Thailand

• Panel OKs tax cuts for small firms – The Joint Public-Private Consultative Committee yesterday agreed in principle with a proposal to cut corporate income tax for small and medium-sized enterprises (SMEs) for three years in a bid to help them stay afloat. Arkhom Termpittayapaisith, secretary general of the National Economic and Social Development Board, said the proposed tax cut would apply only to SMEs with sales of 200 million baht or less. The panel chaired by Prime Minister Prayut Chan-o-cha also agreed in principle on a tax proposal by the Federation of Thai Industries (FTI). Under the proposal, SMEs with a net profit of 5 million baht or less would pay 5% tax, those with a profit of up to 10 million baht would pay 10%, and those with a profit of up to 20 million baht would pay 15%. The current income tax rate is 20% for companies with a net profit greater than 1 million baht. (Bangkok Post, 20/2/15)
• Demand for 3.2m workers seen – Five major industrial sectors are estimated to need 3.2 million more labourers between now and 2017, according to Office of Industrial Economics director-general Udom Wongviwatchai. The automotive and auto-parts industries are expected to demand 430,000 workers during the period, while the electrical goods and electronics sector will demand 470,000, food and beverage 1.31 million, machinery 173,000 and textile and garments 885,000. (The Nation, 20/2/15)

• Tax revenue exceeds target in the first 4 months – Collection by the Revenue Department in the first four months of fiscal year 2015 was Bt665bn, 0.2% exceed the target. VAT collection was +5.1% YoY, 3.1% higher than target, indicating that the policy to stimulate consumer spending is working well. (Daily News, 20/2/15)
• Central bank urges state, private sector to act now – The public and private sectors should consider investing now, given the low interest rates and cheaper foreign goods, says the head of the Bank of Thailand. Central bank governor Prasarn Trairatvorakul said the current time was appropriate for both the government and business operators to invest, thanks to low borrowing costs, while the slowdown in global economic growth and foreign exchange volatility have led to lower prices of foreign products. The interest rate for a 10-year loan term, standing at 2.6%, is substantially conducive for investment, he said. (Bangkok Post, 20/2/15)
• Plan to push spending by state agencies – The Budget Office has drawn up a plan to accelerate the disbursement of nine state-agency budgets since spending, especially for investment, in the first quarter of fiscal 2015 was far behind the target set by the military government. The Cabinet approved the seven-point acceleration plan yesterday. The agencies have to report on the effectiveness of the plan. Progress will be reviewed by the Budget Office every 15 days. The disbursement rate of each agency would be counted as one of the key performance indicators for the evaluation of the heads of the agencies at the end of the year. Only Bt31.14 billion or 12.7 per cent of the combined investment budget of the nine agencies had been disbursed as of February 6. (The Nation, 19/2/15)
• Growth falls short of forecast, Q4 revival gives cause for 2015 optimism – Economic growth accelerated more than expected in last year’s fourth quarter, but the rate was still not enough to achieve 1% annual growth as projected by the government’s planning agency. The National Economic and Social Development Board (NESDB) yesterday reported the fourth-quarter economy grew by 2.3% year-on-year, an improvement from 0.5% in the first quarter, 0.4% in the second quarter and 0.6% in the third quarter. But full-year growth was only 0.7%, falling short of the 1% forecast by the think tank last November. The figure was also well down on the 2.9% recorded in 2013. (Bangkok Post, 17/2/15)
• Keep an eye on fund flows – PM General Prayut Chan-o-cha said yesterday that he had ordered the Bank of Thailand to watch the inflow of foreign funds closely after many countries introduced quantitative-easing measures. (The Nation, 17/2/15)
• NESDB argues for cut in policy rate to lower business costs – The National Economic and Social Development Board (NESDB) believes that the policy interest rate could be lowered to help cut business costs and support the current initial stage of economic recovery. It also urged the Bank of Thailand to come up with measures to mitigate the strength of the baht, which is deemed to be stronger than other currencies in the region. (The Nation, 17/2/15)=FTI and ICT ministry will set up a joint committee to push the digital economy by creating a website to help FTI’s members starting their E-business. The project is expected to generate Bt2bn of online sales in 2015 and increase to Bt10bn in three years. (Bangkok Biz, 17/2/15)
