Connect with us

Economics

Thailand’s economy in the fourth quarter to be positive

Thailand’s economy in the fourth quarter of this year will turn positive, according to Prime Minister Abhisit Vejjajiva.

Published

on

Thailand’s economy in the fourth quarter of this year will turn positive, according to Prime Minister Abhisit Vejjajiva.

Here is the original:
PM: Q4 economy to be positive

Real GDP in Thailand growth slowed to 2.6 percent in 2008 from 4.9 percent in 2007. In the first three quarters of 2008, output grew 5.1 percent year-on-year thanks to robust exports and investment. Starting in October, however, the sharp decline in global demand, amplified by the domestic political crisis took a toll on growth and real GDP contracted 4.3 percent year-on-year in the fourth quarter. While Thailand’s financial sector was mostly insulated from the financial crisis, the real sector was impacted quickly, and export volumes contracted in October for the first time in six and a half years.

However, significant downside risks remain should political instability resurface in Thailand and the global decline proved more protracted or steeper than now expected

Inflation has been easing with the slowdown in economic activity and the decline in oil and food prices. After peaking at 9.3 percent in July 2008, 12-month inflation fell to only 0.4 percent in December, although the average for 2009 at 5.5 percent was roughly double the level in 2007. Core inflation averaged 2.3 percent in 2008, within the central bank’s target of 0-3.5 percent. In January and February, prices declined 0.3 percent from the first two months of 2008, but this has been driven primarily by fuel prices, with other prices still increasing year-on-year. Given the increased excess capacity in the economy and the continuing decline in global oil and food prices this year, inflation in 2009 is expected to be negligible.
Export volumes are projected to contract 16 percent in 2009 after a 6 percent expansion in 2008. Exports of services, more than half of which were accounted for by tourism receipts (around 8 percent of GDP) will also be heavily impacted by the slowdown in arrivals from advanced countries (40 percent of total tourists). Accordingly, exports of services are projected to contract by 6.6 percent this year. Import volumes should contract more than exports due to businesses running down inventories and a contraction in overall investment and consumption of imports. Net foreign demand will nevertheless contribute negatively to growth since in real terms exports represent a much larger share of GDP than imports.
The thai government is implementing two sets of stimulus measures, one of 1.5 percent of GDP targeted at FY09 (announced in January) and a recently-announced plan for FY10-12 (fiscal years run October-September) that anticipates deficits as high as 5 percent of GDP. As a consequence, government consumption is expected to increase by nearly 10 percent in 2009. The current account registered a small deficit in 2008, and is expected to turn to a surplus starting in 2009 supported by a steep decline both the price and volume of imports – especially fuel. The small deficit registered in 2008 was mostly due to the increase in imports and reduced exports and service receipts in the second half of the year. The financial account is expected to register modest net outflows in 2009 as portfolio investments continue to show outflows , while FDI net inflo will continue to be positive, but at a lower level compared to the past few years.

Thailand’s economic growth is falling by more than earlier expected amid a sharp and continuing decline in global trade.

The contraction would be Thailand’s first since 1998, said Mathew A. Verghis, the World Bank’s Lead Economist in Bangkok. It would follow a decade of growth averaging nearly 5 percent each year.

“Countries like Thailand that have been dependent on manufacturing exports are most affected,” said Verghis, who covers Thailand and four other Southeast Asian countries. The World Bank released its latest forecasts for Thailand and other economies in East Asia and Pacific on Tuesday. The global economic slump shut down what has been, for the past three decades, the main engine for Thailand’s economic growth: exports. As a result, the manufacturing sector has been badly hit. The Thai government estimated that one million or more workers would lose their jobs this year due to the slowdown. In January, the unemployment rate stood at 2.4 percent of the total workforce – a full percentage point higher than the 1.4 percent recorded in December 2008.

dollar_growth

PM: Q4 economy to be positive

So far, the Thai government has enough capacity to finance the first economic stimulus package and the three-year public investment plan. In the face of shrinking revenues, the government estimates its budget deficit to be about 525 billion baht, or 6 percent of Thailand’s gross domestic product, in the fiscal year ending September 2009. It is also seeking loans from domestic and external sources to shore up the budget and support planned investment.

Strong external accounts have enabled Thailand to withstand the contraction in global liquidity. International reserves remain relatively large and external debt – especially short-term debt – is low.

Commercial banks’ loan growth next year will likely be in a single digit after registering 11.2 percent growth as of October this year.

Click to comment

Leave a Reply

Economics

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.

Published

on

70b43f2f
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.

(more…)
Continue Reading

Ecommerce

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

Published

on

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.
 

 

Read More

Continue Reading

Recent

Most Read

Join 14,216 other subscribers