Government spokeswoman Narumon Pinyosinwat said on Sunday (November 3) that Prime Minister Prayut Chan-o-cha had met with Ross on the side lines of the Asean Summit to discuss trade and investment.

Prayut expressed his concern over the US suspension of tax privileges under its Generalised System of Preferences (GSP) programme on Thai products collectively worth about $1.3 billion.

Ross replied that the US remained open to further talks before GSP cuts take effect over the next six months, Narumon quoted him as saying.

Ross was accompanied on his visit to Bangkok by a group of American investors, whom Prayut invited to invest in Thailand, especially in the aircraft, digital and biotechnology industries and medical manufacturing.

Government spokeswoman Narumon Pinyosinwat said the two premiers and other Asean leaders had a separate sit-down on the summit’s side lines.

Prayut said Asean’s relations with Beijing over the past 10 years had been among the most dynamic, she quoted him as saying.

Asean and China have committed to increasing trade and investment, targeting trade volume of US$150 billion next year.

Stocks rose to fresh records and Treasuries fell after the strong report.

Payrolls rose 128,000 after an upwardly revised 180,000 advance the prior month, according to a Labor Department report Friday that exceeded the median 85,000 estimate in Bloomberg’s survey. That includes a General Motors Co. strike-driven 41,600 decline in automaker payrolls and 20,000 temporary census workers leaving their jobs.

The jobless rate edged up to 3.6% from a half-century low, as black unemployment fell to a new record low of 5.4% Average hourly earnings climbed 3% from a year earlier, matching projections after an upward revision the prior month, though the 0.2% monthly gain was slightly below estimates.

The report supports Fed Chairman Jerome Powell’s assessment this week that the U.S. economic outlook remains solid and the job market “strong” — allowing the central bank to take a breather after a third straight interest-rate cut — despite a persistent trade war with China and an increasingly dim global situation. With businesses pulling back on fixed investment, solid gains in hiring and wages will help drive growth and support President Donald Trump’s bid for re-election in 2020.

“Overall the labor market is holding up very, very nicely,” Michael Brown, principal U.S. economist at Visa USA Inc., said by phone. “There’s no signs here the consumer is losing any momentum.”

Fed policymakers are “probably on hold for a while,” Brown said. “Today’s report certainly supports the Fed view that they have provided accommodation and they’ll take a little victory lap.”

Revisions added 95,000 jobs for the prior two months, bringing the three-month average to 176,000, though gains remain below 2018 levels.

Minutes after the report, Trump tweeted that it was a “blowout” number and even more impressive when accounting for revisions and the GM strike. The president touted an “adjusted” employment gain of 303,000 though it wasn’t immediately clear how he got the number.

The jobs data come on the heels of reports this week including third-quarter gross domestic product. The economy grew at a 1.9% annualized pace as consumer spending grew 2.9% — a step down from gangbusters growth in the prior period but exceeding last year’s average. Stocks also hit a record high, even as the figures showed business investment fell for a second straight period and the most since 2015.

Manufacturers subtracted 36,000 jobs, the biggest drop since 2009, though it would likely have been a gain without the effects of the strike. Still, even excluding the impact of the walkout, the sector has become increasingly fragile amid slowing global growth, a strong dollar and an ongoing trade war with China.

The strike may also have hit wages in October. Average hourly earnings rose 0.2% from the prior month, below estimates, following little change the prior month. Annual wage gains have cooled since hitting a peak of 3.4% early in the year. Hours worked were unchanged at 34.4 per week.

The job gains were led by leisure and hospitality, education and health services and professional and business services. Construction and finance also posted gains. Even retail jobs rose, registering back-to-back gains for the first time in more than a year following seven straight declines.

The participation rate, or share of working-age people in the labor force, increased to 63.3%, the highest since 2013, as more Americans were pulled from the sidelines and into the workforce.

The U-6, or underemployment rate, ticked up to 7% from the lowest since 2000; some analysts see this figure as a more accurate reflection of the true labor market as it includes part-time workers who’d prefer a full-time position and those who aren’t actively looking.

The event, which runs until November 11, features more than 250 booths of advanced technology solutions from 20 countries and territories including Netherlands, France, New Zealand, Italy, Chile, Spain, Portugal, Japan, the Republic of Korea, China, Thailand, Malaysia, Taiwan, Indonesia, India and Viet Nam.

The exhibition also includes Vietnamese start-ups through support programmes from the Ministry of Science and Technology.

