ECONOMIC

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Address ageing issues now, World Bank urges

Published August 15, 2016 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Address-ageing-issues-now-World-Bank-urges-30289316.html

ECONOMIC

Ulrich Zachau, left, reckons “lost opportunity” if ageing issue is not properly addressed.--The Nation

Ulrich Zachau, left, reckons “lost opportunity” if ageing issue is not properly addressed.–The Nation

THAILAND’S economy will continue growing and the pace could pick up if the country properly addresses future challenges including its rapidly greying population, according to the World Bank.

The Bank’s 2016 economic forecast for Thailand was raised from the 2.2-per-cent growth estimated six months ago to 2.5 per cent. This is the slowest in Southeast Asia, whose gross domestic product is predicted to grow by an average of 6.3 per cent.

Thailand’s leisurely GDP expansion, below 3 per cent per year, is anticipated to run until 2018.

The Finance Ministry forecasts 3.3-per-cent growth this year, against the Bank of Thailand’s 3.1 per cent.

The future growth path looks rocky, with strong headwinds and the fact that Thailand’s working population will decline by 11 per cent from now until 2040, from 49 million to 40 million, the World Bank says.

This is the sharpest shrinkage among developing economies and compares with just 4 per cent in Vietnam.

Ulrich Zachau, the World Bank’s country director for Southeast Asia, stressed the need for three critical reforms – education for higher labour productivity, further liberalisation in the service sector to maintain economic openness, and fiscal arrangements to cope with the rising ageing-associated costs.

“Thailand has potential but it is not growing at its potential. Thailand will grow faster and Thailand can rise over time in the long run” if all these issues are addressed, he said at a press conference yesterday.

He encouraged the Kingdom first to focus on students at the primary and secondary levels, as they will enter the workforce in 10-15 years.

“It’s not a catastrophe if this doesn’t happen today. But it means a lost opportunity for Thailand. It will take Thailand more years and more waiting.”

Asean ‘champion’

More openness in the service sector is also highlighted as a way to make Thailand play the “champion role in Asean”, as this will complement its leading role in trade and investment.

Medical claims must be factored into fiscal planning, before society gets old and things get out of hand, the Bank said.

Vice Finance Minister Kiatchai Sophastienphong said the social-security system was being improved to help the very poor, while measures were being introduced to increase the number of female workers and increase productivity.

Labour policies are being geared to cope with migration to address the labour shortage in the country, he said.

Zachau said the mobility of people would only increase across the world, as people seek jobs and income opportunities elsewhere. An appropriate policy would help Thailand take advantage of this trend and concurrently address the ageing issue.

Kiatchai acknowledged the short- and long-term ramifications on the Thai economy of British voters’ decision last week to exit from the European Union.

While Zachau said the World Bank was about to release studies on the impacts of “Brexit”, Kiatchai said Thailand’s Finance Ministry and the Bank of Thailand were also completing an analysis of the repercussions.

“There are strong headwinds for Asean,” Kiatchai said. “But given Thailand’s very low debt to GDP, at 44 per cent, fiscal deficit at 3 per cent to GDP, and foreign reserves worth 10 months of imports, Thailand should be able to weather the turbulence.”

To support long-term economic prospects, he highlighted several reforms that were implemented in the past year to address short-term issues and also support long-term prospects.

They include the restructuring of personal income taxes and passage of the land and property tax, policies to boost entrepreneurship and strengthen smalle and medium-sized enterprises, innovation centres in five focus areas, mega-project investment, and improvement in the investment climate with the aim to achieve a higher rung in the World Bank’s “Doing Business Index”.

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Politics to ‘shape sovereign rating’

Published May 17, 2016 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Politics-to-shape-sovereign-rating-30285666.html

ECONOMIC

Customers shop at a supermarket in Bangkok, Thailand, March 31, 2016, while, Kim Eng Tan, an analyst at S&P Global Ratings, said in a report on “Sovereign Risk in Southeast Asia Pivots on Politics”, that given the weak economic performance since the coup.

Customers shop at a supermarket in Bangkok, Thailand, March 31, 2016, while, Kim Eng Tan, an analyst at S&P Global Ratings, said in a report on “Sovereign Risk in Southeast Asia Pivots on Politics”, that given the weak economic performance since the coup.

