It’s cents and sensibility.
By Aiden Jewelle Gonzales
While COVID-19 may have transitioned into the endemic stage, the economic outlook for the region is still bleak. We’ve all heard the doom and gloomin the news: Thailand’s Central Bank has raised key interest rates to tackle inflation; inflation itself has hit a 14-year high in the country; and the Thai baht is the lowest it’s been against the US dollar in almost two decades.
But even in this economic climate, we can take advantage of the dark clouds and find the silver linings – literally, or otherwise. We’ve put together a short and simple guide to money-fest better investments, savings, and value for money even during these tough times.
Most economists are predicting a recession in the near future, or that we’re already in one. To prepare:
- Start (or invest more in) a savings account, especially a high-yield savings account which will give you up to 25 times more interest than a normal one
- Pay off as much as you can of your debts that have high interest rates, such as credit card debt
- Avoid getting loans from banks at this time, as Thailand’s Central Bank has raised its key interest rate to 1 percent, the highest since early 2020
SHIFTING JOB MARKET
The unemployment rate in Thailand has fallen this fiscal quarter. Nevertheless, it’s still a good time to look for jobs, as most companies are facing a shortage in manpower. Whether you’re looking for a new career or are yourself hiring someone new, take advantage of the job market’s shifting landscape by:
- Upskilling yourself in tech-related jobs, as demand for those gifted in IT and 5G systems will increase
- Looking for jobs in e-commerce or telemedicine, which are on the rise
- Investing in R&D, marketing, and assets if you’re an employer
- Keeping a lookout for foreign firms that have moved to Thailand from China – while most firms’ relocation has been focused on Vietnam, Thailand comes a close second, which means there will be an influx of new jobs, especially in the industries of electronics and automotive parts
FLUCTUATING EXCHANGE RATES
The devaluation of Thailand’s currency is currently the worst in Southeast Asia, and the US dollar’s exchange rate recently reached a whopping THB 39 to USD 1 (although it’s now fallen slightly). You can, however, take advantage of this:
- Earn in USD if possible, especially now that remote work is so popular
- If you’re in the import/export business, now is a good time to export to the US and other countries, as your products will be very competitive. Do this especially if you’re in the following industries: canned goods, sugar, rubber, and certain electronic appliances
- Avoid importing from the US, especially medicines and raw materials such as steel and oil
- Although the Thai baht has devalued, so have other currencies – avoid buying US dollars, but buy British pounds and the Euro (the latter of which is worth even less than USD currently)
- Invest in foreign companies
RISING GAS PRICES
The ongoing Ukraine-Russian Conflict has resulted in, among other things, skyrocketing fuel prices worldwide, and Thailand is no exception. Thailand is also cutting down on imports of natural gas, and may boost the shortage with ‘dirtier’ fuels such as diesel and fuel oil (and hopefully renewable sources)
- If possible, consider buying a hybrid or electric vehicle (EV) – Thailand itself is investing more in infrastructure that caters towards EVs
- Sell your shares in natural gas
- Buy shares in other types of fuel – ideally renewable energy sources
- Invest in manufacturers of EVs and car parts, as the country will be diversifying its sources
- Use public transport more, especially those that currently have fixed prices – it’ll be lighter on your wallet!
Inflation is soaring around the world, and not just Thailand. It’s hard to see a silver lining, but there may be some benefits:
- If you’re paying a fixed-interest loan, you’ll be shielded from inflation as your interest rate will remain the same
- If you can afford a one-time-purchase of a product, try buy it in instalments anyway, as the adjusted price will be less if inflation keeps rising
- Those in the energy industry, EV manufacturing industry, and food producers will benefit – consider entering these industries or investing in them, even for the short term
- It’s a great time to sell your collectibles, such as fine art, or even collectible figurines – experts say that their value might even be higher than gold at this time
WHAT ABOUT CRYPTOCURRENCY AND NFTS?
In theory, cryptocurrencies were designed not to be reliant on national currencies. Therefore their value should not be affected by inflation orcurrency depreciation, and with many at lower prices this year, it may be a good time to invest if you believe in the Blockchain (and that their value will rise eventually).
SHOULD WE KEEP INVESTING?
If you do have discretionary funds, now is a good time to invest.
- Invest in index funds
- Invest in short-term government bonds and short-term mutual funds – with high inflation, their prices are low, and the moment that interest rates decline, the price of the bonds and funds will rise, and you can sell them for a profit
- Invest in the tech industry – Thailand’s Board of Investment are rolling out incentives to support high-tech industries
- Diversify your portfolio – invest in NASDAQ, etc.
- Invest in commodities, such as gold, instead of equities
- Invest in real-world assets such as artwork and collectibles
- Finish current real-estate projects and sell them, but don’t start new ones
WHERE TO VISIT:
Because currencies have depreciated around the world, the baht can still go a long way in certain countries, so now is the time to travel. Here are some countries where the currency has depreciated drastically this year, so visit now especially if you have dollars that you can use to exchange money:
- The UK
- The Eurozone (may be a good time to buy designer bags from Europe)
- Venezuela (currently the weakest currency in the world)
- The rest of ASEAN