Only Mumbai and Jakarta offer cheaper services throughout Asia than in Bangkok according to new research, but for goods the city remains one of the most expensive in the region.
In its fifth annual Wealth Report: Asia, which monitors the cost of living in luxury and wealth creation in Asia, the firm found the pool of investable assets held by High Net Worth Individuals (HNWI) could reach US$ 14.5 trillion by 2020, or growth of 160 percent during the current decade.
Thailand’s HNWI wealth is seen rising to around US$ 344 billion in 2020, up from US$ 272 billion in 2014. Thailand’s nominal GDP and HNWI wealth have been rather stagnant in the last four years, according to the firm. Thus far, increased government spending and gradually improving private investment have been insufficient to reinvigorate growth in the face of weak exports and private consumption.
It reported that for now, the recovery in Bangkok is on hold.
“We last made a comparison of Bangkok to the rest of the region, back in 2013. At that stage the country seemed set for growth, particularly in the service area, which is highly dependent on the tourism industry.
“The political unrest in the interim that was evident in Bangkok from late 2013 to mid-2014 seemed to have unsettled Bangkok’s relative position in the Index.
“The observation period for the Julius Baer Lifestyle Index also preceded the unsettling events in August 2015. It seems that Bangkok may have been heading out of a slump, and in future we will have to see if that trend will continue in light of recent events.”
A cursory look at prices in the 2014 report and the 2015 report indicated that there were signs of price recovery. In 2014 many of the prices in the Index were down from the year before. This year they were up again – especially wedding banquets, hospitals, hotels, which are the mainstay of the tourism industry in Bangkok. Jewellery and cars have also increased in price year–on–year.
Bangkok still remains a bargain for services – a sector which is possibly affected by political or economic unrest. Golf memberships, wedding banquet, lawyer’s fees, property, and business class flights are cheaper than much of the region. In the overall service area, only Mumbai and Jakarta offer cheaper services in Asia than Bangkok.
For goods, Bangkok is actually one of the most expensive markets. This is driven by the relatively high price of jewellery, watches, pianos, cars and cigars in this market.
“For Bangkok there may be more price pressure ahead.
“In pure economic terms we expect the Thai economy to perform better next year, as long as the tourism sector can continue to do well, and government spending continues,” the firm concluded.
To access your own copy of the Julius Baer Wealth Report: Asia in English visit: http://www.juliusbaer.com/asia/en/investment-excellence/research/wealth-report-asia/