The Business Development Department last month granted approval to three foreign companies to operate consultancy businesses in Thailand, with a focus on construction of the mass-transit Purple Line linking Bang Sue and Bang Yai.
Public investment will expand only slightly next year as the Thai Kem Kaeng Program will just about compensate for the reduction in the government’s on-budget investment in 2010.
Key risks to the outlook are (i) political uncertainty and (ii) the timing of the withdrawal of fiscal and monetary stimulus. Increased political tensions may have a long-lasting impact on investment, and withdrawal of stimulus (in Thailand and the advanced economies) must be precisely timed to avoid macroeconomic imbalances (including new asset bubbles) while also ensuring that the recovery is on a sufficiently solid footing.
The domestic content of automotive output in Thailand varies between 50 and 90 percent and averaged about 62%. For Isuzu (the largest pickup producer), domestic value-added is probably closer to 90 percent. Electronic and computer components are largely imported (from Japan), as are most transmissions (from the Philippines and India). Electronic components are of high value added and are used globally by the producers. Moreover, their development requires substantial R&D expenditures. Car manufacturers, as a result, prefer to concentrate the production of these electronic components in their home country – notably Japan – limiting technological spillovers. Only Toyota has a local transmission plant, with the remainder imported from India and the Philippines.
Stimulus programs were implemented in Thailand throughout 2009, confirming improved expectations, boosting demand and supporting the momentum of the economic recovery.
The key risk to the global recovery lies in the need to get the timing of withdrawing fiscal and monetary stimulus just right. Withdrawal of fiscal stimulus too early may lead to another negative demand shock and a negative expectations spiral, whereas withdrawing the stimulus too late may lead to high inflation, further weakening of the US dollar, and possible asset price bubbles. In Thailand, for example, more than ten years since the 1997/1998 financial crisis banks still have bad loans in their books and the government still holds a large amount of debt related to the recapitalization of financial institutions. Given the expected length of recovery, it is important not to withdraw stimulus programs too soon, before the recovery is on a firm footing. On the other hand, macroeconomic imbalances are accumulating and eventually fiscal and monetary authorities, especially in the US, must consolidate their fiscal position and withdraw liquidity.
Most of the infrastructure development in Thailand has been responsive to demand rather than forward-looking. Availability and accessibility appear to no longer be a challenge. The next step for Thailand is to put more emphasis on quality of service delivery, management, and sound regulation.
Thailand to sit on United Nations Economic and Social Council
ECOSOC is one of six major United Nations organizations which is in charge of proposing and reviewing international policy toward economic, social and environmental development.
BANKOK, 15 June 2019(NNT) – Thailand has been selected as a member of the United Nations Economic and Social Council from 2020 to 2022 on behalf of Asia and the Pacific region alongside China, South Korea and Bangladesh.(more…)
Delayed Government nomination to weigh on economy in 2nd half
the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) forecasts that delaying in the government establishment will affect the expenditure budget for the year 2020.
Bangkok, 6 June 2019 (NNT) – As for the economic situation, the meeting of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) forecasts that the delay in the government establishment will affect the expenditure budget for the year 2020.(more…)
Over 54 billion baht to be spent on new school term
BANGKOK, 9 May 2019 (NNT) – The University of the Thai Chamber of Commerce (UTCC) estimates cash flow of over 50 billion baht for the new school term, the highest amount in the past six years due to economic recovery, sufficient savings and the government’s economic stimulus measures.(more…)
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Thailand among top five countries for salary hikes
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