Analysts see better year for Thai economy

[webfact]

GDP GROWTH
Analysts see better year for economy
NOPHAKHUN LIMSAMARNPHUN
THE NATION

Thai GDP growth is expected to be better than in 2015; rosier forecast for exports as global situation improves.

BANGKOK: -- THE THAI economy heads into 2016 with a brighter outlook than last year, thanks to a stronger global economy and multiple measures taken by the government to reinvigorate various economic engines.

Both Kasikorn Research and Siam Commercial Bank forecast gross-domestic-product growth of no less than 3 per cent this year, compared to expected growth of 2.5-2.7 per cent in 2015, while the Bank of Thailand is more bullish with a 2016 growth projection of 3.5 per cent.

The economy is expected to gain from more positive external and internal factors this year, according to Montri Sokatiyanuluk of the National Institute of Development Administration (NIDA).

Externally, the global economy will be aided by recoveries in the US, Japan and the European Union, as well as in China, he said.

This in turn would help the Thai export sector, which should return to a growth rate of 2-3 per cent after a contraction last year.

Domestically, mega-infrastructure and transportation projects worth a combined Bt400 billion, as well as state enterprises' investment budgets worth Bt350 billion, will be a key driver of economic growth.

In addition, the economy will benefit from proactive measures launched over the past five months by Deputy Premier Somkid Jatusripitak's economic team.

These range from revival of the multi-billion-baht Village Fund, Bt100 billion in soft loans for small and medium-sized enterprises, and Board of Investment and Finance Ministry special tax privileges for Thai and foreign investors, to the Public Private Partnership (PPP) programme for infrastructure investment, among others.

The new economic team's multiple measures since August have boosted local and foreign business confidence - as well as consumer confidence - in the Thai economy, setting the stage for stronger growth prospects in 2016.

However, Abhisit Vejjajiva, leader of the Democrat Party and former prime minister, said a full economic recovery was unlikely this year due to various risk factors, especially the lack of purchasing power among farmers and low-income people, and international pressures on the fisheries and aviation sectors.

"The tax deduction for consumption is aimed at those who have purchasing power, but there is no benefit for those who don't, so such a measure will only slightly uplift GDP figures at the year's end. I hope those who suffer economically really benefit from the government's policies," he said recently.

On mega-infrastructure projects, Abhisit said the government needed to ensure that they were economically worthwhile.

He also urged Prime Minister Prayut Chan-o-cha to personally take charge of concluding negotiations on the Thai-Chinese railway project, following protracted rounds of talks.

"If there remain world economic uncertainties, plus foreign pressures on the fisheries and aviation sectors, the economy will not return to a full recovery, so it's better for the people to follow the sufficiency-economy principles as we cannot expect a quick rebound," he explained.

Geographical advantage

NIDA's Montri said Thailand should also take advantage of the Asean Economic Community (AEC), which became effective at the end of last year, by implementing various measures to support several special economic zones along the borders with neighbouring countries.

Of Thailand's 77 provinces, 33 border with Myanmar, Malaysia, Laos and Cambodia, so the country has a big advantage when it comes to being a centre of the AEC for trade and investment covering both the manufacturing and service sectors.

In its latest global economic report, HSBC Thailand said the Thai economy was expected to recover gradually in 2016, but cautioned that household debt remained relatively high at over 80 per cent of GDP, which could become an obstacle to further boosting domestic consumption.

However, Thailand's public-sector debts are still comparatively low, at 43 per cent of GDP, with recent auctions of 4G spectra for mobile-phone services resulting in nearly Bt200 billion in additional state earnings.

This gives the government room to launch additional measures to stimulate the economy if growth slows down.

In addition, HSBC Thailand said the 10 new industries identified by the government as new engines of growth, and the setting up of a Bt10-billion fund to promote these sectors, would further complement the country's bid to boost foreign direct investment.

On the other hand, the European Union's "yellow card" warning on illegal, unreported and unregulated fishing practices remains a risk, as Thailand hopes to avoid a "red card", which could lead to a ban on Thai seafood exports to the lucrative EU market, HSBC's Thai unit said.

Supant Mongkolsuthree, chairman of the Federation of Thai Industries, said a further slowdown in the Chinese economy would hurt exporters, as the Chinese market accounts for more than 10 per cent of overall exports.

Source: http://www.nationmultimedia.com/business/Analysts-see-better-year-for-economy-30276068.html


-- The Nation 2016-01-04

[JoePai]

Where can I buy a pair of these 'rose tinted' glasses please ?

[bangkokheat]

Where can I buy a pair of these 'rose tinted' glasses please ?

if you find any, i will take 2....to be sure to be sure

[Assurancetourix]

Three, please ; or more , so I can sell any to my close friends

Me, I predict exactly the contrary; worse than the last year which was bad ;

rising interest rates in the US will weaken the economies of emerging countries .

[sawadee1947]

blindfolded analysts?

[trainman34014]

'Thai' analysts churn out bullshit on a daily basis...and this year will be no different from any other !

[Srikcir]

Do the math.

BOT projects export growth in 2016 to be flat (vs. Thai National Shippers’ Council projection of 2%). Both have shown that their beginning of year 2015 predictions were very optimistic.

Exports account for 70% of GDP. Total GDP growth will be below 3%, perhaps even below 2% depending on global economic events beyond Thailand’s control. Abhisit’s statement that “a full economic recovery was unlikely this year” is an understatement.

[pookiki]

Darn, it's the beginning of the year and I forgot to stock up on my BS repellent!

[wabothai]

Where can I buy a pair of these 'rose tinted' glasses please ?

Not far from Phu Rua (Loei) there is a place (hotel + grounds) where EVERYTHING is painted pink. I am sure you can buy pink colored glasses there.

[phoenixdoglover]

The "hub" concept for ASEAN business (we are central, therefor businesses will locate in Thailand) is only half the argument. It is also possible businesses will relocate out of Thailand (to those lower cost bordering countries).

Thailand: hub or crater?

Edited January 4, 2016 by phoenixdoglover

[waldroj]

Absolute and utter BS!

The news from my stockbrokers (CIMB Thailand) tells a vastly different story, with some sobering statistics that the junta must take some credit for:

Foreign selling pressure to still haunt the market in early-2016

Foreign investors have sold US$4.5bn on a net basis in 2015 with about US$1bn sold in Dec 15 alone. Their holdings in the stock market are at a decade-low of slightly more than 30%. Each 1% pt in foreign selling translates into US$3.3bn selling pressure. Thus, even though we do not expect foreign selling in 2016 to be as severe as in 2015, there could be intense pressure if investors try to rush out the door at the same time.

Weak domestic demand to persist in 2016

Despite government stimulus measures, domestic demand is still soft. High household debt, weak farm prices, poor exports and banks’ tightened credit standards contribute to the sluggish domestic demand. Tourism and healthcare are the only two major bright spots now. However, we are starting to see positive signs for infrastructure launches so if the government can launch more projects, the private sector will gradually improve.

Not quite as rosy as the junta would have us believe!

[chilli42]

Delusional!

[Eric Loh]

If today stock market crash in Asia is any indication, expect a rough ride this year. China weak factory activities, abundance inventory and a fluctuating currency are bad signs. The other major economies in Europe are still weak and USA is still trying to find some firm ground. ASEAN countries will battle a currency depreciation and high household debts. We only have the tourist industry and infrastructure spending to drive our domestic economy. As long as we don't have a democratically elected government, we will find trade negotiation with the rich nations difficult. The analysts play it safe to compare last year which is a low base and we can't go any lower.

[Redline]

Ooooooohhhhh yeeeeeaaaaa go go go!