imported materials in economy country.
After we look in Macro Economics of Thailand, we then move to the Economy of Northern in Thailand as that is where our project is based. These figures will give a clearer picture of the micro environment of the northern states of Thailand.
The size of northern economic accounted for over 8.5 percent of the country and the production structure also has a good distribution.
Private Investment Indicators of the Northern Region
Source: Department of Industrial Works, Ministry of Industry
Northern Region Investment and Economic Center, Office of the Board of Investment (BOI)
From the table above, you can see that the investment value of newly registered factories is decreasing every year. On the other hand, the investment value of BOI’s approved projects is increasing especially in year 2010.
Then we look at the import/export of energy in Thailand in the table below.
Value of energy import in Thailand (UNIT: MILLION BAHT)
COMPILED BY: ENERGY POLICY AND PLANNING OFFICE (EPPO)
From the table above, we can conclude that the total value of energy import in Thailand is fluctuate but not much. We therefore say that it is almost constant every year.
Value of energy export in Thailand (UNIT: MILLION BAHT)
COMPILED BY: ENERGY POLICY AND PLANNING OFFICE (EPPO)
From the table above, we can conclude that the total value of enery export in Thailand is almost constant every year except in year 2008 which jumps to 319,212 million Baht.
EXPENDITURE ON FINAL ENERGY CONSUMPTION
(UNIT: MILLION BAHT)
Source: PTT, EGAT, DODE, DEDE
From the table above, we can conclude that the consumption of final energy is increasing every year including renewable energy.
Electricity utilization
(Peak Demand by Month 1996 to 2010)
Source: PTT, EGAT, DODE, DEDE
Source: FSS Research
Based on the graphs above we can assume that government has been persistently and consistently pursuing the development and growth of renewable energy in order to reduce reliance on oil and other imported fossil fuels. Even though the country still has to invest in conventional energy, its growth will be lesser than that of renewable energy due to higher importance being place on the environment by local and foreign governments. The costs of renewable energy has also be considerable lower when compared to the past which makes it a more attractive business venture as it is a viable source of profit for companies.
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