Thailand

• Economy will expand by 4.7%: Prayut – Prime Minister General Prayut Chan-o-cha expects the economy to expand by 3.7 to 4.7 per cent next year, when the government starts spending the Bt2.72-trillion budget earmarked for the 2016 fiscal year. (The Nation, 22/5/15)
• Baht to remain volatile for now, BOT warns – The Baht will continue to be volatile, the Bank of Thailand has warned, suggesting that business operators keep guarding against foreign exchange risks. Meanwhile markets are keeping an eye on the monetary policies of major economies and the baht’s depreciation will help reduce Thailand’s competitive disadvantages, the central bank said. (The Nation, 22/5/15)
• FPO asks Govt Banks to help SMEs – Krisada Chinavicharana, director-general of the Fiscal Policy Office, said today the FPO will talk to executives of state-owned banks to conclude a new stimulus measure including passing on the low policy rate to help people and SMEs. The new measure will be presented to PM on June 3. (Daily News, 22/5/15)

• Pridiyathorn holds hope for export U-turn – Thailand’s economic growth still has a chance to reach 4% this year if shipments to Japan and China turn positive by year-end, says Deputy Prime Minister MR Pridiyathorn Devakula. On his one-year round-up of government performance, MR Pridiyathorn said yesterday despite lingering criticism by several parties that the Thai economy is spluttering, he believed it was well on the way to healthy growth. He cited myriad economic stimulus measures for both the short and long term to stimulate household consumption and government expenditures. In the first quarter, statistics showed improved private and public investment, tourism and private consumption, he said. “The government expects these factors will continue to grow in the second quarter,” said MR Pridiyathorn. “If exports to China and Japan turn positive, economic growth this year is likely to reach 4%.” (Bangkok Post, 21/5/15)
• Pass on rate cuts, BoT tells banks – The Bank of Thailand is asking financial institutions to ensure its latest policy rate cut helps to ease businesses’ borrowing costs and debt repayment pain amid the sluggish economy. “I have asked banks for their cooperation in passing on our relaxed monetary policy to citizens,” central bank governor Prasarn Trairatvorakul said. The MPC’s cut late last month was a preemptive move to mitigate the economic slowdown, but commercial banks have yet to follow suit in lowering their interest rates for lending due to doubts about the debt repayment ability of business operators and consumers. In addition, nonperforming loans (NPLs) in the SME and consumer lending segments increased in the first quarter. (Bangkok Post, 20/5/15)
• The Cabinet has approved a law to consolidate seven excise-tax regulations into one article to make it easier for people who pay such levies and officials who collect them to gain access to all relevant information. “The new regulations will close the loopholes that allow excise tax to be based on any selling, buying or factory prices. From now on the excise tax will be based on the recommended retail price only, and this should increase the efficiency and the transparency of the collection process,” said acting government spokesman Sansern Kaewkamnerd. (The Nation, 20/5/15)
• NESDB lowers GDP forecast to 3-4% in wake of export contraction in Q1 – The NESDB yesterday lowered its GDP growth prediction from the range of 3.5-4.5% to 3.0-4.0%. Its report showed GDP only narrowly escaped a QoQ growth contraction in the first three months, expanding by 0.3% from the fourth quarter of 2014. GDP was able to expand by 3% YoY in the first quarter of 2015, while the value and volume of the export of goods contracted by 4.3% and 2.6% respectively. Exports account for 70% of GDP, and the NESDB expects the sector to expand by only 0.2% this year. Total investment (private and public) expanded by 10.7%. Public investment and consumption expanded by 37.8% and 2.5% in the same period, while private consumption expanded by 2.4% in the quarter. Collection of value-added tax grew by 1.0%, sales of beer by 15.3%, and consumer imports by 7.2%. The construction sector expanded by 25.4%, hotel revenue was up by 13.5% and restaurants’ income grew by 2.3% YoY. However, the agricultural sector continued to decline, by 4.8%. (The Nation, 19/5/15)
