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BOT decreases economic growth projection
The Bank of Thailand (BOT) has decreased its economic
growth estimate for this year to 4.25-5.25 percent from 4.75-5.75 percent,
citing a decline in local consumption and state spending, as well as surging
fuel prices as main deterrents to the country’s economic expansion.
Bandid Nijathaworn, BOT’s Deputy Governor in charge of the Monetary
Stability Group, said that while the growth estimate was revised down by 0.5
percent, the central bank still maintained its economic growth projection
for next year at 4.5-6 percent.
He said the BOT would continue to give priority to oil prices, which are
expected to further rise, when assessing the economic expansion.
For the latest revision, the central bank predicted that the crude price in
Dubai will stay at US$61.5 per barrel and US$69.3 per barrel in the
worst-case scenario.
Bandid said the BOT had revised the general inflation rate down to 4-5
percent, from 3.5-5 percent, and a core inflation rate to 2-3 percent.
The bank believed the inflation rates would drop although fuel prices would
increase since the stronger baht had helped ease impacts from the oil
import.
He said the sharp appreciation of the Thai baht stemmed from an inflow of
foreign capital into the Asian region, making all currencies in the region
strengthen. He said the BOT would closely monitor and supervise the
situation to prevent too much fluctuation
Bandid said he was worried that the continued inflow of the capital would
press regional currencies, including the Thai baht, to further strengthen.
(TNA)
Internal Trade Dept instructed to closely monitor product prices
The Department of Internal Trade says it will accelerate
monitoring local product prices in light of surging oil prices to prevent
merchandisers from raising their prices unfairly.
Director-General Siripol Yodmuangcharoen revealed that caretaker Deputy
Prime Minister and Commerce Minister Somkid Jatusripitak had instructed the
department to closely monitor consumer product prices now that fuel prices
had increased sharply.
The minister does not want to see merchandisers take advantage of the
situation by raising product prices because it will aggravate consumers’
hardship.
The department’s staff has been ordered to inspect the prices of goods in
local markets in Bangkok and provincial areas every week and seek people’s
cooperation in reporting any exploitation by the merchandisers through the
department’s hotline 1569. The department had also been urged to drastically
punish any merchandisers who are found guilty of raising their product
prices unreasonably, he said.
Siripol said the department is considering the possibility of increasing the
number of products under the watch list by 20, from 150 to 170 items
It is also deliberating adding the number of products under the control
list, which currently stands at 26 items. How many more products would be
listed could not be exactly identified at this time, as officials are
currently calculating cost of the products, he said. (TNA)
Government and refiners move to prevent oil shortages
Thailand’s government and oil firms are jointly taking
prompt measures to cope with possible shortages of fuel. So far, falling
consumption is due to cost rather than supply.
Energy Policy and Planning Office Director General Metta Banturngsuk
announced last Tuesday that the authorities, oil refineries and trading
firms are taking joint steps to ensure that petrol will be sufficiently
supplied to domestic markets nationwide, even though oil prices had climbed
sharply since earlier this month.
Oil reserves in Thailand are currently sufficient for 40 days, the chief of
the Energy Policy and Planning Office said. The public, especially
motorists, are advised not to panic over predicted oil shortages in Thailand
because, Metta said, the government will find ways to preclude such
possibilities.
As part of their preventive measures against oil shortages, oil refineries
and trading firms will inform authorities of their daily production as well
as import and sales volumes.
Small gas stations had closed not because of short supply, but apparently
due to the rising oil prices, which had already seen domestic consumption of
diesel drop from 55 million liters to 51 million liters per day and gasoline
from 20 million liters to 18 million liters daily, he added. (TNA)
Plan to lower government subsidy on LPG
The Energy Ministry is planning to cut the government
subsidy on liquefied petroleum gas (LPG) on a gradual basis, starting from
the middle of this year, after finding that more motorists have switched to
using it following soaring gasoline prices in the country, senior officials
said.
Metta Banturngsuk, director general of the Energy Policy and Planning Office
(EPPO), said that the Energy Ministry remains firm on its policy to reduce
the LPG subsidy on a step-by-step basis. Currently, the state-run Oil Fund
is subsidizing LPG at the rate of Bt3 per kilogram.
Metta said that from mid-2006 the subsidy would be reduced by one-third, or
Bt1 per kilogram, a move that is possible because the price of LPG on the
world market has now dropped to US$430 per ton, he said.
A subsidy to the private sector designed to control the ceiling price at
refineries to US$315 per ton will continue because LPG price will jump
around Bt6-7 per kilogram if its price is allowed to float, according to
Metta.
