South Korea’s gross domestic product expanded 2 percent in 2019 from a year earlier, according to advance data from the Bank of Korea.

The figure marks the slowest on-year growth since 2009, when Asia’s fourth-largest economy expanded 0.7 percent in the aftermath of the financial crisis that jolted the globe economy the year before.

It is on par with the 2 percent forecast by the central bank, but the BOK’s growth outlook published in November followed three earlier downward revisions — from 2.7 percent in late 2018 to 2.6 percent in January, 2.5 percent in April and 2.2 percent in July.

The annual growth estimate beat market consensus.  In a recent poll by Yonhap Infomax, the financial news arm of Yonhap News Agency, seven analysts predicted Asia’s fourth-largest economy to have expanded 1.89 percent in 2019.

Such a gloomy outlook followed 13 consecutive months of a decline in exports.

Last year, the country’s exports fell 10.3 percent on-year. This year’s outbound shipments are forecast to rise 3 percent.

In the fourth quarter of the last year, the economy expanded at a better-than-expected clip of 1.2 percent from three months earlier, fanning hopes that Asia’s fourth-largest economy may get on a recovery track.

The figure marks the fastest quarterly growth rate since the third quarter of 2017.  The estimate-beating performance seems to be underpinned by a surge in state spending and firm domestic demand.

For the year, the economy is expected to grow 2.3 percent.  In 2019, economic expansion generated by exports gained 1.5 percent from a year earlier, sharply slowing from a 3.5 percent on-year expansion in 2018, with that by imports dipping 0.6 percent in the year, marking a turnaround from a 0.8 percent on-year gain in 2018.

Amid the sluggish trade, the country’s overall production by the manufacturing industry also slowed to a 1.4 percent on-year expansion in 2019 from 3.4 percent the previous year.

The construction industry posted a second consecutive year of decline, with its output dipping 3.2 percent last year following a 4 percent drop in 2018.  Fiscal spending jumped 6.5 percent on-year in 2019, up from 5.6 percent the year before, making up shortfalls in other sectors.

Private consumption, on the other hand, slowed to 1.9 percent from 2.8 percent over the cited period. (Yonhap)

Weerasak Wangsupakitkosol, Deputy Minister of Commerce, said on Tuesday (January 21) that 697 foreign investors were permitted to invest in Thailand last year under the Act.

Most of the investments were in capital -intensive businesses such as engineering service, software development, and application services related to logistics and passenger transport, and e-payment.

There were 3,000 Thai-foreign joint ventures set up last year with Bt47 billion in total registered capital.

He added that the figures indicated that foreign investment in Thailand was continuing and expected to expand further this year, thanks to the government’s incentives.

Director-general Sarawut Kaewtathip said the department is expected to conclude next month the number of plots to be put up for the 23rd round of bidding.

The department is expected to open bidding for the plots in the Gulf of Thailand first.

The new round of bidding is the first in 13 years, he added.

Interested bidders will have four months to submit their offers, and the department will subsequently take two months to select the winner.

It is expected to grant the concession, which will be on a production sharing contract basis, next January.

The contract is estimated to see investment of at least Bt1.5 billion, Sarawut said.

He added that land exploration cannot be allowed immediately, given overlapping rules among involved state agencies.

Exploration in the Andaman Sea is still pending as the department’s preparation of information is not yet complete.

Natural gas production in two key plots, Erawan and Bongkot, has a combined capacity of 2.1 billion cubic feet per day. They account for 70 per cent of the country’s natural gas production. This capacity will however decline to 1.5 billion cubic feet per day in 2022.

Additionally, the Energy Ministry has assigned the department to enter into negotiations with Cambodia on developing an overlapping sea area.

The department is preparing information for discussion with related Thai ministries. The negotiations with Cambodia will be based on the joint development area concept between Thailand and Malaysia.

The petroleum exploration and production industry earned Bt160 billion for state coffers last year. This made the department the fourth largest state revenue earner after the Excise, Revenue and Customs departments.

Finance Minister Uttama Savanayana said on Tuesday (January 21) that a cabinet meeting in Narathiwat province acknowledged the PM’s order to appoint the committee.

The Cabinet also gave the green light to a Bank for Agriculture and Agricultural Cooperatives (BAAC) recapitalisation of Bt20 billion over five years.

Government spokeswoman Narumon Pinyosinwat said the PM-appointed committee would accelerate public sector investment this year and the next.

