HEADLINES [click on headline to view story]:

Economy not on path to deflation, says BOT chief

Thai central bank raises economic growth projection

Lower interest rates expected to boost investment

Cathay pacific wins ‘airline of the year’ title at TTG awards

Opinion poll reveals most tourists believe Thailand is a safe tourist destination

Security increased at airport

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)