Thai PM urged to seek extradition of Tak Bai Massacre suspect from Japan at ASEAN Summits

[webfact]

ECONOMY

BOT cautions about uncertain second half

By THE NATION

Exports in the second half could have a bumpy ride, as the global economic recovery becomes vague, particularly in the US, Europe and China, the Bank of Thailand cautioned yesterday.

Deputy Governor Bandid Nijathaworn said Europe is struggling to overcome a debt crisis while China is rushing to cool an overheating economy. Thailand's exports in June showed a robust rebound, with year-on-year growth of 46.3 per cent, but momentum depends on the pace of global recovery. Although exports should still race ahead, they may shift down a gear, he said.

"The US Federal Reserve chairman recently highlighted uncertainties in the second half," he said.

Ben Bernanke said in his Senate testimony that central bankers remain prepared to act as needed to aid growth even as they get ready to eventually raise interest rates from almost zero and shrink a record fiscal deficit.

"We also recognise that the economic outlook remains unusually uncertain ... We will continue to carefully assess ongoing financial and economic developments, and we remain prepared to take further policy actions as needed to foster a return to full utilisation of our nation's productive potential in a context of price stability."

US stocks fell and treasuries climbed after his testimony.

Bandid's chief concern was the European debt crisis, which would create a fiscal burden and could lead to an economic slowdown. China's measures against overheating could also curb the appetite for Thailand's exports.

Sethaput Suthiwart-Narueput of Siam Commercial Bank noted that second-quarter exports also performed remarkably well, soaring 42 per cent from the same period last year. However, part of that surge was due to clearing out of gold stocks. Excluding gold, export growth would have been only 35 per cent. At the rate, growth momentum was rather stable.

He agreed that despite continued expansion in the latter half, the tempo would be slower.

"Superficially, the 42-per-cent growth rate looked encouraging. Deep down, it was boosted by gold exports, which did not contribute any value to the economy. The gold, left over from domestic sales, was exported. It's not our product," he said.

-- The Nation 2010-07-23