2011 floods slash GDP to 1%: Thai central bank

BANGKOK, Feb 3 – The Bank of Thailand (BoT) on Friday cut the country’s 2011 economic growth to just one per cent from the earlier projected 4.1 per cent thanks to the heavy blow of the flood crisis last year, but the economy is expected to grow 4.9 per cent this year and 5.6 per cent in 2013.

Paiboon Kittisrikangwan, BoT assistant governor said the impact of severe flooding on the country’s economy amounted a loss of 3.1 per cent of gross domestic product (GDP) or about Bt340 billion in damages. GDP in the fourth quarter of 2011 shrank 7.4 per cent, compared to the third quarter, with the blow to Thai economy was more severe than that of the 2008 US sub-prime crisis and the Tom Yum Kung crisis in 1997 as flooding heavily affected the industrial sector.

Damage at the industrial estates caused severe supply chain disruptions and overall rehabilitation needs a long time to complete due to insurance claim processes and the need to purchase new machines for those plants.

The Thai economy this year is in a period of recovering from the flood in 2011, Mr Paiboon said.

It is expected that the Thai economy will return to normal in the third quarter of this year and that the overall economic recovery will be supported in part by spending on flood rehabilitation.

Investor confidence has improved as well as private consumption. The government’s Bt400 billion deficit budget will help stimulate the economy.

In Fiscal 2012, beginning with a three-year water management project valued at Bt350 billion and investment in state enterprises will help boost the Thai economy to grow 4.9 per cent from 4.8 per cent.

The Thai economy in 2013 is likely to expand at a normal rate because the manufacture sector will return to normal, and the world economy is likely to rebound and favour Thai exports. The government’s budget deficit will support the Thai economy to grow 5.6 per cent, he said.

Mr Paiboon warned that risk factors for the Thai economy are the European debt crisis, which can affect the economies and financial markets of other countries, particularly their export sectors. Thai exports in 2012 were projected to grow 7.8 per cent. Domestic factors such as the government’s policy on water management to create confidence among investors must be closely monitored.

Inflationary pressure eased in line with consumer goods prices and demand, which slowed down along with the world economy. Core inflation was projected to drop to 3.2 per cent in 2012 and 2.9 per cent in 2013 while headline inflation in 2012 is likely to fall to 2.2 per cent and 1.7 per cent in 2013. (MCOT online news)

Workers protest at Labour Ministry on lack of post-flood employment

BANGKOK, Feb 2 – Laid off workers whose jobs were casualties of the recent floods carried their protest to the Ministry of Labour Thursday after their employers neither had clear policies nor gave them answers about further employment during the post-flood period.

Over 200 workers from Altum Precision Co in Ayutthaya's previously flooded Hi-Tech Industrial Estate protested at the ministry on Thursday, while 600 others from the NEC Tokin Electronics (Thailand) Co in Pathum Thani's Navanakorn Industrial Park have been at the ministry since the day before.

The labourers asked the ministry to find ways to assist them after the companies suspended their employment, therefore forcing them eventually to resign, once the floodwaters receded.

Nipaporn Kaewboriwong, representing the Altum Precision workers, said she wanted the company to compensate the employees according to the law after the situation returned to normal. In December, the firm sacked 370 of their 800 employees, while in January its management team changed. She said the company stopped hiring more workers and did not compensate the dismissed ones.

Protester Duangjai Srichaipoom, a labour union committee member from the NEC Tokin Electronics workers, said the demonstration will continue at the ministry until the employers pay a compensation package, including an opportunity cost as they could have found other jobs elsewhere in the interim. She said the company did not stop its business but instead moved its production base to the eastern province of Chachoengsao. It gave no bonuses to its employees as she said it earlier promised, despite good profits, and laid off as many as 2,900 workers from a total of 3,100.

Meanwhile, Charlee Loisoong, president of Thai Labour Solidarity Committee (TLSC), said a number of companies have been trying to buy time to not close their businesses, while they did not announce employment cancellations either. Workers were thus forced to resign, which resulted in their receiving less funds from the social security system.

He said the current official layoff figure was less than 30,000 labourers, much lower than the actual number which he believed could reach over 100,000.

Over 100 workers from other companies previously facing flood problems in Ayutthaya's industrial estates joined the protest during the day. These firms were CD Carton Plus, Ingress Autovent, Seidai Kasei (Thailand), and Nided Electronics (Thailand).

Officials at Labour Ministry took the demonstrators' issue and said they will try to find ways to deal with the matter. (MCOT online news)

Thai Leather Week expected to boost export to US$2 billion this year

BANGKOK, Feb 2 - The 'Thai Leather Week: Bag and the City' was launched by the Commerce Ministry and was expected to boost Thai exports up to US$2 billion this year together with the domestic market.

Deputy Internal Trade Promotion Department Director-General Anchalee Promnart said at a news conference that the event was a collaboration with Thai Leathergoods Association.

The event is to showcase Thai brand leather goods and will be held Feb17-26 at the department's exhibition building on Bangkok's Ratchadapisek Road.

Ms Anchalee said the country's flood crisis last year directly affected the leather industry and caused it to depend instead on imported raw materials from China. Other problems from the flood included damaged goods and delays in machinery transport and in goods distribution, resulting in foreign buyers' lack of confidence in placing orders.

The Internal Trade Promotion Department accordingly assisted the Thai leather industry private sector to find funds and new markets for exports in Africa and India apart from Vietnam, Hong Kong, Denmark and the United States.

Thai leather goods exports this year are expected to grow 15 per cent year-on-year from US$1.8 billion to $2 billion. (MCOT online news)

'THAI Smile Air' opens first route, Bangkok-Macau, July 1

BANGKOK, Feb 3 - THAI Smile Air, Thai Airways International (THAI)'s new sub-brand carrier, will begin its first operational flight July 1 from Bangkok to Macau.

THAI Executive Vice President for Strategy and Business Development, Chokchai Panyayong, spoke after a board meeting which also approved business plans for both THAI and its new airline.

Flight captains and cabin crew are ready for THAI Smile Air's operations, he said.

The first route to Macau will operate two flights daily. Tickets will begin being sold in April. The passenger load is expected to reach over 70 per cent per flight.

Four aircraft are to be operated this year for the main routes from the Thai capital to Chiang Mai, Phuket, Kolkata, Jakarta, and Phnom Penh.

The airline's name 'THAI Smile Air' was approved in August last year by the THAI executive board.

According to THAI President Piyasvasti Amranand, the new carrier is positioned to be a light-premium sub-brand of THAI, offering passengers another option for flight services.

The airline's image will be based on a trendy, friendly and worthy concept, different than the general concept of other low-cost airliners.

Regarding Thai Airways International, the board also approved THAI’s strategic plan for 2012-2018 and its business plan for 2012-2013. Under the plan, the national flag carrier will be modernised, with 51 aircraft to be decommissioned, and a new fleet of 56 aircraft will be acquired, 26 of which will be purchased and 30 will be acquired through leasing. (MCOT online news)

Thailand's January CPI up 3.38 per cent

BANGKOK, Feb 1 -- Thailand’s Consumer Price Index (CPI) in January rose 3.38 per cent year-on-year to 113.21, growing in at a slow pace during the period of the country’s post-flood rehabilitation, according to the Commerce Ministry.
Prices of food and beverages rose 7.7 per cent, with rice, starches, and flour products rising 2.34 per cent, meats, poultry, fish and seafood by 10.52 per cent, while eggs and dairy products were up 2.30 per cent. In addition, fuel and energy rose by 6.48 per cent.

Inflation in January climbed 0.39 per cent, compared to December, said Permanent Secretary for Commerce Yanyong Puangrach.

Meanwhile, the core CPI, excluding food and energy prices, in January increased by 2.75 per cent year-on-year and 0.26 per cent compared to December last year, Mr Yanyong said.

The commerce ministry targeted the 2012 inflation rate on average to grow within the range of 3.3-3.8 per cent based on assumptions that Dubai crude oil price stays around US$95-115 per barrel, the baht remains at 29-33 baht against the US dollar, as well as the government continuing its measures to cut the cost of living.

The major factors which will further impact Thai inflation were the volatile global economy, domestic and foreign political situations, particularly in Europe and the Middle East, which will affect oil prices as well as natural disasters, currency exchange and interest rates.

Regarding increase of start-up salaries of civil servants and university graduates to Bt 15,000, the government will spend additional Bt7 billion and it will have an impact on inflation of around 0.01-0.02 per cent.

To implement the policy to raise the daily minimum wage to Bt300, the permanent secretary said it is likely to affect inflation by about 0.1 per cent. (MCOT online news)

2012 Rice trade predicted to fall on weaker demand: FAO

BANGKOK, Feb 1 - The international rice trade is forecast to fall by approximately 1 million tonnes, or 5 per cent, this year as improved harvest prospects in several major importing countries may reduce overall demand after achieving a worldwide record of 34.5 million tonnes (milled basis) in 2011, according to the United Nations' Food and Agriculture Organization (FAO).

