What happened this week 23/12 – 27/12

Thailand

  • Growth forecasts forced down again; FPO, BOT, Nida note impacts of political chaos on economy – As political turmoil hits the economy, the Fiscal Policy Office (FPO), Bank of Thailand and National Institute of Development Administration (NIDA) have all cut their estimates for GDP growth this year, and fear it won’t be much better in 2014. (The Nation, 27/12/13)
  • Govt targets rice exports of 8mn tonnes next year – The Commerce Ministry targets rice exports of at least 8mn tonnes next year, making Thailand once again the world’s top rice exporter. (The Nation, 27/12/13)
  • Factory permits close to 2012 level, says ministry – The Industry Ministry has approved 5,222 factory permits worth a combined Bt475bn this year as of Wednesday, increasing the number of factories nationwide to 140,158. Of the new permits, 4,589 were for new factories and the rest for expansion of existing facilities, the ministry said in a report released yesterday. It said the Bt475bn in investment excluding land costs will create 173,085 new jobs. (Bangkok Post, 27/12/13)
  • EC hints at poll date intervention – Clashes that claimed the life of one police officer and injured scores more yesterday could force the resignation of several election commissioners and threaten to derail the Feb 2 election. The newly-appointed Election Commission (EC) members yesterday for the first time stressed publicly that the scheduled poll could not be held under the current circumstances. (Bangkok Post, 27/12/13)
  • Exports face possible contraction as 2013 winds up – Exports fell for a third consecutive month in November, putting more pressure on the sector that accounts for about 60%of the country’s economy. The Commerce Ministry reported yesterday exports dropped 4.08% YoY in November to US$18.757bn, following a 0.67% decline in October and 7.09% drop in September. (Bangkok Post, 26/12/13)
  • BoT cautious on hot money — BoT is wary of hot money inflow in 2014 as multiple factors such as QE3 and local politics are unclear. It said that investors should brace for a volatile baht next year. (Khao Sod, 26/12/13)
  • Diesel subsidy extended — The excise tax subsidy for diesel has been extended until the end of January and the Energy Ministry has already sought approval until April. The excise tax on diesel has been 0.005 baht a liter since the cabinet three years ago approved a rate cut from Bt5.31 in order to ease living costs. (Bangkok Post, 26/12/13)
  • A new lease of life for rice scheme as EC green-lighted a Bt38bn loan to the government, explicitly for replaying rice farmers under the subsidies scheme. (Krungtep Thrurakit, 26/12/13)
  • FTI says goods prices set to go up — The Thai Federation of Industries says good prices are very likely to go up in 2014 despite flat domestic consumption. It cited a weaker baht and increased labor cost as reasons for price adjustments. Currently several labor-intensive industries have migrated to neighboring countries where wages are lower. (ASTV Manager, 25/12/13)
  • New Year spending edges up, UTCC survey forecasts 5.6% rise to B112bn – New Year spending is expected to exceed Bt100bn despite most Thais remaining cautious in light of political uncertainties and the unfavorable economic outlook, reported the annual survey by the University of the Thai Chamber of Commerce (UTCC). (Bangkok Post, 25/12/13)
  • SME growth up next year — The SME office has forecast that Thai SMEs will grow 3.3% in 2013 and will grow in the range of 4.3-4.7% next year. It cited improving global economy as the main reason for growth. (Thai Post, 25/12/13)
  • BoI set to woo foreign investors – With the country facing political deadlock, rebuilding foreign investors’ confidence will be one of the top priorities for the Board of Investment (BoI) in its action plan next year. (Bangkok Post, 24/12/13)
  • Price of diesel set to soar to 40 baht, excise tax subsidy due to expire this month – The pump price of diesel may reach 40 baht next year if the caretaker government fails to seek cabinet approval for the extension of the fuel’s excise tax subsidy, which expires at the end of this year. (Bangkok Post, 24/12/13)
  • ‘Budget woes’ if govt delayed; only limited access to funds, says chief – If a new government cannot be formed within one year, Thailand could face problems with its budgetary spending as a caretaker government would have no authority over the budget for fiscal 2015, budget Bureau director Somsak Chotrattanasiri said yesterday. (The Nation, 23/12/13)
  • End of the line of government rice subsidies scheme as the project now suffers a liquidity shortage. Current lot of 8mn tons of rice will cost government over Bt100bn to pay off, but there far less than that in the coffer. (Than Sethakit, 23/12/13)
  • BoT is concern by politics and currency fluctuation. It says exports next year will not hit 7% as domestics concerns will offset the recovery of international demand. (Matichon, 23/12/13)

