What happened this week 29/04/13 – 03/05/13

Thai Economy:

  • MPC prefers policy mix to handle baht — The Bank of Thailand’s Monetary Policy Committee (MPC) has agreed on the need for a timely implementation of appropriate policy mix, to manage the exchange rate. In a statement released today, the MPC said that the policy mix “as warranted by circumstances” will be implemented “in close coordination with the Ministry of Finance and other agencies.” The MPC expressed concern over recent volatility and rapid appreciation of the baht, which, at times, have not been justified by economic fundamentals. The decision was announced after the regular monthly macroeconomic briefing today, where they discussed recent exchange rate developments. (The Nation website, 30/04/13)
  • Private spending as key economic driver in Q1: BoT — The Thai economy stabilized in the first quarter at a level comparable to the previous quarter, having private spending as the key driver, according to the Bank of Thailand. Tourism was buoyant, while merchandise exports gradually recovered in line with a stabilizing global economy. On the stability front, unemployment was kept low, and inflation moderated. The currency appreciated from a surplus in the current account coupled with strong capital inflows in the form of direct investment and debt security investment by non-residents. (The Nation website, 30/04/13)
  • Economic indicators head down — Private consumption and investment, which are the country’s two main economic driving forces, contracted in March after commercial banks tightened consumer loans and farmers’ incomes declined. The Private Consumption Index contracted by 1.1% MoM while the Private Investment Index shrank by 0.7% along with a slowdown in machinery and equipment investment after a period of acceleration. (Bangkok Post, 01/05/13)
  • Inflation slows again on strong baht, subsidies — Inflation slowed for a fourth straight month in April as government measures and subsidies continued to hold down prices and continued baht gains eased energy costs. Commerce Ministry figures showed consumer prices rising by 2.4% YoY last month against 2.7% in March. Analysts had expected a CPI of 2.5% in April. (Bangkok Post, 02/05/13)
  • Cambodia’s trade with Thailand down 2.3% in Q1 — Bilateral trade between Cambodia and Thailand went down by 2.3% during the first quarter of this year, according to the statistics released by Thai Embassy in Phnom Penh on Monday. Officials said the drop was due to “Thai baht appreciation, not ongoing border conflict” between the two nations. During the January-March period this year, the two-way trade was valued at US$1.1bn, down 2.3% from US$1.13bn in the same period last year, the data showed. (Xinhua, 29/04/13)
  • Finance still confident of revenue target — The rising value of the baht has had a strong affect on government revenue collections this fiscal year, but the Finance Ministry is still confident of meeting the overall target of Bt2.1trn, according to a report in Post Today. The three main departments – Revenue, Customs and Excise –turned in a good performance in the first half of fiscal year 2013, starting October 2012, with tax and fee collections exceeding the budget target. They collected a total of Bt992bn in revenue, 6.43% higher than the budget estimate, said Rungson Sriworasat, deputy permanent finance secretary. (The Nation website, 29/04/13)
  • Kittiratt pushes for stabilized baht, warns of economic slowdown — Finance Minister Kittiratt Na-Ranong has warned that the economy might slow down if nothing is done to curb the strong baht. Speaking on Prime Minister Yingluck Shinawatra’s weekly television program, Mr. Kittiratt said several economic agencies had forecast that the Thai economy could expand 4.5-5.5%this year. He said the average of 5% growth was not based on the current strong baht, adding if the currency is not forced to stabilize at an appropriate level, the economy might expand more slowly. (Bangkok Post, 28/04/13)

Global Economy:

  • Europe: Unemployment rate reaches new high in eurozone in March — The unemployment rate in the eurozone was 12.1% in March, up 0.1 pps from February and reaching a new high compared to 2000, the European Union’s (EU) statistical bureau Eurostat said Tuesday. It was up from 11% registered one year ago, a sign that the eurozone labor market deteriorated due to the ongoing debt crisis, austerity measures and financial market turbulences. In the 27-nation bloc, the jobless rate stayed at 10.9% in March, unchanged from last month. It was 10.3% a year ago. (Xinhua, 30/04/13)
  • France: French consumer confidence remains stable in April — French consumer appreciation of their general economic and financial situation remained unchanged at the end of April, compared to a month earlier, but it was still below its long term average, government figures showed on Friday. The consumer confidence index was stable at 84 points over the period, with people’s confidence about their personal past finances improved by two points to minus 28. However, they were less optimistic about their future situation, as the indicator lost one point from March. (Xinhua, 26/04/13)
  • US: U.S. pending home sales in March rose 1.5% to its highest level in three years, according to a report released Monday by the National Association of Realtors. The reading exceeded market expectations. U.S. personal income increased 0.2% in March after jumping 1.1% in the prior month, and personal consumption expenditures advanced 0.2%, weaker than February’s 0.7% increase, the Commerce Department said Monday. (Xinhua, 30/04/13)
  • US: Private sector employment increased by 119,000 jobs in April, the smallest gain since last September, according to a report produced by ADP, a leading provider of human capital management solutions, in collaboration with Moody’s Analytics. The figure also fell short of consensus expectations. The ADP report came ahead of the closely watched U.S. nonfarm payroll report in April scheduled to be released Friday by the U.S. Labor Department. (Xinhua, 02/05/13)
  • U.S. economic growth accelerates to 2.5% in Q1 — The U.S. economy grew at an annual rate of 2.5 percent in the first quarter this year, according to the initial estimate released by the Commerce Department on Friday. The first-quarter growth of real gross domestic product (GDP), though accelerated from a meager 0.4% in the final three months of 2012, was lower than the market expectation of 3%. The economy gained steam mainly on stronger consumer spending and increased stockpiling by businesses. The pick-up was also propelled by an upturn in exports and a smaller decrease in federal government spending, according to the report. (Xinhua, 27/04/13)
  • U.S. consumer sentiment fell to a three-month low of 76.4 in April after climbing to a four-month high of 78.6 in March, as Americans grew more pessimistic about the economic outlook, according to survey results released by Thomson Reuters and the University of Michigan on Friday. (Xinhua, 27/04/13)
  • U.S. consumer spending rises 0.2% in March — U.S. families continued to boost their spending in March with more take-home pay, the U.S. Commerce Department said on Monday. U.S. personal consumption expenditures (PCE) rose 0.2% in March, slower than the revised growth pace of 0.7% in February, the department said in a report. U.S. personal income rose 0.2% in March, following an increase of 1.1% in February, said the department. The savings rate, personal saving as a percentage of disposable personal income, remained flat at 2.7% in March. Consumer spending accounts for about 70% of the U.S. economic activity. The U.S. economy grew at an annual rate of 2.5% in the first quarter this year, partly boosted by stronger consumer spending, the department said on Friday. (Xinhua, 29/04/13)
  • U.S. pending home sales in March rose 1.5% to its highest level in three years, according to a report released Monday by the National Association of Realtors. The reading exceeded market expectations. Moreover, U.S. personal income increased 0.2% in March after jumping 1.1% in the prior month, and personal consumption expenditures advanced 0.2 percent, weaker than the February’s 0.7-percent increase, the Commerce Department said Monday. (Xinhua, 30/04/13)

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