• 7-month revenue up – Government revenue in the first seven months of its 2015 fiscal year increased by 6.2 per cent over the same period last year, Fiscal Policy Office director-general Krisda Chinavicharana said. “The government has collected Bt1.143 trillion, which is Bt15.577 billion or 1.4 per cent more than what the Budget Bureau expected, because of the increased incomes of state-owned enterprises and [higher] collections by the Excise Department,” he said. The SOEs contributed Bt25.055 billion more than expected, and the Excise Department collected Bt14.771 billion more than anticipated. However, the Revenue Department collected Bt47.713 billion less than projected, and the Customs Department came up Bt2.988 billion short. Meanwhile, income from value-added tax expanded by 7.5 per cent year on year. (The Nation, 19/5/15)

Globally

• US Markit Flash PMI Slows to 53.8 in May – U.S factory activity is expanding only modestly in May, according to a survey released Thursday. Manufacturers say the stronger U.S. dollar is hurting demand for exports. The U.S. flash purchasing managers’ index compiled by data provider Markit fell to 53.8 in May from a final 54.1 reading in April. A reading above 50 mark indicates expansion. Economists surveyed by the Wall Street Journal had expected the flash index to rise to 54.6. (Nasdaq, 21/5/15)
• Eurozone PMIs: steady as she goes – The composite eurozone PMI reading was 53.4, a little below expectations, but not enough to trip up the euro. The breakdown for the Markit index: 53.4 this month, from 53.9 last time around. (Financial Times, 21/5/15)
• ECB says QE working, but government reforms needed – minutes – European Central Bank rate setters agreed last month the bank’s asset buying programme was working as intended but its full benefit would only be felt if governments implemented reforms, minutes of April’s monetary policy meeting showed. (Reuters, 21/5/15)
• British retail sales increases 1.2 pct in April – Britain’s retail sales volume increased by 1.2 percent in April 2015 compared with that of the previous month, with all store types, predominantly food stores, showing growth, said the Office for National Statistics (ONS) on Thursday. (Xinhua, 21/5/15)
• BOJ starts 2-day meeting, focus on economic assessment – The Bank of Japan started a two-day policy meeting Thursday, with one of the main topics likely to involve whether to raise its assessment of the domestic economy on the back of an economic recovery. (Kyodo, 21/5/15)
• U.S. existing-home sales slowed in April but remained above an annual sales pace of 5 million for the second straight month, according to the National Association of Realtors. Total existing- home sales declined 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April from an upwardly revised 5.21 million in March. (Xinhua, 22/5/15)
• Jobless Claims in U.S. Fall Over Past Month to 15-Year Low – The average number of Americans filing for unemployment benefits over the past four weeks dropped to a 15-year low, a sign the labor market continues to strengthen. The four-week average for jobless claims decreased to 266,250 in the period ended May 16 from 271,750, a Labor Department report showed Thursday in Washington. The figure corresponds to the week the government surveys employers to calculate the monthly payroll data. On a weekly basis, applications rose by 10,000 to 274,000. (Bloomberg, 21/5/15)
• US interest rate hike not likely until 2016 – A hike in US interest rates is not likely to be appropriate until early 2016, Chicago Federal Reserve President Charles Evans said on Wednesday. Evans, who has long argued for a delay to rate hikes so as not to undermine economic recovery, said that the US central bank should not move on rates until there was greater confidence that its inflation goal could be hit within one or two years. (Economic Times, 20/5/15)
• Eurozone construction production up by 0.8 pct in March – Seasonally adjusted production in the construction sector rose by 0.8 percent in the eurozone and by 1.5 percent in the 28-nation European Union (EU) in March, compared with the previous month, the EU statistics office Eurostat said Wednesday. (Xinhua, 20/5/15)
• BoE monetary policy committee votes unanimously on holding rates – The nine-member Monetary Policy Committee (MPC) of the Bank of England (BoE) voted unanimously on the holding of benchmark interest rate and quantitative easing policy this month, according to the central bank’s meeting minutes published on Wednesday. (Xinhua, 20/5/15)
• German employment increases in Q1 – The number of people in employment in Germany increased slightly in the first quarter of 2015, official data showed on Tuesday, suggesting the stability of the labor market of Europe’s biggest economy. In the first quarter, the number of employed persons in Germany increased by 0.7 percent from the same period of previous year and reached 42.2 million, said German federal statistical office Destatis. (Xinhua, 19/5/15)
