Thailand’s economy up, but exports down

Thailand’s economy has continued to expand through February, but exports shrank for the first time in six months, the director of the Fiscal Policy Office said last week.
Somchai Sajjapong said domestic manufacturing, particularly in the industrial and agro industrial sectors, has slowed down while tourism enjoys steady growth.
He said Thailand should achieve a 5.3 percent economic growth this year, slightly up from the previous forecast of 5 percent, mainly thanks to a higher trend in domestic demand, consequently from increasing household income, positive employment rate, the adjustment of the daily minimum wage to Bt300 and the government’s rice pledging scheme.
Consumption in the public sector has climbed based on the overall 2013 budget spending while domestic investment will contribute to economic expansion this year, Somchai said.
He added that investment in the private sector is expected to be higher than last year’s volume due to the government’s stimulus package after the massive floods in 2011 and investment promotional measures.
External demand will drive up Thailand’s exports, forecast to expand by 9 percent this year - in line with the global economic recovery, he pointed out.
Thailand’s inflation will remain at 3 percent and the country will enjoy a slight trade surplus compared to last year.
He said risk factors must be closely monitored regardless of the volatile Thai baht, economic recovery of trading partner countries, the United States public debt, the Eurozone progress in resolving its public debt problem, and the impact of drought on the agricultural sector and rural people’s income. (MCOT)

Japan backs Thailand as ASEAN Economic Community hub

Japan fully advocates Thailand’s vision to become the hub of the ASEAN Economic Community (AEC) given the country’s capability as a business springboard for the Mekong region, according to the Japanese ambassador to Bangkok.
Shigekazu Sato also urged Thailand to support Japanese investment in the kingdom and create additional mechanisms to enhance bilateral trade and cooperation.
Speaking Thursday, March 28, he said that Thailand should find additional measures, besides the Japan-Thailand Economic Partnership Agreement (JTEPA), to encourage more Japanese investment in the country. JTEPA is a free-trade agreement between the two countries.
Sato said Japanese auto investment in Thailand represents 90 percent of the total auto industry with an investment value of 15 percent. There are 1,400 Japanese companies and 50,000 citizens in Thailand.
Industry Minister Prasert Bunchaisuk, speaking at the seminar titled “Thailand Unparalleled Opportunities,” said among the 1,584 foreign direct investment (FDI) projects which have a combined value of Bt647 billion, 872 projects are operated by the Japanese private sector with a total investment value of Bt373.985 billion or 57.7 percent of the total FDI.
The Thai Board of Investment (BoI) has targeted applications for investment privileges at a total value of Bt600 billion this year and half of them will be foreign investments, he said.
BoI Secretary General Udom Wongviwatchai said Thailand will put more emphasis on new industries concerning the country’s education base, innovation, alternative energy, medical equipment and logistics.
He said the Industry Ministry plans to build eight industrial estates for small- and medium enterprises in Thailand’s Northeast, the North, Central and Southern regions.
Last week’s seminar was jointly organised by the BoI and Japan’s Nikkei Business magazine and was attended by more than 200 Japanese businessmen in Thailand. (MCOT)

Central Bank: Thai baht situation improves

The Thai currency has slightly weakened due to the outflow of US dollars and Thai investors’ purchases of the US currency in higher volumes, a senior central bank official said last week.
Pongpen Ruangvirayuth, Bank of Thailand (BoT) deputy governor, said foreign investors have recently sold their stocks and exchanged the funds into US currency to be transferred out of Thailand, while Thai investors bought more US dollars either for speculative purposes or overseas direct investment.
Though the Thai currency has strengthened by 4.5 percent since early this year, its appreciation in the last few years has been lower than other currencies in the region, she said.
Pongpen said foreign capital inflow will continue on a regular basis and the Thai baht will remain attractive among foreign investors.
“A balanced capital inflow and outflow gives us a relief. The slight depreciation of the baht is not unpredictable. There always are investors who make speculative investments when the baht weakens,” she said.
Pongpen said the BoT has taken into consideration a proposed registration of capital inflow in the bond markets but the right and appropriate timing is crucial in executing the measure to avoid a negative impact.
Thailand needs foreign capital and investment in both the public and private sectors, she pointed out. (MCOT)

Thai exports in February drop 5.83% due to global economic problems

Thai exports in February were valued at US$17.9 billion, a drop of 5.83 percent compared to the same period last year, said Permanent Secretary for Commerce Watcharee Wimuktayon.
Exports in farm and agro-industrial products such as rice, para rubber, frozen seafood, canned and processed food dropped 13.5 percent. Meanwhile, exports in industrial goods such as textiles, gems, jewelry, rubber products, paper and containers declined 2.6 percent.
Exports to almost all markets dropped due to the fragile global economy, particularly main markets like Japan, which dropped by 1.1 percent, the US by 0.9 percent and the European Union by 0.8 percent.
However, the baht strengthening started to impact exports slightly as orders were submitted in advance.
The prime minister earlier assigned the commerce ministry to map out a proactive plan to find new potential markets and to expand Thai exports in all markets.
The ministry will meet with the private sector, the Thai Chamber of Commerce, the Federation of Thai Industries, and the Thai Bankers’ Association on April 9 to review measures to boost export growth to reach the 8-9 percent target this year.
The commerce ministry has no plan to revise the 2013 export target but if the global situation fluctuates, it will be reviewed in the first half of this year. However, it is believed that Thailand’s exports in March will turn positive with an increase of farm product exports, particularly rice, Ms Watcharee said. (MCOT)