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Economy still vulnerable to 4 risk factors
Bank of Thailand’s Governor M.R. Pridiyathorn Devakula
has affirmed the economy has satisfactorily recovered, but there remained at
least four risk factors that could affect the sustainability of its growth.
In a keynote speech delivered at a seminar on “Economic
Management on Recovery Path - Future Challenge”, he said the central bank
was happy with the current economic growth and wanted to see the economy
continue to expand steadily but he conceded there were risk factors that
should be closely monitored.
Firstly, the economic growth driven by the consumption
and export can not be sustained unless private investment expanded
considerably. The growth in the consumption and investment should be
balanced.
Secondly, the continued growth in export, which is the
main driving factor for the economic expansion, remained uncertain given the
global economic volatility.
Thirdly, non-performing loans (NPLs) and non-performing
assets (NPAs) remained quite high in the financial institution system and
impeded the smooth function of the financial institutions.
Finally, inflationary pressure would mount when the
economy recovered. The BOT wants to keep inflation rates under control to
ensure the economic stability.
However, the point was whether the central bank had
sufficient information on the inflation. The BOT governor said, “The bank
needs to monitor the movement of assets prices and try to curb the price
increase to ensure the country would not experience the repetition of the
bubble economy.” (TNA)
Bank of Ayuthaya extends cheque clearing period
Bank of Ayudhya, a leading Thai commercial bank, has
initiated a move to further facilitate its clients by extending its cheque
clearing hours to 03:00 p.m. Chet Raktakanishta, First Executive Vice
President of the bank, said that the service would initially serve clients
at its five branches located in major business areas, including the Rama
III, Ploenchit, Sam Yaek, and Surawong branches, as well as its North
Sathorn Sub-Branch. “From now on our clients can visit the five branches
for the extended cheque clearing service”, he said, adding that the
service would later be expanded to other branches.
Bank of Ayudhya is the first commercial bank here which
has moved first to extend the cheque clearing period. Normally, commercial
banks close their cheque clearing service at around 11:00 a.m.
Chet said that Bank of Ayudhya had also developed a new
service, called the Cheque Express Service, by which the bank’s clients
could immediately withdraw cashes from cheques paid on their names at the
maximum of 200,000 baht per cheque in its clearing center in Bangkok, and at
the maximum of 100,000 baht at its clearing centers outside Bangkok. (TNA)
200 million baht budget pledged for deep-sea fisheries projects
The government says it is preparing to pour 200 million
baht into the private fisheries sector to boost the nation’s deep-sea
fishing industry, in a bid to search for new markets for Thailand’s
fishing companies and avoid concession fees. The Department of Fisheries
will soon conduct feasibility studies regarding the proposal.
Songsaeng Pathawanich, president of an association
concerned with fisheries outside Thailand’s waters, said that the prime
minister had called on Thai fishermen to band together to engage in deep-sea
fishery. Once the fishing industry had made its proposals to the government,
the government would respond with 200 million baht in aid, he said, but he
conceded that at present Thailand had few boats suitable for deep-sea
fishing.
The industry is also calling on the government to open up
negotiations with Africa to allow Thai fishing boats to operate in African
waters. Songsaeng noted that already 10 Thai fishing boats operated in
Madagascar and a further four boats in Mozambique, adding that Mozambique
had also requested Thai investment in shrimp farming. (TNA)
Rice prices likely to rise in world market, says MOC
Rice exports are expected to benefit in terms of prices
from the expected insufficient supply of the output in the world market next
year, according to Thailand’s Ministry of Commerce.
Pasit Pumchusri, the ministry’s deputy spokesman, said
the ASEAN Food Security Reserve Board met recently and concluded the rice
output was on the decline in the global market with stocks likely to drop by
20% late this year, the lowest since 1987. According to the board’s
estimate, the supply of the rice output would not meet the demand next year,
resulting in rice prices in the world market edging up.
Pasit said the situation would benefit Thailand’s rice
exports as prices would rise in tandem with those in the global market,
although he conceded Vietnam was a remarkable rival in the global market
share of rice. (TNA)
Former BOT chief appointed as SET’s chairman
Former central bank governor Vijit Supinij has been
appointed as the new chairman of the Stock Exchange of Thailand’s board in
place of Chavalit Thanachanan whose term had expired. Chavalit said Vijit
was highly qualified for the job since he had long work experience in the
country’s financial and economic system.
Vijit said, “I am honored and glad all members of the
board entrust me to take the top post. As a former central bank governor, I
have had an opportunity to help develop SET from the outset and worked
closely together with its executives.”
