Finance minister upbeat about export prospects

Finance Minister Korn Chatikavanij on Thursday voiced optimism about a turnaround in exports, saying that export figures had shrunk at a slower pace for three consecutive months and purchase orders from trading partners worldwide had risen.
He predicted the export situation would pick up in the second half of this year because the economies of Thailand’s trading partners had begun recovering.
While many think tanks have forecast that Thailand’s exports will contract some 18-20 percent this year, some believe the shrinkage will be only 15 percent.
He said the Finance Ministry is ready to give assistance to the export sector through investment projects under the Thai Khem Keng (Stronger Thai) scheme.
Korn said the ministry planned to use US dollars to buy raw materials, equipment and machinery as part of its efforts to prevent the baht from strengthening too much.
In addition, the ministry would provide help to exporters through the Export and Import Bank of Thailand (EXIM).
The practice, he believes, would help increase EXIM capital so the bank could lend more and guarantee private sector exports. (TNA)

Thai economy already bottomed out, say top economists

The Thai economy has already bottomed out given the improved economic indicators and implementation of the government’s economic stimulus packages, according to a veteran fund manager and leading academic.
Speaking at a panel discussion on “In-depth Analysis of Hot Stocks: Opportunities for Well-Off from Thai Stocks,” Maris Tharab, president of ING (Thailand) Asset Management Co., said that given the recent improvements in economic signals, he believes the Thai economy has already bottomed out.
Domestic purchasing power has already begun to increase because the public is daring to spend more.
At the same time, the government’s plan to apply its 2009 budget of about Bt115 billion and another Bt800 billion in loans meant to stimulate the economy through development of transport routes and the purple-line electric mass transit system would enable more money to flow into the economic system.
These combined actions will enable the Thai economy to begin recovering late this year and clearly pick up in 2010.
He said the Stock Exchange of Thailand (SET) composite index had risen at a slower pace than many countries in the region since early this year although the value and earning growth of stocks are now more attractive than before.
Because of this, he predicted that the Thai stock market will be more bullish than the exchanges in neighboring countries in the second half of this year.
Thanawat Polvichai, director of the University of Thai Chamber of Commerce (UTCC) Economic and Business Forecasting Center, said the Thai economy had already hit bottom.
However, the economy would not recover in a “V” shape as the prime minister projects, but would instead possibly recover in a “U” shape because investors and tourists remain worried about local political woes and external risk factors.
Nevertheless, if the Thai Khem Keng (Stronger Thai) project is successfully implemented, it would contribute greatly to the country’s economic recovery. (TNA)
 

Small business owners told to monitor exchange rates as Thai economy improves

Saksiri Uraiworn
As Thailand’s economy continues to improve, foreign exchange rates may become more volatile with the Thai baht strengthening, a group of small and medium-size business executives were told last week.
Officials from the Bank of Thailand and Siam Commercial bank told an Aug. 19 forum at the Zign Hotel that the manufacturing sector will be the first to resume growth with tourism lagging due to continuing economic hardship in Europe. As the world economy recovers from recession, small business owners need to place more emphasis on financial risk management so as not to fall victim to volatile exchange rates.
“During the past two to three months, the baht has moved in a narrow range against the U.S. dollar and other currencies because an influx of foreign currency has created some stability,” Setthaput Suthhiwatnarueput, vice president of the SCB Economic and Business Intelligence Centre, explained to attendees at the forum entitled “Trends and Economic Guidelines for Addressing Risks from Fluctuations in Exchange Rates.” “However, the market remains volatile and entrepreneurs must focus on exchange-rate risk management to prevent losing revenue and profitability due to volatility.”
Suchada Kirakul, deputy director for the BOT’s financial-marketing department, said that while Thailand’s economy is showing signs of improvement, “Restructuring the economy must continue for some time until things return to normal.
“Exports have improved, but the growth of the global economy is likely to be lower than in the past,” Suchada said. “Therefore, small and medium-size enterprises need to focus more on business planning, including risk management for exchange rates.”
“The global economic crisis has affected the Thai economy in two major ways: the export sector, and the tourism sector,” Setthaput said. Export volumes have fallen 40 percent from their peak and twice as much as they fell during the 1997 economic crisis.
“However, the good news is that metrics show the crisis may have bottomed out. The manufacturing industry is in better shape and the economy will improve over the last two quarters of this year,” he continued. “While the economy will likely contract 4 percent to 4.5% this year, growth should return to the range of 3.5-4 percent next year.”
Tourism, however, will remain a trouble spot, Setthaput said. “Recovery will likely be slow, especially as it concerns Europe, which will face a slower recovery than other regions.”

American agency praises Thailand’s energy programs

The United States Agency for International Development (USAID) has commended two Thai energy programs which it said could promote energy conservation among consumers and in the business sector as well as help boost investment on alternative energy, a senior Thai Ministry of Energy official said Sunday.
Krairit Nilkuha, director-general of the Alternative Energy Development and Efficiency Department, said USAID praised the Thai government-sponsored Revolving Fund for Energy Conservation (RFEC) and the Innovative Approaches to Financing Energy Efficiency in Asia programs as it believed they could also persuade banking institutions to extend more loans to energy operators.
Only two countries in Asia - Thailand and India - have received praise from the agency, said Krairit.
The RFEC program has now entered the fourth phase and has received funding amounting to Bt5.567 billion from the Energy Conservation Promotion Fund and another Bt5.401 billion in loans extended by commercial banks. So far it has carried out 242 energy conservation projects in Thailand.
Krairit said the three phases carried out under the RFEC program had helped reduce electricity costs amounting to Bt2.083 billion and fuel amounting Bt1.932 billion annually. They could also help reduce greenhouse gas emissions by 76.8 million tons.
The fourth phase of the program is being carried out from this year until 2012 by the Energy Ministry with total investment of Bt400 million. Private operators could borrow a maximum of Bt50 million per project at a maximum interest rate of 4 percent and a seven-year maturity. (TNA)