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BOT warns of five risk factors
to Thai economy this year
According to the Bank of Thailand, there are five risk
factors to the Thai economy this year. First is the continued high
fluctuation of fuel prices. Second is the concern that the US and European
Union interest rates would fuel inflationary pressure. Third is the
volatility of the US dollar and foreign capital. Fourth is the possibility
that the US economy might grow lower than expected at 3.3 percent since
property prices had dropped. Fifth is the lack of confidence due to the
current political instability.
Bandid Nijathavorn, BOT’s deputy governor supervising the Financial
Stability Group, said that the Thai economy is likely to expand 4.75-5.75
percent this year, boosted by an increase in exports.
He projected that next year the Thai economy would re-enter a cycle of
investment with higher capacity utilization in the industrial sector and
better performance results of listed companies on the Stock Exchange of
Thailand (SET).
Local interest rates are unlikely to increase considerably, which could
contribute to higher investment. Private consumption is expected to continue
to grow since the employment rate is high. Figures show that income earned
by consumers are still sound.
The BOT said that it would closely monitor the political tension and review
the economic figures at the end of February. The figures could reflect
whether the Saturday demonstrations have an impact on the Thai economy, he
noted.
Bandid reiterated that the BOT would continue to implement the monetary
policy with caution. The policy would focus on maintaining the economic
stability and supervising inflation rates to ensure that they do not
increase considerably, he said.
The general inflation rate has remained at 5.9 percent and is expected to
stay at 3.5-5 percent for the whole year.
He said what concerns the central bank most now are higher household debts.
Proper understanding on debt repayment with hefty interest rates must be
given, particularly to low-income earners, he suggested. (TNA)
Government organizes special brainstorming economic forum
The government organized a special economic forum between
public and private agencies to brainstorm ideas on how to stimulate and
sustain Thailand’s economic growth in the long term, according to Government
Spokesman Surapong Suebwonglee.
The special economic forum was held at the Ministry of Foreign Affairs lst
Friday, Dr. Surapong said.
All economic ministers, as well as officials of government agencies
concerned and representatives of the private sector, including those from
the Bank of Thailand (BOT), the Stock Exchange of Thailand (SET), the Thai
Chamber of Commerce and the Federation of Thai Industries (FTI) attended the
forum chaired by Prime Minister Thaksin Shinawatra.
Leading local economists and business leaders, including former finance
minister Veerapongse Ramangkura - now an advisor of the finance minister -
and top executives of the Charoen Phokphand (CP) and the Saha Patanapiboon
Groups were also invited to join the forum.
The discussion focused on approaches to stimulate economic activities of
people in the middle class and those in the grassroots level, said the
government spokesman. (TNA)
Shin share trading via Ample Rich under examination, says SET chief
The Stock Exchange of Thailand (SET)’s officials are
examining the trading of Shin Corporation Public Company Limited’s shares
through Ample Rich Investments, but could not yet tell when it will be
completed, according to SET’s President Kittirat na Ranong.
He said that the officials concerned were gathering relevant information and
obtaining trading data from Ample Rich, which is located in the tax-heaven
British Virgin Islands.
However, he conceded, SET could not yet identify when the examination would
be finalized although the Securities and Exchange Commission (SEC) intends
to make a conclusion of the shareholding examination and other Shin Corp
deal-related issues by this week.
Kittirat said the examination of the share trading of the Shin Corp Group by
the SET would focus only on the insider trading matter.
The issue would be brought for discussion at meetings of sub-committees on
legal aspects and inspection, as well as an advisory council on good
governance, he noted.
He said it had not yet been clear on whether a conclusion of the
consideration would be made by all panels or on a case-by-case basis.
Still, it is likely that each panel would be asked to have joint discussions
to facilitate the conclusion, he said. (TNA)
Small securities firms unlikely to survive upon liberalization with US
Many small Thai brokerage houses are likely to close
their businesses should there be financial trade liberalization under the
proposed free trade area (FTA) between Thailand and the United States,
according to an industry executive.
Rapee Sucharitkul, president and CEO of Kasikornthai Securities Co,
suggested that the government attempt to double or triple the amount of
institutional investors prior to the adoption of the FTA on financial and
service sectors with the US. Institutional investors make a combined
investment of approximately 300 billion baht out of the total portfolios of
1.25 trillion baht.
The move is necessary if the government wants to stabilize the money and
capital markets in preparation for competition under the planned FTA
agreement.
He said local securities companies should accelerate improving their
services prior to industry liberalization, which would see an entry of a
large number US rivals in the country.
