Thai Economy

• Kittiratt warns of stifled 2014 growth, As ‘shutdown’ wreaks economic havoc, MPC to meet as scheduled next week – The Finance Ministry expects the prolonged political protest to drag down economic growth to only 3.1% this year, while the Bank of Thailand insists its Monetary Policy Committee will meet on January 22 as scheduled. (The Nation, 17/01/14)
• December Producer Confidence Index lowest in 2+ years — The chairman of the Thai Industrial Federation reports Dec 2013 Producer Confidence Index at 88.3, the lowest level in 25 months. Fears of prolonged protests plague producers and distributers alike. (Post Today, 17/01/14)
• FPO sees 2014 GDP growth at 3.1%. This is down for the previous estimates as the Bt2trn spending bill does not seem likely to materialize. It fears that if the protests are prolonged and no political resolution can be reached, it might cause a bubble, similar to 1997. (Matichon, 17/01/14)
• Begging for rice subsidies — Commerce plans to ask EC approval for additional rice subsidies for the coming season. (Thai Post, 17/01/14)
• World Bank: Thai GDP growth at 4.5% in 2014 — The World Bank estimates Thai GDP growth in 2014 at 4.5%, citing global economy recovery and government spending. Local economists are baffled by the forecast stating that 4.5% will not happen as political conflict means there will not be any significant spending. (Krungtep Thurakit, 16/01/14)
• 1H14 to see Bt20bn fund outflow. The Thai Bond Market Association expects Bt20bn fund outflow in 1H14as a result of QE tapering and political conflict. 2013 foreign ownership in Thai bonds is at Bt707bn, the first fall in four years. (Krungtep Thurakit, 16/01/14)
• Rice farmers considering lawsuits — Rice farmers are consulting attorneys with the intention of levying both criminal charges and civil suits against the PM and her cabinet for not paying the rice pledge money. (Post Today, 15/01/14)
• Commerce will halt G2G rice sale to China as the EC does not believe this lies in its realm of authority. The Commerce Minister still insists that the halt will not affect rice payments. (ASTV Manager, 15/01/14)
• BoI perk requests still above Bt1trn – The combined value of projects seeking Board of Investment (BoI) privileges last year was 20% higher than the target and remained slightly above Bt1trn, says the investment promotion agency. (Bangkok Post, 15/01/14)
• SME bank said that its clients are not yet affected by the shutdown. However if the protest is prolonged, they will be damaged. (Post Today, 14/01/14)
• Tax collections beat target in FY1Q14 — The tax revenue department said that tax collections in FY1Q14 surpassed its target of Bt13.413bn, or a 2.7% increase, due to the tax increase on alcohol and beer. In Sept 2013, tax revenue from alcohol beverages beat the target of Bt3.769bn, reflecting strong continual growth in the private sector’s financials. (Krungthep Turakij, 14/01/14)
• Auto production hits 20-month low – Thailand produced 158,893 vehicles in December, the lowest output in 20 months and down 28.22 per cent from December 2012, affected by the discontinuation of the government’s first-car scheme, said Surapong Paisitpattanapong, spokesman for the Federation of Thai Industries’ Automotive Industry Club. (The Nation, 17/01/14)

