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Thai exports surged by 9.2% in March, but challenges remain ahead

EIC projects that export value will grow by only 1.5% in 2017. This is firstly because oil price is expected to normalize beginning in the second quarter.

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Thai export value in March expanded by 9.2%YOY. The across-the-board growth was seen in more sectors, and in almost all destinations, except exports of cars and parts to the Middle East.

Driving the improvement included exports of oil-related products and major manufacturing sectors, especially electronics and electrical appliances, which hit record highs in over 4 years.

Meanwhile, import value continued to expand by 10.3%YOY, on the back of 71.9%YOY growth in import of fuels, 5.8%YOY growth in import of capital goods (excluding aircrafts and ships), along with increase in imports of computers and parts, and machineries and parts.

EIC assesses that first quarter’s 4.9%YOY growth of Thai export value was mainly thanks to development in oil price and recovery in global manufacturing, which bolstered oil-related exports and major manufacturing exports.

Nevertheless, EIC projects that export value will grow by only 1.5% in 2017. This is firstly because oil price is expected to normalize beginning in the second quarter.

Second, trade protectionism policies by the United States are starting to take effect, after the US President ordered investigation into and measures to cut the country’s trade deficit with Thailand, among the 16 trading partners targeted.

EIC expects the effects of such trade policies to be felt in the third quarter onward. Products at risk include

1) those with GSP, which together account for 23.2% of total Thai export to the US, such as car parts, processed food, and rubber gloves;

2) those contributing significantly to the US trade deficit, including computers and parts, electronic parts, rubber products, gems and jewelries; and

3) agricultural products with government supports, such as rice.

  • EIC expects the value of imports to expand by 3.5% YOY in 2017. Contributing to import growth will include imports of fuels, which may start to level off in the second quarter, and investment by the manufacturing sectors, which is expected to be soft this year. Notably, it remains to be seen if this month’s positive growth in investment-led imports of machineries and parts will continue into the next months. In addition, imports of computers and parts capital goods may increase by more than expected, given the steady growth in this group of exports.

Author: Pimnipa Booasang

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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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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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