Speaking at the event, Deputy Minister of Science and Technology Tran Van Tung said to build and develop the high-tech market, Growtech 2019 is expected to be an international-level exhibition of agriculture, forestry and fishery, a trading platform for new equipment and technologies, bringing sustainable agriculture development and creating real value of high quality agricultural production.

“This is not only an opportunity for professionals and business people to approach innovations and new technology products, but also a bridge to help farmers have deeper access to high-tech products that can be applied in the era of technology 4.0,” Tung said.

Tung said Vietnam Growtech 2019 will be a reliable address to support trade promotion between domestic and international businesses, helping boost consumption of domestic products, moving towards sustainable development for agriculture, forestry and fisheries.

The organisers said Vietnam Growtech 2019 is an ideal platform for international producers and traders to access Viet Nam’s main buyers who are representatives of about 300 high-tech agricultural cooperatives, 1,000 well-performing farmers and 500 typical national farm owners. — VNS

The number was below recent averages but signaled that the labor market remains resilient and healthy 11 years into the economic expansion. The Standard & Poor’s 500 and Nasdaq stock indexes closed at record highs amid growing signs that recession fears several months ago might have been overblown.

The new data was somewhat skewed because of a General Motors strike, in which 46,000 workers shut down production for six weeks at the automaker, causing layoffs from Canada to Mexico in related industries, and sent unemployment claims in states such as Michigan surging.

“For now, we can take solace that there are sufficient job and wage gains to support the economy and keep it miles away from any recession,” Joseph Brusuelas, the chief economist at the tax and consulting firm RSM, said in an interview.

The jobs data lifted two Wall Street indexes to record levels. The S&P 500 stock index rose 1% to 3,067, and the Nasdaq rose 1.1% to 8,386. The Dow Jones Industrial Average closed near a record, rising more than 300 points.

The Bureau of Labor Statistics, which released the report, noted the effects of the GM strike. The number of workers in auto and parts manufacturing declined by 42,000. Federal employment decreased by about 17,000, as temporary workers engaged in the 2020 Census completed their work.

Brusuelas said that those numbers indicated that the economy would have generated about 187,000 jobs in October if not for the strike and Census completions, besting the monthly average of about 167,000 for the year.

“For forward-looking policymakers and investors, that would be the number you want to hang your hat on going forward,” he said in an interview. “That implies strong spending going forward, which will prevent the economy from entering a downturn anytime soon.”

Daniel Zhao, a senior economist at Glassdoor, agreed.

“If not for the strike, the report would have been a blockbuster,” he said.

The Bureau of Labor Statistics also revised the monthly job total from August and September upward, to a net of 95,000 more jobs.

The positive jobs report came two days after the Commerce Department issued data showing that the economy had slowed from July through September, in part because of a contraction in business investment. The Federal Reserve lowered interest rates this week for the third time this year in an effort to boost the economy and insulate it from the downward drag of the trade war and weakening growth abroad.

The job news was coupled Friday with the release of the Institute for Supply Management’s index for October, a closely watched gauge that indicated a contraction in the manufacturing sector for the third straight month.

The slowing but positive growth, weaker business investment, and resilient labor market paint a picture of an economy that has decelerated a bit from 2018’s strength but doesn’t appear close to dipping into a recession, despite fears that were sparked several months ago.

The jobs gains in October came primarily in industries such as health care and social assistance, which added 34,000 jobs, and leisure and hospitality industry, which added 61,000.

Wage growth has remained stubborn at around 3%, puzzling economists who don’t understand why it has failed to rise more dramatically as the job market has tightened.

President Donald Trump, who is staking his reelection campaign in part on the growth the economy has recorded in recent years, cheered the jobs report.

“Wow, a blowout JOBS number just out,” he wrote. “This is far greater than expectations. USA ROCKS!”

Larry Kudlow, the director of the National Economic Council, spoke glowingly of the numbers to Bloomberg News.

“Don’t write off the economy just yet,” he said. “It’s got a lot of fundamental strength.”

David Berson, the chief economist at Nationwide Insurance, said it is getting harder and harder for employers to find workers. He forecast that wage growth would grow stronger if the unemployment rate sinks further.

“We’re in the 11th year of an economic expansion, and this is the longest ever, we’re starting to slowly run out of workers,” he said. “There simply aren’t as many out there. The low-hanging fruit of employers finding people to work for them has all been picked.”

The total value of FDI applications received by the BoI from January to September rose 69 per cent compared to the same period last year, to a total value of Bt203.37 billion, the latest data from the BoI shows.