The total rice trade should decline to about 32.8 million tonnes. Among the countries expected to import less rice in 2012 are Bangladesh, Indonesia, Nepal, Nigeria and the Philippines.

In Thailand, the recent extension of government-sponsored pledging programme for secondary paddy crops is likely to keep the country’s rice export prices high. As the result, the world’s leading rice exporter is expected to incur a contraction in shipments, as buyers seek better prices from competitors, FAO said in a statement released here on Wednesday.

Supply constraints will probably inhibit exports also from Argentina, Brazil, Myanmar, the United States and Uruguay. Viet Nam, the world’s second-largest rice exporter, may not match its export totals from 2011. Cambodia, China and Pakistan, on the other hand, appear set to increase shipments, while India’s return to the export market, following the lifting of a ban on non-basmati rice exports, should also boost export totals from that country, FAO said.

The good 2011 world production outcome should facilitate an increase in 2012 global rice utilization of 11 million tonnes, or 2 per cent, to 471 million tonnes, but also boost global rice inventories by 10 million tonnes to 151 million tonnes (milled basis), sufficient to cover 32 percent of world utilization in 2012.

Global rice production is expected to set a new record when figures for 2011 are finalized, according to FAO, which raised its forecast for the world harvest by 700 000 tonnes on improved crop prospects in Asia.

Rice production should increase by 21. 4 million tonnes, a 3 per cent increase over the record set in 2010, and total 721 million tonnes (481 million tonnes, milled basis). Improved output from Asia was the key driver in the higher forecast.

Despite rising input prices and numerous weather setbacks – most notably widespread flooding in Southeast Asia during the second half of 2011 – total paddy production in Asia is now forecast at 653 million tonnes, also 3 percent higher than 2010 totals. The figure is 1.5 million tonnes more than the previous forecast issued in November 2011.

Countries in the Asia-Pacific region that registered strong gains over 2010 include Bangladesh, China, India, Pakistan and Viet Nam. However, production was expected to decline in Indonesia, Japan, the Republic of Korea, Myanmar, Sri Lanka and Thailand, much as a result of adverse weather conditions, under the influence of a recurring La Niña, and, in the case of Japan, of the March 2011 tsunami.

Further afield, Africa will probably produce 25.5 million tonnes for a 1 per cent increase over 2010. A recovery in Egypt, and progress in Guinea, Nigeria and Sierra Leone underpinned the improved harvest, even as severe contractions were recorded in Mali and Madagascar. The seasons ended positively in Latin America and the Caribbean, and Oceania. In the other regions, gains were also made in Australia and the Russian Federation, but production fell in the European Union and, especially, in the United States.

International rice export prices have been sliding downward in recent months, with the FAO Rice Price Index dropping by 7 percent since October to 235 points by the end of January. Nonetheless, rice prices were still considered high, as world quotations averaged 10 percent more in 2011 than in 2010.

Fierce competition among exporting countries led to lower quotations. Indica and Fragrant (Jasmine) rice prices were most affected, while prices for Japonica, which had also fallen, recovered in January.

The downward trend in rice prices is expected to persist in coming months as demand continues to weaken, and harvests in northern hemisphere countries and those along and south of the equator add supplies to the market, according to FAO. (MCOT online news)

Government plans to drive 2012 Thai economic growth to 5%: PM

BANGKOK, Feb 1 – Thai Prime Minister Yingluck Shinawatra said on Wednesday that she is confident that the country's strong fundamentals would enable the government to push Thai economic expansion to five per cent this year through three major strategies.

The first is to promote exports to the Middle East, India, ASEAN members, and other countries having free trade agreements with Thailand such as China, Japan, Australia and New Zealand, Ms Yingluck said in a seminar entitled “Decoding GDP 2012” held by the Economic Reporters Association.

The government will also accelerate development of basic infrastructure to facilitate connections to Thailand’s neighbouring countries, aiming to be a hub of trade and investment. Transport development to link the Dawei deep-sea port in Myanmar, the Laem Chabang deep sea port in Thailand and the Chennai Port in India will help support shipping of goods from the Andaman Sea to the Gulf of Thailand.

In the long term, the government will expedite construction of high speed trains and transportation routes worth Bt2.24 trillion in total. Meanwhile, a budget of Bt350 billion will be spent on preventing flooding and generating employment and incomes to stimulate the economy.

As a third emphasis, the government will stimulate household spending by increasing their purchasing power which will also help boost sales for small- and medium-sized enterprises, Ms Yingluck said.
The government will boost household spending through its policies such as its village fund project and a fund to promote women’s role as women can also play a larger role as breadwinners to support their families.

The prime minister said she hoped that the Thai economy will recover “in the form of a V shape” and that the recovery should be seen in the second quarter of this year. (MCOT online news)

Thai economy bottoms out: Fiscal Policy Office

BANGKOK, Jan 30 – The Thai economy bottomed out in November last year when the country was hit by the cumulative impact of severe flooding, but it is now likely to grow 5 per cent this year, said Somchai Sujjapongse, director-general of the Fiscal Policy Office (FPO).

The economy began to rebound in December with good signs of improving economic performance, in particular expanding consumption and private investment.

The recovery was reflected in a 9.8 per cent increase of value added tax (VAT) collection after having contracted one per cent in November. Imports of capital goods in December grew 13 per cent compared to a contraction of 4.1 per cent in the previous month, the FPO chief said.

“In the fourth quarter 2011, overall economy shrank five per cent due to substantial impacts from the flood crisis on the manufacturing sector. The number of foreign tourist arrivals was 4.4 per cent in the red and the 2011 economy grew only 1.1 per cent, down from the earlier targeted at 4.5 per cent, " Mr Somchai said.

The Thai economy is beginning to gradually recover, however, in the first quarter of 2012, and is likely to expand two per cent and three per cent in the second quarter, five per cent in the third quarter and seven per cent in the last quarter. It will certainly grow five per cent in 2012 on average, the senior government official said.

The European Union debt crisis must be closely monitored as it impacts the global economy and confidence, Mr Somchai warned. The worst case scenario could see a Thai economic contraction by 0.8 per cent.

Other factors include the European and US economies, the US elections and post-election policies, while La Nina-induced natural disasters could affect exports and contribute to capital flow volatility. Moreover, Thai politics have not yet stabilised, he said.

In December, exports improved to only a two per cent contraction, compared to 14.4 per cent in the red in November, indicating rebounding December production capacity. The Manufacturing Production Index in December shrank 25.8 per cent, compared to 47.2 per cent contraction in November with major retractions in the auto and electronics industries.

Meanwhile, the agriculture sector has also recovered in particular rubber as well as a service sector with increasing foreign tourist arrivals. The country's economic stability was evidenced by a 3.5 per cent inflation, 0.8 per cent unemployment and a US$17.5 billion international reserve, which triples short-term external debt. (MCOT online news)

Thai PM convinces business leaders there will be no flood crisis

DAVOS, Switzerland, Jan 28 -- Thai Prime Minister has convinced international business leaders that Thailand has prepared plans to prevent future flood crises and that the country has potential to be centre of the Association of Southeast Asian Nations (ASEAN) ready to offer investment privileges.

Ms Yingluck was attending the 42th annual World Economic Forum (WEF) in Davos, Switzerland and took the opportunity to regain confidence of leaders and investors in Thailand after last year's flood crisis.

On Saturday, Ms Yingluck met business leaders and CEOs under the topic of “Public-Private Interaction on Thailand” to seek ways to develop Thailand's economic potential and policy on water management and long term reform measures in Thailand.

The Thai premier has informed top executives that the Thai government realised investors' concern over the massive flood crisis last year so the government has systematically laid down water management plans to assure to foreign business people that the government could handle the flood situation and that there would be no future flood crisis.

A Single Command Authority would be set up to integrate directives on water management to effectively handle the flood crisis, as US$11 billion budget was set aside to repair and build infrastructure--including dykes--and for disaster forecasting, she said.

Ms Yingluck said that the flood crisis in Thailand last year has shrunk Gross Domestic Product (GDP) growth by 2 per cent but strong economic sentiment could help rebound to GDP growth of 5 per cent.

The country's financial and fiscal status remained healthy, as foreign exchange reserves were high, with public debt-to-GDP ratio at about 40 per cent of GDP, she said.

The government has adhered to an investment promotion policy by creating a free and competitive atmosphere, and would cut corporate income tax to 20 per cent next year, she said, adding that the government would also dismantle obstacles for companies who wished to set up their regional headquarters in Thailand.

