What happened this week 10/06 to 14/06

Thailand

  • Kittiratt hints at pledge ceiling price cut on heavy losses — The government is likely to cut the ceiling price for the rice pledging scheme following reports of potential heavy losses from the program for the previous three crops, Finance Minister Kittiratt Na Ranong sid yesterday. He hinted there is a possibility the pledging price double reduced from the current Bt15,000/tonne for ordinary rice. (Bangkok Post, 14/06/13)
  • Kittiratt to BoT: Put on the brakes — Deputy Prime Minister and Finance Minster Kittiratt is urging the BoT to step in to stem the rapid pace of baht depreciation, renewing pressure on the central bank to rein in the local currency. The central bank should stabilize the baht’s movement to help both exporters and importers he said yesterday. (Bangkok Post, 14/06/13)
  • Baht dives, finds footing late — The baht yesterday fell beyond the 31/US$ to its weakest in nine months as foreign investors kept unloading Thai equities and bonds amid growing fears that the US Federal Reserve will rush to cut back stimulus. The baht has fallen from its 16-year peak of 28.55 on April 19 amid a mix of negative factors such as capital outflows, which began after Fed chairman Ben Bernanke’s recent remark that the US central bank would scale back asset buying if economic growth is sustained. (Bangkok Post, 13/06/13)
  • Food export target slashed — The National Food Institute has downgraded this year’s forecast for food export value to Bt981bn from Bt1.03trn. The move is due to the baht appreciation and an oversupply of farm product. (Bangkok Post, 13/06/13)
  • BoT: Property sector cooling with economy — The recent slowing of the Thai economy is helping to ease concerns about the overheating property sector, although the BoT will keep monitoring the situation, says governor Prasan. In remarks made yesterday, he said the slowdown means a real estate bubble is no longer a major concern. Some areas are suffering from a glut, but others still have room for further growth, said Mr. Prasan. He said property developers are also protecting themselves from the potential artificial demand of speculators by requiring higher down payments and identifying potential housing loan defaulters. (Bangkok Post, 12/06/13)
  • TCT highly optimistic — The Tourism Council of Thailand is upbeat about international tourist arrivals, forecasting the number will reach 26.08mn by the end of this year, outpacing the 24.5mn projected by the TAT. TCT president Piyaman Techapaiboon attributed the positive forecast to the country’s political stability. Chinese arrivals will be the main driver, with the number expected to reach 4mn this year, a surge from 2.7mn last year. (Bangkok Post, 12/06/13)

Global

  • World Bank cuts world’s GDP growth outlook — The World Bank cut its outlook for global growth, saying the economy should expand more slowly this year than last as it cited a deeper than expected recession in Europe and a recent slowdown in some emerging markets. In its twice-yearly Global Economic Prospects report, the bank forecast the world’s GDP growth at 2.2% this year, slightly below last year’s growth of 2.3%. In its last forecast in January, the bank estimated the world economy would expand 2.4% this year. (Reuters, in Bangkok Post, 14/06/13)
  • China: The Chinese Government released a series of economic data over the weekend: China’s producer price index fell 2.9% in May from a year earlier, quicker than a 2.6% decline in April YoY; total social financing dropped by about a third to 1.19 trillion yuan (about US$194bn) in May from April; total property investment in China in the first five months of this year rose 20.6% to 2.68 trillion yuan, compared with a 21.1% rise in the first four months; fixed-asset investment in non-rural areas rose 20.4% in the January-May period YoY, slower than the 20.6% increase recorded in the January-April period; value-added industrial output in China rose 9.2% in May YoY, slowing slightly from a 9.3% increase in April; and exports rose 1% in May from a year earlier, much slower than April’s increase of 14.7%. (Xinhua, 11/06/13)
  • China: China inflation, lending falls point to economy weakness — China’s annual consumer inflation slowed in May to 2.1% (vs. consensus of 2.5%) while growth in bank lending was 667.4bn yuan (US$109bn), missing market expectations of 850bn yuan and lower than April’s 792.9bn yuan. (Reuters, 09/06/13)
  • China’s industrial value-added output rose 9.2% year on year in May, down from April’s 9.3% increase, the National Bureau of Statistics said Sunday. Value-added industrial output measures the final output value of industrial production, or the value of gross industrial output minus intermediate input, such as raw materials and labor costs. (Xinhua, 09/06/13)
  • US: The advance figure for seasonally adjusted initial claims declined by 12,000 to 334,000, the U.S. Labor Department reported Thursday. The number of new claims was smaller than analysts’ forecast and indicated gradual improvement in the U.S. labor market. Meanwhile, U.S. retail sales rose in May, led by strong auto sales, the Commerce Department said Thursday. Advance estimates of U.S. retail and food services sales for May rose 0.6%, beating economists’ forecast of increasing 0.5%. Moreover, U.S. manufacturing and trading companies’ inventories in April rose 0.3% from March, according to the Commerce Department. As for other data, U.S. import prices continued to decline in May, dipping 0.6% after a 0.7% drop in April, thanks to falling fuel and nonfuel prices, and export prices also fell last month, the Labor Department said in a separate report. (Xinhua, 14/06/13)
  • US: U.S. wholesale inventories, a key element in gross domestic product changes, advanced 0.2% in April, which was consistent with market expectations, according to the Commerce Department. Meanwhile, wholesale sales rose 0.5% in the same month, beating investors’ forecasts. U.S. small-business owner confidence rose for the second consecutive month, according to the National Federation of Independent Business’ Index of Small Business Optimism, which went up to a final reading of 94.4 in May. (Xinhua, 12/06/13)
  • US: Standard & Poor’s Ratings Services upgraded the U.S. credit outlook from “negative” to “stable.” “Our sovereign credit ratings on the U.S. primarily reflect our view of the strengths of the U.S. economy and monetary system, as well as the U.S. dollar’s status as the world’s key reserve currency,” the rating agency said in a news release Monday. “We do not see material risks to our favorable view of the flexibility and efficacy of U.S. monetary policy. We believe the U.S. economic performance will match or exceed its peers’ in the coming years. We forecast that the external position of the U.S. on a flow basis will not deteriorate.” (Xinhua, 11/06/13)
  • US: Total nonfarm payroll employment increased by 175,000 in May, and the unemployment rate was essentially unchanged at 7.6% from 7.5% in April, the U.S. Labor Department said Friday. Analysts had expected the May jobless rate to remain unchanged. Meanwhile, nonfarm payroll employment in April was revised down to 149,000 from 165,000, the department added. (Xinhua, 08/06/13) 
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