Thai exports next year are expected to grow 4 per cent to US$238.477 billion, driven by demand for health products, farm produce, and products related to Covid-19 prevention and work-from-home measures, said Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office (TPSO).
She added that while many countries were suffering a second-phase outbreak, their governments were expected to impose only partial lockdowns.
Thai exports in November contracted 3.65 per cent to $18.932 billion, better than the projected $18.5 billion due to the global economic recovery.
Imports in November fell 0.99 per cent to $18.880 billion.
Thai exports in the first 11 months declined 6.92 per cent to $211.385 billion, while imports shrank 13.74 per cent to $187.872 billion.
She added that if exports reach $18.5 billion this month, total exports in 2020 will drop less than 7 per cent from last year to $229.03 billion.
Cabinet to consider Bt3 trillion budget proposal next month
EconDec 24. 2020Prime Minister Prayut Chan-o-cha (Photo credit: Thai government)
By The Nation
In a meeting on Wednesday, key economic state agencies approved Bt3.11 trillion for the 2022 fiscal budget with a budget deficit of Bt700 billion, Budget Bureau director Dechapiwat na Songkhla said.
The 2022 budget plan will be submitted to the Cabinet on January 5, he added.
The state agencies attending the meeting were the National Economic and Social Development Council, Bank of Thailand, the Finance Ministry and the Budget Bureau. The meeting was chaired by Prime Minister Prayut Chan-o-cha.
The 2022 budget is 5.66 per cent or Bt186 billion less than that of the 2021 fiscal year.
The meeting based the budget on the assumption that Thailand will experience an economic growth of 3.5 per cent in 2022. The repayment of debt principal in 2022 is Bt100 billion, up by Bt1 billion from the Bt99 billion allocated in 2021.
The Bank of Thailand has relaxed conditions attached to its Bt500-billion soft loan package, making it easier for individuals and companies to access credit.
The relaxation follows a surge of Covid-19 cases in Thailand as well as other countries around the world. Some countries have also been hit by a new mutation of the virus, signalling a severe and lingering pandemic that will affect trade, exports, tourism and the overall Thai economy, said the central bank.
In response, it has narrowed the definition of a “business group” for loan applicants, meaning more people can apply for the loans.
Under the new rules, a “business group” covers only the borrower and his/her spouse, making other family members eligible for the loans. For corporates, a business group now covers the company and its subsidiary but opens up loan access for linked companies.
The new rules also allow borrowers to take two loans, when previously they were limited to one. However, the total amount loaned must not exceed 20 per cent of their outstanding debt as of December 31, 2019. Commercial banks will grant borrowers a 6-month grace period on interest payments. Banks will be compensated for loans that turn bad after the two-year repayment period. Compensation will be based on the loan quality.
The new rules will come into force in January, the central bank said.
The Thai economy is recovering but downside risks and uncertainties remain high in the period ahead, says the Bank of Thailand.
The recovery would depend on the new Covid-19 outbreak and containment measures, as well as revival of the foreign tourist trade after global Covid-19 vaccination, BOT assistant governor Titanun Mallikamas said on Wednesday.
The central bank upgraded its economic projection for this year to 6.6 per cent contraction, from the 7.8 per cent contraction predicted in September.
However it downgraded its forecast for next year from 3.6 per cent to 3.2 per cent growth, due to the smaller number of tourist arrivals than projected, he said.
The impact of a prolonged Covid-19 outbreak abroad coupled with the fresh outbreak in Thailand would delay recovery of tourism, he added.
The central bank predicted 6.7 million visitors to Thailand this year, down from 39.7 million in 2019. It forecast just 5.5 million tourist arrivals next year, revising downwards its September projection of 9 million. The smaller projection is due to new surges of Covid infections in many countries. Tourism should recover significantly in 2022, assuming wider coverage of vaccination, said the bank. Revival of the tourism sector as a key engine of the Thai economy should drive growth to 4.8 per cent in 2022.
Domestic demand, especially in private consumption, has improved due partly to fiscal stimulus measures and the recovery of economic activities following relaxation of containment measures, the bank said. It expects private consumption to fall 1.4 per cent this year from 2019, then rebound to 2.8 per cent and 3 per cent in 2021 and 2022 respectively.
Continuity of government measures and policy coordination among government agencies would be critical to support the economic recovery. Fiscal measures must also continue to sustain the economy, said Titanun. In particular, the government should expedite budget disbursement under the recovery plan, he added.
Brokerage firms expect the price of Kerry Express (KEX) shares to rise from their initial public offering (IPO) price of Bt28.