Therefore, Thailand would be considered a good potential business location, as it was a strategic location for ASEAN, and when the ASEAN Community commences in 2015, the mobilisation of goods, service, investment, and labour would flow freely in the region. (MCOT online news)

More workers will be unemployed after flood

BANGKOK, Jan 27 -- More workers are expected to be unemployed after last year’s flood crisis reduced forward purchase orders for some factories while others shifted their production to other provinces to avoid a repetition of flood problems, according to a senior labour official.

Labour Protection and Welfare Department Director-General Arthit Isamo said that starting from the end of January, the establishments that were affected by the flood would terminate more contracts with their employees due to the lack of advance purchase orders.

Meanwhile some companies have moved their production bases to other provinces to avoid possible flooding, but would not relocate their factories abroad, he said.

The department, however, believed that unemployment will not reach the 100,000 worker level earlier forecast by many agencies.

According to official figures, he said, there were in total 28,195 workers being laid off from 99 flood-hit factories, while 350 factories could not reopen and 167,541 workers have not returned to work.

As of present, 28,317 factories have reopened and resumed normal production, and 822,444 workers have returned to work already, he said.

Mr Arthit said the department would collect information of the affected factories and the numbers of labourers unemployed before reporting to the labour minister. He added that the situation would become clear after Jan 31 when the three-month project period to help workers unemployed from the flood crisis ends (MCOT online news)

Thai PM stresses Thailand is good place for investment

AVOS, Switzerland, Jan 28 -- Thai Prime Minister Yingluck Shinawatra on Friday at the World Economic Forum (WEF) in Davos, Switzerland said that Thailand remained a good place for investment, as it was a centre of and gateway to the region.

She was also attempting to win the confidence of business people by affirming that Thailand has prepared measures to prevent a repeat of the flood crisis after massive floods in the country caused widespread damages.

Ms Yingluck was attending the 42th annual WEF and would take the opportunity to regain confidence of leaders and investors in Thailand after last year's flood crisis.

During the 42th WEF, Ms Yingluck has already participated in three main sessions, including a round table discussion with international leaders and executives, and an informal gathering of World Economic Leaders (IGWEL) on “Defining the Imperatives for 2012” covering sustainable economic growth.

She told the discussion that every country needed to strengthen its domestic economy in order to weather fluctuations in the world economy.

She was a keynote speaker at the opening conference called "Women as the Way Forward” intended to exchange opinions on the values and roles of female leaders.

Ms Yingluck stressed the importance of the equality between males and females for sustainable economic growth. She said the Thai government has placed importance on developing women's roles and their quality of lives.

Ms Yingluck also participated in a discussion with business leaders and CEOs on “Public-Private Interaction on Thailand” to seek ways to develop Thailand's economic potential and policy on water management and long-term reform measures in Thailand.

On Friday evening, Ms Yingluck has presided over "Thailand Night" and told the group of 700 guests that attended the event that Thailand not only had charming culture and beauty of nature but it was also a good business opportunity for investors.

She has assured guests which included world leaders and business leaders that with effective water management, there would definitely be no repeat of the flood crisis like last year's problems.

The premier said Thailand was a strategic location to link with other countries in the region and they have prepared investment in infrastructure networking to all countries in the region.

Ms Yingluck also invited the world and business leaders to attend The WEF on East Asia that Thailand would host during May 30-June 1 in Bangkok.

The theme of this forum is called "Shaping the Region's Future through Connectivity." (MCOT online news)

Three in four oppose government idea of selling PTT shares: Survey

BANGKOK, Jan 27 – An opinion poll released Friday found that a substantial majority of respondents--77 per cent, or three out of every four persons polled--oppose the government idea of selling shares of PTT Plc, the state-owned oil and gas conglomerate, which would effectively privatise the state enterprise.

The survey was conducted by the Bangkok University or Bangkok Poll among 1,160 persons in metropolitan Bangkok and its neighbouring provinces on public views on the planned sale of part of the government's stake in the PTT to the state-owned Vayupak Fund.

The majority of those polled gave thumbs down to the idea, but 23 per cent supported the idea.

Meanwhile, slightly over half--51.7 per cent-- believed there is a hidden political agenda behind the proposal, while 8.8 per cent did not think so, and 39.5 per cent said they were uncertain.

Forty-four per cent were concerned that if a portion of the government shares in PTT would be sold, they would inevitably shoulder the burden of rising energy prices in the future. One in five persons--19.6 per cent of the respondents--worried that some capital and interest groups might give priority to shareholder profits and 11.6 per cent worried about a possible conflict of interest.

Regarding the advantages and disadvantages of PTT losing its status as a state enterprise, in particular its effect on the public, 66.8 per cent believed it would be a disadvantage to the general public as energy prices--such as oil and gas--may be higher while 24 per cent believed it would not cause any impact given that any changes on energy prices depend on the global market.

Nearly two-thirds--62.6 per cent--said the PTT should retain its status quo as a state enterprise under governmental supervision. More than a quarter--28 per cent—believe that PTT should be nationalised as an entirely state-owned company.

The Ministry of Finance currently holds 51 per cent stake in PTT. If it sells two per cent of the government’s stake in PTT to the Vayupak Fund, the government’s ownership in the PTT will be reduced to 49 per cent and the government will be able to jettison its responsibility for PTT’s debt and will be allowed to borrow more to finance other projects.

In other developments, PTT Employees Union president Apsorn Kritsanasamit said Friday that the union representatives together with the State Enterprise Worker’s Federation of Thailand and State Enterprises Workers' Relations Confederation plan to submit a letter to Deputy Prime Minister/Finance Minister Kittiratt Na-Ranong next week to show their opposition to any plan to sell the government's stake in PTT and Thai Airways International (THAI), the national flag carrier (which is also a state-owned company).

They argued that if taken, the action would have a far-reaching impact given that the PTT is the country’s main energy conglomerate running an energy enterprise which is involved with national security.

The PTT union chief claimed that she had discussed the issue with fellow PTT employees and that a large number of them opposed the move. She said she would make it known to the finance minister. (MCOT online news)

Bank of Thailand sees Thai economy growing 4.8% this year

BANGKOK, Jan 26 – Thai economy is projected to grow at least 4.8 per cent this year as the country's growth base in 2011 at 1.8 per cent was lower than earlier projection, Thai central bank governor said on Thursday.

Bank of Thailand (BoT) Governor Prasarn Trairatvorakul said the BoT will release official figures on February 3.

The US’s Federal Reserve (Fed) keeps interest rates low at 0-0.25 per cent until at least late 2014 to boost the US economy, which needs recovery and the Fed has continuously extended its easy monetary policy, Mr Prasarn said.

He added the market has already acknowledged the news as well as the risk-on, risk-off pattern of the US dollar deemed as high quality liquid asset. It has a psychological effect in the capital market. If investors want to avert risk, they will invest in dollars while if they are ready to take risks, they will opt for another higher profit asset and the dollar will weaken. (MCOT online news)

Bank of Thailand cuts key interest rate to stimulate post-flood economy

BANGKOK, Jan 25 – The Bank of Thailand (BoT), the country’s central bank, cut the policy interest rate Wednesday by 0.25 percentage points from 3.25 per cent to 3.00 per cent per annum, with immediate effect, to help boost the post-flood economy.

The BoT’s Monetary Policy Committee (MPC) today resolved unanimously by a 7-0 decision to cut the repurchase rate as widely anticipated.

“With private sector confidence improving but still fragile, this policy accommodation should help accelerate the return of economic activity to normal levels,” the MPC said in its statement.

The MPC assessed that inflationary pressure remains contained, while headwinds from the global economy continue to pose risks to Thailand’s economic growth, said Paiboon Kittisrikangwan, committee secretary.

The impact of the floods on the Thai economy was greater than previously assessed and the restoration process is likely to be more drawn out.

The MPC projected that manufacturing production would return to normal by the third quarter of this year, supported by government measures, improving confidence, and accommodative monetary conditions.

The positive momentum generated by these factors would help to limit downside risks to growth, especially the drag on exports from a slowdown in global demand.

The MPC assessed that the global economic outlook had weakened further. The euro zone is likely to enter a recession, undermining the authorities’ ability to solve the sovereign debt problem in the region. On the other hand, economic conditions in the US improved, but limited fiscal policy space and continued weakness in the housing market would constrain economic growth in the periods ahead to remain below potential.

Economic growth in Asia moderated slightly, as softer global demand tempered export growth in the region.

Inflationary pressure declined, reflecting a more prolonged recovery in domestic demand and a slowdown in commodities prices in line with weakening global demand.

Nonetheless, the boost to economic activity from reconstruction spending and various government stimulus could exert some upward pressure on inflation going forward.

Meanwhile, Mr Paiboon said the latest economic growth forecast--to be released in the next two weeks--is expected to revise growth domestic product (GDP) in 2012 and 2013 to reflect latest economic data.

