Thai economy not going to grow rapidly. ASEAN +3 Macroeconomic Research Office (AMRO) said the Thai economy is not going to grow rapidly since private investment has not recovered. Household debt and SME NPLs continue to rise, pressuring GDP growth down. (Thai Post, 13/6/17)
Package to promote SEZ to be proposed to cabinet on June 15. Treasury Department will propose the new package to attract investors in SEZ to a cabinet tomorrow. One of the packages is to reduce renting rate in SEZ area. (Bangkok Biz,14/6/17)
KTB is reported to have given loans of Bt12bn to EARTH, the highest of all banks, of which Bt8bn is short term and Bt4bn is long term. KBANK lent Bt3.8bn, BAY Bt1.2bn. The risk that this will become non-performing is very high and it will set provisions in 3Q17. The B/E market is in chaos with fund managers slowing investment. 4Q17 may see B/Es rated BBB+ and worse have trouble rolling over. (Kao Hoon, 14/6/17)
Revenue Dept soon to table draft law on e-business taxation. THE Revenue Department is expected to table a draft e-business law, which will tax online trading transactions for goods and services, for the Cabinet’s approval this month. (Bangkok Post, 12/6/17)
BoT downplays Energy Earth’s B/E default, says no systemic risk. The Bank of Thailand has asked Energy Earth Plc’s creditors to report on the debtor’s situation, saying the company’s bill of exchange (B/E) default does not pose systematic risks to the stability of the financial sector. (Bangkok Post, 15/6/17)
China’s easing factory gate prices hint at broader economic slowdown. China’s producer price inflation eased for the third straight month in May on tumbling prices of raw materials, signaling a broader cooling in economic activity as profits are squeezed by slackening domestic demand and rising financing costs. China’s producer price index (PPI) rose 5.5 percent in May from a year earlier, the National Bureau of Statistics said on Friday, versus an expected gain of 5.7 percent and slower than the 6.4 percent increase in April. (CNBC, 12/6/17
China May factory output beats expectations with 6.5% gain. China’s factory output grew 6.5 percent in May from a year earlier, slightly better than expectations along with retail sales that rose a more than seen 10.7 percent, but January to May fixed-asset investment grew 8.6 percent—less than forecast. Analysts polled by Reuters had predicted factory output would grow 6.3 percent in May, easing slightly from 6.5 percent growth in April. (CNBC, 6/15/17)
U.S. recession remote in next 12 months: Deutsche Bank. Chances are remote the U.S. economy will fall into a recession in the next 12 months despite a recent flattening of the U.S. yield curve suggesting growing recession risk, Deutsche Bank’s economists said on Monday. Based on other bond market indicators, they estimated the probability of a U.S. recession from now to June 2018 at less than 10 percent. This compared with the yield curve, or the gap between longdated and short-dated yields, which currently implies roughly a 33 percent chance of a recession. (Reuters, 13/6/17)
UK inflation rate at near four-year high. The rising cost of foreign package holidays and imported computer games helped to push the UK inflation rate up to 2.9% last month from 2.7% in April. The latest inflation rate is the highest since June 2013, and above the Bank of England’s 2% target. The Office for National Statistics said the price of food and clothing also went up slightly but fuel costs fell for a third month in a row . (BBC, 14/6/17)
Fed hikes interest rates despite declining inflation, sets plan for balance sheet reduction. The Federal Reserve approved its second rate hike of 2017 even amid expectations that inflation is running well below the central bank’s target. In addition, the Fed provided more detail on how it will unwind its $4.5 trillion balance sheet, or portfolio of bonds that includes Treasury, mortgage-backed securities and government agency debt. As financial markets had anticipated, the policymaking Federal Open Market Committee increased its benchmark target a quarter point. The new range will be 1 percent to 1.25 percent for a rate that currently is 0.91 percent. A statement on the program said the roll-off is targeted to start this year, though no specific date was provided. “The committee currently expects to begin implementing a balance sheet normalization process this year, provided the economy evolves broadly as anticipated,” the post-meeting statement said. (CNBC, 6/15/17)