POLITICAL uncertainties remain high and the bickering is expected to continue for a while, adding to uncertainties in Thailand’s economic outlook and possibly leading to pressure on its sovereign rating, according to S&P.

Kim Eng Tan, an analyst at S&P Global Ratings, said in a report on “Sovereign Risk in Southeast Asia Pivots on Politics”, that given the weak economic performance since the coup, Prime MinisterPrayut Chan-o-cha is likely to keep his word to go ahead with an election rather than be blamed for a further deterioration of growth prospects.

There is no guarantee, however, that he will write a constitution that Thai politicians will accept.

So the political bickering could go on for some time, while little is expected to change in improving the country’s infrastructure or education system.

Thanks to Thailand’s relatively conducive investment climate and its attraction as a tourist hub, growth remained at close to 3 per cent last year.

However, the continued political instability is damaging the economy’s potential even as international competition intensifies with the rapid development of Vietnam and Myanmar’s opening.

“Even without a possible violent confrontation in the country, a further slowdown in Thailand’s economic growth trajectory could erode its sovereign credit metrics over the next few years,” he said.

The policy environment is unlikely to improve much in the near future, as the junta attempts to extend its influence beyond the election promised by the middle of next year.

Malaysia and the Philippines are also highlighted in the report.

In Malaysia, the 1MDB saga is a threat to political stability, making the company an important development for the government’s credit standing.

In the Philippines, the risk of political uncertainty is somewhat higher if Rodrigo Duterte wins the presidency. He will be the second president after Estrada who does not represent elite families.

If Duterte’s style leads to serious political battles, it could damage one of the Aquino administration’s key achievements – a sustained period of political stability.

A return of political confrontations could weaken the improving trend for sovereign credit metrics.

Since 2013, S&P has upgraded the Philippines twice.

Meanwhile, S&P Global Ratings yesterday said its sovereign credit ratings on Philippines are unaffected by Duterte’s likely win. It said that Duterte has given few details regarding the shape of economic policies to come under his presidency, but S&P expects him to continue with policies that had contributed to sovereign rating improvements in the past few years.

Duterte’s track record of more than 20 years in Davao gives few indications that he would embark on economic policies significantly different from the Arroyo and Aquino administrations, S&P said.

Tourism and fiscal stimulus expected to fuel 3.3% GDP growth

Published May 17, 2016 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Tourism-and-fiscal-stimulus-expected-to-fuel-3-3-G-30284905.html

ECONOMIC

THE FISCAL Policy Office (FPO) has expressed confidence that gross domestic product (GDP) will grow by 3.3 per cent this year, driven by expanding tourism and fiscal stimulus measures.

Kulya Tantitemit, deputy spokeswoman for the Finance Ministry, said GDP was expected to grow within the range of 3.0-3.6 per cent in 2016. Last year’s growth was 2.8 per cent.

Aside from rising tourism, state spending is tending to rise, particularly on transport infrastructure, water management and road-transport development, she said.

In March, the number of foreign tourists climbed by 15.4 per cent year on year and by 15.5 per cent in the first quarter.

Consumption and private investment are expected to make gradual recoveries on satisfactory farm income and employment, drops in crude-oil prices and low interest rates. The government’s stimulus measures could also help promote expansion of domestic spending.

However, exports could run up against uncertainties in the global economic recovery, particularly China’s economic slowdown and structural problems in Thailand’s export sector.

Headline inflation is forecast at 0.3 per cent this year on expectations of higher demand pressures, according to the FPO.

Kulya said the estimated headline inflation was still low after expected drops in global oil prices.

March inflation stayed in negative territory, at minus 0.5 per cent, and core inflation was 0.8 per cent. In the first quarter, headline inflation was minus 0.5 per cent, while core inflation was 0.7 per cent.

The country’s trade balance is expected to rise because of contraction in imports following declining crude-oil prices. Thailand is expected to enjoy a trade surplus of about US$38.5 billion (nearly Bt1.35 trillion) or 9.7 per cent of GDP.

Warotai Kosolpistkul, deputy director-general of the FPO, said private consumption was signalling a slowdown, reflecting in a 1.6-per-cent contraction in value-added tax at constant prices in March and a 0.1-per-cent rise in the first quarter.