He said the GDP projection is likely to be revised downward, thanks to adverse impacts from last year’s floods and the global economy. (MCOT online news)

Cabinet approves shoring up natural rubber price to Bt120/kg

BANGKOK, Jan 24 - The Cabinet on Tuesday approved a Natural Rubber Policy Panel proposal to shore up the price of para rubber to Bt120 per kilogramme, according to Deputy Government Spokesman Anusorn Iamsa-ard.

He said the Thai rubber price now stands at Bt107/kg. The price previously dropped to its lowest at Bt85/kg at the end of last year due to the global economic downturn, the Japanese tsunami and the Thai flood crisis that caused the suspension of automobile production.

The price reduction was caused by China buying less expensive Indonesian rubber and that investors made profits from selling their rubber contracts.

The Bank for Agriculture and Agricultural Cooperatives (BAAC) will offer interest-free loans of five billion baht to agricultural institutes including agricultural cooperatives and Bt10 billion to the Rubber Estate Organization, both under the Agriculture and Co-operatives Ministry.

Both organisations will buy rubber from producers for processing and wait for a good timing to sell it at an appropriate price. The government will compensate management costs to the BAAC. (MCOT online news)

Thai exports in Q1 forecast to shrink 7%: KResearch

BANGKOK, Jan 22 – Thai export revenue is likely to shrink in the first quarter of 2012, possibly by as much as seven percent, according to Kasikorn Research Center Co., Ltd. (KResearch).

The entire year’s exports are expected to grow between 2-8 percent, in contrast with the Commerce Ministry’s statement that Thai exports would move in a more positive direction this year.

KResearch reported balance of payments–based exports may contract by over seven percent year on year in the first quarter of this year, partly due to last year’s highly competitive base.

The forecast of seven percent contraction forecast for the first quarter of 2012, which is worse than the 4.7 percent drop in the fourth quarter of 2011, is mainly due to the country’s production sector still recovering from the flood crisis of last year.

However, accelerating imports of capital goods and raw material after the flood crisis are a good sign that Thai industrial production capacity may return to normal by the second quarter of 2012 as expected.

This is a positive for Thai exports, in particular industrial goods, accounting for 62.6 percent of Thailand’s exports.

Positive export growth is likely to be seen in the second half of 2012, but variables in the world economy, such as the European debt crisis and signs of China’s economy slowing, must be closely monitored.

Economic momentum of Thailand’s trade partners--such as China, Europe and Japan--tends to slow down in the face of risks of a protracted European debt crisis.

KResearch projects that 2012 export outlook may grow by about five percent in the estimated range of 2-8 percent, compared to 17.2 percent growth over 2011. (MCOT online news)

Bt31 billion circulation estimated during Chinese New Year: BoT

BANGKOK, Jan 20 - Circulation of around Bt31 billion was estimated for withdrawal during the Chinese New Year festival, according to the Bank of Thailand (BoT).

Comparatively close to that of the same period last year, such an amount was part of BoT's forecast on total money withdrawals of Bt107 billion to be requested by commercial banks during the period of two weeks before the New Year.

As of Jan 16, the BoT has supplied around Bt490 billion. All types of banknotes are sufficiently in reserve for commercial banks, it stated.

Meanwhile, the latest Suan Dusit Poll revealed that during this period of Chinese New Year, 76 percent of Thai-Chinese will follow the tradition of paying respect and gratitude to ancestors and spirits, while 56 percent said they would give less importance to the tradition due to social and economic changes.

Respondents spoke of different reasons on how they benefited from spirit offerings during the Chinese New Year. Almost forty percent said they were happy to pay respects to ancestors, whereas 19 percent viewed it as a means to garner good luck, fortune and safety. Twenty-seven percent viewed it as an occasion for family gathering, and 12 percent said it was when they received gift money in red envelopes.

When asked what they would like to say to other Thai-Chinese, 47 percent of those surveyed said they wanted all Thais with Chinese origin to keep the Chinese New Year spirit offerings tradition alive.

Twenty percent asked for them to love Thai soil and 17 percent for Thais of all ethnicities to love each other and unite.

The survey was conducted among 1,936 Thais-Chinese citizens in Bangkok and Chinese communities nationwide from Jan 16-20. (MCOT online news)

Thai exports grow 17.2 per cent in 2011

BANGKOK, Jan 20 - Thai exports grew 17.2 per cent in 2011 compared to the previous year, or some US$228 billion, while the value of exports in December reached over US$17 billion, or a 2-per cent decrease year-on-year, Permanent Secretary for Commerce Yanyong Phuangrach announced on Friday.

The over 17-per cent growth was higher than the previously targeted 15 per cent by the ministry, while the drop in value last month was due to the recent flood crisis. The drop was lower than that in November, however, which means that the Thai industrial sector has recovered quickly, Mr Yanyong said.

Merchandise with a lower percentage on exports in December included main industrial goods at a reduced rate of 10.2 per cent, electronics of 26.9, motor vehicles, equipment and auto parts of 20, and electric appliances of 12.9 per cent respectively.

The continuous decline of Thai exports amounted to 7.7 per cent in the major markets of the United States, Europe and Japan.

Meanwhile, Thai imports in 2011 grew 24.9 per cent year-on-year, valued at US$228 billion.

Thai imports last month stood at US$19.1 billion, a 19-per cent increase year-on-year for all types of merchandise such as fuel at 22 per cent, capital goods at 14.5, consumer goods at 21.7, and raw material and semi-finished goods at 20.6 per cent respectively. In December alone, Thailand recorded a trade deficit at US$2.1 billion.

However, the country in 2011 recorded a trade surplus at US$334 million.

The Department of International Trade Promotion targeted the growth of Thai exports this year at 15 per cent, or around US$263 billion in value.

The rise of Thai exports in 2012 will depend on the fluctuation of the world economy and of fuel prices. The balance of trade in Q1 will still be negative but not so seriously, as the industrial sector has shown signs of quick recovery, the permanent secretary for commerce said.

Positive factors will come from the prices of agricultural goods in the world market, which shows a positive tendency, the government's measures to boost the economy and rehabilitation measures for sectors affected by the recent flood. (MCOT online news)

Sluggish spending on Chinese New Year projected

BANGKOK, Jan 19 – Consumer spending during the Chinese New Year this weekend is likely to be sluggish due to the cumulative impact of flooding and concerns over higher cost of living related to increased energy prices, according to a survey released on Thursday.

The survey on consumer spending during Chinese New Year was conducted among 1,200 persons during Jan 10-15, 2012 by the Economic and Business Forecasting Center of the University of the Thai Chamber of Commerce (UTCC).

UTCC Director Thanawat Polvichai said overall spending nationwide is forecast at Bt40.1 billion, a 2.56 per cent rise from Bt39.1 billion last year.

If there had been no flood crisis, about Bt42-43 billion could have been expected during the Chinese New Year, or about seven per cent growth.

However, the Thai economy in the first quarter has not yet recovered and is likely to only grow by 1.5-2.5 per cent. Consumer spending during the Chinese New Year is not expected to be robust because many people have spent resources on post-flood rehabilitation.

The southern flood, with tourism yet to recover and affected by terror concerns puts more pressure on the economy and the mood for Chinese New Year. Moreover, the 300 baht daily minimum wage has not been raised as earlier expected and the rice mortgage scheme has not been fully implemented due to reduced rice output, impacted by flooding.

Some 80 per cent of consumers said their increased spending this year resulted from rising goods prices.

Compared to other regions, consumers in Bangkok and surrounding provinces are likely to spend at most Bt14.8 billion, but the spending in these areas increased only 2.11 per cent from the previous year.

Meanwhile, the northeastern region, unaffected by this year’s flood, records higher growth of 4.81 per cent year-on-year to Bt6.3 billion this year from six billion baht, recorded last year.

The survey on travel plan during the Chinese festival showed that 95 per cent of respondents planned to travel in the country while about 4.4 per cent planned overseas trip to countries such as China, Myanmar and Hong Kong.

In a related development, Suvarnabhumi Airport projected that the number of air passengers during Chinese Lunar New Year from Jan 19-31 will increase by 23 per cent year-on-year to 2.3 million passengers in total or on average 176,000 persons per day.

Wilaiwan Natwilai, airport spokesperson, said that airlines have requested permission for 323 additional flights, both international and domestic, during the festival, adding that most foreign tourists visiting the kingdom during the Chinese New Year were Chinese visitors, followed by Japanese and Indian tourists.

Regarding the US embassy’s terror threat warning in Bangkok, the spokesperson said the airport has raised its security level by one step with more police officers and security personnel guarding the airport around the clock. (MCOT online news)

December domestic auto sales, production drop year-on-year

BANGKOK, Jan 18 – Thailand’s total domestic automobile sales in December fell by 41.40 per cent to 54,575 units year-on-year, but increased by 109.35 per cent compared to the previous month, according to the Federation of Thai Industries (FTI).

