What happened this week 04/08 – 08/08
Thailand
- MPC holds key rate at 2% amid subdued export, tourism growth – The Bank of Thailand is generally upbeat about the country’s economic-recovery prospects in the second half of the year, due to firmer domestic demand and fiscal policy. (The Nation, 07/08/14)
- MoF still expects growth of 2% — The Ministry of Finance remains confident that 2014 will see GDP growth of 2%. It also reports that the level of household debt has declined slightly to 79.4% of GDP from 82.3% at the end of 2013. (Thai Post, 07/08/14)
- SA and Thailand to trade — Thailand and South Africa will look to promote more trade, with a new target at US$9.5bn per annum over the next 60 years. The governments expect to sign an FTA in October, with possible trade of rice, auto parts, and local fruits. (ASTV Manager, 07/08/14)
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- Pros and cons of inheritance tax being considered – The Revenue Department will list the pros and cons of adding three potential payers of inheritance tax for deliberation by the National Council for Peace and Order (NCPO). (Bangkok Post, 07/08/14)
- Populism labeled a threat – Maintaining fiscal discipline will be a challenge, as politicians are used to giving in to voter demand for populist policies, says Banthoon Lamsam, CEO of KBANK and a member of the junta’s appointed State Enterprises Policy Commission. (The Nation, 07/08/14)
- Proposed salary hike for state officials ‘may be delayed’ – The proposed 8% hike in state officials’ monthly salaries is likely to be implemented only in April 2015 and not in October this year as earlier expected, Finance Ministry permanent secretary Rungson Sriworasat said yesterday. (The Nation, 07/08/14)
- Consumer Confidence Index hits 11-month high at 68.5 – A stabilized political situation under the military junta is translating into a more positive consumer outlook, with the automotive, property and tourism sectors benefiting and small and medium-sized enterprises investing again, according to the latest survey by the University of the Thai Chamber of Commerce. (The Nation, 08/08/14)
- Infrastructure first, then economic zones — Transport Ministry unfolded a plan to improve infrastructure in preparation for the launch of six key economic zones within two years. These include airport improvements in Mae Sot and road and rail improvement in the northern regions. JBIC said it will support the project with financing. (Krungtep Thurakit, 08/08/14)
- Benefits of negative tax aired – If the National Council for Peace and Order finally gives the nod to a negative income tax, it will add 0.3 percentage point to economic growth and help reduce income disparities, according to the Centre for Economic and Business Forecasting. (The Nation, 08/08/14
- Goldman Sachs bumps Thailand 2014 GDP growth to +0.4% from the previous estimate of -0.5% on improving domestic consumption, aggressive government spending and improve investment climate. (Kom Chud Luek, 06/08/14)
- First rice auction since junta took power open to all traders – The Commerce Ministry is scheduled to open bidding for 167,000 tonnes of rice tomorrow in what will be the first auction to reduce the size of the state’s stockpile since the National Council for Peace and Order took power on May 22. (The Nation, 06/08/14)
- Foreign purchase orders to rise, investment still slow: BOT – Foreign purchase orders are expected to start recovering this quarter, while investment will continue to see only slight recovery while the private sector waits for more clarity on the direction of the new government, according to the Bank of Thailand’s second-quarter business survey. (The Nation, 06/08/14)
- NCPO to attempt to halt rise in household debt – Gen. Prayuth has asked the NCPO to explore ways to stabilize the level of household debt, with an eye to slowing the rise in household debt in the future. (Post Today, 06/08/14)
- Thai-Chinese trade group signs MoU with Shantou cooperation bureau – The Thai-Chinese Promotion of Investment and Trade Association yesterday signed a memorandum of understanding with the Shantou Foreign Trade and Economic Cooperation Bureau on boosting investment and trade. (The Nation, 05/08/14)
- Low-paid govt workers may get salary boost – The Finance Ministry intends to complete discussions with the Comptroller-General’s Department this week in relation to the National Council for Peace and Order’s policy to raise the monthly salary of state officials who earn Bt9,000 or less. (The Nation, 05/08/14)
- Commerce Ministry lowers 2014 inflation target to 2.35% as concerns ease – With less concern about drought and lower fuel prices, the Commerce Ministry has lowered its 2014 inflation target to 2.35%, slightly down from 2.4%, but still within the projection of 2-2.8% set earlier. (The Nation, 02/08/14)
- National debt up — The Ministry of Finance reports a rise in June of national debt to Bt5.64trn or 46.6% of GDP. National debt increased slightly by Bt109bn from the previous month. (Post Today, 04/08/14)
- Japanese investors still confident and expanding in Thailand. Japanese investors intend to use Thailand to tap into the AEC market with Japanese companies in consumer staples, service industries, and property developments. Sahapat Group said that Japanese relations are key in Thailand with, Japan likely to take back the top place for FDI into Thailand back from China.