However, a source from the capital market disagrees, saying the KEX shares will not exceed their initial offering price anytime soon, citing uncertainty over the Covid-19 outbreak, large market capitalisation and the small number of IPO shares.
The source added that the KEX IPO price is high compared to its price-to-earnings in the previous four quarters, at 33 times, even if its delivery business is in line with the new economy.
“KEX must rely on rapid growth in the next phase because the company has to compete with others in the same industry,” said the source, adding that KEX sales in the past nine months this year rose by only 0.2 per cent year on year.
SCB Securities director Veena Lertnimitr said the Covid-19 outbreak had boosted online sales but reduced people’s purchasing power at the same time. However, she expects Thailand’s leading parcel delivery brand to escape the virus fallout being felt by other companies.
“We believe investors will assess risks and choose stocks that can escape the Covid-19 impact,” she said. “Also, KEX shares will gain positive sentiment from increasing stock demand because only a small number were allocated.”
The Stock Exchange of Thailand (SET) Index closed at 1,416.02 on Wednesday, down 8.37 points or 0.59 per cent. Total transactions amounted to Bt89.55 billion with an index high of 1,440.52 and a low of 1,414.21.
In the morning session, an analyst at Krungsri Securities expected the day’s index to fluctuate between 1,415 and 1,435 points amid an influx of foreign funds.
“However, uncertainty over the [highly infectious] coronavirus mutant in Britain and fears of a new Covid-19 wave in Thailand would pressure the index,” he predicted.
The 10 stocks with the highest trade value today were PTT, DELTA, CPF, BANPU, CPALL, KBANK, STGT, ADVANC, SCB and AOT.
As of 4.30pm, the price of oil dropped by US$0.08 or 0.17 per cent to $46.94 per barrel, while gold rose by $5.10 or 0.27 per cent, to $1,875.40 per ounce.
Other Asian indices were on the rise:
Japan’s Nikkei Index closed at 26,524.79, up 88.40 points or 0.33 per cent.
China’s Shang Hai SE Composite Index closed at 3,382.32, up 25.54 points or 0.76 per cent, while Shenzhen SE Component Index closed at 14,015.02, up 132.72 points or 0.96 per cent.
Hong Kong’s Hang Seng Index closed at 26,343.10, up 223.85 points or 0.86 per cent.
South Korea’s KOSPI Index closed at 2,759.82, up 26.14 points or 0.96 per cent.
Taiwan’s TAIEX Index closed at 14,223.09, up 45.63 points or 0.32 per cent.
Bank of Thailand keeps interest rate at 0.5%, downgrades 2021 GDP outlook
EconDec 23. 2020Titanun Mallikamas, secretary of the Monetary Policy Committee (MPC)
By The Nation
The Bank of Thailand (BOT) kept its benchmark interest rate unchanged for the fifth straight time on Wednesday, but downgraded its outlook for the economy next year after a fresh Covid-19 outbreak.
The unanimous vote to maintain the policy rate at 0.5 per cent was taken to preserve its limited policy space to support economic recovery that remained “highly uncertain”, said Titanun Mallikamas, secretary of the Monetary Policy Committee (MPC) after Wednesday’s meeting.
Most economists had expected the policy rate to remain unchanged following three rate cuts earlier this year.
The bank also projected the Thai economy would contract 6.6 per cent in 2020, upgrading its previous forecast of 7-per-cent contraction due to improvements in private consumption and exports.
However, the BOT cut its 2021 growth outlook from 3.6 per cent to 3.2 per cent. The move follows an outbreak of more than 1,000 Covid-19 cases at the weekend. The bank forecasts 4.8 per cent growth in 2022.
It said the economic recovery remained highly uncertain and would depend in the short term on effective containment of the latest virus outbreak.
Recovery in the longer term would rest on revival of the foreign tourist trade, Covid-19 vaccination, and the labour market, where unemployment and underemployment remained high, it added.
The financial system remained sound while vulnerabilities among households and SMEs remained, said the bank. It also voiced concern that uneven recoveries across sectors would affect sustainability of economic growth.
Headline inflation was projected to return to the target in the middle of 2021.
The bank said it would consider additional measures to rein in the baht, which has been rising rapidly against the dollar to the dismay of Thai exporters.
Monetary policy must remain accommodative, said the BOT.
In deliberating monetary policy going forward, the bank said it would monitor government recovery measures and also risks such as the fresh virus outbreak.
The “Khon La Khrueng” (Let’s Go Halves) subsidised shopping scheme is gaining popularity among people, so much so that the government has decided to launch the second phase to meet the demands of more people. From 10 million, the scheme is being expanded to cover 15 million people.
However, there are some negative views about the scheme, such as loopholes which facilitate corruption.
