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Bank interest rates may rise during 2005
Senior officials at Bank Thai are confident that the bank
will reach its lending target of 20 billion baht this year, although local
consumption is expected to slow because of increased oil prices.
Non-performing loans (NPLs) are expected to remain
unchanged from last year at about 6%, the Bank Thai’s president, Pirasilpa
Supapolsiri said.
The bank president said he was optimistic that lending
would increase in line with the country’s economic development at between
5-6%.
The bank’s lending should grow to about 20 billion baht
this year, up from around 17 billion baht in 2004, Pirasilpa said.
Public consumption may slow because of rising oil prices,
but public spending on several mega-projects and an increase in private
spending are likely to help boost lending in the banking system.
Local interest rates are unlikely to increase in the
first half of this year because of high liquidity in the banking system of
around 400 billion baht.
But the interest rates may rise marginally during the
second half of the year, said Pirasilpa.
In 2004, Bank Thai’s net profit was 546 million baht,
compared to a net loss in 2003 of 3.936 billion baht. (TNA)
Oil prices prompt Finance Ministry to downgrade GDP forecast
The Ministry of Finance downgraded its 2005 gross
domestic product (GDP) growth forecast by 0.1 percentage point to 6 percent,
citing high global oil prices, avian flu and the continuing insurgency in
the southern border region.
The move served to overshadow a low-key prediction that
Thailand could record a trade deficit this year due to high imports of raw
materials and capital goods.
Announcing the new forecast, Naris Chaiyasoot,
director-general of the Fiscal Policy Office (FPO), said that due to
uncontrollable external factors, such as the global economic slowdown, high
oil prices, rising interest rate trends, avian flu, drought and the southern
insurgency, the ministry was cutting its growth prediction from 6.1 percent
to 6.0 percent.
Nonetheless, he stressed that a number of positive
factors would continue to act as motors for economic growth, including
government investment in ‘mega projects’, the government’s decision to
set a mid-year budget of Bt50 billion, rising employment and economic
stability.
He also insisted that the slower than expected economic
growth was merely a reflection of adjustments in the nation’s economic
structure, and that if the government issues new policies in the latter half
of the year, including strategies to promote tourism, the nation’s economy
could witness a higher growth rate.
Thailand, alongside Indonesia, Malaysia, China and
Singapore, is one of a number of countries in the region expected to achieve
economic growth of at least 6 percent this year.
The Bank of Thailand (BOT) has predicted expansion of
5.25-6.25 percent, slightly lower than the 5.5-6.5 percent predicted by the
National Economic and Social Development Board (NESDB).
But a more downbeat assessment came from Somchai
Sajjapongse, the FPO’s deputy director general, who said that while
exports look set to grow by 11.8 percent this year, Thailand is likely to
experience a USD1.6 billion trade deficit, compared to the USD1.7 billion
surplus recorded in 2004.
He reasoned the expected deficit on high important of
capital goods and raw materials, particularly oil.
Nonetheless, he stressed that Thailand was likely to hold
a current account surplus of 1.6 percent of GDP, or around Bt3 billion,
which he described as a high rate.
And while revealing that inflation is likely to stand at
4.1 percent due to high oil prices, he said that this is a controllable
rate. (TNA)
Gasoline prices hiked again
The prices of premium and regular gasoline are Bt0.40
higher as of last Wednesday, representing the fourth increase since the
beginning of this year.
The price hike came hot on the heels of a Bt0.60 increase
in diesel fuel to Bt15.19 per liter.
Motorists in Bangkok and outlying areas now have to pay
Bt20.89 per liter for 95 premium gasoline, while 91 premium gasoline is
Bt20.09 per liter.
Meanwhile, Energy Minister Prommin Lertsuridej insisted
that the diesel fuel price hike would increase overall transportation costs
by only one percent, while economic growth would remain at 5.5-6.5 percent
and inflation not higher than 3-3.5 percent.
Somchai Chitsuchon, research director at the Thailand
Development and Research Institute (TDRI), said the Bt0.60 per liter diesel
fuel increase was minimal and would not affect the country’s economy.
He was, however, concerned that the private sector would
have difficulties adjusting its competitive edge if the Oil Fund continues
subsidizing diesel by Bt3.0 per liter. (TNA)
Air and sea fares to increase
Airfares and boat charges are set to rise because of the
increasing oil prices.
Thai Airways International Public Company Limited (THAI)
has announced a five percent increase in its fares on both its domestic and
international services beginning in April.
THAI is being forced to raise its prices by five percent
in order to cushion the impact of rising costs as a result of increasing oil
prices, the executive vice president of THAI’s Commercial Department,
Vasing Kittikul, explained last week.
The airline also plans to ask the Aviation Department and
the Aviation Association to consider calculating the oil duty on a
progressive rate in order to reflect actual costs.
Operators of passenger boat services along the Chao Phya
River have also proposed a fare increase of between 15-20% after a five year
fare freeze, the director general of the department, Tawalyarat Onsira,
said.
The current fares are based on a diesel price of 12.50
baht a litre, but the increase in diesel prices to 15.19 baht a litre makes
it impossible for operators to absorb the rising costs.