Global

  • US reports fall in initial jobless claims – The number of Americans initially applying for unemployment aid went down last week, a positive signal for the improving jobs market. In the week ending Dec. 21, the advance figure of seasonally adjusted initial claims for jobless benefits fell by 42,000 to 338, 000, U.S. Labor Department reported Thursday. Economists were expecting a decrease to 345,000. (Xinhua, 26/12/13)
  • Britain to become largest European economy in 2030 – Britain is expected to become the largest Western European economy in 2030 by overtaking Germany, said a research report issued by the Center for Economics and Business Research (CEBR) on Thursday. The CEBR World Economic League Table report said that Britain is “the West’s second best performing economy.” (Xinhua, 26/12/13)
  • China expects 13mn new jobs in 2013 – China’s new urban employment number is expected to reach 13mn by the end of 2013, the country’s human resource minister said on Thursday. More than 5.4mn urban people who were laid off will be reemployed, while more than 1.7mn people with poor skills will find jobs by the end of 2013 (Xinhua, 26/12/13)
  • China confronts workforce drop with retirement-age delay – China plans to raise the retirement age for the first time since the 1950s, as policy makers confront the prospect of a shrinking workforce that damps economic growth. (Bloomberg, 25/12/13)
  • China’s growth may hit 7.6% – China’s economic growth is likely to stand at 7.6% this year, slightly down from 7.7% in 2012, said a State Council report on Wednesday. (Xinhua, 25/12/13)
  • Vietnam’s industrial production sees recovery signs in 2013 – Vietnam’s Index of Industrial Production (IIP) witnessed a recovery sign in 2013 with an increase of 5.9% YoY compared to that of 4.8% in 2012, said the country’s General Statistics Office on Wednesday. (Xinhua, 25/12/13)
  • BOJ chief calls for “favorable moves” from businesses to beat deflation – Haruhiko Kuroda on Wednesday called for “favorable moves” by businesses such as more capital investment and wage increases, saying there is a “golden opportunity for overcoming deflation.” (Kyodo, 25/12/13)
  • US: U.S. durable goods orders go up in November – New orders for U.S. manufactured durable goods rose more than expected in November on strong business capital spending. Orders for durable goods increased US$8.2bn, or 3.5%, to US$241.6bn last month, led by an 8.4% jump in transportation equipment orders. (Xinhua, 24/12/13)
  • U.S. new home sales slide from five-year high, prices up – Sales of new single-family houses in November dropped 2.1% percent October to a seasonally adjusted annual rate of 464, 000 units. The revised October rate of 474,000 was the highest since July 2008. Sales of new single-family houses fell from a five-year peak while prices continued to rise last month. (Xinhua, 24/12/13)
  • China to enhance risk prevention on foreign investment in domestic property market – Foreign investment in China’s real estate market registered a rising trend this year, but the percentage of such foreign investment in the country’s total investment in real estate development is still at a low level, and the share of foreign-invested real estate property in China’s property market has no significant change, according to Ministry of Commerce (MOC) spokesman Shen Danyang on Monday. (Xinhua, 24/12/13)
  • Japan’s cabinet OKs record ¥95.88trn FY2014 budget – Japan’s Cabinet on Tuesday approved a record-high ¥95.88trn (US$922.22bn) general-account budget for fiscal 2014, as the government of Prime Minister Shinzo Abe simultaneously seeks to conquer decades of deflation and restore the nation’s precarious fiscal health. (Kyodo, 24/12/13)
  • Abe’s Cabinet OKs tax reform policies for FY 2014 – PM Shinzo Abe’s Cabinet approved tax policy changes for fiscal 2014, imposing higher taxes on households despite a planned sales tax hike while giving benefits to companies to shore up the economy. (Kyodo, 24/12/13)
  • France confirms negative economic growth in Q3 — The French national statistics bureau Insee on Tuesday confirmed a negative performance of Europe’s main powerhouse during the third quarter of the year on weak exports and poor investment. For the July-September period, France’s gross domestic product (GDP) shrank 0.1%, compared to a 0.6% growth for the previous quarter, the agency added. (Xinhua, 25/12/13)
  • US: U.S. personal consumption expenditures increased 0.5% in November, the biggest gain in five months, while personal income edged up 0.2%, the Commerce Department said on Monday. It was the seventh straight monthly increases for consumer spending, and matched economists’ forecasts.
  • The U.S. consumer sentiment index jumped to a five-month high of 82.5 in December, higher than the November reading of 75.1, according to a Thomson Reuters/University of Michigan survey.
  • The Chicago Fed National Activity Index, a monthly index designed to gauge overall economic activity and related inflationary pressure, stood at 0.60 in November, up from minus 0. 07 in the preceding month. A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth, and positive values indicate above-average growth. (Xinhua, 24/12/13)
  • China needs to be vigilant about inflation in 2014 – It is predicted China’s consumer price index (CPI) will grow about 3.3% in 2014, up 0.7 percentage points from the estimated 2.6% in 2013, according to the Back of China. Although unlikely to see serious inflation in 2014, the government still needs to pay close attention to rising inflation. (Xinhua, 23/12/13)
  • US: U.S. real GDP increased at an annual rate of 4.1% in the third quarter before the 16-day partial federal government shutdown, up from the previous estimate of 3.6%, the Commerce Department reported Friday. In the second quarter, the U. S. economy grew at a 2.5% rate.
  • Kansas City Fed manufacturing activity fell slightly to minus 3 in December from 7 in the preceding month. A reading below zero indicates contraction. (Xinhua, 21/12/13)
  • BOJ maintains ultra-easy monetary stance – The Bank of Japan on Friday kept intact its ultra-easy monetary policy and left unchanged its assessment of the domestic economy for the third straight month, saying it is “recovering moderately” amid a continued improvement in corporate sentiment. (Xinhua, 21/12/13)
  • China to relax limits on foreign access into securities, futures sectors – China will gradually relax restrictions on foreign capital’s access into the domestic securities and futures industries as the capital market urgently needs to raise resource allocation efficiency through both international and home markets, said Jiang Yang, vice chair of the China Securities Regulatory Commission (CSRC), on Thursday. (Xinhua, 21/12/13)
  • EU credit rating downgraded by S&P – Standard & Poor’s (S&P) on Friday cut the European Union (EU)’s credit rating to AA+ from AAA, noting that the bloc’s budgetary negotiations are posing risk for member states to get support. (Xinhua, 21/12/13)

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