Even though it cannot be denied that various schemes tend to be misused, but thanks to technology, the government has been able to check damage and arrest participants who violate the scheme’s regulations as soon as possible.
Prime Minister Prayut Chan-o-cha had instructed the Finance Ministry to work on his policy to relieve the people’s sufferings from the Covid-19 impact, especially of low-income people.
As a result, the Finance Ministry launched three measures to help the people:
1. Low-income people: The government paid an extra Bt500 to 14 million state welfare cardholders for six months.
2. Moderate-income people: The government launched the “Let’s Go Halves” scheme to reduce the cost of living for 15 million participants and boosted approximately 1 million retailers’ incomes.
3. High-income people: The government launched the “Shop Dee Mee Kuen” (Shop and Payback) scheme, which enables people to deduct tax from buying goods.
Apart from reducing the cost of living, the scheme helps stimulate spending to boost the economy and enables people to spend via the electronic payment system as well.
The ultraroyalist Thai Pakdee group submitted a letter to Education Minister Nataphol Teepsuwan on Wednesday, asking him to launch five measures to promote protection of national institutions.
The group’s leader, Warong Dechgitvigrom, said the move aimed to prevent politicians and activist networks from using teachers and students as tools to encroach on the “three pillars” of nation, religion and the monarchy.
The proposals follow months of anti-establishment protests by school and university students, who are calling for the removal of PM Prayut Chan-o-cha, a democratic Constitution and reform of the monarchy. Critics allege the student protests are being funded by politicians, but there is no credible evidence for this.
Thai Pakdee proposed the following five measures:
▪︎ Educational executives should protect their places of learning and should not allow politicians or activist networks to use them to encroach on the institutions.
▪︎ Teachers and related staff should protect the institutions and not support those who seek to undermine them.
▪︎ The Education Ministry should improve the curriculum to promote pride in being Thai.
▪︎ The ministry should organise activities to create awareness of the importance of national institutions among teachers, students and related staff in places of learning.
▪︎ Educational institute executives must take responsibility for any activities held under their jurisdiction that encroach on national institutions.
Nataphol said the ministry would consider Thai Pakdee’s proposals, and confirmed he planned to improve learning programmes to raise awareness of pride in being Thai.
“As long as I am education minister, the identity of Thailand will not disappear,” he said.
By Syndication Washington Post, Bloomberg · Jessica Summers, Sheela Tobben
Oil rallied along with equity markets as a decline in U.S. crude inventories injected optimism into a market that’s reeling from the resurgence of the pandemic.
Futures in New York climbed as much as 3.2% on Wednesday. Stocks rose as investors shrugged off the latest tension over a U.S. pandemic relief package, while the U.K. and European Union reached the outline of a post-Brexit trade agreement. The dollar also weakened, boosting the appeal of commodities priced in the currency.
Meanwhile, a government report showed American crude stockpiles fell to the lowest level since late November and exports rose for a second straight week.
“The sentiment in the crude market has switched from a sell all strength to buy the dip,” said Rebecca Babin, a senior equity trader at CIBC Private Wealth Management. “The dollar and shift towards bidding for risky assets such as in the equity markets continue to be the main driver of trading action.”
Crude’s rally follows a rough start to the week. Futures declined Monday and Tuesday on concerns that the new coronavirus mutation — which is possibly already in the U.S., Germany, France and Switzerland — will cause widespread movement restrictions that would weigh on energy demand. South Korea and the Philippines already moved to temporarily suspend U.K. flights, while Japan is strengthening entry regulations for people traveling from Britain.
Brexit negotiators are now working to finalize the wording of their deal with the EU after almost ten months of often fraught deliberations.
West Texas Intermediate for February delivery rose $1.14 to $48.16 a barrel at 12:24 p.m. on the New York Mercantile Exchange. Brent for February settlement added $1.17 to $51.25 on the ICE Futures Europe exchange.
The Energy Information Administration report showed that the U.S. crude inventory decline was largely due to a decrease in West Coast supplies, limiting the impact on prices. The region is sometimes ignored by traders because its distribution system is isolated from the rest of the country.
“The draw in crude was small, but traders and producers have been more opportunistic. That would explain the increase in exports,” said Quinn Kiley, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets.
Investors are also focused on the likelihood President Donald Trump will sign a coronavirus relief package into law by Dec. 28. Speaker Nancy Pelosi said the House plans to proceed Thursday with a bill to replace the $600 stimulus checks in this week’s proposal with the $2,000 payments Trump asked for.
Prime Minister Prayut Chan-o-cha (Photo credit: Thai government) 
Titanun Mallikamas, secretary of the Monetary Policy Committee (MPC) 
SootinClaimon.Com 