Meanwhile, Pornchai Rujiprapha, the ministry’s deputy permanent secretary,
said more motorists are using LPG instead of natural gas for vehicles (NGVs)
which is promoted by the government.
Pornchai said the major incentive for motorists to use LPG is the
comparative low cost of installing the system - slightly more than Bt8,000 -
while the over Bt35,000 installation cost for NGV acts as a disincentive.
Most LPG spare parts are imported mainly from Taiwan and Japan, while NGV
stations are also still fewer than LPG, making it less popular among
motorists who now face high oil prices in the country.
The Transport Ministry plans to lower the annual tax for cars using NGV by
half, and by 25 percent for public buses, which may induce more vehicle car
owners to use more NGV, Pornchai said. (TNA)
DPM upbeat about growth despite oil price hike and baht volatility
Caretaker Deputy Prime Minister and Commerce Minister
Somkid Jatusripitak expressed confidence that the Thai economy would
continue to grow steadily despite oil price hikes and the baht volatility.
He conceded that surging oil prices and fluctuation in currency exchange
rates had repercussions around the world. In Thailand, many industries have
been affected to a certain extent.
However, all state agencies are finding appropriate approaches to easing
their hardship.
Dr. Somkid said he still believes the overall economy would improve soon,
although the economic growth rate would drop moderately.
Should the Thai economy be able to grow steadily, repercussions would ease,
he noted.
The deputy premier added that he had already instructed the Internal Trade
Department to closely monitor and supervise consumer product prices.
However, if any products were adversely affected, the ministry would allow a
price increase. However, unless they are considerably affected, the
department will ask entrepreneurs to peg their prices.
Dr. Somkid believes that once the political situation becomes stable, more
foreign investors return to invest in Thailand. (TNA)
Motorists flock to fill fuel tanks in Malaysia
Motorists in Thailand’s southern border region have
flocked across the border to fill their fuel tanks in Malaysia, leading to a
temporary shortage of supply.
A number of motorists, particularly in this southern border province, have
opted to fill their fuel tanks, for both motorcycles and sedans, in
Malaysia’s northern Peris State, where diesel and gasoline are sold at
cheaper prices.
Local police said there had been no problem of oil smuggling from Malaysia
due to good cooperation between Thai and Malaysian authorities.
Meanwhile, fuel prices in the remote area of northern Chiang Rai Province
have surged to more than Bt30 per liter due to higher transport costs, while
many petrol stations in the country’s Northeast have closed their businesses
due to financial losses. (TNA)
Cabinet approves short-term economic stimulus package
Concerned over possible impacts from oil price hikes on
the Thai economy, the cabinet approved short-term measures aimed at
stimulating the country’s economy in the remaining eight month of this year
as proposed by the National Economic and Social Development Board (NESDB).
Government Spokesman Surapong Suebwonglee said that NESDB reported the
overall picture of the Thai economy in the first quarter of this year to the
cabinet at its weekly meeting last Tuesday.
The national think tank viewed that the economy in the first quarter of this
year continued to expand more satisfactorily than in the same quarter of
last year due to higher exports.
However, the Thai economy is still in a path of slowdown due to risks from
surging oil prices and an upward trend of inflation and interest rates.
Should the global oil price stay at around US$70 per barrel in the remaining
eight months of this year, the average price for the whole year would be
US$66 per barrel, up US$17 from US$49.20 per barrel last year, the NESDB
noted.
The inflation rate surged to 5.7 percent in the first quarter and the
short-term repurchase rate stood at 4.75 percent.
Dr. Surapong said private consumption grew roughly 3.5-4 percent in the
first quarter, compared with 4.4 percent the same quarter last year.
Private investment in the first two months of this year increased 5.1
percent, compared with 8.4 percent the same period the year before.
Dr. Surapong said NESDB had proposed short-term measures to stimulate the
Thai economy within the remaining eight months of this year as follows:
On energy conservation measures, NESDB saw a need to encourage local
consumption of natural gas for vehicle (NGV), increase the number of NGV
service stations to 180 within this year and motivate consumers to use NGV
by offering an attractive service cost for equipment installation and
low-interest loan sources.
As well, it is necessary to accelerate production of alternative gasohol to
the amount of eight million liters per day within this year.
State agencies have been instructed to help save energy by 10-15 percent
this year.
NESDB suggested an acceleration of the export promotion campaigns to
increase state revenues.
The measures are aimed to make export growth, particularly for farm
products, electronics and vehicles, reach 17 percent as targeted.
