What happened this week 16/12 – 22/12

All the news and data points towards the world doing marvelously well and Thailand bickering like children

Thailand

  • ADB and World Banks downgrade short term economic outlook for Thailand. GDP forecasts by both is 2.9%, with outlook for next year at risk, mainly on political concerns. (Kom Chad Leuk, 16/12/13)
  • Election policies are key to economic recovery said University of Thai Chamber of Commerce. It said that parties should come up with plans that will benefit the country in the long run, not just populist scheme for quick votes. It also warns all parties not to tamper with minimum wage, as it should be kept at Bt300 per day for a couple of years at the very least. (Khao Sod, 16/12/13)
  • Protests affecting tax receipts — The Commerce Ministry says that tax receipts have been affected by the protests but that nothing can be done to correct the situation as there is no government in power. (Khao Sod, 16/12/13)
  • TDRI: Rice subsidies damaging entire system — Thai rice consumption is on a downtrend, and the government’s rice subsidies scheme is damaging the whole system, says TDRI. Rice exporters say that it will take at least 5 years to clear current stock. (Krungtep Thrurakit, 17/12/13)
  • Row blamed for plunge in start-ups – Business start-ups plunged last month out of concern that the political demonstrations would erode investor confidence. (The Nation, 17/12/13)
  • Diesel taxes may come back up — Diesel tax could jump back to the previous level of Bt5.305 per liter from the current level of Bt0.005 if the government cannot extend the tax cut provision in the current power vacuum. (Khao Sod, 17/12/13)
  • Projects can go ahead without Bt2trn bill: MoF — The MoF says that mega projects will go ahead even if the Bt2trn bill is thrown out. It insists that there is a mechanism in place to do such projects, but at a slower pace than would be possible with the Bt2trn loan bill. (Matichon, 17/12/13)
  • UTCC: Instability trips growth – Political instability is a key risk for Thailand’s economic growth next year, prompting the University of the Thai Chamber of Commerce (UTCC) to probably cut its growth forecast next year to only 3% if protests are prolonged. (Bangkok Post, 18/12/13)
  • Kittiratt offers apology, says rice farmer payments coming soon – Caretaker Finance Minister Kittiratt NaRanong says rice farmers will be paid for their pledged paddy within seven days, blaming the late payments on the ongoing anti-government protests. (Bangkok Post, 18/12/13)
  • Oil imports down on strong baht — The Department of Energy reports that in the first 11 months of 2013, Thailand imported over Bt1tn, down by 3% YoY due to the stronger baht. It expects imports to rise in 2014 on higher demand from a growing economy and new cars. (ASTV Manager, 18/12/13)
  • Diesel subsidies cut — The Energy Policy and Planning Office will cut diesel subsidies to Bt0.50 per liter as oil prices have fallen. (IQ Biz, 18/12/13)
  • Tax revenues impacted by politics — The revenue department is concerned that politics will soften domestic consumption in the long run, with November VAT revenue down by over Bt2bn. (Matichon, 18/12/13)
  • Last call for BoI incentives due to expire at year-end – The BoI expects more investors to apply for its incentive packages expiring at the end of this year. The packages are for sustainable development and for companies seeking to list on the exchange. Investments that want to tap benefits must apply before Dec 27, said BoI. (Bangkok Post, 18/12/13)
  • The Election Commission to release a statement today regarding the election. The purpose is to try to attempt to achieve a resolution of the current political tension, and host the coming election. The red shirts threaten to march if the election does not take place. (Krungtep Thurakit, 19/12/13)
  • Small growth in craft sales this year — Support Arts and Crafts Center says that sales of crafts grew just 0.14% this year as economies in Europe and Japan continue weak. The organization expects 4% growth in 2014. (ASTV Manager, 19/12/13)
  • EC pushes for poll delay to avoid unrest – The Election Commission yesterday warned that proceeding with the upcoming general election may fuel further unrest, and urged the government and protesters to reach a compromise. The five election commissioners also warned that holding an election during this time of intense political strife could lead to many people rejecting the poll result. (Bangkok Post, 20/12/13)
  • NESDB still concerned — The Center for Administration of Peace and Order will consult multiple organizations to summarize the effect the political protests. The NESDB remains concerned that politics will halt GDP contribution from some sectors especially tourism. (Krungtep Thrurakit, 20/12/13)
  • Cassava farmers demand pledging – A hundred cassava farmers from the Central and Northeastern regions marched to the Commerce Ministry yesterday calling for the government to provide a pledging project as the price of their crop is falling. (The Nation, 20/12/13)

