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Thai Economy slowly recovers from Q1 decline

The Bank of Thailand says Thai economy recovered from the first quarter setback in the second quarter of this year, while business confidence is also improving, but exports likely to miss the target.

Olivier Languepin

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The Bank of Thailand says Thai economy recovered from the first quarter setback in the second quarter of this year, while  business confidence is also improving, but exports are likely to miss the target.

Although highly criticized by western democracies, the military takeover and resulting stability has restored Thai confidence. The stock exchange is on the rise, the baht is appreciating and domestic investment is at an all-time high.

Desperate farmers who were left penniless by the former government’s rice-pledging scheme have finally been paid. Tourists are starting to come back to Thailand but despite of recovery sign, exporter association concedes that the country’s export might not reach the growth target this year.

Exit from EU trade preference scheme may impact exports

Exporters will start to feel the impact next year  from the European Union’s decision to curtail trade cooperation and trade visits  with Thailand and the downgrade of the country by the US  to the lowest standing in its annual Trafficking in Persons (TIP) Report although their good orders are not yet affected for the time being.

As Thailand is set to exit from the EU Generalized System of Preference Scheme at the end of this year, he said exporters are calling for the government sector to quickly arrange measures to assist them.

Don Nakornthab, Director of BoT’s Macroeconomic Policy, said Thailand’s gross domestic product (GDP) growth for the second quarter was 1-1.1 percent above the quarterly average, reflecting  a strong comeback from the first quarter decline of 0.6 percent.

The second quarter economic growth is, however, down by 0.4 percent compared with the same period of last year, he said. But he said even though the expansion would be negative, the recovery is considered substantial.

He said the economy has passed its lowest point and has a tendency to go up since April this year.

He attributed the second quarter economic improvement to expansions of industrial sector, private spending and private consumption.

The senior BoT official conceded that the country’s export still faces slow recovery due to weak demands for agricultural, processed agricultural and automotive products in the Asian region.

Thailand’s export in May shrunk by 1.2 percent year on year, he said, adding that the country’s export value has to reach 20,000 billion US dollar each month from June to December in order for the country to achieve the annual growth target of 3.5 percent, set by the central bank.

Inflation in June this year fell by 0.10 per cent compared with that in May, becoming the first decline in 10 months, the Commerce Ministry’s advisor Ampawan Pichalai said.
Contributing factor to the decline was the economic measures announced and implemented by the National Council for Peace and Order, she said.

Such measure, she said, was the NCPO’s decision to freeze diesel and household cooking gas prices and its call for manufacturers and other producers to freeze their product prices for six months.

But year-on-year inflation in June rose by 2.35 per cent and inflation in the first half of this year stayed at 2.23 per cent.

 

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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Economics

Customs Department Considers Measures to Help SMEs

National News Bureau of Thailand

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BANGKOK (NNT) – The Customs Department is seeking ways to reduce the impact of the exemption on import tax and value-added tax (VAT) for imported goods worth up to 1,500 baht, as such measures are hurting small and medium-sized enterprises (SMEs).

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