• Bt7 bn set aside for water projects – The Cabinet yesterday approved funding of well over Bt7bn for 1,700 urgent water-management projects, which according to Commerce Minister Chatchai Sarukulya will be implemented within a year. (The Nation, 19/2/15)
• Japan’s rating agency R&I maintain Thailand’s negative outlook – Japanese rating agency Rating and Investment Information, Inc. maintain its negative outlook on Thailand credit rating on political instability. (Thai Post, 19/2/15)
  No reason to ease monetary policy, central bank says – The Bank of Thailand (BOT) says further easing of monetary policy will not guarantee an increase in the amount of loans granted for investment, as recent surveys show companies do not find the current interest rate an obstacle for doing business. Also, lowering the policy interest rate will not help boost the consumption of durable and non-durable goods. (The Nation, 18/2/15)
• Bills tipped to adjust taxes – Draft bills on the land and buildings tax, amendments to the excise tax and customs code and the launch of a long-awaited National Savings Fund will seek cabinet approval this month. The three draft bills, if they come into force, will foster fairness among taxpayers, bolster state coffers and modernise the tax system, Deputy Finance Minister Wisudhi Srisuphan said. If the amended law gets the green light, the Excise Department can then charge the tax for both local and imported products at a single base. The current excise tax is based on ex-factory prices, allowing manufacturers to understate such prices in order to pay less duty. (Bangkok Post, 18/2/15)

Globally

• U.S. industrial production up in January – The U.S. industrial production, an indicator of mines, factories and utilities output, increased 0. 2 percent in January after decreasing 0.3 percent in December, the Federal Reserve reported Wednesday. The capacity utilization for total industry, a main gauge of industrial efficiency, was unchanged in January at 79.4 percent, 0. 7 percentage point lower than its long-run average. (Xinhua, 19/2/15)
• U.S. housing starts down in January – U.S. homebuilders broke ground on less houses in January, and applications for building permits also slipped, showing the property market is recovering slowly, the U.S. Department of Commerce reported on Wednesday. U.S. privately-owned housing starts were at a seasonally adjusted annual rate of 1,065,00 in January. It was 2% below the revised December estimate, but was 18.7% above the year-ago level. (Xinhua, 19/2/15)
• U.S. wholesale price going down in January – U.S. wholesale prices plunged in January as energy prices dropped sharply, U.S. Labor Department reported Wednesday. The Producer Price Index (PPI), which measures price changes at factory gates, fell 0.8 percent in January on a seasonally adjusted basis, after decreasing 0.2 percent in December. It was the third straight decline. Energy prices went down 10.3 percent, while food costs decreased 1.1 percent. Excluding the volatile food and energy sectors, the so-called “core” wholesale prices edged down 0.2 percent, which indicated the general inflation pressure is still tamed. (Xinhua, 19/2/15)
• British unemployment rate drops to 5.7 pct in Dec. – British unemployment rate fell to 5. 7 percent in the three-month to December 2014, lower than that of a year earlier (7.2 percent), and registering the lowest level since mid 2008, data showed by the Office for National Statistics (ONS) Wednesday. The employment rate for those aged from 16 to 64 in the fourth quarter was 73.2 percent, higher than the previous quarter’s 73.0 percent and that of a year earlier (72.0 percent), figures showed. (Xinhua, 18/2/15)
• Greece postpones request for extension of loan agreement to Thursday – Greece postponed the submission of a formal request for a six-month extension of the four-year bailout loan agreement from Wednesday to Thursday, Greek government sources said Wednesday. “The content of the letter to be addressed to EU institutional partners was not yet finalized,” government sources told the Greek news agency AMNA. (Xinhua, 19/2/15)
