Economics
Thai Think tank warns of escalating debt and public overspending
The Thailand Development Research Institute (TDRI) urged the government to reduce the country’s public debt, especially due to the annual Bt200 billion loss incurred from the highly-criticised rice pledging scheme which is set to drag on to 2017.
The Thailand Development Research Institute (TDRI) urged the government to reduce the country’s public debt, especially due to the annual Bt200 billion loss incurred from the highly-criticized rice pledging scheme which is set to drag on to 2017.
Somchai Jitsuchon, a leading TDRI economist, said today that investment in infrastructure in preparation for the ASEAN Economic Community, water management projects and the new corporate tax structure are some of the factors contributing to escalating public debts in 2013-2017.
More populist measures are pushed on the table as elections come closer
He forecasts that Thailand’s economy this year will grow at least 5 per cent with inflation at 2.8 per cent, while export will be slightly higher than last year at 4.2 per cent.
The government should control public spending and adjust some projects he described as being exorbitant while increasing certain taxes such as the land tax, construction tax and value added tax.
Debt per capita will exceed 60 per cent if Thailand’s annual economic growth is lower than 6 per cent, the TDRI economist said, indicating that successful spending control will result in public debt control.
Somkiat Tangkitvanich, TDRI president, said the Bt300 daily minimum wage has boosted workers’ income, but negatively impacted some small-sized businesses in several industries.
The TDRI proposed that the government announce 2013-2022 as a decade of productivity growth for Thailand’s businesses by boosting labour skills, investment in research and development and launching education reform. (MCOT online news)
via Think tank warns of surging public debt, overspending | MCOT.net.
Concerned about a rising level of public debt, former finance ministers have urged the government to focus on fiscal discipline and stop its populist policies.
At a seminar on “Challenge for the Future of the Thai Economy in 2013” held by the Economic Reporters Association yesterday, former finance minister MR Pridiyathorn Devakula said two challenges were how to grow the Thai economy and how to keep the economy stable. To achieve both of these, the government has to pay more attention to the public debt.
Pridiyathorn said the current government was less concerned about fiscal discipline than populist policies to ensure voter support, and that could result in damage to the nation’s finances.
Before introduction of the rice-pledging programme, the public debt stood at Bt8.6 trillion (S$355 billion). If the scheme is continued, the debt could reach Bt10.3 trillion, or 63.7 per cent of gross domestic product, by the end of September 2019, he predicted.
What measures has SET taken to support listed companies’ compliance with ESG standards?
PAKORN PEETATHAWATCHAI:
PAKORN: When we first began promoting ESG-compliant investments, we were met with little interest. We attributed this to a lack of clear data to showcase the economic benefits of ESG investment, and perhaps limited clarity as to what constitutes a sustainable or ESG-compliant investment. The launch of the THSI list and, subsequently, the SETTHSI Index, was designed to address this. Our most recent data, comparing returns for the SETTHSI Index with the broader SET and SET100 indices from April 2020 to April 2021, underscores the economic benefits of these investments: the group compliant with ESG standards outperformed the other two indices on every data point.
As of May 2021 Thailand was home to CG and ESG assets under management totalling BT54.8bn ($1.7bn) across 50 funds – up from 23 funds in 2019. Meanwhile, of the BT187.1bn ($5.9bn) raised in green, social and sustainability bonds since 2018, BT136.4bn ($4.3bn) was raised in 2020 – 83% from the government and the remainder from development banks and private players. This rising demand, in a move to manage risk and generate returns, has been complemented by growing supply and promotion: supply from ESG-compliant businesses aiming for resiliency and sustainable growth, as well as promotion from regulators highlighting investment opportunities with good CG and SD practices. Indeed, the pandemic has been a catalyst in shifting the view of ESG compliance from a luxury to a requirement in the new normal.
In what ways can enhanced standard-setting and regulatory mechanisms overcome the remaining barriers to improved ESG performance?
PAKORN: A multi-stakeholder approach is crucial for enhanced ESG performance – not only in Thailand, but around much of the globe. This can also help to address the standout incumbent challenge: access to reliable, wide-ranging ESG data. For example, the 2020 update to the 56-1 One Report established clear ESG standards and triggered online and offline capacity-building programmes to support listed firms’ compliance. SET is developing an ESG data platform with a structured template to promote the availability of comparable data, maximise value added from corporate sustainability disclosures, and foster collaboration between the business value chain and stakeholders. This is expected to support Thai companies along their ESG journey in an economically sustainable way, result in a greater number of sustainability-focused products and services, drive sustainable investing in the Thai investment community and ultimately “make the capital market work for everyone”, as outlined in the SET’s vision.
Economics
Youth unemployment hits new highs in Thailand due to COVID-19 restrictions
BANGKOK, Thailand (ILO news) – Joblessness among young men and women in Thailand has reached a level unseen in recent years due to the impact of the COVID-19 pandemic, according to a new brief from the International Labour Organization (ILO).
The Thailand labour market update found that youth employment fell by 7 per cent in the first quarter of 2021 (from the fourth quarter 2019). The youth unemployment rate increased by 3 percentage points for both men and women, reaching a high of 6 per cent and 8 per cent, respectively.
(more…)
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...
Thai Cabinet reverses CCSA relaxation of on-arrival Covid testing protocol
The Center for COVID-19 Situation Administration’s approval of the relaxed testing requirement has been overturned by the Cabinet in light...
Insights into the impact of COVID-19 on Thailand’s households
In April 2020, the Thai government passed a 1 trillion baht borrowing decree to address health needs, provide relief, and...
COVID-19 vaccine guide for travellers to Thailand
International travellers, including returning Thais and foreign residents, who are above 18 years of age should get fully vaccinated for...
True and Dtac Merger Talks Highlight Necessity of Scale at Thai Telcos
The merger between True Corporation, a subsidiary of conglomerate Charoen Pokphand Group, and Total Access Communication (Dtac), a subsidiary of...