Spokesman Surapong Paisitpattanapong of the FTI Automotive Industry Club said Wednesday that the rise in auto production was because almost all automobile plants have resumed operations and have begun delivering vehicles to customers after Thailand’s devastating floods though the plants are not yet fully operational.

Overall auto sales last year, from January through December, were recorded at 794,081 units, down 0.80 per cent compared to 2010.

Meanwhile, December auto production dropped 27.64 per cent to 99,426 units compared to the same period in 2010, but rose by 319.61 from November 2011.

Mr Surapong reported that auto production in 2011 totalled 1,457,795 units, shrinking by 11.40 per cent, year-on-year.

The country’s flood crisis in late 2011 halted auto production as the mega-floods hit the central provinces, where many industrial estates are located, which immediately led to a shortage of parts to supply the country’s automobile assembly plants.

The widespread inundation slashed auto production in October and November, falling in November to a record low of 23,695 units for the preceding 151 months

Not since mid-1999 – more than 12 years ago -- had Thailand’s automotive production been so low.

In a related development, Japanese leading automaker Toyota Motors reported that flooding in Thailand and the devastating March 11 tsunami in Japan affected its auto production in Thailand, dragging its 2011 overall sales to 794,081 units, a drop of 0.8 per cent year-on-year.

Kyoichi Tanada, President of Toyota Motor Thailand Co., Ltd., said the company was confident that the Thai auto market could continue to expand to meet the demand of the markets which will lead to competition among automakers as well as government policy supporting the automotive industry.

Mr Tanada projected Thai auto sales to grow to 1.1 million units, marking the first time in Thailand’s auto sale history that the auto sales volume will exceed one million units.

Meanwhile, Toyota Motor Thailand projected its total auto sales in 2012 to reach 450,000 units, including 214,000 passenger cars and 236,000 commercial vehicles, he added.

Mr Tanada asserted that Toyota Motor Thailand will continue expanding its investment here and will build a new auto manufacturing plant at Gateway City Industrial Estate in Chachoengsao province, named Gateway Plant 2, and will resume operations at its TAW factory, which manufactured the Toyota Fortuner.

The combined production capacity of the two factories will reach 88,000 units, with an investment value of Bt8.2 billion.

Meanwhile, the STM factory, which produces engines of Toyota vehicles, will also expand its production capacity.

All expansion is to meet rising market demand, the Toyota Thailand president added. (MCOT online news)

Thailand's Industrial Confidence Index up in December

BANGKOK, Jan 18 -- Thailand’s Industrial Confidence Index in December rose to 93.7 in from 87.5 in November, indicating signs of a good industrial recovery after the country’s worst flood crisis in decades, according to a survey conducted among 1,034 industrial entrepreneurs by the Federation of Thai Industries (FTI).

FTI Chairman Payungsak Chartsuthipol on Wednesday announced that the rising index was attributed to growing purchase and sales orders, production quantity and profits.

As the flooding situation in a number of zones has returned to normal, the industrial sector, particularly the automotive and auto spare parts industries, gradually resumed operations, Mr Payungsak explained, adding that main transportation routes which now are passable again after the floods, supported the logistics and supply chain systems.

Although the rising index was a good indication of recovery, the December index, which was below the benchmark of 100, meant that entrepreneurs continued confident in their own businesses, the FTI president said, reasoning that so far some entrepreneurs were unable to resume operations because their plants were hard hit by the inundation which had to take some time for the recovery.

Meanwhile, the industrial confidence index in the next three months was projected to edge up to 106.3, from 104.5 forecast in November.

The projected increase was because industrial entrepreneurs believed that total purchase and sales orders, productions, production cost and profits would rise.

Most entrepreneurs suggested that the government should speed up stimulating the country’s post-flood economy, but the Bt300 (US$10) national daily minimum wage policy implementation should be put on hold as well as the price hike for energy used in the industrial sector.

In addition, they urged the government to balance water resource management for both the agricultural and industrial sectors, Mr Payungsak said. (MCOT online news)

Thailand's rice exports likely to drop this year

BANGKOK, Jan 16 – The Thai Rice Exporters Association on Monday announced that the country’s rice exports will fall by 2.5-4 million tonnes to 6.5-8 million tonnes from last year’s 10.5 million tonnes.

Thai Rice Exporters Association President Korbsook Iamsuree said that rice exports face many obstacles this year. The US Department of Agriculture believes that the global rice trade will amount to 31.88 million tonnes, dropping from about three million tonnes from last year’s 34.78 million tonnes.

A major factor is India’s export policies with India resuming rice exports after a three year suspension. It has already allowed exports of two million tonnes of rice and added rice export permissions are likely to negatively impact Thai exports, in particular white rice and parboiled rice which could drop by another 1.5 million tonnes, she said.

In addition, Thai rice prices are higher than their competitors due to the government’s rice mortgage scheme.

For example, Thailand’s five per cent white rice and five per cent parboiled rice, both exported at the same price, US$533 per tonne, while Indian rice is priced at $435 per tonne for five per cent white rice and $450 for five per cent parboiled rice.

Vietnamese jasmine rice sales at $350-450 per tonne, cheaper than Thai rice. Vietnam has grabbed a share of Thailand’s current rice export market, in particular in Asia, according to Ms Korbsook.

In addition, several other countries have also increased rice exports this year. They include Cambodia, Myanmar, Brazil, Uruguay and Pakistan, she said.

Thai rice prices and production this year also depend on regional conditions and any possible natural disaster as well as currency exchange fluctuations and the government’s policies. Currently, Thai rice price is the world’s most expensive, said the Thai Rice Exporters Association. (MCOT online news)

Court rejects injunction on government's energy price hike

BANGKOK, Jan 17 - Thailand's Administrative Court on Monday night rejected a request from the civil sector asking the court to issue an injunction against the Oct 4 cabinet resolution to raise the price of Natural Gas for Vehicles (NGV) and liquefied petroleum gas (LPG), citing insufficient evidence to show that the cabinet action is unlawful.

The injunction was earlier sought by the Foundation for Consumers and three citizens who presented themselves as gas consumers against Prime Minister Yingluck Shinawatra, the cabinet, Energy Minister Pichai Naripthaphan, Energy Policy and Planning Office (EPPO) and PTT Public Company Limited.

The complaint urged the court to consider the injunction until the court has its verdict on the cabinet resolution made on Oct 4, 2011 that the NGV price would rise, from Jan 16, by 50 satang/kg monthly until the end of 2012 when it would stay at Bt14.50/kg from the present Bt8.50/kg, a 70 per cent hike.

The liquefied petroleum gas (LPG) price would also increase by 41 satang/litre every month to Bt16.06/litre from the current Bt11.14/litre.

The court however rejected the request saying there is insufficient evidence to prove that the resolutions made by the cabinet and the EPPO were unlawful and if the court issues an injunction, the action will affect state operations on energy price policy and obstruct public service as well as country's administration.

Before the court consideration, taxi and truck operators last week rallied against the cabinet decision, blocking roads outside Government House and PTT headquarters in Bangkok, calling for the revocation of the energy rise plan.

After negotiations, the Land Transport Federation of Thailand (LTFT) and the government agreed to set up a joint working group to determine the NGV cost and appropriate pricing but in the meantime the NGV price would rise in accord with the cabinet resolution in the first four-month period. (MCOT online news)

Cabinet approves Bt380 bln investment budget for infrastructure projects in North

CHIANG MAI, Jan 15 – Thai Cabinet on Sundayy approved in principle a Bt380 billion budget to invest in 128 infrastructure projects in the northern region.

Deputy Prime Minister and Commerce Minister Kittirat Na Ranong said after the first mobile cabinet meeting that the cabinet has given a green light for the budget towards infrastructure development including a Bangkok-Chiang Mai high-speed electric train project, a mass transit system project and a flood prevention system project in the region.

Mr Kittirat added that agencies relevant to each project were assigned to propose the investment budget to the screening committee and the Strategic Committee for Reconstruction and Future Development in order to scrutinise the appropriate budget for each project, explaining that the country needed to invest around Bt2 trillion for long-term infrastructure projects for the whole country.

Meanwhile, Government Spokesperson Thitima Chaisaeng said that the cabinet approved the speeding up of building sluice gates and repairing of destroyed river banks as a short-term investment for flood prevention in the northern region of Thailand.

Regarding the long-term projects in the North valued at Bt380 billion, Ms Thitima explained that the projects included a water resource investment project worth Bt15 billion, the trans-provincial road development project valued at Bt25 billion, a project on the mass transit and rail development worth Bt311 billion, as well as the tourism development project worth Bt10.5 billion.

