BoT reserves Bt470 billion for Songkran holidays

The Bank of Thailand (BoT) is reserving Bt470 billion in cash for the upcoming Songkran holidays while expecting money in circulation during that period will increase 3 percent.
BoT spokesperson Roong Mallikamas said banknotes will be in higher demand during the Thai New Year. The amount of money reserved at Bt470 billion will be equal the demand for 3.7 months.
She said commercial banks also reserved money during the holidays for public spending.
TMB Bank, formerly the Thai Military Bank, has reserved Bt12 billion, Siam Commercial Bank Bt35 billion, Kasikornbank (formerly the Thai Farmers’ Bank) Bt25.6 billion, and CIMB Thai Bank Bt2.3 billion. (MCOT)

Political vacuum may plunge Thailand’s GDP to below 2.7%

Thailand’s economic growth will be below 2.7 percent if the new government fails to take office in the second half of the year, according to the Bank of Thailand (BoT).
Rung Mallikamas, BoT spokesperson, said the failure to set up a new government in the second half of the year will impact public confidence and business revival in the third quarter, and delay national budget disbursement.
Rung Mallikamas,
BoT spokesperson.

The central bank maintains its assessment of the country’s gross domestic product (GDP) at 2.7 percent so far this year but the political situation must be closely monitored, she said.
On the positive side, overseas orders for the export sector have increased in accord with strengthened export indices worldwide including the US.
She said the BoT was not concerned with the higher prices of commodities following an increase in inflation from 1.9 percent to 2.11 percent in March, mainly due to higher cooking gas prices.
Food prices have increased but consumers’ demand has declined, she said, adding that general inflation will be at 2.5 percent, and fundamental inflation at 1.5 percent which is within the framework of 0.5-3 percent, she said.
Ms Rung said the ratio of household debt which increased from 80.1 percent against GDP in Q3 to 82.3 percent in Q4 was as predicted due to economic slowdown and people’s decreasing income.
Despite an increase in household debt, debts among financial institutions and non-financial institutions are stable, she said. (MCOT)

Political impasse hits 85% of SMEs

Eighty-five percent of Thailand’s small and medium businesses have been affected by the months-long political conflicts, a senior official reported.
Patima Jeerapaet, director of the Office of Small and Medium Enterprises Promotion.

Patima Jeerapaet, director of the Office of Small and Medium Enterprises Promotion (OSMEP), said a survey of 500 small and medium enterprises found that 50 percent have encountered declining sales.
There was no sign of closings among enterprises which have continued to receive assistance from the OSMEP on cost reduction, revolving fund and debt payment extensions to prevent bad debt, he said.
If the political impasse carries on during the next few months, the impact on small and medium enterprises (SMEs), especially micro enterprises with registered capital at less than Bt20 million, will be more severe, he said.
Out of 2.8 million SMEs nationwide, two million are small enterprises with registered capital at Bt20-200 million, enabling them to survive for a few years.
Patima said the political stalemate has compelled the OSMEP to adjust the SME growth target to 40 percent of gross domestic product in 2017, from the present ratio of 37-38 percent of GDP.
Patchara Samalapa, executive vice president of Kasikorn Bank, said the number of SME customers who delayed loan payments has increased 10 percent, to a total Bt1 billion - a minimal ratio compared to the total Bt500 billion credit.
The delayed payments are from customers in the hotel industry, and businesses related to agriculture and electronics, he said, adding that the debts could possibly become non-performing loans (NPL).
The number of NPLs in the first quarter was stable at 2.8 percent while the economic slowdown has decreased loan requests, he said. (MCOT)

Thailand’s March Consumer Confidence Index lowest in 12 years

The political impasse and vacuum in the administrative system have plunged Thailand’s Consumer Confidence Index (CCI) in March to its lowest level in 149 months, more than 12 years, the University of the Thai Chamber of Commerce (UTCC) announced last weekend.

Thanawat Polvichai.

Thanawat Polvichai, director of the university’s Economic and Business Forecast Centre, said the CCI has slipped for the last 12 consecutive months to 68.8 in March - the worst since November 2001 due to the months-long political turmoil, the Thai economic slowdown and uncertainty in the revival of global economy.
He said the CCI for the overall economy also dropped for 11 consecutive months to 58.7 - its lowest in 150 months, since October 2001.
Dr Thanawat said the CCI regarding economic prospects also fell sharply to 51.5 - its lowest in 28 months or from December 2011.
The centre predicted a continued decline in public consumption until the end of Q2 owing to Thailand’s worsening economy without any sign of improvement.
If the new government takes office in the second half of the year and the appointment of a new panel for the Board of Investment is completed, foreign capital and national spending will flow into the economic system, revitalizing the Thai economy in Q4 and triggering this year’s economic growth to 2-3 percent, he said.
If not, the negative impact will clearly hit the tourism sector and domestic consumption, and possibly resulting in a zero percent economic growth, Dr Thanawat said.
This year’s unemployment problem may affect new graduates as the country has been moving without direction, he said, adding that the widely-speculated possibility of a coup, if it is actually staged, will result in a long-standing political vacuum in case it is rejected by the public. (MCOT)

Thai auto parts exports to surge 10% this year

Auto manufacturing in Thailand will reach 2.5 million units this year and possibly increase to three million units in 2016, according to the Commerce Ministry.
Nantawan Sakuntanak, director general of the International Trade Promotion Department, said the auto industry has generate US$30 billion, or Bt900 billion, in the past year, breaking down into $18 billion from automobiles and $12 billion from auto parts.
This year’s production will reach 2.5 million units, compared to last year’s 2.457 million units. Thailand ranks ninth among top auto manufacturers worldwide and it should step up to the fifth position in the next two years.
This year’s exports of auto parts should increase 10 percent this year thanks to the depreciating baht. Forty percent of locally-produced auto parts are exported and the remaining 60 percent are for local distribution.
Exports in January reached $971.95 million, representing a 3.05 percent increase year-on-year and 5.40 percent of the country’s total export value.
Ms Nantawan said the department will collaborate with Thai auto manufacturing associations and organizations in holding the “Thailand Auto Parts and Accessories 2014” exhibition at the BITEC Convention Centre, Bang-na April 28-May 1.
Total sales in the event, to be participated by about 400 operators, should reach Bt1 billion, she said.
Achana Limpaitoon, president of the Thai Auto-parts Manufacturers Association (TAPMA), said Thailand imported $2 billion worth of auto parts in 2012-2013 but the weakened baht has resulted in added exports.
Thailand produces Bt600 billion worth of auto parts annually, she said. (MCOT)