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Economics

World Bank downgrades Thai growth to 3.5%

This is the first time since the 1997-1998 Asian financial crisis that growth in the region has dropped below 6% according to the World Bank’s latest “Global Economic Prospects” report.

Olivier Languepin

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Thailand’s 2019 GDP growth outlook is seen down to 3.5% from the 3.8% forecast in January, according to the World Bank’s latest “Global Economic Prospects” report.

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Growth in East Asia and Pacific is slowing, largely due to a deceleration in China, and is projected to ease to 5.9% in 2019.

This is the first time since the 1997-1998 Asian financial crisis that growth in the region has dropped below 6%.

Domestic demand will continue to benefit from favorable financing conditions amid low inflation and rising capital flows in Cambodia, the Philippines, Thailand, and Vietnam.

Last October, the World Bank predicted that Southeast Asia’s second-largest economy would expand by 3.9% in 2019.

Bank of Thailand officials said recently that GDP would likely expand by less than the 3.8% forecast for this year.

Regional growth excluding China is forecast to decline to 5.1% in 2019 before inching up to 5.2 percent in 2020-21 as global trade rebounds.

Thailand and the Philippines will profit from large public infrastructure projects coming onstream in 2020-21. Growth in Indonesia is expected to accelerate marginally to 5.3% in 2020, reflecting continued support from strong infrastructure spending and robust private consumption.

In Malaysia, growth is expected to remain steady at 4.6% next year with weakening export activity offset by strong domestic demand in an environment of favorable financing conditions and low inflation.

Risks: escalation of trade tensions and non-financial sector debt in China

Risks to the outlook are tilted to the downside and have intensified amid re-escalation of trade tensions. They include the possibility of a sharper-than-expected downturn in major economies, including China, a further deceleration of global trade, intensification of trade disputes, or an abrupt change in global financing conditions and investor sentiment.

Non-financial sector debt in China is at high levels and high corporate indebtedness in sectors with weak profitability is a concern. Policy uncertainty around unresolved trade disputes between the United States and China remains high, and further escalation of trade tensions could have global and regional consequences.

The region could further be negatively impacted by a disorderly U.K. separation from the European Union as the United Kingdom is an important trading partner for several regional economies, especially Cambodia and Malaysia.

Economics

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.

National News Bureau of Thailand

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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.

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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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