- (Krungtep Thurakij, 04/08/14)
- BoI confident Japanese firms will stay in Thailand despite all the difficulties they faced, such as politics and floods. BoI said that Japanese firms have pumped over Bt370bn into the Thai economy in the past two years. (Krungtep Thurakij, 04/08/14)
- Ministry of Commerce concerned about slowing Indonesian economy, as it is one of Thailand main export partners. The ministry is concerned about the automotive industry as a weak Indonesia will likely adversely affect the already fragile auto industry in Thailand. (ASTV Manager, 04/08/14)
Globally- US crude stockpiles: The EIA said nationwide crude stockpiles in the United States decreased 1.8 million barrels to 365.6 million last week, adding that U.S. crude production increased 10,000 barrels a day to 8.453 million. (Xinhua, 06/08/14)
- Italy back in recession as GDP contracts 0.2 pct in Q2 2014 – Italy’s gross domestic product (GDP) shrank 0.2% in the second quarter of 2014 when compared to the previous three months and 0.3% compared to same period last year, the Italian National Institute of Statistics (ISTAT) said Wednesday. (Xinhua, 06/08/14)
- China to punish Chrysler, Audi for anti-trust violations: official – Two separate anti-trust probes into Chrysler and Audi have found that the two multinational carmakers have pursued monopolistic practices and will be punished, an official with China’s top economic planning agency said Wednesday. (Xinhua, 06/08/14)
- U.S. jobless claims data came out better than expected. In the week ending Aug. 2, the advance figure for seasonally adjusted initial claims was 289,000, a decrease of 14,000 from the previous week’s revised level, said the U.S. Labor Department Thursday. (Xinhua, 07/08/14)
- ECB keeps interest rates unchanged – The European Central Bank (ECB) on Thursday kept interest rates unchanged at its regular monthly governing council meeting here. While Draghi considered heightened geopolitical risks, developments in emerging market economies and global financial markets as factors that might have the potential to affect economic conditions negatively. (Xinhua, 07/08/14)
- Bank of England maintains ultra-low interest rate for 65th month – Bank of England (BoE), the central bank of Britain, Thursday voted to maintain Bank Rate at 0.5 percent. It will also maintain the stock of purchased assets, or quantitative easing policy scheme, at 375 billion pounds (632 billion U.S. dollars). (Xinhua, 07/08/14)
- US: The Institute for Supply Management said that economic activity in the U.S. non-manufacturing sector expanded at the fastest pace since December 2005, with the non-manufacturing index registering 58.7 in July from 56 the prior month. Data company Markit said Tuesday that the final seasonally adjusted Markit U.S. Services Business Activity Index registered 60.8 in July, only a touch below its post-crisis high of 61.0 registered in June. (Xinhua, 06/08/14)
- Eurozone retail trade volume up 0.4% in June – Eurozone’s seasonally-adjusted retail trade volume increased 0.4% in June from May and went up 2.4% year on year, Eurostat said Tuesday. (Xinhua, 05/08/14)
- Uncertainty remains after Portugal’s bailout for ailing BES bank – Portugal’s decision to bailout the country’s largest private bank Banco Espirito Santo (BES) is widely welcomed, but there is uncertainty regarding the extent to which the taxpayers will be affected by the move. (Xinhua, 05/08/14)
- Indonesian economic growth slows in Q2 – Indonesia’s gross domestic product (GDP) expanded by 5.12% in the second quarter, the slowest since the last quarter of 2009, the national statistic bureau announced here on Tuesday. (Xinhua, 05/08/14)
- Financial data firm Markit reported that the final Markit U.S. Manufacturing PMI registered 55.8 in July, down from a 49-month high of 57.3 in June but well above the neutral 50, which signaled a robust improvement in overall business conditions across the manufacturing sector. (Xinhua, 01/08/14)
- China Central Bank Signals No Broad Monetary Easing – The People’s Bank of China warned that the country’s credit and money supply have increased rapidly and indicated that it will refrain from broader monetary easing to support growth. (Bloomberg, 03/08/14)
- China’s non-manufacturing PMI retreats in July – The Purchasing Managers Index (PMI) of the non-manufacturing sector came in at 54.2% in July, down 0.8 percentage points from June, according to a report jointly released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing (CFLP). (Xinhua, 03/08/14)