What happened this week 28/07 – 01/08
Thailand
- UTCC cuts GDP forecast to 2.2% from the previous 2.5%. It says the largest downside risk is delay in government spending. The 2.2% annual growth translates to 4.3% growth in 2H14. (Kom Chud Leuk, 01/08/14)
- Export outlook decays further, shippers slash view to 1.6% growth at best – Although the Commerce Ministry has maintained its export growth forecast at 3.5% for the full year, the central bank expects the figure to come in below 3%, and shippers are even more pessimistic. (Bangkok Post, 01/08/14)
- NCPO approves 8 plans to rejuvenate Ma Tha Phut Port. It has budgeted Bt677mn to finish zoning, basic infrastructure improvements and port expansion. (Kom Chud Luek, 01/08/14)
- FTI concerned on tax burden — The FTI is concerned that the Revenue Department will get carried away in attempts to boost tax revenue and that this will send a negative signal to local industries. (Post Today, 01/08/14)
- FPO to revise 2014 forecast — The Fiscal Policy Office said it will revise its 2014 GDP forecast (but it did not say whether it will be more than 3%) after seeing encouraging signs from all around and also the NCPO’s economic stimulus programs taking off. (Thai Post, 28/07/14)
- Sell your rice – please! — The Ministry of Commerce is urging the private sector to release their rice stockpiles since new supply is expected to flow into the market in October from the harvest. The government is focusing on G2G deals to boost rice exports e.g. China and Malaysia, and encouraging the private sector to auction their rice to Indonesia and the Philippines. (Kom Chad Luek, 28/07/14)
- NCPO hurrying to green-light mega projects that are waiting to receive environmental impact assessment (EIA) approval from the National Environment Board. Amongst these projects are mining, petroleum, power plants, utilities, infrastructure, housing and water supply. It aims to approve these projects within 45 days. (Prachachart Turakij, 28/07/14)
- Thai exports back in positive territory after best performance in 17 months — Thailand’s overseas shipments in June rebounded into positive territory of 7.2% growth year on year, thanks to economic recovery in major markets and strong export promotion, Commerce Ministry permanent secretary Chutima Bunyapraphasara said yesterday. (The Nation, 26/07/14)
- Seven ‘ailing’ state units given 45 days to submit rehab measures – The “superboard” supervising state-enterprise policy has asked up to seven financially ailing enterprises to submit rehabilitation plans within 45 days, superboard member Veerathai Santipraphob said. (The Nation, 26/07/14)
- Despite first-half dip, year’s export growth could hit 3.5% target – Exports are expected to grow by 7.29% in the second half of the year, after declining by 0.35% in the first half, so Thailand could meet its full-year export-growth target of 3.5%, according to the Commerce Ministry. (The Nation, 29/07/14)
- Ministry of Transport rejects THAI and SRT reform roadmap. It said that the plans are not comprehensive and complete. It wants more details before submitting the plans to NCPO for final approval. (Thai Post, 29/07/14)
- Revenue shortfall — The Revenue Department reports that during the first nine months of fiscal 2014, it has collected only Bt68.1bn tax revenue. It says the biggest miss was in auto sales tax. (Thai Post, 29/07/14)
- High-speed train gets go ahead – The National Council for Peace and Order (NCPO) has approved two high-speed train projects at a total cost of Bt741.4bn. The two routes approved are intended to serve as a transport link between Thailand and southern China. (Bangkok Post, 30/07/14)
- ‘Back in business’ – Thailand is back to work and business after months of political impasse, but there are challenges to be addressed to ensure sustainable growth, an international business conference heard yesterday. (ASTV Manager, 30/07/14)
- SRT starts auction of Red Line expansion. The 3 contracts up for bid are for electrical and mechanical works and carriages. MHSC, a Japanese joint venture group has bid Bt49bn for the package. (Post Today, 30/07/14)
- UTCC releases 4-year AEC report, claiming that Thailand is badly losing its competitive edge with exports and investment down. The university suggests government and local business promote brand awareness and increase support for SMEs. (ASTV Manager, 30/07/14)
