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Eurozone Crisis to have limited impact on the Thai Economy

The eurozone crisis is likely to have only a slight impact on the Thai economy, since Thailand has been enjoying financial stability, and it is quite well-prepared for dealing with the situation, according to Thailand official media.

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Euro crisis

The eurozone crisis is likely to have only a slight impact on the Thai economy, since Thailand has been enjoying financial stability, and it is quite well-prepared for dealing with the situation.

Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said that various government agencies concerned are closely monitoring economic woes in Europe. The direct and indirect impacts of the volatility of the eurozone crisis to the Thai economy are being analyzed.

Euro crisis

Eurozone Crisis to have limited impact on the Thai Economy

He stated that the export industry might be affected slightly, as Europe is Thailand’s major export market. Even so, the Government believed that Thailand would be able to achieve its export growth target, earlier set at 15 percent. He said that Thailand had diversified its export markets and penetrated new markets, while the implementation of the increase in the daily minimum wage this year would help stimulate the domestic economy and encourage spending.

Prime Minister Yingluck Shinawatra said that the Government would not be complacent about the eurozone crisis. In fact, she said, Thailand had constantly been preparing for global economic uncertainties by depending less on its international trade and relying more on domestic economy. The Government would also provide assistance to businesses affected by the situation.

The Secretary-General of the Office of the National Economic and Social Development Board, Mr. Arkhom Termpittayapaisith, stated that the Thai economy in 2012 is expected to grow by 5.5-5.6 percent. Despite the eurozone crisis, the Office has not yet adjusted its forecast for the country’s economic growth, since the European economic problems would not have direct impacts on Thai exports. He said that Thai exports to Europe account for only 9 percent of Thailand’s total exports.

Meanwhile, the Governor of the Bank of Thailand, Mr. Prasarn Trairatvorakul, said that impacts of the eurozone crisis might be felt on exports, financial institutions, and the financial market. He believed that Thailand would be able to cope with impacts of the economic situation in Europe, as Thai financial institutions have been strengthened and the country’s international reserves are at a high level. Although a slight impact might be felt on Thai exports, relevant agencies are working to ease the situation.

The Bank of Thailand’s Monetary Policy Committee, during its meeting on June 13, said that risks to the global economy had increased since the previous meeting, reflecting heightened uncertainty about the future of Greece in the eurozone and banking problems in Spain. As a result, the contraction of the eurozone economy was projected to be more protracted than previously anticipated. This could have repercussions on the US economic recovery as well as on Asia, where export growth has moderated in line with the slowdown in China and the global economy.

via Inside Thailand — Eurozone Crisis and the Thai Economy.

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Thailand’s Ministry of Finance expects 3.5 to 4.5% economic growth in 2022

For next year, the Ministry of Finance is projecting an economic growth of 3.5-4.5% from effective pandemic control measures, incentives, domestic spending, the export sector, private investment support, global economic recovery, and government expenditures.

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The Minister of Finance says Thailand’s economy this year would see only a 1.1-1.2% growth

BANGKOK (NNT) – The Ministry of Finance is now projecting an economic rebound to 4.5% growth next year, with government investments serving as key drivers. The Minister of Finance says the government will focus more on inclusive growth next year, with no sectors left behind.

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Ecommerce

Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)

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Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)

What measures has SET taken to support listed companies’ compliance with ESG standards?
PAKORN PEETATHAWATCHAI:

PAKORN: When we first began promoting ESG-compliant investments, we were met with little interest. We attributed this to a lack of clear data to showcase the economic benefits of ESG investment, and perhaps limited clarity as to what constitutes a sustainable or ESG-compliant investment. The launch of the THSI list and, subsequently, the SETTHSI Index, was designed to address this. Our most recent data, comparing returns for the SETTHSI Index with the broader SET and SET100 indices from April 2020 to April 2021, underscores the economic benefits of these investments: the group compliant with ESG standards outperformed the other two indices on every data point. 

As of May 2021 Thailand was home to CG and ESG assets under management totalling BT54.8bn ($1.7bn) across 50 funds – up from 23 funds in 2019. Meanwhile, of the BT187.1bn ($5.9bn) raised in green, social and sustainability bonds since 2018, BT136.4bn ($4.3bn) was raised in 2020 – 83% from the government and the remainder from development banks and private players. This rising demand, in a move to manage risk and generate returns, has been complemented by growing supply and promotion: supply from ESG-compliant businesses aiming for resiliency and sustainable growth, as well as promotion from regulators highlighting investment opportunities with good CG and SD practices. Indeed, the pandemic has been a catalyst in shifting the view of ESG compliance from a luxury to a requirement in the new normal.

In what ways can enhanced standard-setting and regulatory mechanisms overcome the remaining barriers to improved ESG performance?

PAKORN: A multi-stakeholder approach is crucial for enhanced ESG performance – not only in Thailand, but around much of the globe. This can also help to address the standout incumbent challenge: access to reliable, wide-ranging ESG data. For example, the 2020 update to the 56-1 One Report established clear ESG standards and triggered online and offline capacity-building programmes to support listed firms’ compliance. SET is developing an ESG data platform with a structured template to promote the availability of comparable data, maximise value added from corporate sustainability disclosures, and foster collaboration between the business value chain and stakeholders. This is expected to support Thai companies along their ESG journey in an economically sustainable way, result in a greater number of sustainability-focused products and services, drive sustainable investing in the Thai investment community and ultimately “make the capital market work for everyone”, as outlined in the SET’s vision.
 

 

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