The committee will be chaired by Deputy PM Somkid Jatusripitak. The finance minister is to be vice chairman.

The committee members will comprise economic ministers, including ministers of Finance, Commerce, Energy, Industry, and Digital Economy and Society, as well as deputy secretary-general to the prime minister for political affairs Kobsak Pootrakool, the permanent secretaries of the Foreign and Commerce ministries, and the Board of Investment secretary-general.

Also among the committee are the Budget Bureau director, the National Economic and Social Development Council secretary-general and deputy secretary-general, the State Enterprise Policy Office director, the Trade Negotiations Department director-general, and the Eastern Economic Corridor Policy Committee secretary-general.

The committee is tasked with accelerating state enterprise investment this year and in 2021 to meet schedules.

It will determine the guidelines for international trade negotiations and investment promotion and joint investment, and is to draw up monetary and fiscal policies and related urgent action plans and propose them to the cabinet.

The committee, which will also invite companies to jointly invest with the state sector in mega projects, will report progress and obstacles of its tasks to the premier on a regular basis.

The BAAC’s recapitalisation of Bt20 billion will raise the bank’s capital to Bt80 billion.

Somkid recently said the higher capital will enable the BAAC to become a key mechanism of the government in bringing sustainable development to rural areas.

The financial injection will come from the Specialised Financial Institutions Development Fund.

The Cabinet also approved in principle an urgent investment plan of Bt18.68 billion in the special economic zone in Songkhla’s Chana district.

However, the value of exports will contract 0.3 per cent to Bt1.02 trillion if the baht rises to 29.30 per US dollar.

The export value is expected to expand 3.5 per cent to Bt1.06 trillion if the baht holds steady at 30.40 per dollar.

One positive factor helping food exports this year is the global economic recovery after tensions over a US-China trade war eased.

The Olympic Games in Japan will also spark demand for more food.

The negative factors that could affect the food industry are the drought and the possible hike in production and logistics costs if energy prices rise following an escalation in the US-Iran conflict.

Food exports last year dropped 3.8 per cent to $33.1 billion, or Bt1.025 trillion, while food imports amounted to Bt401.3 billion, down 0.1 per cent.

Among items suffering a decline in export value are rice, which fell 22 per cent, sugar 13.7 per cent, canned tuna 6 per cent, shrimps 9.2 per cent, and pineapples 15.7 per cent. However, the value of chicken exports increased 0.8 per cent, condiments 4 per cent, coconuts 3.8 per cent and ready-to-eat meals 4.6 per cent.

The institute blames the drop in the value of food exports on the global economic situation, the strengthening baht and declining world food prices. The global food trade last year amounted to $1.3 trillion, down 0.6 per cent. Thailand’s food exports accounted for 2.51 per cent of the world food trade.

Last year, China was Thailand’s biggest food importer, replacing the CLMV (Cambodia, Laos, Malaysia, Vietnam) bloc. Exports to China rose 34 per cent to Bt150.75 billion, accounting for 14.7 per cent of Thailand’s total food exports.

The investment will cover building of a city, a deep sea port, water and land transportation networks, power plants driven by natural gas and biogas, she said after the Cabinet meeting in Narathiwat province.

The economic zone will occupy 16,753 rai of land, of which 4,253 rai will be allocated for agro and light industries, 4,000 rai for heavy industry, 4,000 rai for four power plants with a combined electricity generating capacity of 3,700 megawatt. In addition, 2,000 rai will be allocated for supporting industry, 2,000 rai for a logistics hub and another 500 rai for services and residential areas.

The Cabinet also approved a budget of Bt390 million for the Southern Border Provinces Administration Centre’s purchase of 1,683 rai of land in Narathiwat province from a private company currently running a rubber plantation on the site.

The land will be leased by Industrial Estate Authority of Thailand with 1,003 rai to be put on auction for leasing to investors, she added.

The amount is part of the ministry’s proposed investment budget of Bt179 billion between 2021 and 2024.

For the FY2021 spending of Bt36.3 billion, the Highways Department will invest about Bt34.1 billion in new projects, Airports Department Bt360 million and State Railway of Thailand(SRT) Bt861 million, she said.

The Cabinet also approved a short-term borrowing plan of Bt800 million for the SRT.

Last year, the Cabinet approved debt management of the SRT worth Bt11.7 billion with short-term borrowing being part of the total.