Private sector hails government’s lifting emergency decree

The government’s decision to lift the enforcement of the State of Emergency Decree in Bangkok and the metropolitan region on Friday has drawn applause from private-sector executives.
Santi Vilassakdanont, chairman of the Federation of Thai Industries (FTI), said the lifting of the emergency degree would help restore confidence in the country. It is expected the situation would return to normal within a couple weeks.
However, he said, the government must more quickly explain the situation to investors and the international media, within one or two days, as top executives, who had planned to come to Thailand, had cancelled their visits.
Thanawat Palavichai, director of the University of Thai Chamber of Commerce (UTCC) Economic and Business Forecasting Center, said the lifting of the decree would lead to recovery of the country’s economy, particularly the tourism sector.
However, he said the expressions of optimism were made on the assumption that no more violent protests would take place in the coming months and that all parties tangibly cooperate in resolving the political crisis.
Dr. Thanawat said that Thailand lost some Bt110 billion in revenue from tourism during the political unrest and implementation of the emergency decree.
With the lifting of the decree, it is expected the revenue loss would be limited to Bt50-70 billion or some 10-20 percent of total tourism revenues, not 30-40 percent as originally projected.
He believed the tourism industry would shrink less than expected if all parties cooperate concretely to contain the violence and promote tourism.
Thanawat said the center projected that the country’s gross domestic product (GDP) this year would contract only 1 percent, not 4 percent as estimated earlier, if the emergency decree remains lifted and the situation returns to normal. (TNA)

Exports to China appear to recover in March, says KRC

Thailand’s exports to China began to recover in March although they still experienced negative growth during the month, according to the Kasikorn Research Center.
The leading think tank reported the demand for Thai products in China is expected to increase during the rest of this year as consumption and investment in the country has begun to improve as a result of the government’s measure to inject 4 trillion yuan, or US$586 billion, into the economy since November 2008.
The implementation coupled with tax reduction and easing financial policy has caused key economic indicators in China to improve in March.
The economic recovery in China helped boosted demand for Thai products there.
In March, Thailand’s exports to China continued to shrink 14 percent. However, the contraction is considered lower than the first two months of this year which saw exports shrink 34.6 percent.
This resulted in exports to China contracting 27.6 percent in the first quarter of this year compared with a 9 percent growth in the same quarter last year.
Key export items which enjoyed positive growth in March included plastic pellets, rubber products, electric-circuit boards, cassava, wood, electrical appliances, motors and electrical generators, and rice.
Still, KRC believed Thailand’s exports to China would return to enjoy a growth of over 25 percent like in the past six years only when the global economy, particularly economies of the United States, Europe and Japan recovers, perhaps, in 2010. (TNA)
 

Thailand’s food exports to net Bt720 billion this year

Thailand is expected to earn about Bt720 billion from food exports in 2009, down from the Bt760 billion received last year, according to Paiboon Ponsuwanna, vice chairman of the Federation of Thai Industries (FTI).
Paiboon, also president of the FTI’s Food Industry Club, said at a seminar that despite the global economic meltdown, demand for food and agricultural products still exists and Thailand is capable of exporting more food to countries which are reluctant to import food from China due to concerns over melamine-tainted food products.
There is still an opportunity for Thailand to export more primary food products such as frozen shrimp and tuna fish to the United States as well as chicken and fruit to the European Union, he said.
But food exporters must bear in mind that their average profit will decline more than 15 percent, depending on the costs of each food manufacturer, Paiboon said.
Thai food producers, especially small- and medium-sized enterprises must consider the supply side and have an ability to verify food standards in order to create consumer confidence as the world is gripped with the ongoing economic meltdown, he said.
Other major factors that Thai food manufacturers must strictly follow are to maintain price competitiveness and food quality, and to not damage the environment, he added. (TNA)

Spending budget cut won’t affect investment, says BoT

Bank of Thailand (BoT) Deputy Governor Atchana Waiquamdee on Thursday expressed optimism that the government’s decision to reduce the spending budget for Fiscal 2010 to Bt1.7 trillion from Bt1.9 trillion would not affect investment it planned to make as part of efforts to stimulate the country’s economy.
She said the expenditure budget cut would have a little impact on investment because the government had come up with the second phase investment plan, which requires an investment of Bt1.56 trillion, to stimulate the economy in the 3-year period.
The amount does not come from the budget directly, but stems from the off-budget the government sought from various lending sources to jumpstart the ailing economy.
How the investment might work in the medium and long terms, she said, depends on the investment plan in each project.
Atchana downplayed concerns over the downgrading of Thailand’s economic perspective by the Standard and Poor’s and Fitch Rating, two internationally-recognized rating agencies, from stable to negative, in the wake of persistent political turmoil.
She said the downgrading would neither impact the Thai economy adversely nor fuel offshore loan rates because the economy does not rely chiefly on foreign investment at present. (TNA)

Foreign investors still keen to invest in Thailand

Despite economic sluggishness and political turmoil in Thailand, most foreign investors are still willing to invest in this country as they watch the government’s policy and see how it solves problems prevailing in the country, according to Thai Finance Minister Korn Chatikavanij.
In his speech during an investor road show in London on Thursday and Friday, Korn told investors from 30 institutions commanding about US$1 trillion that Thailand is now impacted by the global economic slump which has impacted its exports.
The political unrest in Thailand has deteriorated tourism industry and consumer confidence, he said. However, Thailand’s monetary sector remains strong because non-performing loans remain at less than 6 percent of total bank assets.
The Thai finance minister said that foreign investors believed that Thailand’s economy should recover faster than many other countries due to its strong economic fundamentals and monetary stability, and that Thailand should become more attractive for investment if the government succeeds in implementing political reforms and economic policy.
Korn said foreign investors were interested in the Thai government’s plans to invest in mega-projects and inquired regarding funding sources for these projects.
He told them that Thailand preferred to borrow from domestic financial institutions because of their high liquidity - now Bt1.4 trillion - while overseas debts stand at only 12 percent of the public debt.
Domestic or foreign borrowing is not an obstacle to Thai government’s plans on investment, he said.
After the road show in London, Korn traveled to Washington, DC to attend a World Bank meeting, meet American investors and call on U.S. Treasury Secretary Timothy Geithner to exchange views on ways to tackle economic problems. (TNA)