On the fiscal front, state-budget disbursement last month rose 3.2 per cent year on year to Bt259.4 billion, with disbursement in the first quarter of this year (second quarter of fiscal year 2016) at Bt680 billion.

Net government revenue collection in March increased 15.1 per cent year on year and edged up 4.5 per cent in the first quarter.

The government budget had a deficit of Bt77.8 billion in March and Bt204.8 billion in the first quarter of the calendar year.

The country’s public debt stood at 44.1 per cent of GDP at the end of February. International reserves at the end of March were $175.1 billion, about 3.3 times the short-term debts, Warotai said.

Caution urged on stimulus

Published March 18, 2016 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Caution-urged-on-stimulus-30281286.html

ECONOMIC

FORMER DEPUTY prime minister MR Pridiyathorn Devakula warned yesterday that economic stimulus through credit extension could heighten risks to the economy amid the current slowdown.

Lending should be targeted at investment in modern industries, he said.

Priming the economy through liquidity lifelines to either businesses or households should be done cautiously, said Pridiyathorn, who has also served as governor of the Bank of Thailand.

If loans are given to businesses when they have no purchase orders, that is promoting indebtedness, he said.

An exception is if they are planning to invest in new, modern industries.

Now, there are no purchase orders, nor money, for the private sector.

“When businesses see declines in purchase orders, they may have to manage stocks properly without more borrowing.

“The government cannot encourage them to build up inventory. However, what they need is encouragement in planning modern industries,” he said.

If the global economy climbs on the recovery cycle in two years, Thailand will have modern industries in place to compete with others, he said.

It is also not proper during an economic downturn if the stimulus is made to accelerate borrowing for acquiring or investing in property or credit utilisation.

“When economic measures are employed, we may have to know which measure is proper for which period,” he said.

Direct assistance to farmers or rubber growers is fine, but the assistance should be made without more borrowing now, as the economy may stay like this for a while.

The global money and capital markets have been volatile for years, but the situation may ease now as global oil prices have started rising and the prices of other products will likely increase as well, Pridiyathorn said.

He expressed no concern about the Bank of Thailand’s Monetary Policy Committee or its governor, saying they were a good team. Driving the economy now does not involve much monetary policy, given the global economic slowdown.

“To drive [the economy] now, we may have to understand the situation comes from the world, which has been in contraction on the back of drops in global oil prices and declines in crop prices.

“About 80 per cent of exports for the whole world have contracted and 80 per cent of imports for the whole world have shrunk,” Pridiyathorn said.

Solid economic growth expected in 2016

Published February 7, 2016 by SoClaimon

ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation

http://www.nationmultimedia.com/business/Solid-economic-growth-expected-in-2016-30277996.html

ECONOMIC

The Fiscal Policy Office has forecast the economy will grow 3.7 per cent this year

Krisda Chinavicharana, FPO director-general and finance spokesman, highlighted the Bt35-billion budget for the national village and urban community development fund as one of the stimulus measures.

A higher investment budget this year is also tipped to fuel growth.

Headline inflation is estimated at 0.3 per cent for 2016 on the expectation of rising demand pressure.

“In estimating Thai economic indicators, we have to take into consideration risk factors and monitor them closely,” Krisda said. “These risks include fluctuations of global oil prices and [the] weak recovery of the global economy.”

It is expected the Thai economy expanded 2.8 per cent last year, driven by rising public spending on the back of consistent stimulus measures, relief measures for farmers and increased number of tourists. The economy grew 0.9 per cent in 2014.

In December and the fourth quarter of 2015, there was a recovery in domestic spending for both consumption and private investment due partly to consistent government stimulus measures since and government spending.

At constant prices, value-added tax collection rose 6.8 per cent and 2 per cent year-on-year in December and the fourth quarter, indicating improved consumption.

For private investment, property tax soared 32.7 per cent and 18.8 per cent year-on-year in December and the fourth quarter.

However, exports continued to contract, reflecting economic slowdowns for the country’s trading partners. December’s exports, in terms of US dollars, shrank 8.7 per cent year-on-year. In the fourth quarter, exports contracted 8.1 per cent.

Headline inflation was -0.9 per cent in December and the fourth quarter following sharp drops in oil and commodity prices.

At the end of December, Thailand’s foreign reserves stayed at US$156.5 billion (Bt5.6 trillion), 2.9 times its short-term external debts.

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