What happened this week 20/01 – 24/01

Thailand

  • EC head offers solution on FB — The head of the EC wrote on his Facebook account that there might be a solution to the current rice scheme problems, but the solution will have to wait until at least the 21st of this month before any action can take place. Rice farmers are angry at the government for the payment delays and have set the 25th as the deadline for government action. (Krungtep Thrurakit, 20/01/14)
  • Ministry of Industry said that the scheme to encourage farmer swapping rice for cane will net an additional increase in cane production by 180mn tons in the coming year. (Matichon, 20/01/14)
  • Tax collection ability in doubt — The Revenue Department fears the protests might hang on for up to two months, hampering its ability to collect taxes. (Thai Post, 20/01/14)
  • Department of Internal Trade pushes responsibility of finding funds for the rice scheme to the cabinet. Three government banks (KTB, BAAC, and GSB) all said they will not finance the government for the scheme. (Krungtep Thurakit, 21/01/14)
  • Thai Home Builder Association said it had delay the annual Thailand Home Builder Fair (intended for January) indefinitely due to political protests. (ASTV Manager, 21/01/14)
  • MPC to meet as scheduled — BoT said that the MPC will met as scheduled on January 22 despite the political protests. (Post Today, 21/01/14)
  • UTCC worries about SMEs — The University of Thai Chamber of Commerce is worried about SMEs as the current political protests continue. It also reported that as a result of government delays in payments, rice farmers have turned to taking out loans from loan sharks, with interest rates of 30-50%. (Matichon, 21/01/14)
  • Motorbike sales declining — In 2013, motorcycle sales slid 5.9% as a result of slow consumption and the first-car scheme. Outlook for 2014 is flat; however there might be an upside depending on the price of agriculture products. It also said that the industry as a whole faces trouble with increased labor costs, and labor shortages. (ASTV Manager, 21/01/14)
  • Economists: Populist policies to blame — Both local and global economists say the government damaged the economy by its populist schemes. The International Trade Department said that the WTO is investigating whether government exceeded its budget limit on the rice scheme. (Kom Chad Leuk, 19/01/14)
  • Mfg sector earnings of concern — The Office of Industrial Economics is concerned about manufacturing sector earnings in 1Q14. It fears that exports might not hit target, as global economic recovery is not in full stream yet, and protests will disrupt the supply chain. (Matichon, 22/01/14)
  • MPC pauses, cuts view, no rate cut despite weaker GDP outlook – The Bank of Thailand’s Monetary Policy Committee (MPC) kept its policy rate unchanged yesterday even though it slashed this year’s economic growth forecast to about 3%. (Bangkok Post, 23/01/14)
  • Protests take toll on vehicle tax collection — The temporary suspension of services at the Land Transport Department due to the anti-government protest rally site at the five-way Lat Phrao intersection has resulted in a 40.5% (or Bt22mn a day) drop in vehicle tax revenue in Bangkok, according to Transport Minister Chadchart Sittipunt. (The Nation, 24/01/14)
  • UTCC unit forecasts 5.9% rise in Chinese New Year spending – The Centre for Economic and Business Forecasting at the University of the Thai Chamber of Commerce estimates that the Chinese New Year festival will generate spending of about Bt47.7bn, up 5.9% over last year, despite some people’s concerns about the political conflict, the centre’s director said. (The Nation, 24/01/14)
Globally
  • US: The Commerce Department said Friday that U.S. housing starts fell 9.8% to a seasonally adjusted annual rate of 999,000 units, the largest drop since April 2013. However, the figure was moderately higher than the market consensus.
  • Meanwhile, data from the Federal Reserve showed that U.S. industrial production climbed 0.3% in December after a revised 1% increase in November, in line with market forecasts.
  • Additionally, the Reuter’s/University of Michigan’s consumer sentiment index unexpectedly dropped slightly in January, declining to 80.4 from 82.5 in the preceding month. (Xinhua, 18/01/14)
  • US: The U.S. flash manufacturing PMI dropped to 53.7 in January, down from December’s 55, which was an eleven-month high, the research organization Markit said Thursday, pointing to the still- sluggish expansion of the U.S. manufacturing sector.
  • Among other data, U.S. initial applications for unemployment benefits rose by 1,000 to 326,000 in the week ending Jan. 18, the Labor Department reported on Thursday. However, the figure was still hovering around the lowest level in six weeks.
