What happened this week 08/07 – 12/07

Thailand

  • Spending slump hits direct sales – The direct-sales industry is expected to grow by 5% to about Bt73.5bn this year, down by half from the norm over the past decade, says the Thai Direct Selling Association. President Kittawat Ritteerawee said the slowdown in consumer spending in the sector has been evident since the first quarter as people carefully considered purchasing products such as beauty and food supplements. (Bangkok Post, 12/07/13)
  • MPC keeps policy rate at 2.5% — The central bank’s Monetary Policy Committee (MPC) kept its policy rate unchanged yesterday at 2.5% to maintain financial stability amid weakening domestic demand and exports plus the global economic slowdown. (Bangkok Post, 11/07/13)
  • Chamber highlights three risks in 2nd half — The Thai Chamber of Commerce yesterday raised concerns about three serious risks facing the country’s economy in the second half of this year. Chamber chairman Isara Vongkusolkit said that the global economic slowdown is the most worrisome issue. The Thai export sector relies on the Chinese and European markets together accounting for 21.5% of total exports. The decline in exports will lead to cutbacks in production capacity from 70% to 50%, which in turn will increase the cost per unit. (The Nation, 11/07/13)
  • NESDB forecasts static Q2 growth — Thailand’s economy will likely show flat growth for the second quarter due to sluggish private investment and shrinking household consumption, industrial utilization and agricultural production. This outlook is based on the latest report by the NESDB submitted to the cabinet yesterday. The only sector that remained promising was tourism, which grew by 19.4% with 3.9mn visitors. (Bangkok Post, 10/07/13)
  • Personal tax rates face delay – The new personal income tax rates for the 2013 tax year will likely be delayed, says Jitmanee Suwannapool, the Revenue Department’s principal adviser on tax base management. (Bangkok Post, 10/07/13)
  • Kittiratt keys on state outlay — Thailand’s economic growth is expected to expand in a range of 4.5% to 4.7%this year, while the government’s infrastructure projects will be the major growth driver, says Deputy Prime Minister Kittiratt Na-Ranong. (Bangkok Post, 09/07/13)
  • TAT forecasts 7% jump in foreign arrivals next year, with revenue up 13% — The Tourism Authority of Thailand (TAT) projects the number of foreign tourists and the revenue earned from them to rise next year. (The Nation, 09/07/13)
  • NBTC may relax content rules for digital TV news channels — In response to industry input, the national broadcasting regulator may ease its content rules to allow commercial digital terrestrial TV operators in the news category to devote just 50% of total airtime slots to news and documentary programming, down from 75% in its previous plan. (The Nation, 09/07/13)

