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Economics

Bank of Thailand raises rate to 2.25%

Key risks include inflationary pressure following the acceleration in commodity prices and domestic demand, says Bank of Thailand to justify recent interest hike

Boris Sullivan

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Mr. Paiboon Kittisrikangwan, Assistant Governor, Bank of Thailand, announces the outcome of the Monetary Policy Committee (MPC) meeting today, as follows. Risks to global growth have declined compared to the previous MPC meeting. The US economy continued to recover and growth in 2011 is expected to exceed that of the previous year. Nevertheless, risks from unemployment and the slow recovery in the real estate sector remain.

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Key risks include inflationary pressure following the acceleration in commodity prices and domestic demand, says Bank of Thailand to justify recent interest hike

The European economy continued to expand on the back of robust exports and consumption in core member countries such as Germany. Nevertheless, risks from sovereign debt problem still remain.

Meanwhile, Asian economies continue to grow robustly, supported by rising domestic demand and exports which is expected to grow in tandem with global and regional recovery. Key risks include inflationary pressure following the acceleration in commodity prices and domestic demand.

The Thai economy improved in the fourth quarter of 2010 due to domestic and external demands which improved from the previous quarter partly due to the acceleration in production and spending as the flood abated. In addition, exports and tourism posted better-than-expected growth.

The economy is expected to grow robustly in 2011 due to strong growth in the fourth quarter of 2010 compared to the previous year and domestic consumption and investment which continue to be supported by rising income, employment, and high capacity utilization in certain sectors. Pressure on headline and core inflation, going forward, is expected to rise as a result of demand pressure and the clear upward trend in oil and commodity prices. Increasing costs of production are expected to lead to increasing product prices, partly due to pent-up pressure from delayed price adjustments.

In light of rising inflation pressure and the return of economic growth to its long-term trend, the MPC therefore decided unanimously to raise the policy interest rate by 0.25 per cent per annum, from 2.00 to 2.25 per cent per annum, effective immediately.

Thai inflation rose to 3% in December from 2.8% in the previous month – the first spike in the inflation rate in five months. Core inflation, which excludes fresh food and energy prices, jumped to 1.4% from 1.1% on higher housing and recreational costs.

Like many countries across the region, Thailand has had to cope with a strengthening currency as international liquidity searches for better returns. The baht appreciated more than 10 per cent against the dollar in the first 10 months of last year, but has stabilised at around Bt30 to the dollar for the past eight weeks

Economics

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.

National News Bureau of Thailand

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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.

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Economics

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

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The Sydney Opera resumed live performances and the city of Melbourne recently hosted the Australian Open tennis tournament with fans (mostly) in attendance.

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Economics

50:50 campaign may not get immediate extension

National News Bureau of Thailand

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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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