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Tough economic challenge ahead for new government

Chiang Rai reveals surplus from border trading

Property business grows at slower pace

Unemployment in Thailand likely to hit 780,000

Tough economic challenge ahead for new government

The new government is facing an enormous challenge in managing the Thai economy in the midst of tough external and domestic factors, academics and businessmen warn. Dr. Somchai Pakapasvivat from the Faculty of Economics, Thammasat University, said provided that the official outcome confirms exit polls predicting nearly 400 seats in the Lower House for the Thai Rak Thai (TRT) Party, there is zero chance for the opposition to mount a no-confidence censure against the government. But at the same time, such overwhelming majority will give the government a free hand to deliver its electoral promises.

“Steering the Thai economy through rough path over the next four years will be a totally different exercise from the time of the previous administration. Four years from now, the global economy is bound to be jolted by oil prices, bird flu epidemics, which will affect Thailand. We will also face the consequences of the various free trade agreements,” said Dr. Somchai.

Chakramon Phasukavanich, Permanent-Secretary for Industry, said ideally, the industry and commerce portfolios of the new government should be led by internationalized figures that are well-versed and in sync with both domestic and global trends in trade and industry.

Praphad Phodhivorakhun, President of the Federation of Thai Industries (FTI), said he would like to see the new government undertake measures to stimulate both public and private sector investment. These measures will help revive consumer spending which has shrunk since the 26 December tsunamis. The FTI would also like the government to tend to the issue of energy prices which are the fundamental concerns of the industrial sector.

Vice-President of the FTI, added that the new government should give priority to bureaucratic reform, particularly the coordination between bureaucrats and the private sector. The private sector should also be more involved in major moves that will impact them, such as free trade agreement negotiations. (TNA)


Chiang Rai reveals surplus from border trading

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Staff reporters

The Chiang Rai Chamber of Commerce revealed that border trade in 2004 earned seven billion baht, of which 3.1 billion was surplus. The grand dragon (China) trade became the leading border trading partner.

The main exports were agricultural goods, consumer goods, petrol, lubricants, machines and spare parts, medicines and chemical materials, animals, construction equipment, and electronic devices. Trade with Laos and Burma included uncut rubies and other precious stones, teak, old cars, cows, buffaloes, garlic, whisky, wine, oranges, poster pictures, and woven cloth.


Property business grows at slower pace

The overall property business last year expanded at a slower pace due to the expiration of tax measures issued by government to stimulate the business and upward interest trend, according to the Bank of Thailand (BOT).

The BOT’s Monetary Policy Committee (MOC) reported the property business in November last year slowed down, given a marked decline in the approved areas for housing construction, cement sales, and the number of newly-registered houses. The slowdown resulted partly from the fact that the calculation was made in light of the high growth base in the same month of the previous year when a lot of properties were transferred before tax incentives ended in December.

Still, competition in the business had intensified as can be witnessed by an increase in the building material price index over the housing price index in the fourth quarter of last year. MOC found the property sector continued to grow in the fourth quarter without any sign of over heating that could affect the overall economic stability.

In October last year the approved areas for housing construction in municipal areas dropped while the number of houses and condominiums registered in Bangkok and its environs increased.

However, the land trading value dropped by 11% from the same month of the year before since there was an acceleration of the land transfer to cash-in on the cut in transfer fees before the end of 2003.

Suchada Kirakul, senior director of the BOT’s Local Economy Department, said a measure issued earlier by the central bank to control the speculation on the property was another factor that made the sector expand at a slower pace last year. Under the measure, commercial banks that lent to home purchasers more than 10 million baht each and property development projects more than 100 million baht each are required to report the transactions to the central bank. (TNA)


Unemployment in Thailand likely to hit 780,000

Thailand’s official unemployment rate is likely to rise by over 40,000 to hit 780,000 this year, largely as a result of high oil prices, avian flu, the southern security situation and the December tsunamis, according to a forecast released today by the National Statistical Office (NSO).

The office said that the number of people out of work was set to make a significant leap over the coming 12 months. The number of people in the active labor market is likely to rise to 36.2 million this year, up 360,000 from last year.

However, the country’s economic growth rate looks set to contract to 5.0-6.0 percent, down from last year’s rate of around 6.2 percent, due to a number of negative factors including the southern insurgency, the latest outbreak of avian flu, high global oil prices, and the tsunamis which struck southern Andaman provinces last December.

As a result, there will be a slight increase in the official unemployment rate, with the average annual figure likely to stand at 780,000, up from 740,000 last year. This will put the percentage of people without jobs at around 2.2 percent, compared to 2.1 percent in 2004.

The first quarter of the year, when people are still struggling to recover from the tsunamis, could see unemployment hit 3 percent, but this figure looks set to fall over the course of the year. (TNA)