Finance minister sees exports dropping 10% this year

Finance Minister Korn Jatikavanich last Friday predicted the country’s exports would drop by10 percent, or some Bt 500-700 billion in value this year in the wake of repercussions of the global financial crisis.
Speaking in a panel discussion on “Impacts of the Global Financial Crisis”, he said all countries had been affected by this crisis, although by different degrees.
Thailand had experienced heavy losses in terms of exports. It is expected that export values this year would fall by 10 percent or Bt500-700 billion or so from around Bt7 trillion last year.
He said the government is worried most about imminent mass layoffs. For this reason it had ran a budget deficit and set aside a funds to boost employment and stimulate the economy.
Korn said a proposed reduction in raw materials import would be raised for consideration at the discussion as part of Thailand’s efforts to ease the impacts of the financial crisis.
Former finance minister Chalongphob Sussangkarn said the ongoing global economic crisis is considered the worst in history.
The economic slowdown Thailand is facing now is just a beginning of the crisis. The impacts of the crisis are expected to be prolonged, for as long as three to four years.
He said the crisis would be more difficult to address than that in 1997 because it had adversely affected both exports and private-sector employment. (TNA)

Finance minister still worried about economic woes

Finance Minister Korn Chatikavanich on Friday conceded he is still worried about Thailand’s economic woes even though the government is about to issue new economic stimulus packages.
At present, he said, many of the world’s leading financial institutions remain unable to address their financial problems.
A number of major commercial banks are expected to seek state assistance. Should they receive the help, they will become state-owned banks, which could face difficulty in setting aside money to invest overseas or in placing purchase orders for products.
However, the government has prepared measures to prevent future problems, he said, adding that it would soon issue a second and third set of economic stimulus measures.
Simultaneously, the mid-year budget is scheduled to be disbursed by the end of this month.
Korn said executives of two giant foreign automakers called on him Friday morning and expressed an attention to expand their investment in Thailand further.
Some foreign companies, aware that they had only a limited amount of cash available, chose to invest solely in Thailand.
The finance minister believed that more foreign companies in many industries would shift their investment to Thailand from neighboring countries in the near future. (TNA)
 

Bank of Thailand sees economy recovering quickly, in 2010

Bank of Thailand (BoT) Governor Tarisa Watanagase on Thursday voiced confidence that the Thai economy in 2010 would recover more quickly than that in 2009 due to the forecast by the United States Federal Reserve that the US economy will accomplish a turn-around late this year.
Mrs. Tarisa views the Thai economy in the first quarter this year as being better than its performance in the last quarter of 2008, and states that she believes the economy will not be in recession because state spending and investment has begun to accelerate.
She said the economy in the first quarter would contract definitely when compared with the same quarter last year, which saw economic growth of 6 percent, but if compared with the last quarter of 2008, the first-quarter economy is expected to be an improvement.
The BoT chief conceded the economy for 2009 is likely to shrink in the same direction with that forecast by the National Economic and Social Development Board.
Also, Tarisa said she doubted the accuracy of the rating agency Moody’s Investors Service’s forecast that the Thai economy would grow worse than any other country in Asia. She said she did not know what information the agency had used to make the projection. (TNA)

Economists: Stimulus packages don’t reach truly vulnerable

The economic stimulus packages introduced by successive Thai governments are not well-targeted to reach really ‘vulnerable’ people, and the government should invest in a system to compile information on the most vulnerable portion of the population, according to Thailand’s leading economists.
The comments were made in a seminar on ‘Economics Shocks and the Vulnerable in Thailand: A Case Study of Rising Food and Fuel Prices,’ organized by the Office of the National Economic and Social Development Board (NESDB), Thailand Development and Research Institute (TDRI) and the United Nations Country Team for Thailand.
Professor Dr. Ammar Siamwalla, TDRI distinguished scholar, said that unlike the 1997 economic crisis which first affected the financial institutions and the middle-class, this time, the most vulnerable people, that is the poorest of the poor, are first group being hard hit due to the rapid increase in food and fuel prices.
Dr. Ammar said the TDRI report indicated that the range of subsidies introduced by successive Thai governments to help citizens during the economic slowdown were meant to support only household expenditures. For example, the ‘Six Months Six Measures’ stimulus packages which ended last month offered subsidies for transport and utilities, but no provision for basic food items, which are really needed by the most vulnerable.
The report also found that the measures launched by both the previous and incumbent governments are not well-targeted due to lack of up-to-date information on numbers, location and situation of the poorest sectors of population.
The report also suggested that cash transfers are an efficient and effective mechanism for cushioning the impact of economic shocks on vulnerable groups, as seen being implemented in other countries.
In Thailand, however, no large scale cash transfer programs have been introduced due to the difficulties in targeting those most in need.
Meanwhile, Dr. Ekniti Nitithanprapas, senior expert on macroeconomic policy in the Ministry of Finance, said that a database of the really vulnerable is needed in order for the government to inject the right remedy to those suffering from economic shock.
Dr. Ekniti noted there is an estimated 37 million persons in the labor force in Thailand, but 23 million of those are not registered, and thus excluded from all kinds of assistance.
They do not ‘exist’ as far as the 30-baht health care scheme and social security system are concerned.
Those who registered for social security benefits are bureaucrats and private employees, he noted. They benefit from many stimulus packages, but not so with the vulnerable and at-risk lower-income population, including upcountry farmers and the homeless in urban areas, he said.
Dr. Ekniti suggested that if the comprehensive database of vulnerable groups is compiled, any government will be able to lay out an appropriate national development plan, as well as find appropriate and timely solutions to any economic crisis. (TNA)

MAI listed firms continue higher revenue and profits

Listed companies on the Market for Alternative Investment (MAI) continued to enjoy higher revenues and net profits in 2008 despite the economic slowdown, according to MAI president Chanit Charnchainarong.
He said that last year 52 firms listed on the MAI earned combined revenues of Bt52.56 billion, up 16 percent from Bt45.44 billion in the previous year, and enjoyed combined net profits of Bt2.59 billion, up 19 percent from Bt2.19 billion the year before.
He said 40 companies or 75 percent of the total number of MAI-listed firms earned the net profits, 10 of which gained over Bt100 million.
The top three companies with revenues higher than the market average include Asia Green Energy with Bt2.36 billion, up 147 percent, Absolute Impact with Bt220 million, up 62 percent, and Thai Polycons with Bt1.74 billion, up 33 percent.
“Up to 77 percent of MAI-listed companies remained healthy in their performance in 2008. They still enjoyed revenue and profit growth despite the economic slowdown,” Chanit said.
For the performance result in the 4th quarter of 2008, listed firms on MAI earned combined revenues of Bt13.83 billion, up 13 percent from the same quarter the previous year, and registered combined net profits of Bt86 million, down 86 percent from the same period the year before. (TNA)