• Greece says it will default in June without aid from lenders – Greece will not be able to make a payment to the International Monetary Fund due on June 5 unless foreign lenders provide more aid, a senior ruling party lawmaker said on Wednesday, the latest warning from Athens that it is on the verge of default. (Reuters, 20/5/15)
• China’s NDRC could relax rules for bond sales – There are reports that China’s NDRC (National Development and Reform Commission) could relax bond issuance requirements to boost investment funding and credit growth. This should make it easier for the local governments to sell bonds. (Fxwire, 20/5/15)
• U.S. privately-owned housing starts in April were at a seasonally adjusted annual rate of 1.135 million, the highest level since November 2007, the Commerce Department announced Tuesday. This is 20.2 percent above the revised March estimate and 9.2 percent above the April 2014 rate. (Xinhua, 20/5/15)
• Coeure Says ECB Will Moderately Frontload QE in May, June – The European Central Bank intends to increase its purchases of euro-area assets in May and June ahead of an expected lowliquidity period in the summer, Executive Board member Benoit Coeure said. (Bloomberg, 19/5/15)
• Greece in “final stretch” to achieve debt deal with int’ l lenders: PM – Greece was “in the final stretch” to achieve a deal on the resolution of the Greek debt crisis with its international lenders in following days, Greek Prime Minister Alexis Tsipras said on Monday in Athens. (Xinhua, 19/5/15)
• Eurozone CPI stays at 0% year-on-year in April – The data released by the Eurostat on Tuesday showed the Eurozone annual inflation was 0.0% in April 2015, up from -0.1% in March. In April 2014 the rate was 0.7%. (FXStreet, 19/5/15)
• Britain sees deflation in April as transport costs drop – Britain’s Consumer Prices Index (CPI) fell by 0.1 percent in the year to April 2015, it is the first time that CPI has fallen over the year since official records began in 1996 and the first time since 1960 based on comparable historic estimates, data showed on Tuesday. (Xinhua, 19/5/15)
• Japan economy grows annualized 2.4% in Jan.-March – The Japanese economy grew an annualized real 2.4 percent in the first quarter of 2015, the government said Wednesday. (Kyodo, 20/5/15)
• Japanese household spending falls at fastest pace in FY 2014 – Japanese household spending in the year ended March was down 5.0 percent from a year earlier, falling at the fastest pace on record amid price rises following the consumption tax hike in April 2014, the government said Tuesday. (Kyodo, 19/5/15)
• France eyes 1.5 pct growth in 2015 – France targets to expand its national wealth by 1.5 percent by the end of year after reporting unexpected rise in GDP in first quarter, Prime Minister Manuel Valls said on Monday. “We must consolidate this growth. It is necessary to reinforce it throughout the year, so that, we will have gradually a growth rate at or more, if necessary, of 1.5 percent at the end of the year,” Valls told France Culture radio. “This is the figure that allows us to reduce unemployment,” he said, adding that “the government’s economic policy would be totally credible when unemployment will fall.” (Xinhua, 18/5/15)
• U.S. builder confidence drops in May – U.S. builder confidence in the market for newly built, single- family homes in May dropped 2 points to a level of 54, missing expectations of a slight gain, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Monday. (Xinhua, 18/5/15)
• Greece demands creditors’ consistency in debt deal negotiations – The Greek government intends to meet all its financial obligations inside the country and abroad in coming weeks, but needs the prompt support of international creditors who should show consistency so that a compromise deal on the Greek debt is reached in May, Greek government spokesman Gavriil Sakellaridis said on Monday. “It is the government’s responsibility to be consistent with its financing obligations domestically and abroad, but there should be also consistency on the part of our lenders,” Sakellaridis said during a press briefing in a reference to the Feb. 20 Euro Group agreement commitments that would pave the way for a new deal this spring. (Xinhua, 18/5/15)
• Net inflows of FDI in China financial institutions at RMB8.56 bln in Q1, SAFE – Foreign direct investment inflows into China’s financial institutions stood at 9.613 billion yuan (1.566 US dollars) in the first quarter of this year, according to data published by the State Administration of Foreign Exchange (SAFE) on Monday. The outflows of FDI from China’s financial institutions reached 1.053 billion yuan (172 million U.S. dollars) in the same period, leaving net inflows of 8.560 billion yuan (1.395 billion U.S. dollars). (Xinhua, 18/5/15)