Economist expresses concern over rising household debt
While speaking at a recent seminar, Chirathep Senivongs
Na Ayudhya, an economist at the Bank of Thailand (BOT) said latest figures
show a sharp increase in personal loans which is resulting in higher
“We are back to the 20 to 30 percent growth in personal
loans, similar to that seen during the pre-crisis level and this is
something that the country needs to keep a close eye on,” Chirathep told
Chirathep’s study was backed by central bank governor,
Pridiyathorn Devakula, who agreed rising household debt was something that
would be monitored. “We are closely watching the situation, but presently
we view these debts are still at a manageable level,” Pridiyathorn said.
“Thailand’s consumer confidence index recently hit a 58 month high, led
by purchases of durable goods which boosted demand for consumer loans,” he
Chirathep said that his study shows that household debt
rose around 20 percent to 82,485 last year from 68,279 baht in 2001 and
about 69,674 baht in 1998, a year into the economic crisis. (TNA)
ASEAN’s largest solar
powered electricity plant to open in Mae Hong Son
Thailand is set to harness its year-round sunshine to
provide electricity for the northern province of Mae Hong Son, with the
Electricity Generating Authority of Thailand (EGAT) now pushing forward with
a 200 million baht project to establish a solar powered generating plant
Speaking after the ceremony to lay the foundation stone
at the solar powered station in Tambon Pha Bong, Energy Minister Prommin
Lertsuridej said, “The opening of the generating plant underlines the
government’s policy to provide electricity to people living in remote
locations and ensure the use of clean energy. The Mae Hong Son plant will be
the largest solar powered station in the Association of Southeast Asian
While conceding that the production costs for solar
powered electricity were five times higher than those for ordinary
electricity, the energy minister stressed that the construction costs for
the station were considerably lower than the billions of baht which would
otherwise have to be spent on bringing in electricity from nearby provinces.
EGAT governor Sithiporn Rattanaphas added, “The Pha
Bong plant will help preserve the environment and meet the growing demands
of tourists in the province. In the first phase, the plant will generate 500
kilowatts, but in the future the plant will generate 1,750 kilowatts.” (TNA)
Thailand and Laos agree
to expand trade and
Senior Commerce Ministry officials have hailed a recent
trip to Laos as a resounding success, after the two countries agreed to
boost bilateral trade and investment, with Laos acting as a gateway for Thai
goods to the region.
Wichak Wisetnoi, Deputy Director-General of the
Department of International Trade led a delegation of businesspeople from
the timber industry, furniture industry, agricultural sector, vegetable oil
sector, paper pulp industry, construction sector, eucalyptus cultivation
sector, and transport sector to business and investment talks in the Lao
provinces of Savannakhet and Champasak. The Thai delegation was able to meet
deputy governors of both provinces, as well as policy-making officials.
Laos asked for assistance in investment and development
in marketing, and had requested that Thailand purchase more Lao products.
Wichak noted that the completion of the second Friendship Bridge, scheduled
for 2006, would give a boost to the regional economy by forging more
communication links between Thailand, Myanmar, Laos and Vietnam.
The Thai delegation also proposed investment in an
integrated eucalyptus cultivation program. In addition, Thailand expressed
an interest in collaborative development to add value to wood waste and
small wood products, as well as assist in marketing.
The two sides also want to boost the soy bean cultivation
sector, noting that Thailand currently imported 1.5 million tons of soy
beans each year from the United States, Brazil and Argentina. (TNA)
Local industries urged to
improve production efficiency
Leading economists say many local industries need to
improve production efficiency unless they want to lose competitiveness.
Speaking at a seminar on “Strategy to Enhance Competitiveness of Thai
Industries, Theera Atchakul, economic advisor of Industrial Finance
Corporation of Thailand (IFCT), said some foreign economists warned the Thai
economic growth of 5-6% might not be sustainable because the expansion
stemmed from economic stimulation through state spending, and not actual
Theera said, “The IFCT and the Industrial Economics
Office jointly estimated industrial competitiveness by using the Total
Factor Productivity (TFP) approach to gauge production efficiency of each
industry in many countries including Japan, Hong Kong, France, Germany,
China, the United States and Thailand. They found the production efficiency
of Thailand lowest since the country’s economic growth stemmed from an
increase in labor and capacity, not production efficiency.”
Theera said many industries ran the risk of losing
competitiveness with foreign rivals as their TFP is lower than 100 points.
The industries at risk include auto parts, concrete products, processed
fruits and vegetables, ceramics, electrical appliances, sugar, steel
products, footwear, furniture, and textiles. (TNA)
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