Vijit said SET had played a crucial role in the economic
system. As the new chairman, he would work closely with the board and
management, and his full knowledge and capability to develop SET. (TNA)
US Franchise Mission to Thailand
The Thailand-U.S. Business Council (TUSBC) and the
U.S.-Thailand Business Council (USTBC) are hosting the ‘U.S. Franchise
Mission’ on September 15-16, 2003 at the Oriental Hotel, Bangkok. This is
a rare opportunity for Thai entrepreneurs to have one-on-one meetings with
representatives from top U.S. Franchises, and more importantly to acquire
information about new franchise opportunities from the United States.
The U.S. Franchise Mission, a part of the U.S.-Thailand
Franchise Program, is organized by the Thailand-U.S. Business Council and
the U.S.-Thailand Business Council. The program is supported by the
International Trade Administration (ITA), U.S. Department of Commerce, and
the International Franchise Association (IFA). The program is designed to
link American Franchisors with potential Thai Franchisees as they develop
opportunities in one of the world’s fastest growing markets. Participating
franchises in the program include successful food related and service-based
franchises from the U.S.
Make an appointment to meet with the Franchisors and
learn more about this event by contacting Khun Wanotai/ Khun Kornshulee at
Thailand-U.S. Business Council, Tel: 02-636 9020-5 or E-mail: info@
tusbc.org. Updated information about the U.S.-Thailand Franchise Program can
also be found at www.USTBC franchise.com
Future exports expected to reach more than $100 billion
A concentrated effort on exporting to more developing
countries, coupled with the various free trade agreements signed by the
country, could aid Thailand’s exports to reach soaring heights, according
to Commerce Minister Adisai Bhodaramik. “The government’s goal over the
next three to four years is to reach in excess of $100 billion in
exports,” he said.
Exports during the first seven months of the year stood
at $44.6 billion, a jump of 18.1 percent from the same period last year and
the ministry expects exports to reach $76 billion for the whole year, one of
the highest amounts ever recorded in the country.
Adisai said Thailand will aim at penetrating all markets
in order to achieve this target, but will focus more on developing countries
not explored by Thai exporters in the past.
“We are also looking at markets such as China, India
and Bangladesh. In some cases the competition is relatively lower than those
seen in Europe,” he said.
Official free trade talks with the US and the European
Union are expected to begin by the end of the year and Thailand is also
looking for a free trade pact with Australia and Japan. (TNA)
‘Mobile units’ to boost Middle East trade
Government trade representatives are preparing to
establish ‘mobile units’ bringing together private and public sector
forces in a bid to increase trade and investment in the Middle East and
Iraq.
Speaking at a seminar on trade and investment in the
Middle East and Iraq, organized by the Thai Chamber of Commerce, Kornphot
Assawinwichit said that the Ministry of Foreign Affairs, Ministry of
Commerce and the Thai Chamber of Commerce had entered into discussions with
the private sector on the establishment of mobile units to facilitate
private sector business in the Middle East. “Trade and investment
opportunities for Thai businesspeople in Iraq are still high and Thai
businesspeople are continually working with businesspeople in that
region,” he said.
Sanchat Thephassadin Na Ayutthaya, director-general of
the Ministry of Foreign Affairs’ South Asia, Africa and Middle East
division revealed that the government had a five-pronged strategy for
opening up new markets in the Middle East and Iraq. Regarding the mobile
units, Sanchat said, “The units will require entrepreneurs with sound
marketing vision to assess investment channels and to facilitate operations
for Thai businesspeople, with full financial backing from the government.
Businesspeople are urged to work together to draw up proposals for the
units. In addition, the government is backing the Thai construction industry
in these areas as well as establishing a Thai goods exhibition center in
Iraq and constructing accommodation for Thai students.” (TNA)
Former finance minister agrees with current policy
of budget deficit
Speaking at a seminar on “Managing the Recovery:
Challenge Ahead”, former finance minister Veerapong Ramangkul said
indicators showed the Thai economy had already recovered. “The
higher-than-targeted tax collection reflects more profits earned by
companies. The budget deficit has declined while the current account balance
is in surplus and the international reserve has increased,” he said.
He urged the government not worry about deflation because
people want to invest under the current circumstances. He also said the
value added tax (VAT) rate should stay at 7 percent to encourage economic
growth.
Veerapong voiced concern about the improper movement of
local interest rates, saying some commercial banks reduced the rates for
speculative purposes. On the currency exchange rate, he suggested, the Bank
of Thailand try to keep the baht stable and not allow it to further
strengthen or it would affect exports and the overall economy. (TNA)
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