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Bank of Thailand: Q4 growth could be negative

The gross domestic product growth in the fourth quarter of the year could be a negative figure because of the flood impact, Bank of Thailand governor Prasarn Trairatvorakul said on Thursday.

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The gross domestic product growth in the fourth quarter of the year could be a negative figure because of the flood impact, Bank of Thailand governor Prasarn Trairatvorakul said on Thursday.

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The floods would also trim this year’s economic expansion to 3.1 per cent, from a previous projection of 4.1 per cent, as the flood damage on the production sector could be as much as 100 billion baht, said the BoT chief.

Asked whether the central bank would ease its monetary policy to enhance economic growth, Mr Prasarn said the BoT has to wait to see economic damage and the assessment of the situation in the long-term first.

He added that the monetary policy panel had yesterday agreed to keep the repurchase rate unchanged at 3.5 per cent to boost economy.

“However, if it is necessary or there are more economic risk factors, the central bank was ready to call an extraordinary meeting of the committee to consider adjusting monetary policy to make it suit with the situation”, said Mr Prasarn.

via Bangkok Post : BoT: Q4 growth could be negative.

Mr. Paiboon Kittisrikangwan, Assistant Governor, Bank of Thailand, The MPC deemed that the current level of the policy rate is appropriate in addressing upcoming inflationary pressure and supporting economic adjustments amidst heightened uncertainty in the global economy. Meanwhile, with the floods not yet over, their impact on the economy was not fully evident. The MPC therefore voted 6 to 1 to hold the policy interest rate at the current level of 3.50 per cent, with one vote in favour of a 0.25 per cent decrease. The MPC would remain vigilant in monitoring developments of risks and stand ready to take appropriate policy actions.

The MPC assessed that the global economic outlook had deteriorated markedly as a result of the impasse over the resolution of the euro area’s sovereign debt problem, which prompted a surge in financial market volatility on concerns that spillovers onto the banking sector and the real economy will become more severe. Latest US economic data indicated a fragile recovery and market perception of a recession had increased. In Asia, export growth in some countries moderated in line with the global economic slowdown.

Nonetheless, firm domestic demand and available fiscal policy space should help to cushion growth and trade within the region from the impact of a slowdown in advanced economies. Preliminary data for 2011 Q3 pointed to continued growth of the Thai economy though the effects of a softer world economy became evident in the moderation in export growth. Going forward, intra-regional trade and domestic demand, particularly from forthcoming government stimulus measures, would help limit downside risks to growth.

The MPC noted the severity of the floods, which had already brought about partial halt in some production sectors, and would substantially curtail economic growth in the remaining part of the year from previously projected.

Nevertheless, reconstruction spending would provide support for domestic demand to gradually pick up in the periods ahead. Inflationary pressure continued to be sustained by growth in domestic demand, though declines in input costs, such as moderated oil prices from a weaker global economy, as well as more stable inflation expectations would lessen inflationary pressure going forward.

Nonetheless, upside risks to inflation from higher public and private spending as the floods recede would need to be monitored.

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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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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Economics

Customs Department Considers Measures to Help SMEs

National News Bureau of Thailand

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BANGKOK (NNT) – The Customs Department is seeking ways to reduce the impact of the exemption on import tax and value-added tax (VAT) for imported goods worth up to 1,500 baht, as such measures are hurting small and medium-sized enterprises (SMEs).

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