KTC x NESDC Pinpoints Growth Opportunities Amidst Challenges for the 2025 Economy and Consumer Finance Industry

Dr. Supavud Saicheua, Chairman of NESDC shared insights on the global and Thai economic outlook, "The Thai economy in 2024 is expected to grow by approximately 2.7%. In Q4 2024, GDP is projected to rise by 4%, driven by government stimulus measures, a steady recovery in tourism, and export expansion. For 2025, the IMF forecasts GDP growth at 2.9%, but the outlook remains highly uncertain with potential downside risks, likely influenced by President Trump's election victory and geopolitical tensions. Moving into 2025, 4 key factors will drive economic growth:

1. Exports, which contribute about 50% of GDP, face significant downside risks, with Thai exports to the US making up nearly 10% of GDP. Weak demand from Europe and China further dampens prospects.
2. Tourism is expected to continue its recovery, with foreign arrivals in 2025 likely reaching 40 million, matching pre-COVID levels. However, per capita spending is projected to remain lower.
3. Government stimulus is anticipated to persist until mid-2025, driven by final cash handouts and accelerated investment spending. However, discussions of tax hikes by the Finance Minister suggest fiscal policy may tighten.
4. Monetary policy is expected to see the Bank of Thailand cutting interest rates twice in 2025 due to very low inflation. Nonetheless, stricter lending guidelines from the Bank of Thailand and ongoing efforts by commercial banks to resolve non-performing loans will likely extend the trend of debt deleveraging.

However, if the Bank of Thailand eases monetary policy too slowly, domestic purchasing power may remain weak, and the baht could strengthen further."

Mr. Apichet Kiatworakun, Director - Finance at KTC or Krungthai Card Public Company Limited, shared the outlook for the Thai economy, "The Thai economy is projected to grow by 2.9% in 2025 amid uncertainties in global trade policies, particularly US import tariffs that could disrupt production chains and exports in the region. The potential for the US to raise tariffs by 60% on Chinese goods and 10% on other countries could alter global trade and investment patterns. However, Thailand may benefit in the short term from China's shift of production to ASEAN (China+1), though long-term competition in export markets may intensify. The strongest growth is expected in Q4/2024 and Q1/2025, supported by accommodative monetary policies. The Bank of Thailand is likely to cut the policy interest rate to 1.50-2.00%, in line with global trends, due to slowing inflation and anticipated lower energy prices. Foreign direct investment, particularly in electronics and digital sectors, continues to flow in, with ASEAN as a key investment hub. Government spending is also expected to remain strong in the first half of 2025."

Business sectors with strong growth potential include restaurants and hotels, healthcare services catering to an aging population, and financial institutions that have embraced digitalization and financial

innovations, particularly in products that help customers manage debt. The success of driving Thailand's economy in 2025 will depend on leveraging changes in the global supply chain, alongside effective public-private sector collaboration and prudent risk management to foster sustainable long-term growth.

The consumer finance industry has growth potential driven by an accelerating economy and lower funding costs, enabling financial institutions to offer more competitive products. The adoption of technology will also expand access to financial services. Despite this, the key challenge remains high household debt, requiring strict risk management, adaptation to tighter regulations, and increased competition from existing and new providers. KTC is committed to offering products that help customers manage debt effectively, fairly, and in line with evolving lifestyles.

KTC's business direction in 2025 focuses on becoming a sustainable digital organization with 3 key components: People, Process, and Technology. We believe that understanding future economic trends and strategic planning will enable KTC to grow sustainably in a rapidly changing world. We are committed to supporting the development of the Thai economy and society through modern, comprehensive financial services. As a strategic partner, we aim to drive the country's economy by expanding products and services that meet customer needs, leveraging technology to enhance access to financial services, and broadening our customer base. This will help maintain our leadership in the consumer finance market and support sustainable growth for the Thai economy in 2025 and beyond."

Regarding performance in 2024, KTC reported a net profit of 5,549 million baht in the first 9 months and expects to reach its target of 7,295 million baht by year-end. For 2025, the company aims to increase net profit from 2024, with a loan portfolio growth target of 4-5% while maintaining a non-performing loan (NPL) ratio of no more than 2.0%. KTC plans to boost credit card spending by 10% through customer engagement strategies, expand the "KTC PROUD" Cash Card product by 3%, and grow the KTC P BERM Car for Cash new booking to 3,000 million baht, offering personal financial solutions tailored to consumer needs.