  • Meanwhile, U.S. existing home sales rose 1% in December from November to a seasonally adjusted annual rate of 4.87mn, the National Association of Realtors said Thursday. But analysts believed that the data showed the market is losing momentum and inventories of homes for sale were limited. (Xinhua, 24/01/14)
  • China’s service sector outperforms industry for first time – China’s service sector accounted for 46.1 percent of the country’s gross domestic product (GDP) in 2013, outperforming the industrial sector for the first time, the National Bureau of Statistics (NBS). (Xinhua, 20/01/14)
  • China economy grows 7.7 pct in 2013, beating government target – China’s economy grew 7.7% in 2013, the same as 2012, overshooting the government target of 7.5%, according to the National Bureau of Statistics (NBS). (Xinhua, 20/01/14)
  • Retail sales edged up in China – Retail sales growth slowed slightly to 13.6% in December from November’s 13.7%, in line with market expectations, according to the National Bureau of Statistics (NBS). (Xinhua, 20/01/14)
  • Japan Nov. industrial output revised down to 0.1% fall – Japan’s industrial output in November dropped a seasonally adjusted 0.1%from the previous month, revised downward from the initially reported 0.1% increase, the Ministry of Economy, Trade and Industry. (Kyodo, 20/01/14)
  • Japan: Abe vows to end deflation, create virtuous cycle with pay raises – Prime Minister Shinzo Abe vowed Sunday to end the country’s deflation and create a virtuous cycle that would lead to wage increases, calling for an early passage of spending bills to prop up the economy after the scheduled sales tax hike next April. (Kyodo, 19/01/14)
  • BOJ starts 2-day meeting, likely to keep inflation target for FY – The Bank of Japan started a two-day policy meeting Tuesday, with the central bank likely to stick with its fiscal 2015 target of around 2% inflation to beat deflation, believing the economy will continue to recover even after a sales tax hike in April. (Kyodo, 21/01/14)
  • Europe: Ireland welcomes Moody’s upgrade of credit rating – Ireland on Saturday welcomed the announcement by Moody’s Investors Service to upgrade the country’s credit rating to Baa3 and to change the outlook to positive. (Xinhua 19/01/14)
  • British central bank official says no interest rates rise “in near future” – A member of the British central bank’s Monetary Policy Committee (MPC) said Wednesday that there was “no immediate need to increase interest rates, even if unemployment reaches 7% in the near future.” (Xinhua, 22/01/14)
  • Britain’s unemployment rate drops to 7.1% – British unemployment rate dropped to 7.1%, marking a further step forward toward the threshold set by central bank to consider raising the interest rate, official figures released on Wednesday showed. (Xinhua, 22/01/14)
  • Spain: Inquest into the Active Population (EPA), Spain’s unemployment rate stood at 26.03%, rising by 0.05% from the previous rate of 25.98% of the third quarter of 2013 and increasing by 0.1% when compared with 2012 rate, 26.02%. (Xinhua, 23/01/14)
  • Iran begins work to curb uranium enrichment, U.S., EU ease sanctions – Iran has begun work to curtail its uranium enrichment activities in line with its agreement with world powers reached last November. The United States and the European Union decided to partially suspend sanctions against Tehran immediately. (Kyodo, 21/01/14)
  • IMF raises global economic forecast as constraints on growth gradually ease – The International Monetary Fund (IMF) on Tuesday slightly raised its growth forecast for the world economy to 3.7% in 2014, 0.1 percentage point higher than its October projection. (Xinhua, 21/01/14)
  • Chinese premier confident over economic growth – Chinese Premier Li Keqiang said here on Tuesday that China is confident of maintaining sound and stable economic growth this year through further reform and opening up. (Xinhua, 21/01/14)
  • Indonesia investment picks up to 25% in 2013 – Total investment in Isndonesia last year scaled up by 25% to 398.6 trillion rupiah (some US$32.88bn), a minister said on Tuesday, despite of the country’s subdued economic growth and risks of U.S. plan of reducing fund injection. (Xinhua, 21/01/14)
  • China to continue boosting investment to drive up economy in 2014: NDRC official – China will continue to encourage and expand investment in 2014 in order to drive up its economy, Ou Hong, an official with the National Development and Reform Commission (NDRC), said at a press conference on Wednesday. (Xinhua, 22/01/14)
  • China: The flash reading for the China manufacturing Purchasing Managers’ Index (PMI) fell to 49.6 in January, hitting a six-month low, the HSBC said on Thursday. A PMI reading below 50 indicates contraction. (Xinhua, 24/01/14)
  • China central bank injects US$19.6bn U.S. dollars – The Chinese central bank pumped 120 billion yuan (US$19.6bn) into the money market on Thursday, following this year’s first cash injection through reverse repurchase agreement (repo) operations on Tuesday. (Xinhua, 23/01/14)
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