However, the investment budget for each project will be considered again, the government spokesperson added. (MCOT online news)

December Consumer Confidence Index edges up first time in 5 months: UTCC

BANGKOK, Jan 12 – Thailand’s Consumer Confidence Index (CCI) in all categories in December increased for the first time in five months, according to a survey by the Economic and Business Forecasting Center of the University of the Thai Chamber of Commerce (UTCC).

The confidence index among Thai consumers on the overall economy climbed to 63.1 in December from 61.0 in November, Center Director Thanawat Polvichai announced on Thursday.

The rise was attributed to last year's worst flood in decades which now returns to normal, post-flood economic rehabilitation measures which are projected to drive the 2012 overall Thai economy to grow by 4-5 per cent as well as more public spending boosted by the New Year festival.

However, the index remained below the benchmark of 100, meaning that the consumers continue to experience a lack of confidence in the overall situation, Dr Thanawat explained.

He added that the December index is also lower than the figure reported prior to the flood crisis because consumers are still concerned about the high cost of living and the fragile global economy affected by the debt crisis in Europe.

Meanwhile, the director predicted that consumption in Thailand will continue at a slow pace until half way through this year’s first quarter.

Dr Thanawat analysed that the speed-up in the post-flood economic rehabilitation, including budget injection for boosting the country’s economy and a flood-prevention plan for this year, will help restore consumer spending and may help the Thai economy to expand by 5-7 per cent.

However, the economic problems in Europe and oil prices should be closely monitored, he warned, explaining that if the problems continue and intensify, Thai exports will be affected immediately. (MCOT online news)

Bank of Thailand launching new banknote series next week

BANGKOK, Jan 12 -- The Bank of Thailand (BoT) will issue a new series of banknotes, its 16th series, next week after the current series has circulated in the market for more than 14 years, according to BoT Governor Prasarn Trairatvorakul.

Mr Prasarn said that the new notes comprise five denominations -- Bt20, Bt50, Bt100, Bt500 and Bt1,000. Their size and colour remain unchanged from the present notes.

First launches will be the Bt50 banknote on January 18, the date commemorating the glorious victory of King Naresuan the Great in traditional royal combat on elephant back in 1593, he said.

The BoT governor said that about 190 million Bt50 banknotes currently circulate in the system, and that the new issue would cost Bt5 higher then the currently used notes.

The central bank has applied newest technology as a security feature for the Bt50 note to prevent counterfeiting which included the watermark which HM the King's portrait will be shown on the right side and a watermark of Thai numeral 50 is especially transparent.

The current Bt50 banknote and those previously issued would also be legal tender by law, he said. (MCOT online news)

Twin-track eastern rail link opens to connect Chachoengsao, Laem Chabang port

Twin-track eastern rail link opens to connect Chachoengsao, Laem Chabang port

CHACHOENGSAO, Jan 12 - Thailand's eastern double-track railroad linking this province with Chonburi's Laem Chabang opened Thursday, and expanding the country's road and rail logistics system with a connection to the deepwater Laem Chabang Port.

Deputy Transport Minister Pol Lt-Gen Chat Kuldilok presided over the railway's opening ceremony.

The railroad will also support the Lat Krabang Inland Container Depot (ICD) in Bangkok, as planned by the ministry and the State Railway of Thailand (SRT), the deputy transport minister said.

The Lat Krabang depot currently handles some 400,000 containers per year. After the double-track railroad's opening, it is expected to serve 800,000 containers annually in the near future and up to one million within a few years.

The ministry will speed up other double-track railway construction links with the Chachoengsao-Laem Chabang route to support the transport sector.

On the same occasion, Pol Lt-Gen Chat launched a railway passenger car for handicapped passengers and travellers with wheelchairs, considered as a development of SRT services to serve the elderly and handicapped and as a part of the government's policy to support the quality of life of such groups of people.

The Chachoengsao-Laem Chabang double-track railroad covers Chachoengsao and Chon Buri provinces. It was built with an investment of Bt5.85 billion for a 78km length. From Chachoengsao station, the route passes through Chon Buri, Bang Phra, Si Racha terminating at Laem Chabang station. (MCOT online news)

Thai shrimp production projected to grow 10-20% this year

Thai shrimp production projected to grow 10-20% this year

BANGKOK, Jan 11 – The Thai Shrimp Associaation on Wednesday announced its projection that this yearโ€™s overall Thai shrimp production will increase by 10-20 per cent, valued at some Bt120 billion.

Somsak Paneetatyasai, president of the Thai Shrimp Association, said that the 2012 Thai prawn harvest is likely to yield 650,000-720,000 tonnes, up 10-20 per cent year-on-year, while shrimp exports will expand to 400,000 tonnes on the condition that global weather is not volatile.

Thailand's major market destinations for shrimp exports are the United States, Japan and countries in the European Union with 46 per cent, 25 per cent and 15-18 per cent growth respectively, Mr Somsak added.

The country's main competitors for prawn exports remain Vietnam, Indonesia and India. Meanwhile, China, the major shrimp producer, still imported shrimp produced in Thailand due to its high domestic demand.

The US anti-dumping law is still a threat to Thailand and other shrimp exporting countries, as well as the negative impact of the shrimp-related pandemic found in Indonesia, the association president said, explaining that Thailand's Fisheries Department is closely monitoring the pandemic and preventing infected breeds from being imported into the kingdom.

In a related development, Mr Somsak added that overall Thai shrimp production in 2011 remain satisfying with a prawn harvest of 600,000 tonnes, lower than the earlier expected 640,000 tonnes.

Meanwhile, last yearโ€™s shrimp exports were valued at Bt110 billion due to the declining volume of shrimp available for export and the weakening of the baht currency. (MCOT online news)

Cabinet approves 4 financial decrees to facilitate water management investment

Cabinet approves 4 financial decrees to facilitate water management investment

BANGKOK, Jan 10 - The Thai cabinet on Tuesday approved four urgent decrees on the acquisition of funds for massive investment in the countryโ€™s water management projectsย to restore confidence among the public after the country has been severely hit by its worst flooding in decades.

Council of State Secretary-General Atchaporn Charuchinda announced the cabinet meeting action to a news briefing after the cabinet last week agreed in principle but assigned concerned agencies to thrash out and revised details of the four financial decrees.

Mr Atchaporn said the four decrees included management of Bt1.14 trillion debt to be transferred to the Financial Institutions Development Fund (FIDF) supervised by the Bank of Thailand (BoT), authorisation for the central bank to grant Bt300 billion in soft loans to flood-hit business operators, permission for the finance ministry to seek loan for setting up Bt350 billion national rehabilitation fund and foundation of Bt50 billion insurance fund.

The decrees were earlier proposed to the cabinet by the Strategic Committee for Reconstruction and Future Development (SCRF) and the Strategic Committee for Water Resources Management (SCWRM) for urgent rehabilitation of areas of the country devastated by last year's flooding, restore confidence among Thai people and prevent any future flooding which may reoccur this year.

With the three measures needed to be carried out simultaneously and urgently from January, Mr Atchaporn said the cabinet approved the four decrees so that implementation could proceed immediately.

The BoT must discuss with financial institutions the repayment of the FIDF debt, while a loan to invest in the overall water management system will be sought immediately, from earlier plans to be done in one to five years, the Council of State secretary-general said. (MCOT online news)

Transport operators protesting NGV fuel price hike at PTT disperse

Transport operators protesting NGV fuel price hike at PTT disperse

BANGKOK, Jan 10 -- Transport operators who gathered at the PTT headquarters on Vibhavadi Road to protest the natural gas for vehicles (NGV) price hike dispersed about 7pm Monday after the government agreed to set up a joint panel to resolve the problem.

Trucks, private joint city buses, taxis and passenger pickup trucks have parked their vehicles in front of the PTT Plc headquarters, paralysing traffic on Vibhavadi Road and nearby areas.

Deputy Prime Minister/Commerce Minister Kittiratt Na Ranong told reporters after meeting with Energy Minister Pichai Naripthaphan and Land Transport Federation of Thailand (LTFT) chairman Yoo Chienyuenyongpong to find a solution that the LTFT has acknowledged that the NGV cost is higher than it is sold at Bt8.50/kg and agreed the price of NGV must rise.

However, he said, both sides agreed that the exact cost of the NGV should be studied and an appropriate price be set, while truck operators want more NGV service stations in response to higher demand.

The LTFT and the government will set up joint working group to determine NGV cost and appropriate pricing, he said, adding that in the meantime the price of NGV would rise in accord with the cabinet resolution.

The cabinet on Oct 4 resolved that the NGV price would rise, from Jan 16, by 50 satang/kg monthly until the end of 2012 when it would stay at Bt14.50/kg from the present Bt8.50/kg, a 70 per cent hike.

