The Bank of Thailand (BoT) on Wednesday continued the key interest rate unchanged at a record low of 1.25 per cent, reasoning that uncertainties related to the impact of sovereign debt problems in Europe and the domestic political situation remain key risks to Thailand’s growth outlook.
BoT assistant governor Paiboon Kittisrikangwan announced the outcome of the Monetary Policy Committee (MPC) meeting on Wednesday.
Global economic outlook has improved since the last MPC meeting, supported by continued growth in the US, Japan and particularly in Asia. However, sovereign debt problems in some European economies may dampen the region’s recovery and pose risks to the sustainability of global growth. The MPC will closely monitor the outcome of measures taken to resolve problems and restore confidence in Europe.
The Thai economy expanded in the first quarter of 2010 at a stronger pace than anticipated. This was driven by strong growth in exports and tourism, on the back of global economic recovery. Also, domestic demand, especially private investment, continued to expand. In April, economic activities slowed down somewhat, partly owing to adverse impacts of domestic political situation on tourism as well as confidence of consumers and businesses. Meanwhile, inflation remains low at present but is projected toincrease in the periods ahead.
If the Greek debt crisis and the global economy improve, the MPC may revise its forecast that the Thai economy is likely to grow over 5.8 per cent, higher than 4.3-5.8 per cent projected earlier, he said.
In April, economic activities slowed somewhat owing in part to adverse impacts of the domestic political situation on tourism as well as confidence of consumers and businesses.
However, the BoT has projected the Thai economy this year is likely to expand at least 4.3 per cent.
Mr Paiboon conceded that inflation next year is likely to rise in tandem with the recovery of the world economy and higher prices of consumer goods.
The central bank said economic activities slowed down somewhat in April, partly owing to adverse impacts of domestic political situation on tourism as well as confidence of consumers and businesses. Capital Economics’ Grice expects the unrest to hit second quarter economic data and to leave lasting scars on the economy.
In April, the bank upgraded its economic growth forecast for 2010 to 4.3%-5.8% from 3.3%-5.3%. For 2011, GDP growth is seen at 3%-5%, also upwardly revised from 2.8%-4.8% forecast earlier.
Meanwhile, inflation remains low at present but is projected to increase in the periods ahead, the central bank said today. In May, Thailand’s core inflation rose to 1.2% from just 0.5%in April. The central bank aims to keep the core inflation between 0.5% and 3%. It forecasts the core inflation to be in a range of 1%-2% this year and 2%-3% in 2011.
The headline inflation logged 3.5% in May, an increase from 3% in April. According to the central bank’s outlook, headline inflation is expected be in a range of 3.3%-4.8% this year and 2%-4% next year.
The economic indicators in April 2010, both demand and production, decelerated due to fewer working days as well as the political unrest which adversely affected the number of tourist arrivals and undermined both consumer and business confidence.
Export value amounted to 13,832 million US dollars, rising by 34.6 percent (yoy). After seasonal adjustment, export volume, however, fell by 2.0 percent from the previous month as a result of a drop in exports of high-technology products, including computers, integrated circuit (IC), and vehicles, after acceleration in earlier periods, particularly in March. Imports concurrently slowed down. Although import value, amounting to 14,022 million US dollars, rose by 43.1 percent (yoy), import quantity after seasonally adjusted declined by 7.9 percent from the previous month. Import value in April, however, outnumbered exports as evidenced by an acceleration of crude oil imports this month to re-stock oil reserves which were depleted in February, and considerable raw material imports for electronic production to meet bulk order from abroad.
As a result, trade balance turned into a deficit of 190 million US dollars, compared to a surplus of 1,090 million US dollars in the previous month. The current account was consequently in a deficit of 423 million US dollars. Regarding capital movements, there were net capital inflows of 2,999 million US dollars. Overall balance of payments in April registered a surplus of 3,749 million US dollars, up from 3,137 million US dollar in the earlier month.
Thai fruit exports to FTA markets up 107 percent
China, Malaysia, Singapore, Indonesia, the Philippines, Hong Kong, Australia and Chile are top importers of Thai fruits, especially fresh durian, mangosteen, longan and mango. Thai exporters are able to benefit from FTA privileges.
BANGKOK (NNT) – Thailand’s fruit exports continue to increase, despite the sluggish global economy caused by the COVID-19 pandemic, with key trade partners being countries that have free trade agreements (FTAs) with the kingdom.
The Future of Asia: greener but with a public and private debt hangover
The COVID-19 pandemic has been a perfect storm, destroying jobs, worsening poverty and inequality, and creating a public and private debt problem—especially for countries and firms already in fragile financial health beforehand
50:50 campaign may not get immediate extension
BANGKOK (NNT) – The government’s 50:50 co-pay campaign expiring on 31st March may not be getting an immediate campaign extension. The Minister of Finance says campaign evaluation is needed to improve future campaigns.
The Minister of Finance Arkhom Termpittayapaisith today announced the government may not be able to reach a conclusion on the extension of the 50:50 co-pay campaign in time for the current 31st March campaign end date, as evaluations are needed to better improve the campaign.
Originally introduced last year, the 50:50 campaign is a financial aid campaign for people impacted by the COVID-19 pandemic, in which the government subsidizes up to half the price of purchases at participating stores, with a daily cap on the subsidy amount of 150 baht, and a 3,500 baht per person subsidy limit over the entire campaign.
The campaign has already been extended once, with the current end date set for 31st March.
The Finance Minister said that payout campaigns for the general public are still valid in this period, allowing time for the 50:50 campaign to be assessed, and to address reports of fraud at some participating stores.
The Fiscal Police Office Director General and the Ministry of Finance Spokesperson Kulaya Tantitemit, said today that a bigger quota could be offered in Phase 3 of the 50:50 campaign beyond the 15 million people enrolled in the first two phases, while existing participants will need to confirm their identity if they want to participate in Phase 3, without the need to fill out the registration form.
Mrs Kulaya said the campaign will still be funded by emergency loan credit allocated for pandemic compensation, which still has about 200 billion baht available as of today.
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