The operators wanted to increase fares from March 1, but
the government is not expected to approve the rise until after March 15.
More than 100,000 passengers use the boat service every
day. (TNA)
Consumer confidence could take a beating over oil price hike, says think tank
The government’s recent reduction in fuel subsidies
could shake consumer confidence and trigger a slow-down in both consumption
and investment, according to the Kasikorn Research Centre (KRC).
In its assessment of the impact of Tuesday’s initial 60
satang rise in the price of diesel, the research body predicts that it will
have no significant effect on production costs, but could hit fragile
consumer sentiment.
The government is attempting to remove the fuel subsidy
gradually.
The subsidy on domestic fuel prices at a time of soaring
world energy costs has seen the State Oil Subsidy Fund plunge 68 billion
baht into the red over the last 10 months.
The KRC estimates that by mid-year when retail oil prices
are fully adjusted to real market prices, the fund will be 80 billion baht
in debt.
“Subsidizing retail oil prices also renders energy
saving policies ineffective, as consumers are not fully aware of the real
cost of energy imports and therefore don’t economize,” the KRC analysis
says.
The research centre estimates the oil price rise should
add another 0.3 percent to private sector production costs and this falls
well within the KRC projection that the Thai economy will grow by 5.2
percent, with inflation estimated at three percent.
It points out that the price of goods hinges on several
factors other than energy. The cost of other key commodities such as steel
and copper can be influenced by demand from big consumers like China, while
some agricultural commodities can be affected by issues such as drought.
The Kasikorn Research Centre says while the impact of the
new oil pricing structure on consumer sentiment is unpredictable, there is
still a risk of a slow down in consumption and investment. (TNA)
Tops reports 14% growth for 2004
Central Food Retail Co., Ltd. announced sales growth of
14% in 2004 following its purchase of Food Lion last year and announced its
intention to revamp its Central Chidlom outlet.
Ian Pye, president of Central Food Retail (CFR) said,
“We had great success last year and grew beyond our projections. Our
purchase of the Food Lion stores went smoothly and the results have been
excellent.”
 Ian
Pye, president of Central Food Retail
He added, “In 2004, the company opened 25 new stores
and sales in the new stores were 45% higher than originally forecast. These
figures were supported by research that showed 96% customer satisfaction in
the new outlets.”
In March, the company will add three more stores in
Sriracha, Rayong and Bangsaen and will add further stores during 2005.
The company’s flagship store at Central Chidlom will be
revamped and Pye believes the finished store will be the best in Thailand.
Other stores including Central World, Chiang Mai Airport and Ratanathibet
will be completely refurbished.
“We will continue with our vision to focus on customer
research, product range, develop new store concepts and look for new
locations that fit our specification,” he said.
Pye explained that the company is constantly looking for
new product lines and is currently processing new lines from Europe,
Australia, and Japan that will satisfy the demand for new food produce from
other markets.
He explained that the product line expansion is possible
because of the excellent support that the company has received from the
suppliers.
“Our suppliers have been brilliant during our expansion
phase by giving us fantastic support and further strengthening the strong
bond that we have with them. For example, many major suppliers informed us
that their business with us had grown more than 20% last year and especially
more than 40% in Quarter 4.”
A performance highlight for the company has been the SPOT Rewards Card.
To date, TOPS has 1.7 million registered members and data shows that SPOT
Rewards Cardholders spend 40% more per basket than the average shopper,
which outlines the benefits of the incentive program.
BCCT goes east
The monthly British Chamber of Commerce Thailand events
on the Eastern Seaboard have been stepped up. The last event took place at
the L’Opera Restaurant at the entrance to the Eastern Seaboard Industrial
Estate. The event was sponsored by estate developer, Hemaraj Land and
Development Co. Ltd.
BCCT
members and sponsors partook in some of the fine food and refreshments at
L’Opera during the last Eastern Seaboard networking night.
Around 40 active members and the regular stalwarts
attended the informal networking night as everyone sampled the food and wine
on offer through the night.
David Nardone, Hemaraj president and CEO revealed that
business was booming in the region. He said his company has acquired an
extra 9,500 rai to add on to the current estate.
This was echoed among quite a few of those attending the
evening that industrial sector and its affiliates are experiencing growth at
various levels.
Whilst a little far from the humble seaside city of
Pattaya, the evening was enjoyed by all in attendance.
The next BCCT Eastern Seaboard networking night will be held at Henry J
Beans Bar & Grill on Friday March 11. The venue is located on Beach
Road, North Pattaya and the event will be sponsored by Sallmanns &
Panchalae. Sallmanns is sponsoring selected beverages and snacks on a
first-come, first-served basis from 6.30 p.m. There is no entry fee for
members but non-members must pay 500 baht per person.
Phuket Airport still quiet, nearly two months after tsunamis
Last year, it was a bustling little international airport
on a Thai island paradise, dubbed the ‘Pearl of the Andaman’. Now, it is
just a shadow of what it once was, with visitor arrivals down by more than
64 percent.
