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Economy not on path
to deflation, says BOT chief
Bank of Thailand’s Governor M.R. Pridiyathorn Devakula
has reiterated the country’s economy is not on the path to deflation,
which contradicts a recent report by the Economic and Social Development
Board which said the country was experiencing deflation.
M.R. Pridiyathorn Devakula said the national think tank
has its own definition and meaning of deflation, which can differ from that
of the central bank.
In the BOT’s view, deflation begins to take hold only
when inflation rates contract. In the past several years, the country’s
inflation rates have not been in negative territory. They have only
increased at a slower pace since the nation’s economy has been struggling.
Thanawat Polvichai, director of the Thai Chamber of
Commerce’s Economic Forecasting Center, said inflation rates for this year
would be definitely lower than 1 percent and the country’s economy is
running the risk of experiencing deflation.
Some have expressed concern that inflation rates of many
countries around the world were low; a signal that deflation might occur
here soon. Some countries including Japan and China are already experienced
deflation.
Thanawat said the Thai government needs to take action
quickly to prevent deflation. He said the government should accelerate the
implementation of economic stimulus packages to ensure the country’s
economy can enjoy a minimum growth of 4 percent. (TNA)
Thai central bank raises economic growth projection
The Associated Press
Thailand’s central bank raised its forecast for gross
domestic product growth this year to 4 - 4.5 percent from an earlier
forecast of 3 - 4 percent, because of strong exports and domestic economy in
the third quarter.
But the GDP forecast for 2003 remains at 3 - 4 percent
due to risks associated with a slower U.S. economy, higher oil prices and
tensions in the Middle East, said Bank of Thailand Assistant Governor Bandid
Nijathaworn.
Growth of GDP - the sum of a country’s goods and
services - was 1.8 percent in 2001.
“In the past quarter, the Thai economy has continued to
grow at a satisfactory level. In particular, the monetary policy committee
noticed that the domestic economy was stronger than previously expected,”
Bandid said. “However, the level of external risk has increased as
well,” he said.
Lower interest rates expected to boost investment
Moves by major local commercial banks to lower their
interest rates are expected to help boost domestic investment. Prime
Minister Thaksin Shinawatra said last week that he expects the lower rates
to spur local investors which in turn will stimulate the economy. The PM
conceded, however, that lower deposit rates could discourage people from
saving.
The Prime Minister’s remarks came after major
commercial banks, led by Bangkok Bank Plc cut both their deposit and lending
rates by 0.25%, claiming that the move was in line with current market
situations, where local banks are suffering from excess liquidity.
Bangkok Bank Plc cut its deposit rate for its saving
accounts to 1.50%; while reducing its prime lending rates to 6.75%. The
country’s largest commercial bank also cut its 3-6 month-deposit rate to
1.75% and its 12 month-deposit rate to 2.0% annually.
Other major commercial banks, including Thai Farmers
Bank, Siam Commercial Bank, Bank of Ayuthaya and Thai Military Bank then
followed suit.
State-run Krung Thai Bank Plc, however, maintained both
its deposit and lending rates, but announced it would suspend its 24-month
and 36-month deposit services in accordance with the current market
situations.
The deposit rate for saving accounts of Krung Thai Bank
Plc was maintained at 1.75%; while its 3-6 month and 12-month deposit rates
was pegged at 2.0% and 3.0% annually. Its lending rates were maintained at
7.0-7.25%.
U.S.-based CITIBANK cut its 12-month, 24-month, and
36-month deposit rates by 0.25% to 1.50-1.75%, 1.75-2.0% and 2.25-2.50%
respectively.
Conceding that the latest rate cuts were the lowest
recorded in 40 years, Decha Tulanont, senior vice president of Bangkok Bank
Plc said that it was most likely to be the last interest rate cuts of
Bangkok Bank Plc this year on the condition that no unexpected incidents
occurred.
However, Kiartpong Noichaiboon, vice chairman of the
Federation of Thai Industries (FTI) disagreed that the lowered interest
rates would help boost the Thai economy through increased domestic spending
as expected.