• Greece rejects bailout extension request after Eurogroup meeting deadlock – Greek officials categorically rejected the prospect of submitting a request for the extension of the current bailout program on Monday after the latest Eurogroup meeting in Brussels over the Greek debt crisis ended in a deadlock. Despite the fruitless talks at the latest Eurogroup meeting, Greek Finance Minister Yanis Varoufakis told media in Brussels on Monday that Greece was “ready to reach an honorable agreement.” He underlined that Greece will remain a euro zone member. The Eurogroup head said there was still some time for Greece this week to agree to an extension so that another Eurogroup could seal a new contract on Friday. (Xinhua, 17/2/15)
• Eurozone trade surplus increases – The Eurozone international trade in goods was expected to witness a surplus of €24.3bn (US$27.7bn) in December 2014, up from €21.2bn in November, the statistical office of the European Union (EU) Eurostat said on Monday. Compared MoM, seasonally adjusted exports fell by 1.1% and imports by 2.4% in the eurozone. (Xinhua, 16/2/15)
• ECBI upgrades British economic growth forecast in 2015 – The Confederation of British Industry (CBI) Monday announced that it has upgraded British economic growth forecast this year to 2.7 percent from 2.5 percent it expected in November 2014. It also expects British GDP to grow at 2.6 percent in 2016. CBI expects Britain’s GDP growth to remain steady throughout this year, rising by 0.7 percent each quarter, following by quarterly growth of 0.6 percent in 2016. (Xinhua, 16/2/15)
• Japan’s direct investment in China in Jan. rises 3.2% – Japan’s direct investment in China in January increased 3.2 percent from a year earlier, in a tentative sign that business between Asia’s two biggest economies may be gradually gaining momentum after years of sluggishness brought on by strained political ties, official data showed Monday. (Kyodo, 16/2/15)
• The Empire State Manufacturing Index for February fell to 7.78 from January’s reading of 9.95, the Federal Reserve Bank of New York said in a survey Tuesday. The latest figure missed market consensus, but still indicated that business activity continued to expand at a modest pace for New York manufacturers. (Xinhua, 17/2/15)
• U.S. builder confidence drops to 4-month low due to harsh weather – The builder sentiment index fell two points to 55 this month, the lowest level since October, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Any reading over 50 indicates that more builders view sales conditions as good, rather than poor. (Xinhua, 17/2/15)
• European car sales recovery gains momentum in January – The recovery in Europe’s car market gathered momentum in January, industry data showed on Tuesday, as an improvement in consumer confidence, retail incentives and new product launches boosted demand for most brands.New passenger car registrations in the European Union and European Free Trade Association trading block rose 6.2 percent during the month to 1.03 million vehicles from 968,451 in the same month last year, according to data from the Association of European Carmakers (ACEA). (Reuters, 17/2/15)
• German investors’ confidence hits one-year high – German investors’ confidence rose for the fourth consecutive month in February and hit the highest level in a year thanks to fresh money stimulus in the euro zone and good performance of German economy, a survey found on Tuesday. Mannheim-based Center for European Economic Research (ZEW) said its indicator measuring confidence of German investors and market analysts gained 4.6 points and stood at 53 points in February, reaching its highest value since February 2014. (Xinhua, 17/2/15)
• Japan’s 2014 real household spending falls at fastest pace in 8 yrs – Japan’s average monthly household spending in 2014 fell at its fastest pace in eight years, down 3.2 percent in price-adjusted terms from the previous year to 251,481 yen ($2,121), the government said Tuesday. Many households were reluctant to spend aggressively in the wake of price rises triggered by last April’s consumption tax hike and a weaker yen as well as bad weather last summer, the Ministry of Internal Affairs and Communications said. (Kyodo, 17/2/15)
• Indonesian central bank cuts rate to 7.5 pct – Indonesian central bank on Tuesday unexpectedly lowered its benchmark interest rate by 25 basis points to 7.5 percent to accelerate economic growth, Agus Martowardojo, governor of the bank said. Indonesia’s economic growth slowed to 5.02 percent last year, the lowest in five years, according to the national statistic bureau. The central bank governor said that inflation in 2015 will be at the lower end of the 3 to 5 percent, compared with 8.36 percent last year. (Xinhua, 17/2/15)