Writer: Nuttawut Kulkaew

Editor: Wittaya Wonglor

The global economic outlook is uncertain. But foresight researchers at FutureTales Lab by MQDC have gathered signals of change for 2023-25.

In 2023, the digital economy in the US, China, and India will set a model for other countries. China and India are emerging as global economic hubs. The US dollar is steadily losing power. Only 60% of countries will still use the US dollar as their foreign exchange reserve. The growth of cryptocurrencies is affecting traditional monetary systems. Countries are switching their reserve and trade currencies from the US dollar to other currencies, which could affect the US economy. Countries will change fiscal policies in 2023. The global environmental crisis will also push governments, businesses, and financial institutions toward Sustainable Finance. The business sector must, above all, make supply chains more environment friendly.

The Thai economy in 2023 will still be focused on tourism. Thailand must aim to be "top of mind" as a destination for well-being in all dimensions, such as medical, wellness, bleisure, gastronomical, religious, and nature tourism. But the tourism industry's gradual recovery alone may not maintain the country's finances. A significant rise in utility bills since 2022 will affect people on low and middle incomes. With a general election this year, the new government must face cost of living issues, public debt, and political conflicts.

The surest response for business in 2023 would be to prepare for a domestic and global recession by diversifying portfolios and suppliers. The business sector must also closely study the policies of all political groups to be prepared to adapt and grow. Businesses must consider putting environmental and sustainability principles such as ESG, BCG, and SDGs into practice. This is another challenge for all business groups, whether small, medium, or large.

In 2024, the world economy will remain weak. Technocracy will become even more pronounced and multilateral institutions worldwide will deteriorate. There are divisions due to economic, political, and environmental tensions. Neighboring countries may form alliances to profit from or attack each other to access and manage limited resources. In addition, deep recession in the United States since 2023, long and complex global supply chains, and growing global debt will threaten local economies in different areas, determining whether the global economy remain stable or declines.

The Thai economy in 2024 will remain broadly in line with the global economy. The trade regulations and policies imposed on small and medium-sized enterprises (SMEs) and local manufacturers may widen the profit gap between small, medium, and large businesses, fueling social conflict.

The global economic outlook for 2025 is for bubbles to pop. Developing countries may become underdeveloped with the long-term economic impact from COVID-19 in 2020-22 and subsequent recession. Countries face different challenges but many will feel an impact from climate change, cybercrime, falling commodity prices, domestic corruption, middle-income trap, stimulus efforts, health problems from COVID, and the trade cooperation.

The Thai economy in 2025 will still align with the global economic direction, facing economic problems from the previous year. The new government must look to solve economic problems when many are losing confidence in the stability of the Thai baht. We may see exponential growth in digital assets, transactions, and platforms for financial decentralization. Blockchain will be used to develop new products and innovations, such as customer relationships, supply chains, and accounting management. The same period will shape how Metaverse will play a role in the Thai and global economies, especially in the entertainment and retail industries. For example, will real-world businesses have to migrate entirely to virtual physical stores? Or could the technology of extended reality and the virtual world platform enhance the experiences and economic activities in the real world to drive business and the overall economy? The private sector may consider investment opportunities in underdeveloped countries such as Africa. In addition to expanding business in areas with many workers, both now and in the future, it can create jobs and opportunities for local people.

Implications for the future:

- Businesses and regulators will play a more meaningful role in the Metaverse, laying the foundation for the economy and future labor market.

- Organizations and businesses will begin exchanging innovations to increase business opportunities and solve social issues.

- Entrepreneurs should diversify their business portfolios and investments for resilience and overall growth rather than monopolizing any single industry.

- Rapid growth may not be the best goal in a recession. Staying debt-free and socially and environmentally conscious may be another way to grow a more valuable business, especially in the era where financial institutions pay attention to green finance.

- Large businesses may contribute to SMEs and local entrepreneurs by educating and encouraging technology adoption. This may be exchanged for a business alliance or helping to advocate actively in advancing trade regulatory demands.

- There may be political unrest in Thailand in 2023-25 that affects economic activities or causes business to halt. Businesses may use this time to develop their cyber and tangible infrastructure and comprehend social movements. Companies may provide shelter or assistance to those affected regarding their ability to maintain relations with stakeholders, which is sincere corporate social responsibility.

*Note: This article is intended to share knowledge. It is not an intention to seek profit or provide investment advice.

References:

- 2022-2024 THAILAND INDUSTRY OUTLOOK https://www.krungsri.com/en/research/industry/summary-outlook/outlook-2022-2024

- Ministry to place greater focus on global megatrends https://www.bangkokpost.com/business/2308506/ministry-to-place-greater-focus-on-global-megatrends

- Thailand's tourism-reliant economy likely gathered pace in Q2 https://www.reuters.com/markets/asia/thailands-tourism-reliant-economy-likely-gathered-pace-q2-2022-08-12/

- Tourism Jump to Power Thai GDP Growth to Five-Year High in 2023 https://www.bloomberg.com/news/articles/2022-08-02/tourism-jump-to-power-thai-gdp-growth-to-five-year-high-in-2023

- Global debt has risen to dangerous levels. Here’s what needs to be done https://www.weforum.org/agenda/2022/05/dangerous-global-debt-burden-requires-decisive-cooperation/

- Dangerous Global Debt Burden Requires Decisive Cooperation https://blogs.imf.org/2022/04/11/dangerous-global-debt-burden-requires-decisive-cooperation/

- 2024: Elections around the world https://www.youtube.com/watch?v=_fpevDx-SAQ

- Permafrost thaw could release bacteria and viruses https://www.esa.int/Applications/Observing_the_Earth/Permafrost_thaw_could_release_bacteria_and_viruses

- Bacteria species found in glacial ice could pose disease risk as glaciers melt from global warming https://phys.org/news/2022-06-bacteria-species-glacial-ice-pose.html

- The Potential Role of Carbon Pricing in Thailand's Power Sector https://www.iea.org/reports/the-potential-role-of-carbon-pricing-in-thailands-power-sector

-  Cost-Benefit to GDP of Managing CO2 through Taxation: A Quantitative Analysis of CO2 Emission, GDP and Energy Price https://www.bot.or.th/Thai/Segmentation/Student/setthatat/Doclib_settathat_53/pai_preeyanuch_text.pdf

- The Distributional Impact of a Carbon Tax in Asia and the Pacific https://www.imf.org/en/Publications/WP/Issues/2022/06/09/The-Distributional-Impact-of-a-Carbon-Tax-in-Asia-and-the-Pacific-519111

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