The Asian Development Bank (ADB) pared down its Thai economic growth forecast this year to 4 per cent from its earlier estimate of 4.5 per cent, according to ADB country director for Thailand Craig Steffensen.
Mr Steffensen said the revision was attributed to the fact that the Thai economy in the first half of this year expanded at a rate of 2.9 per cent, lower than earlier projected due to the impact of the March 11 earthquake and tsunami in Japan together with the debt crisis in the US and euro-zone countries.
In its, released today, ADB trimmed its full year forecast to 7.5% from 7.8% seen in April. The 2012 projection is also lowered slightly to 7.5% from 7.7% previously.Asian Development Outlook and Asian Development Outlook Updateare ADB’s flagship economic reports analyzing economic conditions and prospects in Asia and the Pacific, and are issued in April and September, respectively.
ADB economist Luxmon Attapich said the bank has been monitoring the Thai government’s fiscal policy implementation to stimulate the economy and boost the peoples’ income for fear that it might cause inflationary pressure. The bank consequently revised up this year’s inflation forecast to 3.8 per cent from its earlier estimate of 3.5 per cent, but the rate is likely to drop to 3.2 per cent next year.
The slowdown in demand from the United States (US) and Europe continues to cast a cloud over the region, with export growth easing substantially in the second quarter of 2011 in leading economies, including the People’s Republic of China (PRC).
“At the same time, strong domestic consumption and expanding intraregional trade are helping to underpin still solid growth levels,” said Changyong Rhee, ADB’s Chief Economist. “Since the onset of the global recovery, the growth in exports to the PRC from several Asian economies has been stronger than their exports to the rest of the world.”
The share of intraregional exports among the largest economies in the region has increased from 42% in 2007 to 47% in the first half of 2011, the report noted.
Accelerating price pressures remain a threat to many economies, with the inflation rate for developing Asia expected to average 5.8% this year, up from an April projection of 5.3%. The rate should cool in 2012 to 4.6% as commodity prices recede but central banks will still need to keep a close watch and may need to take remedial action.
Capital continues to flow into the region, although the pace has eased in recent months, and remains at manageable levels. However policy makers should be prepared to act in the event of any upsurge in capital volatility once the US and European debt markets settle and advanced economies pick up again.
The report notes that many economies in the region are well placed to cope with soft global economic conditions for a while, provided the major industrial economies do not fall back into recession.
“Ample fiscal space, even after the recent spate of fiscal stimulus measures, and large foreign reserves provide a buffer against further downside risks,” said Mr. Rhee.
In the longer term, the region must press forward with structural reforms that encourage domestic-led, inclusive growth, as demand from advanced countries is likely to remain subdued.
East Asia remains the key economic driver for developing Asia with expected growth of 8.1% this year, although more moderate activity in the PRC has seen the forecast trimmed from the April estimate of 8.4%. Next year, a further easing of growth in the PRC will see overall growth for the five economies dip further to 8.0%.
Growth in South Asia is also slowing this year as monetary authorities move to combat still high levels of inflation. GDP is expected to expand 7.2%, with the inflation forecast marked up to 9.1%. Next year growth should pick up to 7.7%, led by India, after higher interest rates crimped consumer spending and investment in 2011.
Growth projections for Southeast Asia and Central Asia have also been lowered slightly to 5.4% and 6.1%, respectively, for 2011, although overall economic activity in both regions remains buoyant on the back of solid private consumption, investment, and remittances, and favorable export prices. Oil production problems in Azerbaijan are weighing on Central Asia as a whole, while a pruning of estimates for Malaysia, Philippines, Thailand and Viet Nam has offset expectations for a stronger performance by Indonesia.
In the Pacific, the resource-rich economies of Papua New Guinea, Timor-Leste and the Solomon Islands will underpin expected growth of 6.4% this year, but this will be partly offset by lackluster performances elsewhere, including the Cook Islands and Vanuatu. Next year the growth rate is likely to ease further to an aggregate 5.5% with inflation expected to average 8.3%.
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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