The liquefied petroleum gas (LPG) price would also increase by 41 satang/litre every month to Bt16.06/litre from the current Bt11.14/litre.

Mr Kittiratt said that he could not say that the NGV price would gradually increase to Bt6 or not as it awaits the study result, and he believed that it could be acceptable by all parties.

He apologised to truck operators that the government gave insufficient information on the NGV price hike plan to explain the price change need to them.

Meanwhile, Mr Pichai said that he expected the study would take less than one month to complete.

Mr Yoo said that he was satisfied with the result of the meeting and he believed the NGV price hike after the study would not reach Bt6 as set but may be less than Bt2/kg.

He later reported on the meeting to the protesters and announced that protesters who had gathered since 11pm Sunday would disperse at around 7pm Monday. (MCOT online news)

Government is confident economic growth this year will hit 7%

BANGKOK, Jan 7 -- Deputy Prime Minister and Commerce Minister Kittirat Na Ranong affirmed Thailand's economy remained strong, despite the country facing a massive flood crisis late last year, and he was confident the Gross Domestic Product (GDP) could expand more than 7 per cent this year.

Prime Minister Yingluck Shinawatra on Saturday was absent from her weekly TV and radio programme, "Yingluck Government Meets the People," but assigned Mr Kittirat, who also represented the premier as chair of the Strategic Committee for Water Resources Management, along with the Strategic Committee for Reconstruction and Future Development chairman Virabongsa Ramangkura, to clarify the water management plan and Thailand's economic prospects in 2012.

Mr Kittirat said that he believed that this year could be a golden year for Thailand despite the flood crisis because there would be investment and development to make up for the damages caused by the one of the worst floods in recent history.

More investment would be carried out in flood prevention and response as well as to fight drought, so employment could increase, he said, adding that he was confident that Thailand could achieve 7 per cent GDP growth in 2012.

Mr Kittirat said that the master plan for updated water management programme could be implemented immediately when the 2012 budget bill was approved by Parliament, with more than Bt29 billion to be initially spent on the repair and rehabilitation of water sluice gates and dykes that were damaged by the flood.

Moreover, he said, legislation would be promulgated to mobilise more than Bt350 billion in funds to spend on the management of 25 river basins.

Mr Virabongsa, former finance minister, said that since he assumed the position, he visited many countries including England and Japan to hold talks with insurance companies, investors, business leaders and leaders to assure them about Thailand's rehabilitation plan and preparation to tackle future flood.

He said that business leaders have confirmed that they would not move their production bases from Thailand, but wanted the government's assurance that there would be no further flood crisis.

Mr Virabongsa said he has convinced them that there would be no more disasters like the flood crisis of last year. (MCOT online news)

Govt eyes setting up industrial estates on borders

BANGKOK, Jan 6 - The Thai government will press ahead with setting up industrial estates along Thailand's borders to support more investment and link with neighbouring nations, after existing industrial parks in the country fully serve investment projects.

Deputy Minister of Industry Supap Kleekajai told a forum on post-flood industrial estates rehabilitation that three industrial parks currently are on the agenda.

Phu Nam Ron Industrial Estate in the western province of Kanchanaburi will link with neighbouring Myanmar's Dawei project.

The Industrial Estate Authority of Thailand will go on site again next week for an inspection. The Yingluck administration set up 13 committees to collaborate with each other and work on the matter.

In the north, an industrial estate is to be constructed at Tak's Mae Sot district, while another one currently in a feasibility study is in Chiang Rai's Chiang Khong district to connect with China's Yunnan province. The latter project's original location was changed from Chiang Saen district after it was rejected by local residents claiming the area was a historic heritage site and source of civilisation.

The government is also considering possibilities to build an industrial estate in the northeastern province of Khon Kaen.

It will also designate the southern province of Narathiwat as a new economic zone although development there is difficult partly due to security issues and its peat swamp forest, Mr Supap said.

Meanwhile, Payungsak Chartsutipol, Chairman of the Federation of Thai Industries (FTI) said his organisation supports the government in finding new locations for industrial estates, as the industrial sector has been more concerned regarding natural disasters, but a proper selection of types of industrial parks to be built is needed.

Thailand is being considered by many foreign investors, he added, for its strategic location connecting with other nations in Southeast Asia. Having good relations with its neighbours will help Thailand to be more attractive among investors particularly when regional economic integration through the Association of South East Asian Nations (ASEAN), or ASEAN Economic Community (AEC), is established by 2015.

Thailand is ready as a centre of trade and investment in the region, according to the FTI chairman.

Much value to the country will be added; for instance, agriculture and tourism, with full support by the government. Mr Payungsak said he wished the future development of Thai industry to become eco-friendly industries or towns and produce more value-added goods rather than basic merchandise. (MCOT online news)

PTTEP contracts Myanmar petroleum concessions

BANGKOK, Jan 5 –Thailand’s state-owned PTT Exploration and Production (PTTEP) on Thursday signed an agreement with Myanma Oil and Gas Enterprise (MOGE) for an investment in Myanmar's Zawtika M9 gas field.

PTTEP president and chief executive Anon Sirisaengtaksin said petroleum and natural gas production will start in 2013 with a production capacity of 300 million cubic feet/day, with 240 million cubic feet to be distributed to Thailand daily. MOGE holds a 20 per cent stake in the investment, he said.

Granted rights by Myanmar, PTTEP will also begin exploring the country's two onshore oil blocks, EP2 and G, on Wednesday.

The Thai company is investing in neighbouring Myanmar to build ties between the nations and to secure energy for Thailand.

Mr Anon said PTTEP expects petroleum sales to rise to 290,000 barrels/day this year, an increase of 8 per cent. Petroleum sales volume were 265,000 barrels/day in 2011.

PTTEP current main production centre in the Greater Bongkot South project in the Gulf of Thailand will begin production in March at 300 million cubic feet/day, and its Australian Montara field will resume in either Q2 or Q3 at 30,000 barrels/day.

The firm began producing oil in the Vietnam 16-1 Project in Sept 2011, with full production capacity beginning this year at 30,000 barrels/day.

The company's investment strategies include collaboration with the PTT Group in petroleum exploration and with partners such as Statoil to seek investment opportunities in the United States, South America and Africa, whereas the Browse LNG project in Western Australia and other investment sources in Thailand and Asian countries such as Malaysia also have PTTEP’s interest.

This year's investment total was set at Bt150 billion, said Mr Anon, out of which Bt100 billion is for construction, Bt20 billion for drilling and exploration, and Bt30 billion for management.

PTTEP's five-year investment plan reached a total of Bt600 billion, with Bt350 billion earmarked for construction. The company aims to produce oil at 900,000 barrels/day in 2020. (MCOT online news)

December Consumer Confidence Index rise first in four months

BANGKOK, Jan 5 – Thailand’s Consumer Confidence Index (CCI) rose in December for the first time in four months, following the end of the flood crisis, according to the commerce ministry.

Yanyong Puangrach, Permanent Secretary for Commerce, announced the results of a survey on consumer confidence among 3,250 people throughout the country.

On a scale ranging from 0 to 100, the Consumer Confidence Index in December rose to 21.4 from 18.5 in November, its first increase in four months since the flood crisis began in late July.

All consumer confidence indices relating to the economic and business situation, future income and job opportunities have risen, indicating strengthening confidence after the flood.

The public is now spending more on buying consumer goods and electrical appliances but have no plan to buy new cars in the next six months, seen in the low index of 8.8. However, consumer confidence remained low as the index was below 50. Most people are still concerned over commodity and oil prices and the cost of living, Mr Yanyong said.

Factors that will help boost consumption are the civil servants salary rise from January onwards, post-flood rehabilitation, expenditures during the Chinese New Year, he said.

The public want the government to help cap prices of consumer goods and solve unemployment, low wage problems and to regain investors’ confidence.

They also want the government to expedite rehabilitating flood victims, leading the economy to recovery, and determining clear flood response and management plans.

He said the commerce ministry’s Internal Trade Department will oversee consumer goods prices as demanded by the public, according to the survey. (MCOT online news)

Thai inflation rises 3.53% in December, lowest in 8 months: Commerce Ministry

BANGKOK, Jan 4 - Thailand’s Consumer Price Index (CPI) in December edged up to 112.77, an increase of 3.53 per cent year-on-year, or the lowest inflation rate growth in eight months, Permanent Secretary for Commerce Yanyong Phuangrach announced on Wednesday.

The low inflation rate was attributed to lower production costs, owing to the retreating floodwaters and better weather, and the government's continuous policy to lower living expenses and to closely monitor consumer prices.

The 2011 CPI rose by 3.81 per cent, compared to 2010, Mr Yanyong said, and was previously anticipated by the ministry at 3.2-3.8 per cent.