Other measures are to promote tourism concretely, accelerate opening of the
Suvarnabhumi Airport in July and speed up disbursements of budgets. (TNA)
Suitable level of Thai currency is Bt39-40 to US dollar: FTI
The Thai baht should hover close to Bt39-40 to the US
dollar, which is considered a suitable level to maintain the country’s
competitiveness on the global market, according to the Federation of Thai
Industries (FTI). Currently, the Thai currency stands at roughly Bt37 to the
US dollar.
“The level is too strong, and could dent competitiveness and business
opportunities of the country’s export sector,” FTI’s newly elected Chairman
Santi Vilassakdanont said.
He told journalists that he called a meeting of FTI’s board members on April
29 and discussed risk factors affecting local businesses and sought proposed
solutions to be later submitted to the government. The major risk factors
included the stronger baht and continuing fuel price hike, he noted.
Santi, a former FTI vice chairman, was elected to be the organization’s new
chairman at the board’s meeting last Monday.
He said he would further develop the organization’s members, particularly
those in provincial areas and in small and medium-sized enterprises
nationwide. (TNA)
Transport operators raise service charges by 10-20 %
Private operators of land transport services last Monday
agreed to raise service charges for all goods transport across the country
by 10-20 percent, taking immediate effect, due to continuing diesel price
rises.
The service charge hike was announced after a meeting of members of the
Federation of Land Transport, comprising of five major land transport
organizations nationwide.
The private operators also called for the government’s assistance to ease
their hardship caused by the continued diesel price hike, threatening that
unless the government comes up with short-term measures within seven days as
demanded, they would halt 50 percent of their services. This means that
approximately 40,000-50,000 trucks out of a total 100,000 will suspend their
services.
The demands include measures to ensure sufficient supply of diesel for the
transport operators nationwide and to help curb the price of diesel.
The private operators also urged the government to come up with long-term
measures to assist them, including financial support to convert their truck
engines from diesel-based to natural gas for vehicles (NGV) based ones.
(TNA)
Housing and land price index rises by 6-8% last year
The index on housing and land prices in greater Bangkok
last year increased by 6-8 percent from the previous year, with the price of
single houses enjoying the highest rise of 8 percent on average, according
to the Government Housing Bank’s Real Estate Information Center.
The center revealed that the price index of single houses stood at 154.4
points, up 8 percent from the year before, while that of townhouses at
144.2, up 6 percent, and the land price index at 155.3, up 6.3 percent.
The index on housing and land prices surged to the highest level in the
third quarter of last year with those of single houses, townhouses and land
prices rising by 9, 6.8 and 7.5 percent, before weakening slightly in the
fourth quarter.
The center said the number of completely built houses and condominiums last
year totaled 37,435 units, down 12.7 percent from the previous year. Of
this, 23,453 units were single houses, down 13.9 percent, 9,478 units were
condominiums, down 17.5 percent, 4,389 units were townhouses and commercial
buildings, down 36.3 percent, and 115 units were twin houses, down 13.9
percent. The fourth quarter of last year saw houses and condominiums being
built in largest numbers.
Previously, Prasong Ourlan, President of the Housing Business Association,
and Athip Peechanont, President of Thai Condominium Association, shared a
common view that prices of houses and condominiums this year would rise by
roughly 5-10 percent due to higher costs of construction, inflation rate
hike and economic growth estimate of 4-5 percent.
They also forecast that the Thai property market this year would expand 5-10
percent since demand for houses among consumers still exists, although their
buying behaviors have changed. (TNA)
Number of new entrepreneurs rise
by 0.49% in March
The number of Thai entrepreneurs registering their
business in March increased by 24 or 0.49 percent from that of the same
month last year to 4,898, according to the Department of Business
Development.
Of this, 2,047 entrepreneurs are in Bangkok and 2,852 in provincial areas,
with a total registered capital of 13 billion baht, said Orajit
Singkalavanich, the department’s director-general.
She said the number of entrepreneurs increased by 445, or 9.99 percent from
that of February.
She added that the number of entrepreneurs seeking to raise capital in March
totaled 1,311, with increased capital totaling 48.41 billion baht.
Businesses that raised their capital by the highest amounts included
transport, retail, vehicle repair and household product businesses.
Orajit revealed that there were five public companies that sought to raise
their registered capital, worth a total capital increase of 17.98 billion
baht.
The number of companies seeking to end business in March totaled 984, down
133 or 11.91 percent in the same month of the previous year. Most closing
businesses were in the construction, services and refineries sector. (TNA)
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