- Tax reform aims to cut income gap – The National Council for Peace and Order has instructed the Finance Ministry to seek tax measures that can foster social fairness and bridge income disparities while boosting revenue for government coffers, says a ministry source. (Bangkok Post, 30/07/14)
- FPO lowers forecast to 2% growth – The Fiscal Policy Office (FPO) has lowered this year’s economic growth forecast to 2% from 2.6% and is estimating a 0.3% year-on-year contraction in second quarter GDP. (Bangkok Post, 31/07/14)
- China talks over new rice deal – Thailand is in talks with China to sell 1 million tonnes of rice through a government-to-government (G-to-G) deal and vows to secure more sales through similar contracts with buyers including Indonesia, the Philippines, Malaysia and countries in Africa and the Middle East. (Bangkok Post, 31/07/14)
- Tax revisions upcoming — The Ministry of Finance will approve new land and inheritance tax to address income inequality. It will now divide the land tax into 3 tiers, with empty land being taxed the highest at 2%. The NCPO will also looks to abolish excessive tax benefits for certain classes of individuals. (Kom Chud Luek, 31/07/14)
- Revenue warns accounting firms – The Revenue Department is threatening thorough inspections of accounting firms that prepare tax filings for clients if its new computerized tax-audit system spots irregularities. The clients themselves could also be targeted. (The Nation, 31/07/14)
Globally
- Global Economy US: Jobless benefits. In the week ending July 26, the advance figure for seasonally adjusted initial claims for jobless benefits in the U.S. was 302,000, an increase of 23,000 from the previous week’s revised level. (Xinhua, 01/08/14)
- German June retail sales surprise on the upside – Sales on the month increased 1.3% in June in calendar- and seasonally-adjusted terms, beating expectations for a 1.0% rise in a Dow Jones Newswires survey of analysts. The data followed a revised decline of 0.2% in May, from a first estimate of a 0.6% fall. (NASDAQ, 31/07/14)
- EU inflation — Official data showed Thursday that euro-area inflation dropped to 0.4% in July, the slowest since 2009, igniting market worries that the European economy is still not healthy enough to support a price rise. (Xinhua, 01/08/14)
- Argentina defaults — Argentina, the No. 3 economy in Latin America, defaulted following the failure of last-ditch talks with holdout creditors. Standard & Poor’s Ratings Services on Wednesday downgraded the country’s long- and short-term foreign currency sovereign credit rating to “selective default” from “CCC-/C.” (Xinhua, 01/08/14)
- US: New orders for U.S. manufactured durable goods increased 0.7% in June, boosted by demand for transportation equipment, said the Commerce Department Friday. The increase was larger than market expectations. (Xinhua, 26/07/14)
- Russia lifts key rate amid inflation concerns – The Central Bank of Russia decided Friday to raise its key rate by half a percentage point to 8%, and indicated further raise should inflation risks persist. (Xinhua, 25/07/14)
- Ukrainian economy expected to shrink by 6% in 2014 — The Ukrainian economy will contract by 6% in 2014, the Ministry of Economic Development and Trade said Friday. According to a statement released by the press service of the ministry, the inflation rate in Ukraine this year is likely to climb to 19%. (Xinhua, 25/07/14)
- US: U.S. economy grows 4% in Q2 – The U.S. economy grew at an annual rate of 4.0% in the second quarter after unexpectedly shrinking in the first three months this year, the U.S. Commerce Department announced Wednesday. (Xinhua, 30/07/14)
- The U.S. Federal Reserve announced on Wednesday that it will continue to trim its monthly bond purchase program by US$10bn to Bt25bn dollars from August, staying on track to end the program later this year. (Xinhua, 30/07/14)
- Jobs: the U.S. private sector added more than 200,000 jobs for a fourth straight month in July. Private payroll processor ADP said in a report that private sector employment created 218,000 jobs in July, which is modestly below market consensus. (Xinhua, 30/07/14)
- Crude stockpiles lost 3.7 million barrels to 367.4 million barrels for the week ended July 25. Stockpiles at Cushing, Oklahoma, the delivery point for U.S. crude, fell 920,000 barrels to 17.9 million. (Xinhua, 30/07/14)
- Eurozone economic sentiment stable in July – In the single currency area, the ESI was stable at 102. 2, resulting from an improvement in confidence in industry and construction, which were offset by decreases in services, retail trade and among consumers. (Xinhua, 30/07/14)