With Thailand’s southern Andaman provinces of Phuket,
Krabi and Phang-nga all badly damaged by the massive waves which struck
across Asia on December 26, the Phuket Airport is a victim of sharply
reduced tourist numbers.
According to Sqd. Ldr. Pornchai Ua-aree, the airport’s
director, January saw a 26.74 percent reduction in the number of flights
arriving in Phuket, with only 2,151 flights arriving compared to 2,936 in
January 2004. Of these, 777 were international flights and the remainder
domestic, with international flights down 54.59 percent on the previous
year’s figures.
Although the drop in domestic flights was less severe,
many of the flight arrivals were accounted for by the arrival of aid for the
tsunami victims. Passenger arrivals, meanwhile, slumped by 64.4 percent in
January, with 181, 511 arrivals, compared to 509,841 in January last year.
International arrivals recorded an 88.8 percent drop,
from 241,513 passengers to a mere 27,026, while domestic arrivals were down
by 42.43 percent.
Sqd. Ldr. Pornchai admitted that some flights to Phuket
had still not been resumed, with around 44 percent of regular flights
cancelled. Nonetheless, he noted that some airlines were now beginning to
return to the province, including Orient Thai flying from Hong Kong.
But he conceded that with the badly damaged Phang-nga
resort of Khao Lak, one of the major destinations previously chosen by a
large proportion of passengers using the airport, it would be a long time
before passenger numbers were restored to their pre-tsunami levels. (TNA)
Building of low cost terminal to commence
Work on the low cost terminal at Singapore Changi Airport
will start in the first quarter of this year and should be completed by
early 2006. The new terminal will be made up of two adjacent single-storey
buildings connected via link ways, where arrival and departure procedures
will be processed in separate blocks. It will have an initial passenger
handling capacity of 2.7 million passengers a year.
So far only Tiger Airways has committed to using the
terminal but there is scope for further expansion should more carriers want
to use it.
Meanwhile, AirAsia’s CEO Tony Fernandes said at the
sidelines of an Aviation Conference held in Singapore last week that the
airline may eventually give up on expanding in Singapore after hitting
another obstacle when its Indonesian arm AWAIR had to cancel its inaugural
flight to the country on January 19. He said additional documents had to be
submitted at the “eleventh hour” and at press time there were still no
decisions made.
When quizzed on AirAsia’s AOC application to operate
from Singapore, Fernandes said the airline has “withdrawn” the
application, with no plans to apply in the future. (TTG Asia)
New Chonburi Tourist Visa launched
Aimed at promoting more visitors to the region
Suchada Tupchai
The continuing effort by government and business sectors
took yet another leap forward as both joined the launch of the new Chonburi
Tourist Visa at the Tide Resort in Bangsaen last Thursday afternoon.
 A
young university student shows off the new Chonburi Tourist Visa card.
Provincial officials from the governor’s office and
Provincial Administration Organization, the TAT Central Region 3 office,
Chonburi Attraction Club members and business owners joined together to
announce the new project aimed at attracting more visitors to the Eastern
Region.
The newly revamped program is a continuation of the
previous one created to combat SARS in 2003. The Chonburi Tourist Visa falls
into line with the central government policy of increasing tourist numbers
with a main goal of creating 700 billion baht annually from tourism by 2008.
The card, which costs 100 baht and comes with a booklet, offers discounts at
22 tourist attractions throughout the province, many of which are just a
short drive from Pattaya City.
 Dr.
Pichai Sonjaeng, Chonburi Attraction Club chairman speaks about the new
Chonburi Tourist Visa.
Pisit Boonchuang, Chonburi vice governor said, “I am
honored to be part of the project launch and it is good to see so many
businesses backing the program to promote tourism in Chonburi. The province
is a major tourism hub for the country and has a thriving industry and
commercial business sector.”
Pinyo Tanwiset, Provincial Administration Organization
chairman called for heightened cooperation from local governing bodies to
facilitate further development in the area, including improving
infrastructure to support tourism growth over the coming years.
Show
performers from Nong Nooch Gardens, just one of the venues supporting the
program.
“It is imperative that we ensure that the road
infrastructure is taken care of, for ease of travel, as well as the
environmental aspect of the region. We must develop further service minded
projects such as a One Stop Service center for visitors and business
operators. This must also coincide with better public transport and not take
shortcuts; for example a high-speed train service would benefit the province
greatly. Besides this, it is important for Thai residents to be courteous
and supportive to the industry and visitors in order to promote good will
for the region and the country,” said Pinyo.
A number
of booths exhibiting tourism destinations were set up during the launch
festivities.
Other speeches followed as the new card was introduced by
Dr. Pichai Sonjaeng, Chonburi Attraction Club chairman. He explained that
the card would be on sale for 100 baht at all 220 tourist attractions and at
the Tourism Authority of Thailand Central Region 3 office, or by calling 038
427 667, 038 428 750 and at the Chonburi Attraction Club office on 038 391
671-3.
Following the launch a number of shows and exhibits were presented along
with a video presentation promoting the card. Members of the press and
public were invited to survey a number of booths set up at the hotel
promoting various destinations.
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