Vol. III No. 30 - Saturday July 24 - July 30 2004
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HEADLINES [click on headline to view story]:

Consumer confidence index continues to drop

Customs to get a face lift

Negative factors take toll on industrial sector

Consumer confidence index continues to drop

The consumer confidence index continued to drop for the sixth consecutive month in June upon concern over the fuel price rise and a spate of violence in the southern provinces, according to a top economic forecaster. Thanawat Polvichai, director of the University of Chamber of Commerce’s Economic and Business Forecasting Center, disclosed that the confidence indices on the overall economy, employment opportunities, and future incomes declined to 98, 93.5, and 110 respectively from the previous month. It resulted in the consumer confidence index falling to 100.6 in June from 102.5 in May.

Thanawat said, “The decline in all confidence indices, particularly the continued fall in the consumer confidence index for six months in a row, is of great concern. It signals the index will drop further in the following month especially if fuel prices continue to rise and negative factors to go unabated.”

He said the negative factors that erode the confidence remained unchanged. They include the global oil price rise, southern unrest, weakening of the baht, upward interest trend, and downward revision of this year’s economic growth projection by the National Economic and Social Development Board to 7 percent from 6.5 percent.

Thanawat said it was very likely the confidence index would drop further, particularly in July since the government had given a strong hint that it might need to raise the capped prices of diesel oil. He added that the fresh outbreak of avian flu could have effects on the confidence and the overall economy unless the government managed to control it immediately. (TNA)

Customs to get a face lift

The government plans to overhaul the country’s customs department. The services need to be improved to prepare the customs offices to be able to cope with the increase in imports as a result of future bilateral free trade agreements, according to the Finance Deputy Minister Varathep Ratanakorn.

The Customs Department plans to upgrade its loading and unloading facilities, and its security systems. The restructuring will boost the department’s efficiency and help turn Thailand into an Asian economic hub. The department has already adopted new surveillance technology including an improved monitoring system and closed circuit televisions (CCTV) which have been installed at four major customs checkpoints.

From August, the department will charge users 200 baht per copy of bills of lading to help to clamp down on corruption among customs officials. (TNA)

Negative factors take toll on industrial sector

The industrial sector is expected to grow at a slower pace in the second half of this year on the back of many negative and risk factors, according to the Kasikorn Research Center (KRC). A report published by the center said the country’s industries had taken the brunt of the outbreak of avian influenza, oil price volatility, higher raw material prices, drought, raw material shortage, and trade barriers, resulting in lower-than-expected growth in many industries.

The production in the industrial sector began to slow down in the second quarter, with the manufacturing production index rising 6.9% in the April-May period, compared with 11.3% in the first quarter. The slower growth was mainly attributed by the shortage of raw materials and the reduction of frozen seafood exports due to an anti-dumping measure on shrimp products by the United States.

In the second half of this year, KRC projected, the industrial sector would experience continued risk factors from the first half, and new ones, including the US interest rate hike and the slowdown in the Chinese economy. As a result, it is expected the industrial sector would expand at a slower pace than the first half.

However, public investment is projected to continue to grow, bolstering the overall investment for the whole of this year. KRC said the export of industrial products was likely to grow at the same rate of last year at 18%. Among them are textiles and garments, building materials, electronics, electrical appliances, and precious stones and ornaments. (TNA)

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