Currently, competition in the brokerage business has already intensified
because only 100,000 out of 300,000 securities accounts are active. Under
the circumstance, he said, small brokerage houses need to amalgamate
business to enhance its size, as well as its potential and efficiency for
the competition.
Unless there are mergers, the small brokerage houses will be forced to close
their businesses because they are not any position to compete.
Rapee also suggested that the government hold negotiations for the FTA in
the field of commercial banks, securities and insurance businesses
simultaneously. (TNA)
Instant noodle market value projected to grow 10% this year
The instant noodle market value in Thailand is projected
to grow 10 percent to 11 billion baht this year, due to the fact that people
are spending more carefully and turning to consume products with moderate
prices, according the Kasikorn Research Center (KRC).
The leading think tank said people’s purchasing power have been affected by
higher living costs, leading to an increase in the consumption of instant
noodles.
Additionally, the demand for noodles is expected to increase during the
World Cub soccer tournaments, which will be broadcast late at night during
June-July this year.
KRC said sales revenue of instant noodles have increased to 105.32 tons from
93.99 tons. That number is likely to edge up to 117,000-118,000 tons this
year.
Risk factors producers need to closely monitor include higher costs of
production, packaging, transport, electricity and energy costs.
KRC said it is rather difficult for producers to raise selling prices to
cover higher costs because competition in the business has intensified.
Currently, KRC said frozen instant foods have gained increased popularity on
par with instant noodles because they are available at convenient stores and
easy to cook.
KRC suggested that producers accelerate exporting instant noodles since it
has high growth potential. Last year, export of the product was expected to
reach 21 billion baht. This year, the export is likely to increase to 23
billion baht with main destinations being Europe, the United States, Hong
Kong, Japan, Taiwan, and countries in Indochina. (TNA)
Thai officials to visit Australia
in export promotion bid
A high-level trade delegation will visit Australia next
month in a bid to boost export opportunities amid concern that maximum
benefit was not being extracted from the two countries’ free trade pact.
Thai trade negotiator and ministerial advisor Panpree Pahitanukorn said the
delegation would leave in mid-March, comprising of a variety of government
officials and representatives of the Federation of Thai Industries and Thai
Chamber of Commerce.
The free trade agreement between Thailand and Australia has been in effect
since 2005, and the balance of trade is now in Australia’s favor.
Panpree believes that there is a market in Australia for Thai agricultural
processed goods such as canned pineapple and tuna, as well as textiles and
goods made under the ‘One Tambon One Product’ (OTOP) program.
He said five major issues were expected to be discussed with Australian
foreign and commerce ministers during the visit: the range of goods exported
by the two countries; Thailand’s trade deficit with Australia; the low level
of export some of Thai goods; the promotion of government-sponsored projects
such as OTOP and Thai Kitchen to the World programs; and environmental
management.
Panpree said he has already assigned government agencies, including the
trade negotiations and the export promotion departments, to study the
unsatisfactory level of exports from Thailand to Australia. The results of
the study will be submitted before the trade delegation leaves for
Australia. (TNA)
Japan agrees to help promote
Thai OTOP and SME goods worldwide
Thailand and Japan have agreed to join hands in
distributing products of Thai small and medium-sized enterprises (SMEs) and
those under the government-supported one-tambon one-product (OTOP) scheme
worldwide.
The parties concerned include the Office of Small and Medium Enterprise
Promotion (SMEs), the Export Promotion, the Community Development and the
Industrial Promotion Departments, as well as Japan-based Daiso Industries
Co.
Speaking after chairing the signing of a memorandum of cooperation between
the Thai state agencies and Daiso Industries Co, Deputy Commerce Minister
Preecha Laohapongchana said that the Japanese firm and the Thai agencies
would jointly set up a distribution center of OTOP and SME goods in
Thailand.
The company would also serve as a coordinating center for purchase and sale
of the Thai products on the international market because it has more than
2,400 outlets in Japan and 380 outlets in 15 countries around the world, he
noted.
Thailand has annually exported up to 50 billion baht in OTOP goods.
The minister said he believed the cooperation would help enhance the export
value of the Thai products since Daiso Industries Co. has many outlets in
Japan and foreign countries. Daiso also has outlets in Thailand and plans to
increase the number of outlets in the country to position its products.
The minister believes that it is advantageous for Thailand to get Daiso
Industries Co. as a partner for the distribution of OTOP and SME goods both
locally and overseas. (TNA)
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