Global

  • US: Fixed mortgage rates trend higher – U.S. fixed mortgage rates edged up slightly this week as the market speculated the Federal Reserve will reduce future bond purchases, said the Primary Mortgage Market Survey released Thursday by Freddie Mac. The U.S. mortgage giant said that the 30-year fixed-rate mortgage (FRM) rose to 4.51% in the week ending July 11, up from 4.29% in the previous week, the highest level since July 2011. (Xinhua, 12/07/13)
  • Prices for U.S. imports and exports fall in June – Prices for U.S. imports and exports fell in June for the fourth straight month, a sign of cooler economic growth worldwide that could weigh on the American economy and unnerve policymakers. Export prices fell by 0.1%, matching the expectation in a Reuters poll, Labor Department data showed on Thursday. The drop probably reflects weakness in global demand which has been hit by Europe’s debt crisis and slowing growth in China. (Reuters, 11/07/13)
  • U.S. initial jobless claims jump to two-month high – The number of Americans initially applying for unemployment aid rose last week to a two-month high under the influence of seasonal swings and holiday disturbance, the Labor Department reported Thursday. The advance figure for seasonally adjusted initial claims for jobless benefits was 360,000 in the week ending July 6, up 16,000 from the revised figure of 344,000 for the previous week. (Xinhua, 12/07/13)
  • US: Wholesale inventories decreased 0.5% in May from the prior month, the U.S. Commerce Department said Wednesday, missing market estimates. However, wholesale sales rose 1.6% in May. Moreover, U.S. mortgage applications fell 4.0% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 5. (Xinhua, 11/07/13)
  • Oil prices surge as U.S. inventories slump – On Wednesday, U.S. Energy Information Administration (EIA) said crude supplies fell significantly last week. U.S. crude inventories shrank 9.87mn barrels to 373.9mn barrels for the week ended July 5. Analysts expected a drop of 3.8mn barrels. (Xinhua, 10/07/13)
  • US: The U.S. small-business optimism remained in tepid territory in June, as the National Federation of Independent Business’s monthly economic Index dropped 0.9 to 93.5 after two months of increases, effectively ending any hope of a revival in confidence among job creators.(Xinhua, 10/07/13)
  • US: U.S. consumer credit increased at an annual rate of 8.3% in May, the Federal Reserve reported on Monday. Revolving credit added at an annual rate of 9.3%, while non-revolving credit advanced at an annual rate of 7.9%. (Xinhua, 09/07/13)
  • US: Total non-farm payroll employment increased by 195, 000 in June, and the unemployment rate was unchanged at 7.6%, the U.S. Labor Department said Friday. The fresh figures far exceeded economists’ estimates of creating 165,000 jobs, but the jobless rate fell slightly short of their forecast of 7.5%. The flat unemployment rate reflected higher workforce participation rate, which stood at 63.5% in June compared with 63.4% in May on a seasonally adjusted basis. (Xinhua, 06/07/13)
  • China: Exports in the world’s second largest economy slipped 3.1% in June, while imports fell 0.7%. (Xinhua, 11/07/13)
  • IMF cuts global economic forecast amid slower growth in emerging markets – The International Monetary Fund (IMF) cut its 2013 growth forecast for the world economy Tuesday to 3.1%, due to a slowdown in several key emerging market economies. The new figure is 0.2 percentage points lower than its April projection. (Xinhua, 09/07/13)
  • Europe: Eurozone to keep low interest rates: Draghi – European Central Bank (ECB) President Mario Draghi on Monday said the Eurozone countries interest rates will keep low to help steering their economy out of weakness. (Xinhua, 08/07/13)
  • Europe: S&P downgrades Italy’s credit rating – Standard and Poor’s on Tuesday downgraded its rating for Italy down to BBB from BBB+ with a negative outlook. The U.S. rating agency said in a statement that the country’s economic prospects were getting weaker and it could make another downgrade in 2013 or 2014. (Xinhua, 10/07/13)
  • Greece must complete required reforms by July 19 to get fresh loans: Eurogroup — The Greek authorities must fully implement a set of reforms by July 19 if it wants to get the first tranche of €2.5bn (about US$3.2bn), Eurogroup chief said Monday. Speaking after a meeting of eurozone finance ministers, Eurogroup President Jeroen Dijsselbloem said Greece needs to fully implement the “required prior actions” before July 19 so that the next disbursement of €2.5bn can be approved. (Xinhua, 09/07/13)
  • German industrial production decreased in May – German industrial production (GRIPIMOM) dropped more than economists predicted in May, adding to signs that Europe’s sovereign debt crisis is weakening a recovery in the region’s largest economy. Production fell 1% from April, when it gained a revised 2%, the Economy Ministry in Berlin said today. That’s the first decline since January. Economists forecast a drop of 0.5%, according to the median of 38 estimates in a Bloomberg News survey. From a year earlier, production decreased 1% when adjusted for working days. (Bloomberg, 08/07/13)
  • Germany: German factory orders fell in May, figures show – German factory orders fell unexpectedly in May, the Economy Ministry in Berlin said on Friday. Orders declined 1.3% month-on-month compared to a revised 2.2% drop in April, pointing to a downturn in the sector of Europe’s largest economy. Economist had predicted a rise of 1.2%. (Sharecast, 05/07/13)
  • UK: IMF upgrades British economic growth to 0.9 pct in 2013 – The International Monetary Fund (IMF) has revised up British economic growth from 0.6% to 0.9% this year in its World Economic Outlook Update report, released on Tuesday in Washington. It expects the US$2.43trn economy to grow at 1.5% next year, which would be higher than the 0.9% growth in the eurozone. (Xinhua, 09/07/13)
  • OECD figures point to upturn in British economy — The British economy is on course for above trend growth, according to statistics released Monday by the Organization for Economic Cooperation and Development (OECD). The OECD released Composite Leading Indicators (CLIs) for the Britain which stabilized at 100.7 (above 100.1 shows growth) in May. This remains inside the 100.7-8 range followed by the British economy throughout this year, and was up 1.25% YoY. CLI’s are designed to anticipate turning points in economic activity relative to trend, and typically indicate the direction of the economy between six and nine months ahead. (Xinhua, 08/07/13)
  • China: Consumption weakening — Chinese consumers, particularly those with bank cards, showed weaker confidence in consumption last month, partly due to an unfavorable economic situation, according to an index released Tuesday. The Bankcard Consumer Confidence Index (BCCI), compiled by the Xinhua News Agency and China UnionPay, a national bank card association, dropped 0.87 points to hit 85.56 points in June from May, marking the third month-on- month decline. (Xinhua, 10/07/13)
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