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Thai private sector expects better economic recovery in Q4

The JSCCIB now expects the Thai economy in Q4, 2020 to continue recovering, with the annual performance this year expected to shrink to within the margin of -7 to -9 percent.

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BANGKOK (NNT) – The Thai economy is receiving a boost from government aid measures and improved export sector performance.

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From this, the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) is now projecting better economic growth for the final quarter of this year.

Mr Kalin Sarasin, chairman of the Thai Chamber of Commerce and JSCCIB, has revealed the JSCCIB assessed the Thai economy in late Q3 this year and noted a positive response to the recovery of the agricultural sector and industrial sector, including the manufacturing of automotive parts, computers and parts, and plastic beads, in line with global trends.

This situation has resulted in improved export sector performance in September.

The JSCCIB has acknowledged recovered domestic spending thanks to the government’s stimulation measures, including tourism subsidies and co-pay campaigns which help inject more cash into the economy.

The JSCCIB now expects the Thai economy in Q4, 2020 to continue recovering, with the annual performance this year expected to shrink to within the margin of -7 to -9 percent.

The joint committee has noted however the severe second wave of COVID-19 cases in many countries poses a significant risk and has advised the government to provide additional assistance measures to hotel businesses by establishing a fund for the purchase of competitive hotels. The JSCCIB has already set up a committee for an in-depth study of this matter.

The joint committee also asked the government to expedite the disbursement of its spending to within 30 days of formally receiving the items, projects, or services, in order to help improve the fluidity of contracted companies.

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Ecommerce

Disrupted by Covid-19, will South-east Asia’s super apps join forces?

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Disrupted by Covid-19, will South-east Asia's super apps join forces?
– Super apps explore inorganic growth options
– Gojek in talks with e-commerce company Tokopedia over $18bn merger
– Grab reported to be preparing for a public listing in the US
– Food delivery and financial services increasingly important segments

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After a year of external expansion and internal reorganisation due to Covid-19, South-east Asia’s super apps appear to be looking towards mergers and public listings as a strategy for future development.

In early January international media reported that Indonesian ride-hailing and payments giant Gojek was in advanced talks about merging with local e-commerce company Tokopedia, in a deal estimated to be worth $18bn.

Any potential merger between the two would be significant for Indonesia. The two local unicorns could create a digital powerhouse, with integrated services ranging from ride-hailing to digital payments, e-commerce and delivery.

A tie-up would also create numerous synergies, such as Gojek’s fleet being able to serve Tokopedia’s online shopping orders. However, there is also some overlap in the digital payments space, where Gojek’s GoPay platform competes with Ovo, which is 35% owned by Tokopedia, although there is speculation that Tokopedia may look to sell its stake in Ovo.

The news was followed by separate reports in late January that Grab, Gojek’s biggest competitor in South-east Asia, had selected investment banks Morgan Stanley and JP Morgan to help work on an initial public offering (IPO) in the US, set to take place in the second half of the year.

The Singapore-headquartered company, which operates ride-hailing, food delivery, e-payment and insurance services in around 400 cities across eight South-east Asian countries, is valued at around $16bn. Its IPO is expected to raise at least $2bn, which would make it the largest overseas share offering by a South-east Asian company.

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Economics

Thailand’s economic outlook for 2021

The government expects inbound tourism to be at around 8 million by the second half of 2021, well below 40 million in 2019

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The Thai economy will grow next year after contracting by almost 10% this year. Next year, the Thai economy is expected to expand 3 to 4% from this year. It will not be until the end of 2022 before the Thai economy returns to its pre-Covid level of 2019.

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Economics

Finance Ministry Considers Additional Incentives to Increase NSF Members

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BANGKOK (NNT) – The Finance Ministry is considering additional incentives to increase members in the National Savings Fund (NSF) as Thailand is projected to become a “super ageing society” by 2031.

Finance Minister Arkhom Termpittayapaisith said increasing state contributions to the NSF and extending the maximum membership age to 65 years old from 60 as stipulated by law are among the considerations.

He said Thailand is projected to become a fully aged society this year, meaning 20% of the total population is 60 or older. The country is projected to be a super ageing society by 2031, meaning 28% of the total population is 65 or older.

Mr Arkhom said retirement savings are vital because 20 million informal workers in Thailand are without mandatory savings programs.

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