Global Economy

• U.S. consumer prices rise most in six months- The Consumer Price Index, a gauge of consumer inflation, increased 0.3% in December on a seasonally adjusted basis. The index was flat in November and decreased 0.1% in October. (Xinhua, 16/01/14)
• U.S. initial jobless claims drop to six-week low – The number of Americans initially applying for unemployment aid fell to the lowest level in six weeks last week. In the week ending Jan. 11, the advance figure of seasonally adjusted initial claims for jobless benefits fell by 2,000 to 326,000, the lowest level since late November. (Xinhua, 16/01/14)
• World Bank projects global economy to grow 3.2% this year – The global economy is estimated to expand at 3.2% this year from 2.4% in 2013, with growth picking up in developing countries and high-income economies but growth prospects remain vulnerable to U.S. tapering. (Xinhua. 15/01/14)
• US: New York manufacturing index rises to 20-month high in January – The general business conditions index rose to 12.5 in January from 2.2 in the prior month, according to the latest Empire State Manufacturing Survey. The fresh figure far exceeded analysts’ expectations. (Xinhua. 15/01/14)
• U.S. mortgage applications surged 11.9% last week, reports the Mortgage Bankers Association.
• The U.S. wholesale prices ended two consecutive months of declines in December- The Producer Price Index (PPI), a gauge of inflation at the factory gate, rose 0.4% from November on seasonally adjusted basis. It dipped 0.1% in November and 0.2% in October. (Xinhua. 15/01/14)
• The Federal Reserve’s Beige Book reports that economic activity continued to expand across most regions and sectors. (Xinhua, 16/01/14)
• US: U.S. retail sales edged up 0.2% in December following a downwardly revised 0.4% gain in November, the Commerce Department said, exceeding market forecasts. U.S. business inventories rose 0.4% in November from the preceding month, the department said in a separate report Tuesday. Moreover, U.S. import prices recorded no change in December following two months of decline, while export prices advanced 0.4%, the Labor Department said. (Xinhua, 15/01/14)
• U.S. consumer spending up steadily in December- The retail and food services sales for December, increased 0.2% from a month ago to US$431.9bn. On a year-on-year basis, it was up 4.1%. (Xinhua, 14/01/14)
• China 2014 GDP projected to grow 7.6 pct: CASS – China’s GDP is projected to grow about 7.6% year-on-year in 2014, slightly lower than the expected 7.7% growth in 2013, according to a prediction by the Chinese Academy of Social Sciences (CASS) on Thursday. (Xinhua, 16/01/14)
• China foreign exchange reserves top $3.8trn in 2013 – China’s foreign exchange reserves, already the world’s largest, reached US$3.82trn at the end of 2013 The end-of-year figure was up from the US$$3.66trn as of the end of September, according to data published by the People’s Bank of China (PBoC). (Economic Times, 15/01/14)
• China 2014 GDP projected to grow 7-8% – China’s GDP growth rate is expected to maintain a growth of between 7 and 8 percent in 2014, based on consensus forecast by the market. Economists pointed out the high interest rate, exchange rate and local government bond will be destabilizing factors in China’s economy in 2014. (Xinhua, 13/01/14)
• Indian wholesale price inflation eases – India’s December inflation (the Wholesale Price Index version) is out and the news looks much better than economists forecast. Year-on-year, wholesale prices rose 6.16%, compared with the 7% forecast by economists polled by Reuters and the 7.52% gain in the previous month. (FT, 15/01/14)
• Japan: Business failures hit 22-year low in Japan last year – The number of business failures in Japan last year fell 10.5% from the previous year to a 22-year low of 10,855 as financial institutions flexibly accepted loan rescheduling requests, Tokyo Shoko Research said Tuesday. (Kyodo, 14/01/14)
• Europe: Eurozone industrial output rises in November – industrial output in the EU posted a monthly rise of 1.5% in November, a remarkable improvement from a 0.5% decrease in October. The upward industrial output in both areas was seen mostly in production of capital goods, which grew significantly by 3% and 2.6% in the eurozone and the EU respectively. (Xinhua, 14/01/14)
• British inflation rate falls to 2% in December – Britain’s consumer prices index (CPI), a main gauge of inflation, fell to the government-set target of 2% in December 2013. (Xinhua, 14/01/14)
• Economy watcher sentiment up in Dec. amid robust year-end sales- Business confidence among people in Japan with jobs sensitive to economic conditions improved in December for the second straight month as year-end sales were robust with the economy recovering. The diffusion index of sentiment was up 2.2 points from the previous month to 55.7. (Kyodo, 14/01/14)
• Iran sees no change in crude prices: minister – Iran does not expect a major change in the crude oil prices this year, Iranian Oil Minister Bijan Namdar Zanganeh said on Monday. (Xinhua, 13/01/14)
• Asia to lead world economies amid challenges, ADB says – The Asian Development Bank said Monday that Asia’s role in leading the world economy will continue to grow in the coming decades despite short-term challenges. (Kyodo, 13/01/13)
• OECD sees growth firming on improving euro zone outlook – The Paris-based Organisation for Economic Cooperation and Development said its leading indicator covering 33 member countries pointed to growth firming, reaching its highest level since March 2011. The indicator, meant to flag early signals of turning points in economic activity, rose to 100.9 in November from 100.7 in October, moving further above the long-term average of 100. (Reuters, 13/01/14)
• Italy’s industrial production sees first annualized rise in 2 years– Italy’s industrial production increased 1.4% in November 2013 from the same month the previous year, ending a 26-month run of year-on-year falls, the national statistics institute Istat said on Monday. The last time there was an increase in the year-on-year figures for industrial production was in August 2011. Output was up 0.3% in November compared with October. (Xinhua, 13/01/14)
• Spanish official expects economy fall to stand at 1.2% – The Spanish Secretary of State for Economy Fernando Jimenez Latorre said on Wednesday that the government predicted a GDP fall of 1.2% in 2013. Jimenez-Latorre made this announcement at the press conference where he commented the 2013 inflation rate that stood at 0.3% when compared with a year earlier. (Xinhua, 16/01/14)