Globally

  • US: U.S. Producer Price Index (PPI) fell for the third consecutive month in November, reported the Labor Department Friday. Data showed the seasonally adjusted PPI for finished goods lost 0.1% in November, following a 0.2% decline in October. (Xinhua, 14/12/13)
  • U.S. business inventories post largest gain in nine months – U.S. business inventories rose more than expected in October, showing no signs of slowing yet after an aggressive accumulation in the third quarter left warehouses bulging with unsold stock. Inventories increased 0.7%, the largest gain since January, after rising 0.6% in September. (Reuters, 13/12/13)
  • Eurozone employment rate stable in Q3 – The number of persons employed remained stable in both the euro area and the European Union(EU)28 in the third quarter this year compared with the previous quarter, according to a statement issued on Friday by Eurostat, the statistical office of the EU. Compared with the same quarter of the previous year, employment fell by 0.8% in the euro area and by 0.3% in the EU28 in the third quarter of 2013, after a drop of 1.1% and 0.6% respectively in the second quarter of 2013. (Xinhua, 14/12/13)
  • India’s inflation stands at 9-month high of 11.24% – India’s retail inflation stood at a nine-month high of 11.24% in November, which could trigger further raise of interest rates by the country’s central bank, said official statistics Thursday. (Xinhua, 13/12/13)
  • Japan Oct. industrial output revised upward to 1.0% rise- Japan’s industrial output in October rose a seasonally adjusted 1.0% from the previous month, revised upward from the initially reported 0.5% increase, the Ministry of Economy, Trade and Industry said Friday. (Kyodo, 13/12/13)
  • US: U.S. industrial production jumped 1.1% in November, the biggest gain in a year, the Fed said in a report released Monday. Meantime, U.S. capacity utilization jumped to 79%, exceeding market forecasts.
  • Flash U.S. Manufacturing Purchasing Managers’ Index in December registered 54.4, down marginally from 54.7 in the preceding month, but remained close to November’s 20-month peak, according to the Markit, a global financial information services company.
  • Meanwhile, manufacturing conditions in December were flat for New York manufacturers, according to a survey released Monday by the Federal Reserve Bank of New York. The survey showed that manufacturing activity in the region rose 3.19 points to 0.98 in December from a negative reading in November.
  • U.S. productivity up 3% in third quarter – Labor productivity of the U.S. nonfarm business sector rose at an annual 3% rate from July through September, following a 1.8% gain in the previous quarter. The gain in productivity reflected increases of 4.7% in output and 1.7% in hours worked in the third quarter, the U.S. Labor Department said in a report. (Xinhua, 16/12/13)
  • China’s manufacturing PMI eases to 3-month low: HSBC – The HSBC flash manufacturing PMI for December eased to 50.5, compared to 50.8 in November and 50.9 in October. However, the figure still remained above the boom-bust line of 50, HSBC said in a report. (Xinhua, 16/12/13)
  • Ore export ban in Indonesia seen spurring thousands of job cuts – The ban may trigger hundreds of thousands of job losses in Southeast Asia’s largest economy with 800,000 workers that are directly or indirectly in the mining industry, an industry group said, urging lawmakers to mitigate the rule’s potential consequences. (Bloomberg, 16/12/13)
  • US: U.S. consumer prices flat in November – U.S. CPI stayed unchanged in November from the previous month on seasonally adjusted basis, as declining energy prices offset the slight uptick of food prices, reported the Labor Department Tuesday. (Xinhua, 17/12/13)
  • U.S. builder confidence rebounds in December – U.S. builder confidence for newly-built, single-family homes bounced backed to an eight-year high in December. The builder sentiment index rose to 58 this month from 54 in November, matching the highest level in eight years reached in August, according to the National Association of Home Builders (NAHB). (Xinhua, 17/12/13)
  • The U.S. current account deficit — the combined balances on trade in goods and services, income, and net unilateral current transfers — shrank to US$94.8bn in the third quarter, the lowest level in four years, the Commerce Department said Tuesday. (Xinhua, 17/12/13)
  • U.S. oil production to hit near record high by 2016: report – U.S. crude oil production will come close to its record high by 2016 as the energy boom continues to reshape the U.S. economy, the U.S. Energy Information Administration (EIA) said Monday in a new report. (Xinhua, 17/12/13)
  • Eurozone annual inflation up to 0.9% in November – Annual inflation in the 17-nation eurozone increased to 0.9% in November, up from 0.7% in October, European Union (EU) statistics office Eurostat said Tuesday. (Xinhua, 17/12/13)
