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Thailand’s Industrial Economy in 2009 and 2010 Outlook

The year 2009 was marked by the turbulence of global recession that proved to be both challenging for Thailand and also a reconfirmation of the nation’s inherent strength

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The year 2009 was marked by the turbulence of global recession that proved to be both challenging for Thailand and also a reconfirmation of the nation’s inherent strength. The stellar efforts of the Thai government to respond quickly to the economic crisis succeeded in turning the economy around to positive growth in the last quarter of the year. As a result, the 2009 economy declined by only 2.8%, and much better than previously expected.

According to a recently released report by the Office of Industrial Economics, Thailand’s international trade declined along with the slowdown in global trade. From January to October of 2009, Thailand’s international trade had a total value of US$124.1 billion and an import value of US$106.6 billion, with its trade surplus hitting US$17.5 billion.

The OIE report notes however that this year the Department of Export Promotion at the Ministry of Commerce will restructure the export promotion strategy and appoint a “chief of products” to supervise the top 10 export items Those goods account for 85% of Thailand’s total expor value. Three additional “chiefs” will be appointed to shepherd Thai Unique products; those with high export potential; and the third to assist small and medium sized enterprises (SMEs). According to the OIE, “The new strategy is expected to increase the export volume of  Thai products by 10-15%, probably reaching 18% in 2010.”

With global declines in the automotive sector and the like decline in consumer spending, motor vehicle, electronics and hard disk drive production contributed to a fall in the Manufacturing Production Index in 2009, but this is expected to see a positive reversal this year, with the MPI forecast to increase by 6-8% in 2010.

In the Electrical Appliance and Electronics Industry, the OIE projects an 18.64% increase year over year in 2010. This is because of an expected y-o-y increase of 22.31% in electronics, and a production acceleration of HDDs, integrated circuits (ICs) and semi-conductors. It should be recalled that Thailand is the world’s leading manufacturer of HDDs and one of the leading IC manufacturers.

The Chemical Industry is also expected to see a better year in 2010, “due to the government’s ‘Strengthening Thai land’ project , increased overseas purchase orders and improvement in the world economy.” Likewise, the Petrochemical Industry saw an upturn in the second half of 2009 due to short term government stimulus measures, but will remain challenged by the world economy, fluctuation in global oil prices and new capacity from other regions.

Iron and Steel are set to strengthen over the coming months, as industry growth will improve when demand reaches a range of 10.98 to 12.57 million tons. Related industries such as auto-motives, set to increase by 5-10% y-o-y, auto parts and electrical appliances in recovery will generate increased demand for iron and steel.

Plastic product exports for 2009 totaled US$2.1 billion, with Japan, the United States, Indonesia and Australia as major export markets. As a supporting industry, plastics should see a rise as economies around the world recover.

Several other industries also will see improvement in 2010. Production in the food industry will see a 2.9% increase in 2010, with a value increase of 9.1% in US dollars. Rubber processing from Thailand will see an increase, as demand from China picks up following a reduction in that country of taxes on some auto models, while the textile and garment industry is looking to receive more orders this year from ASEAN and Japan.

Pharmaceuticals will see continued growth in 2010 and in fact the total production volume of medicines and pharmaceutical products should see a 2009 9.9% y-o-y increase.

The difficult economic waters of 2009 didn’t slow down gems and jewelry either, which saw an annual production increase of 6.25% y-o-y, with export value reaching US$6.48 billion. This year, production costs are further reduced with resolution on the 7% VAT exemption of imported gemstones used as raw materials. This is expected to encourage gem entrepreneurs to import more raw materials, thus polishing Thailand’s luster as a gems and jewelry hub.

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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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