Dear all Respected Shareholders,
The year 2024 was another year in which Thailand's economy continued to face economic risks from both domestic factors and global economic volatility. This was amid the political uncertainty and the ongoing war since 2022 between Russia and Ukraine, as well as the war between Israel and Hamas in the second half of 2023 that escalated into a regional conflict in the Middle East in 2024. Consequently, the global economy in 2024 grew only 2.6% which was lower than the 2.9% growth rate in 2023 even though the economies of the United States and European countries showed signs of recovery which have led the central banks of the United States and Europe to signal interest rate cuts continuously.
Such circumstances had an impact on the Thai economy in 2024, hindering it from achieving the targeted 3% growth rate. However, it still performed better than in 2023, when the growth rate was only 1.8%. The Bank of Thailand estimated that the Thai economy in 2024 would grow by 2.7% as a result of the acceleration of government budget disbursement in the second half of 2024, as well as the continued growth in exports and the tourism sector. Nevertheless, the Thai economy in 2024 continued to face pressure from household debt, which soared to 91.4% of the Gross Domestic Product (GDP). At the same time, the non-performing mortgage loans (NPLs) ratio rose to 3-4%. Interest rates remained high. Despite signals from the Monetary Policy Committee of the Bank of Thailand to lower the policy rate by 0.25% in the fourth quarter of the year, the policy rate remained steady at 2.25%. Additionally, the government's public debt has soared to 64% of GDP, reducing its public debt capacity.
The aforementioned economic factors directly impacted the overall business sector of the country, including the real estate sector. This was particularly due to the strict loan approval measures of financial institutions for both project loans and mortgage loans. According to data from the Bank of Thailand, the mortgage loan rejection rate was at 67-70%. As a result, the total value of approved mortgage loans from commercial banks and the Government Housing Bank nationwide in 2024 declined by approximately 16% compared to the same period in 2023. Consequently, the total value of residential property ownership transfers in 2024 was projected to be around 1.04 trillion baht, decreasing by 0.57% when compared to the nationwide transfer value of 1.046 trillion baht in 2023.
Under such circumstances, LPN has adjusted its business strategy by enhancing operational efficiency through improving internal process across all departments and increasing financial liquidity as well as reducing inventory levels and lowering operational costs. This aligns with its 'Rebalance' approach, which focuses on three key components of business operations: Rebalance Portfolio, Rebalance Resources, and Rebalance Stakeholders’ Benefits. Furthermore, LPN has initiated a management approach toward becoming a green organization under the Sustainable Development concept, establishing measures and guidelines to reduce greenhouse gas emissions in its operations, with a target of lowering emissions by 2.5% per year.
With this business approach and the collective effort of our entire team, 2024 has marked another year in which LPN has successfully overcome waves of change. I would like to express my gratitude to all executive members, staff members and business partners for their dedication and unwavering support, as well as to our shareholders for their confidence and trust. Every support serves as a great encouragement for LPN to continuously develop the best products and services, driven by the aspiration to deliver 'a better quality of life.' We are committed to developing 'livable' projects that bring true joy of living to all Thais while fostering sustainable growth for the organization and every groups of stakeholders.
Amornsak Noparumpa
Chairman of the Board
