HEADLINES [click on headline to view story]:

EGAT privatization ‘necessary for energy hub vision’

Leading bankers see interest rates staying low

January consumer confidence index down

EGAT privatization ‘necessary for energy hub vision’

A senior Energy Ministry official has touted the proposed privatization of the Electricity Generating Authority of Thailand (EGAT) as the only mean to strengthen the organization, and enable it to participate in the government’s plan of transforming Thailand into a regional energy hub.

Speaking at a recent public hearing on the EGAT privatization, Viset Choopiban, assistant to the energy minister, said that the privatization would allow EGAT to mobilize its own capital for investment projects, while reducing the state’s burden as a guarantor of loans.

Nonetheless, he stressed that the privatized EGAT would continue to work in accordance with government policies, in particular the government’s strategy of transforming Thailand into a regional centre for the energy trade. At the same time, he said, the privatized EGAT would serve to promote the government’s strategy of boosting economies and societies of neighboring countries, including the Association of Southeast Asian Nations (ASEAN) Power Grid Project for regional resource and energy pooling.

As part of the ASEAN project, countries in the 10-member regional grouping will promote ‘national champions’ in electricity operations, which will act as regional players in the electricity industry.

The government also hopes to encourage Thai electricity companies to invest in neighboring countries, which, in turn, is hoped to lead to greater economic development, a reduction in social problems, and the elimination of economic migration to Thailand.

Viset said, “It is vital that Thailand revamp its electricity operations in order to maintain costs at a low level and to ensure that the system remained stable. The new system would operate on an enhanced single buyer model (ESB), with agencies to supervise and maintain the rules for electricity providers; thus, creating a clear separation between providers and supervisors. This would serve to enhance competition in the electricity production system, as well as encourage companies to boost their efficiency and develop their operations.”

Wiset added that a privatized EGAT would also lead to development and transparency in accordance with international standards, while ensuring that the electricity sector remained flexible in line with the prevailing business climate. (TNA)

Leading bankers see interest rates staying low

The Thai Bankers Association projects that the country’s current low interest rate environment will remain unchanged in the near future, even with increased lending from the country’s financial institutions, particularly from commercial banks.

The country’s largest commercial bank, Bangkok Bank Plc’s president Chartsiri Sophonpanich, who also is the association’s chairman, said interest rates will not be increased in the foreseeable future. “The low interest rate environment aids the country’s economic growth and helps boost investment in the private sector,” he said.

However, he noted that the association would have to closely monitor interest trends in foreign countries and the interest rate policies of the Bank of Thailand (BOT) and the Ministry of Finance.

The maintaining of the country’s low interest rate policy is being witnessed in all types of commercial bank deposit accounts. Currently, the interest rates on savings accounts are the lowest at 0.75 percent, while the lowest lending rate is 5.50 percent, amidst flooding liquidity in the country’s financial system.

Chartsiri also projected that lending in Thailand will expand by 10 percent, in line with economic growth, which is on a rising trend. More industrial manufacturers are acquiring loans for their business expansion.

“The country’s economy is growing, particularly this year, and I see financial institution lending increasing by 10 percent,” Chartsiri said. (TNA)

January consumer confidence index down

Thailand’s consumer confidence index on the economy in January 2004 fell to 107.5 from 110.9 record high level reported in December 2003 because people were worried about the bird flu crisis in Thailand and in some Asian countries.

The Economic and Business Forecasting Center at Thai Chamber of Commerce University said in its report that all index items were down for the first time in the last 6 months.

The report stated that confidence index on job opportunity also dropped to 100.0 in January from 102.9 of a previous month, while confidence index on future income went down to 121.0 in January from 123.3 in December last year.

However the report noted that the consumer confidence index was still higher than the 100 level which was an indication that Thais still believe the nation’s economy will continue to expand.

Apart from the bird flu epidemic, other negative factors included the fluctuation in the stock market, which brought down the Stock Exchange of Thailand (SET) composite index to a lower level than that of the end of last year, the violence in the south, the worry about bubble economy, the rising in baht value and the slow progress in financial institutions’ non-performing loans (NPLs) problem solving.

Encouraging factors included expansion in exports, oil price control measure of the government and the government’s policy on low interest rates to stimulate economy. (TNA)