Partial US gov’t shutdown to impact Thailand only slightly

The partial US government shutdown will have only a slight impact on the Thai economy while the US decision on its debt ceiling, scheduled for October 17, should be closely monitored, a senior Finance Ministry official said.
Ekniti Nitithanprapas, deputy director general of the Fiscal Policy Office, said some US state agencies have been temporarily suspended but a shutdown for one month would affect its gross domestic product (GDP) at only 0.1 percent.
The negative impact should be short term which is different from the situation in 1995 when government shutdown lasted 21 days, he said, adding that investors have predicted the phenomenon while global capital and stock markets have moved higher and the Thai currency has strengthened.
Foreign capital has flowed back into the Asian market, he said.
Ekniti said it was predicted that the US would decide on October 17 to expand its debt ceiling - a decision that could have an impact on the monetary and stock markets.
“We also have to follow up on the Federal Open Market Committee’s meeting late this month on whether the US will slow down its economic stimulus through quantitative easing (QE). It is, however, predicted that the US Federal Reserve would retain QE measures,” he said.
The US will eventually revoke QE in the future, resulting in higher interest rates while the Thai government and investors should speed up their investments at the moment, said Ekniti.
Once the government invests in mega infrastructure projects, the private sector will follow suit and Thailand’s GDP growth could reach 5.1 percent next year, he pointed out. This year’s GDP growth is projected at only 3.5-4 percent.
Pakorn Peetathawatchai, Stock Exchange of Thailand executive vice president and head of the SET Corporate Strategy and Finance Division, said the US government shutdown has contributed to volatility among global and Thai bourses and it could have a negative impact on the stock market if the problem is prolonged.
He warned Thai investors against volatility from capital inflows and outflows. (MCOT)

Seven factories forced to temporarily close due to floods

The Ministry of Labor last weekend reported that seven factories were forced to temporarily close due to floods, affecting about two hundred workers.

Acting permanent-secretary for Labor Jeerasak Sukonthachart.

Acting permanent-secretary for Labor Jeerasak Sukonthachart said the factories were located in Nakhon Nayok, Surin, Si Sa Ket and Ubon Ratchathani.
While other factories in the flood-hit provinces remain opened, he said, the flooding has hindered operations of 431 factories employing 6,726 workers.
So far, Jeerasak said, no employee complaints have been received by the ministry but he said that officials have been instructed to monitor the situation and provide help to workers whose employment is at risk from flooding.
Meanwhile, the Energy Regulatory Commission has announced that about 2.8 million people in 20 provinces have been affected by the current flooding.
To ease the burden and help facilitate the residents, those living in designated flood-disaster areas will be given an extension of electricity bill payment for a maximum 45 days, compared to 15 days for normal situations. (MCOT)

Thai consumer confidence nosedives to lowest in 11 months

Thailand’s consumer confidence index (CCI) plunged for the sixth consecutive month to 77.9 in September and to its lowest in 11 months, an academic survey revealed last weekend.
Thanawat Polvichai, director of the Economic and Business Research Centre of the University of Thai Chamber of Commerce, said Thai people’s consumption will slow successively until the fourth quarter in light of lack of any recovery signals.
He said consumers have remained wary of various situations, especially Thailand’s export slowdown, which has its consequences for the Thai economy, such as the higher cost of living, political volatility, global economic drawbacks and floods.
The university research centre predicted a slowdown in consumer purchasing until at least mid-Q4 since there are no signs of economic recovery, said Dr Thanawat who indicated that the CCI in the fourth quarter would not improve unless the government achieves political stability and speeds up budget disbursements through financial policy to encourage liquidity. (MCOT)