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
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
Premium customers from China
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.
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
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
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.