Mr Yanyong said Thailand's inflation rate was the fourth lowest in Asia, following Japan, Brunei and Malaysia respectively.

The Consumer Price Index in December declined 0.48 per cent compared to November, in accordance with the lower prices of some fresh goods after normality resumed in the post-flood period.

December’s core CPI rose 2.66 per cent year-on-year and 0.11 per cent compared to November, resulting in an average 2011 core CPI increase of 2.36 per cent compared to 2010.

The commerce ministry has set the 2012 inflation target within the range of 3.3-3.8 per cent under the conditions that the Dubai crude oil price stays around US$95-115 per barrel, the baht remains at 29-33 to the dollar, and the government maintains its policy to lower the cost of living.

Key factors, which most directly influence the country’s inflation, were the global economy, politics, natural disasters, oil prices and currency exchange rates. Inflation in this year's Q1 was forecast at 3.65-3.75 per cent. (MCOT online news)

SRT takes over Chatuchak Market from City Hall

BANGKOK, Jan 2 - The Bangkok Metropolitan Administration (BMA) on Monday returned management of the world renowned Chatuchak Weekend Market to the State Railway of Thailand (SRT) after its commercial lease expired on Jan 1.

Speaking to media after a three-hour meeting with BMA senior officials, Prasert Attanant, SRT deputy governor who also heads an SRT preparatory group on market management, said the meeting resolved that the railways would operate the market from Jan 2 onward.

They agreed to set up a joint working group comprising SRT and BMA representatives to discuss how to manage or utilise BMA-owned assets and said that further discussion is needed for a conclusion.

The SRT deputy governor assured the vendors that the market takeover would definitely not adversely affect them.

There will be business as usual over the upcoming weekend since SRT earlier offered to waive their rental fees for two months, he said.

Regarding public utility fees, the joint working group will sort out the matter before the weekend to spare the vendors' difficulties. Security operations will be outsourced to a private company, the SRT executive said.

Although some vendors acknowledged that the SRT has the right to manage its own property, they questioned the continuity and the railway agency's readiness to operate the 27-acre market which attracts as many as 200,000 visitors daily on weekends with 30 per cent of them being foreigners.

Last week’s cabinet resolution acknowledged that the SRT has management rights to Chatuchak weekend market after the expiry of its lease with the Bangkok Metropolitan Administration. (MCOT online news)

Number of post-flood laid off workers lower than anticipated

BANGKOK, Jan 2 - The number of workers being laid off as a result of Thailand’s 2011 flood, the worst in decades, is estimated at about 60,000, lower than earlier estimated, according to Department of Labour Protection and Welfare director-general Arthit Issamo.

Regarding the country’s employment outlook overview for 2012, Mr Arthit said the beginning of this year will see post-flood rehabilitation. Among 990,000 flood-affected workers, more than 600,000 have been reemployed. Some 240,000 workers have joined a scheme in which each receives a monthly wage of 2,000 baht funded by the labour ministry for three months to help reduce their losses by being unemployed.

The number of laid-off workers has so far risen to 25,000 with the remaining 30,000-40,000 workers remaining uncertain as to whether they will be made redundant or not.

Consequently, the number of those unemployed should not exceed 60,000, a number far below the figure previously estimated, the senior labour official said, adding that the exact figure is expected to be known after the New Year's holiday.

In case more workers are to be laid off in 2012, the three-month state-funded scheme which began in Nov 2011 and last through this month could be extended, Mr Arthit said.

The scheme was kickstarted with a total budget of Bt1.8 billion with an initial disbursement of Bt 600 million dispensed through the Government Savings Bank. The total budget is not expected to be used up as some businesses have recovered sooner than expected.

Mr Arthit urged workers who are uncertain about their employment to contact provincial labour protection and welfare officials for assistance. (MCOT online news)

Thailand, Cambodia to establish power plant working group

PHNOM PENH, Dec 30 - Thailand and Cambodia are to establish a working group to facilitate cooperation for the Stung Num hydropower plant and a coal-fired power plant on Koh Kong after both countries agreed on electricity sharing.

Thailand’s Minister of Energy Pichai Naripthaphan and Minister of Foreign Affairs Surapong Tovichakchaikul were officially visiting Cambodian Prime Minister Hun Sen Thursday when the Cambodian leader raised the issue.

Mr Pichai said the matter had been on hold due to political problems between the two nations.

According to Mr Pichai, the Electricity Generating Authority of Thailand (EGAT) was assigned to discuss with Cambodia in detail, as it is to purchase power as stated in the existing agreement.

EGAT subsidiary EGAT International was tasked to further study both power plant projects.

He said that both countries agreed that it would be beneficial for the Stung Num power plant to be in Thailand while the dam and reservoir should be on the Cambodian side.

Cambodia's Koh Kong Seaboard Company presented its study for 94 and 101 megawatt power capacities with a construction budget of Bt5.5 billion.

Water stored in the dam will be managed for Cambodian communities as well as for agricultural and industrial sectors in the Koh Kong area, and it will be sufficient for sharing some 200-500 million cubic metres with Thailand's Map Ta Phut industrial estate in the eastern seaboard province of Rayong, as well as with Chantaburi and Trat provinces.

Regarding the coal-fired power plant at Koh Kong, Mr Pichai said the project now awaits a response from Cambodian investors, which is needed for further progress.

In April 2008, the Cambodian government allowed three private companies to compete for the project development. The condition is any firm succeeding in electricity sales to Thailand will be granted the right to develop such a project.

The three firms are Koh Kong Power Light (KKPL), Cambodia's international joint venture, and Gulf JP Company. All have a power capacity installation of 1,800 megawatts.

Koh Kong Power Light (KKPL) is a joint venture involving Italian Thai Development Plc, Egco Group Plc and Ratchaburi Power Generating Holding Plc. It supplies coal from Indonesia.

The second group comprises a 72-per cent share from Charoen Energy and Water Asia Company (CEWA) and a 28-per cent stake from Cambodia's joint venture with coal supply from Indonesia and Australia.

Gulf JP's shareholders are GJP Holding Company (GHC) and Japan's J-Power, with coal supplied from Indonesia and Australia. (MCOT online news)

Flood crisis effect on Thai economy highest in November: BoT

BANGKOK, Dec 31 - The recent flood crisis in the country reached its peak of affecting the Thai economy in November, according to the Bank of Thailand (BoT) Domestic Economy Department.

The department director Mathee Supapongse said the strong impact of the flood on the economy had been continuous since October, particularly the farming sector both in terms of crop prices and production. The number of agricultural products dropped 7.2 percent year-on-year, resulting in an 8.6 percent decrease of income among farmers.

The industrial sector saw a shrinkage in almost all types of goods due to a halt in production at several automobile plants, a shortage of spare parts and transportation problems.

Meanwhile, the Manufacturing Production Index contracted 48.6 percent, especially from the production of hard disk drives, motor vehicles, and electric appliances.

The private sector's investment lowered as a result of production obstacles, and therefore a stoppage in machinery and equipment investment was seen from the reduced amount of capital goods import. The Private Investment Index dropped 1.3 per cent year-on-year, also due to postponed investment, while the Private Consumption Index decreased 1.6 percent in all sectors when compared to the same period last year.

The global economic slowdown is another factor affecting production as well as imports and exports for many industries.

Import lowered by 1.9 percent, and 5.7 percent if excluding gold. Export value stood at US$15.3 billion, a slash of 13.1 percent from motor vehicles, electric appliances, electric circuit boards, and rice. Inflation rates remained high with headline inflation at 4.19 percent and core inflation at 2.90 percent.

The labour market experienced higher unemployment, but Mr Mathee viewed this as temporary, for labour would be back in demand once post-flood rehabilitation was complete.

Regarding the tourism sector, the number of foreign travellers entering Thailand in November shrank from 17.5 million to 1.2 million year-on-year. The director predicted that the Thai travel industry would resume as normal within 1-2 months, as most tourists are from Asian countries and tend to adapt themselves well to the situation.

Meanwhile, Mr Mathee said that the Thai economy in November shrinking more than earlier expected could cause the Bank of Thailand's estimation on the country's gross domestic product (GDP) in Q4 and 2011 to lower, but by how much is still to be determined based on Thailand's economic figures in December.

BoT had previously estimated the country's 2011 GDP would rise 1.8 percent.

Nonetheless, Mr Mathee said he expected domestic spending and consumption would recover in December, owing to the government's assistance measures to stimulate the economy, while he said demand for automobiles has remained high.

According to the Bank of Thailand, the country's 2012 economic outlook for agricultural and industrial sectors shows promise, as normal situations have returned after the flood crisis. (MCOT online news)

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SRT takes over Chatuchak Market from City Hall

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Flood crisis effect on Thai economy highest in November: BoT
 

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