  • Greece to return to growth in 2014: central bank report – Greece is due to return to growth with a 0.5% of GDP rate for first time after six years of recession, the central Bank of Greece (BoG). Data in the report showed that recession in 2013 is expected to stand at 4% down from 4.6% estimated a few months ago. (Xinhua, 17/12/13)
  • China auto exports down 7.4% on year in Jan-Nov, association- China exported 893,700 motor vehicles in the first eleven months of this year, a drop of 7.4% YoY. In November, China’s auto exports reached 87,700 units, down 4.4% YoY and 2.1% MoM. (Xinhua, 17/12/13)
  • BOJ to postpone sale of shareholdings by 2 years until March 2016 – It will postpone the sale of shares bought from banks from 2002 to 2010, worth about ¥2trn, by two years and hold on to the stocks until the end of March 2016 to avoid upsetting financial markets. (Xinhua, 17/12/13)
  • US: U. S. privately-owned housing starts climbed 22.7% in November to a seasonally adjusted annual level of 1,091,000, the highest since February 2008, said the Commerce Department on Wednesday. Meanwhile, housing permits dropped 3.1% last month. (Xinhua, 19/12/13)
  • China’s retail sales growth to top 13% – China’s retail sales of consumer goods will grow by more than 13% YoY in 2013. Improving economic growth and the country’s determination to shift to a domestic demand-driven expansion model has boosted consumers’ confidence. Sales growth is likely to increase for the remainder of the year, the Ministry of Commerce said on Wednesday. (Xinhua, 18/12/13)
  • German investment expected to rise significantly in 2014 – Investment in Germany was expected to increase significantly in the coming year, strengthening the growth potential of the Europe’s largest economy, said the Berlin-based German Institute for Economic Research (DIW). The institute forecasted that investment for equipment would grow by 6% in 2014, following a drop of 2% in 2013. For the year of 2015, the growth rate was expected to be 9%. (Xinhua, 18/12/13)
  • British unemployment rate falls to 7.4% – The British unemployment rate dropped to 7.4% for the three months ending in October. The fall was bigger than the previous market prediction and for the first time in the history of Britain, employment exceeds 30mn. (Xinhua, 18/12/13)
  • No problems in ASEAN from unwinding QE3 — HSBC is confident that the five ASEAN nations will handle QE tapering with ease as macro status is strong and Japan will step up with its QQE scheme. (Krungtep Thurakit, 19/12/13)
  • US: U.S. initial jobless claims unexpectedly surge last week- In the week ending Dec. 14, the advance figure of seasonally adjusted initial claims for jobless benefits rose by 10,000 to 369, 000, the highest level since late March. (Xinhua, 19/12/13)
  • U.S. existing-home sales dropped 4.3% to a seasonally adjusted annual rate of 4.90mn in November, although median prices continued to show strong year-over-year growth, according to the National Association of Realtors. However, the U.S. Leading Economic Index, a key element in the analytic system designed to signal peaks and troughs in the business cycle, rose 0.8% in November to 98.3, according to the Conference Board, an independent business membership and research association. (Xinhua, 20/12/13)
  • Urban China thinks prices are too high: survey – More than six out of 10 people in China’s cities think prices are “unacceptable,” according to a central-bank survey. Price are “high and unacceptable,” according to 61.6% of respondents in a People’s Bank of China survey for the October-to-December period released on Thursday. That is up from 59.8% in the third quarter. There is no on-year comparison. (WSJ, 19/12/13)
  • Financial assets held by Japanese households up 5.9% on rising stocks – Financial assets held by Japanese households at the end of September expanded 5.9 percent from a year earlier to ¥1,598.16trn, the second-highest level since June 2007, the Bank of Japan said Thursday, boosted by higher share prices. (Kyodo, 19/12/13)
  • Asia-Pacific growth to remain slow in 2014: UN report – Economic performance in developing Asia-Pacific countries is expected to improve moderately in 2014, but growth will remain subpar. Asia-Pacific developing economies are forecast to grow 5.6% in 2014, up from 5.2% this year, said the Economic and Social Survey of Asia and the Pacific 2013: Year-end Update, which is published by ESCAP. (Xinhua, 19/12/13)
  • EU leaders inch towards finalizing rules to close bank – Top leaders of the EU on Thursday reconfirmed reaching an agreement on single resolution mechanism (SRM) at EU summit, paving the way for closing failed banks without weighing on taxpayers. (Xinhua, 19/12/13)

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