Connect with us

Asean

Asean to reduce developmental gaps to bring the Asean Economic Community into effect in 2015

The Asean Economic Ministers’ meeting on Thursday agreed to press on with the plan to reduce developmental gaps in a bid to bring the Asean Economic Community into effect in 2015.

Published

on

The Asean Economic Ministers’ meeting on Thursday agreed to press on with the plan to reduce developmental gaps in a bid to bring the Asean Economic Community into effect in 2015.

See the rest here:
Asean to reduce developmental gaps

Political unrest and the shutdown of the two airports in Bangkok in late November severely affected tourism and consumer confidence in Thailand. Real GDP is projected to contract by 3 percent in 2009, as the global outlook remains negative and external demand continues to contract. The fiscal stimulus and monetary expansion implemented by the authorities are likely to partially mitigate the impact of the slowdown, allowing growth to resume in the fourth quarter of 2009 assuming a better outlook for the global economy in 2010.

However, significant downside risks remain should political instability resurface in Thailand and the global decline proved more protracted or steeper than now expected
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.
External debt service ratios are manageable at 5.4 percent of Thailand’s exports overall. Total external debt was under 60 percent of international reserves at the end of 2008. The Thai financial sector is basically sound and has been largely insulated from the immediate impact of the global financial crisis, but increasing pressure from the slowdown on companies will be passed to banks. The average capital adequacy ratio amounted to about 14 percent at end-2008. Net NPLs declined during 2008 to 2.9 percent of total assets. While this trend is set to reverse during 2009, banks appear to have enough room, at least in the short-term, to cope with higher NPLs. There is adequate liquidity in the domestic banking system, but banks have become more cautious given that credit quality is expected to deteriorate. Credit expanded by 9 percent in 2008, initially due to higher demand for working capital, then as a consequence of large domestic firms switching from foreign to domestic borrowing. Credit growth slowed in January, and the ratio of loan to deposit decreased to 86
from 90 percent, suggesting some room for future loan growth.

asean_flag

Asean to reduce developmental gaps

The Thai government announced an economic stimulus program totaling 117 billion baht ($3.34 billion). The program included a host of short-term measures to boost household consumption and assist lower-income families. The government is now preparing a second stimulus package worth 1.6 trillion baht ($45 billion). Among other initiatives, this package focuses on public investment in infrastructure projects, which the government hopes will help create 1.6 million jobs. “The infrastructure investments, if implemented, will help generate growth and improve Thailand’s competitiveness,” said World Bank. “However, it is worth noting that financing for infrastructure has been available for the past few years. What has suppressed investment was not funding, but rather political and institutional constraints.” While the impact on the real sector has been larger than expected, the global crisis has not shaken the Thai financial sector. The World Bank attributed this to Thailand’s strong macroeconomic fundamentals; low external debt coupled with high international reserves; and a sound financial sector, which has undergone a series of reforms following the 1997 crisis.

For the year 2008, the Thai economy decelerated from the previous year, particularly in the last quarter where global economic downturn and internal political unrest adversely affected manufacturing production and tourism. Nonetheless, farm income still expanded well from higher major crop production and price compared to the previous year.

The impact of the global financial crisis on the Thai financial sector, on the other hand, has so far been limited.Although risk-sensitive indicators have risen since Lehman Brothers announced its bankruptcy on September 15 th they have been lower in Thailand compared to those in its East Asian peers – prior to the airport closure. Credit default swaps (CDS) spiked in line with global conditions and the stock market is down over 50 percent year-to-date. These were however, less than those in other East Asia economies.

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

Asean

ASEAN commemorates Youth in Climate Action and Disaster Resilience Day 2021

An intergenerational dialogue titled ‘Teaming up with You(th) for a Disaster-Resilient and Climate-Friendly ASEAN’, was moderated by the ASEAN Youth Forum’s Programme Manager, Rastra Yasland.

Published

on

f1db4345

JAKARTA, 30 November 2021 – The ASEAN Secretariat hosted an interactive webinar to commemorate ASEAN Youth in Climate Action and Disaster Resilience Day on 25 November.

(more…)
Continue Reading

Vietnam

Vietnam’s Tay Ninh Province: Promising for Investors in the Greater Mekong Subregion

The SKER is one of four key economic regions which cover most economic and investment hubs in the country. The SKER consists of Tay Ninh along with Ho Chi Minh City, Binh Duong, Dong Nai, Long An, Ba Ria-Vung Tau, Binh Phuoc, and Tien Giang.

Published

on

Tay Ninh Province: Promising for Investors in the Greater Mekong Subregion

Vietnam’s Tay Ninh province located in the Southern Key Economic Region (SKER) acts as a key connection point between Ho Chi Minh City and Cambodia’s capital Phnom Penh, sharing a border with Cambodia at Moc Bai and Xa Mat border gates, the main trade centers between the two countries.

(more…)
Continue Reading

Recent

Most Read

Join 14,209 other subscribers