“The sector of the population who are savers, and
particularly those who rely on pension retirement savings are more likely to
be extremely careful in spending following this series of interest cuts,”
Kiratpong pointed out.
Kiartpong cautioned, “The lowered lending rates are not
likely to boost domestic investment. Local banks are still reluctant to
extend loans to large-scale firms, 50% of which are still on their
non-performance loans (NPLs) list. I project that these lowered interest
rates will yield negative results and lead to slower economic growth. Those
who rely on their savings will feel the pinch and tighten their purse
strings.” (TNA)
Cathay pacific wins ‘airline of the year’ title at TTG awards
Cathay Pacific Airways has won two prestigious awards at
the 14th TTG Travel Awards 2002: “Airline of the Year” and “Best
North-East Asian Airline”.
The annual TTG Travel Awards recognize outstanding
individuals and organizations in the Asia Pacific travel industry. The
awards are voted for by readers of TTG Asia and TTG China.
Lvan
Chu (center), Cathay Pacific regional manager Southeast Asia, received two
prestigious awards for Cathay Pacific Airways “Airline of the Year” and
“Best North-East Asian Airline” at the 14th TTG Travel Awards 2002. He
was congratulated by Michael Chow (left), publisher, Travel Group, TTG Asia
Media Pte., Ltd. and Darren Ng (right), managing director TTG Asia Media Pte.
Ltd.
Cathay Pacific’s director and chief operating officer,
Philip Chen said, “We are very pleased to win these two awards as they
were voted for by people who know the business. The awards are clear
recognition of Cathay Pacific’s product excellence. Despite the recent
difficult times in the aviation industry we have continued to invest in new
products, including our acclaimed new Business Class cabin. The awards are
also an acknowledgement of our unique ‘Service Straight from the Heart’
that helps differentiate Cathay Pacific from other airlines.”
Chen added, “I’d like to thank the outstanding people
who work for Cathay Pacific, and of course all our customers for their
continued support.”
In addition to the TTG Awards, Cathay Pacific was in March of this year
voted by UK survey group Skytrax as ‘Best Airline - Asia’, Best Airline
- Trans-Pacific’, and ranked overall as the number 2 airline in the world.
It also it has been named ‘Asia’s Best Airline’ for the third straight
year as part of Reader’s Digest magazine’s SuperBrand 2002 Survey.
Opinion poll reveals most tourists believe Thailand is a safe tourist destination
Most foreign tourists are confident that Thailand is a
safe tourist destination, according to a poll conducted by Bangkok
University here between October 30 and 31. The survey found that 58.2% of
European tourists said they visited Thailand despite news reports on tourist
attacks in Southeast Asia.
When asked about their confidence in the safety in
Thailand, 45.3% of the respondents said that they believed Thailand is a
safe tourist haven.
The Bangkok Poll interviewed 426 foreign tourists at
tourist sites in Bangkok on a random basis to ask for their opinions on the
safety of the kingdom amid news reports on warnings of terrorist attacks in
the region.
Deputy Prime Minister Gen. Chavalit Yongchaiyudh, who
oversees national security, said this week that Thailand is a peaceful and
non-violent haven, which parties use as a center for negotiations. He added
that because of the positive nature of Thai society, conflicting parties eye
Thailand as their negotiation center. He was referring to the recent request
to use Thailand as the venue for peace talks between the Sri Lankan
government and the Tiger Tamil separatists. (TNA)
Security increased
at airport
Transport and Communication Minister Suriya
Jungrungreangkit has ordered tighter security measures at Bangkok
International Airport and other provincial airports, including stricter
inspection of passengers’ luggage, after reports of violent incidents in
the region recently.
Suriya said that the government has given priority to
safety, and he has instructed the Airport Authority of Thailand (AAT) to
step up security measures at the Don Muang Airport and other domestic
airports as a precautionary measure, particularly during the night time.
The beefed-up measures were ordered only as precautionary
measures since there have been no threats to the country, Suriya stressed.
He added that the Airport Authority of Thailand (ATT) has enough personnel
to implement the stricter security procedures. (TNA)
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