Thailand is urged to further open up the financial sector, to increase competition which should lead to lower funding costs, said Thailand Research Development Institute (TDRI) President Nipon Poapongsakorn
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At the conference on “Financial Services Sector in Thailand In the Context of Eventual Free Trade Agreement (FTA)” co-organised by TDRI and Delegation of the European Union to Thailand, Nipon said Thailand may follow the footsteps of Malaysia and Singapore. Meanwhile, more licenses should be issued to prevent market dominance. The authorities should also review the pros and cons of the Foreign Business Act, that controls foreign ownership in commercial banks.
Further liberalisation is necessary ahead of the possible bilateral agreement with the EU. Thailand’s financial service costs are higher than those in the region while service fees are at the same level despite different costs, which indicated the natural collusion.
Thailand performs well compared to other countries in the region on many aspects of government regulations and regulatory procedures that facilitate business. According to the latest annual World Bank’s Doing Business report, in 2008 Thailand ranks 13th among over 180 countries and 4th in East Asia in the ease of doing business. The ease of doing business is measured by quantitative indicators of regulatory requirements and procedures in ten areas in the life cycle of typical small and medium enterprises (SMEs) in the largest city in a country. They include, for example, the number days, steps, and cost needed to obtain business licenses, registering property, clear customs, pay taxes, and close a business. It only takes 2 steps and 2 days to register property in Thailand, on of the fastest in the world.
Changes are unavoidable, as Thailand and other Asean countries are establishing a link under the Asian Development Bank’s roadmap. The electronic trading link will boost Asean companies’ attraction and trading liquidity. He envisioned the similar success as what Nordic countries experienced from its electronic link, which helped facilitate higher volume to small markets. With arbitrage possibility, the markets will draw more investment. This will encourage the entry of new products. While top products in each country will draw more foreign investment, the rest will be local plays.
The first link, between Thailand and Malaysia, will start in 2011, followed by the link between Singapore and the Philippines. Eventually, it will entail six founding nations.
The government has sought to improve efficiency and competition within the sector through the first phase of its Financial Sector Master Plan, launched in 2005. Banks canchoose to be either commercial banks offering a full range offinancial services (minimum capital of $125 million) or retail banks serving mainly smaller companies and low-incomeconsumers (minimum capital of $6.25 million). The Plan also includes the ‘single presence’ rule, which requires financialconglomerates to either merge their holdings into one entityand/or sell group companies.
Thailand’s economic growth expected to return to 2019 levels in mid-2023
Although the economy would recover next year, the recovery is still substantially below potential level resulting in a large output loss and could affect Thailand’s potential economic growth in the future with the economy expected to return to 2019 levels in mid-2023.
The Siam Commercial Bank (SCB), one of Thailand’s largest commercial banks, said in its latest economic outlook report that the country’s economy may wait until the second semester of 2023 to return to 2019 growth levels.(more…)
S&P maintains Thailand’s credit rating at BBB+ with stable outlook
Standard and Poor’s (S&P) maintained Thailand’s credit rating at BBB+ . The global rating firm expects the country’s gross domestic product (GDP) to grow at 1.1% this year, with a more optimistic growth at 3.6% per year from 2022 to 2024.
Standard and Poor’s (S&P) maintained Thailand’s credit rating at BBB+ . The global rating firm expects the country’s gross domestic product (GDP) to grow at 1.1% this year, with a more optimistic growth at 3.6% per year from 2022 to 2024.(more…)
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