Applications for investments in the targeted industries, led by electronics and electrical sector, digital sector and automotive sector, represented Bt131.78 billion or 65 per cent of the total.

Of the 689 projects under consideration, Japan – which has long been the largest source of Thailand’s FDI – came in first with applications for 167 projects worth Bt59.19 billion, followed by China, with 139 projects worth Bt45.44 billion, and Switzerland with 15 projects worth Bt11.71 billion, BoI data showed.

“Based on the applications we received over nine months, it can be confirmed that Thailand continues being an attractive investment destination, despite the fluctuations seen in the global economy,” said Duangjai Asawachintachit, BoI secretary-general.

“With the recently-rolled out investment promotion privileges under the Thailand Plus Package aimed at investment acceleration and further measures to improve the country’s investment ecosystem and ease of doing business, we expect the growth momentum of FDI and overall investment in Thailand to continue to expand into 2020.”

Meanwhile, the overall investment applications, including domestic investments, submitted to the BoI in the nine-month period amounted to 1,165 projects, marking an increase of 11 per cent from the same period last year.

About half of these applications or 585 are for projects in targeted industries, including the digital sector, which came on top with 143 projects, followed by agriculture and food processing with 132 projects, and the electronics and electrical sector, which saw 103 projects.

BoI has also decided to reopen its investment incentive scheme to electric vehicle (EV) charging stations, while incentives for electrical appliance and electronics manufacturers has also been revised.

After a BoI meeting chaired by Prime Minister General Prayut Chan-o-cha, BoI secretary-general Duangjai Asawachintachit said the BoI had approved five more sites as “Food Innopolis” science and technology zones as proposed by the Higher Education, Science, Research and Innovation Ministry.

The five newly named sites are located in Thammasat University, King Mongkut University of Technology Ladkrabang, Ubon Ratchathani University, Walailak University and Naresuan University.

This move will further enhance the Food Innopolis network, which includes Thailand Science Park in Pathum Thani province, Chiang Mai University, Khon Kaen University, Prince of Songkhla University, Kasetsart University, Chulalongkorn University, Mahidol University and King Mongkut University of Technology Thonburi.

“Investment projects in targeted industries that located in any of the 13 Food Innopolis locations will receive additional privileges on top of the normal package of five to 10 years of corporate income tax exemption depending on the type of business. These top-up privileges comprise a 50 per cent corporate income tax deduction for five years or an additional two years of corporate income tax exemption,” Duangjai said.

“The target activities qualifying for investment promotion include plant and animal breeding, research and development, and scientific testing services, among others. This arrangement aims to help push Thailand towards its goal of becoming a global food innovation hub.”

Extension of incentives for EV charging stations

The board also approved a new set of investment incentives to promote charging stations for a wider range of electric-powered modes of transport, including boats, after the previous scheme, which applied only to charging stations for cars, ended in December 2018.

In order to increase the coverage area of EV charging stations, the new scheme sets additional requirements for projects seeking to receive BoI incentives, including a minimum of 40 chargers per project, at least 25 per cent of which must be quick chargers.

Investors will receive 5 years corporate income tax exemption among other privileges.

Revised conditions and privileges

To keep up with changing technology in the electrical appliances and electronics (E&E) industry, the board also agreed to revise the conditions and privileges for the sector with the aim of making Thailand a manufacturing base for smart electronics and electrical appliances.

To stimulate investment that will increase the country’s competitiveness, projects that will undertake R&D and design activities in Thailand will receive additional privileges.

Natural gas power plant project

The board also agreed to grant investment incentives to a natural gas power plant project in Chachoengsao province, with a generation capacity of 560 megawatts and a total investment value of Bt22.27 billion.

He made the remark during the meeting of the Council of the Economic Ministers on Friday (November 1).

He assured that Thailand and Asean economies were not in recession but they would just have slower growth next year. Therefore, Thailand needed to come up with more economic stimulus measures to lift the economy.

He added that Thailand’s monetary and fiscal policies must also facilitate domestic spending and business investment.

The meeting on Friday also gave the nod in principle to the guidelines to solve the problems of small and medium-sized enterprises (SMEs).

The guidelines cover several areas and 13 measures as proposed by the Office of the Small and Medium Enterprise Promotion. They also aimed to help SMEs get easier access to capital, know-how and market access.

The measures include the launch of new types of SME loan guarantee, the promotion of software use by SMEs to draw accounts, to the launch of an SMEs festival.

The rating outlook is stable. It also affirmed the country’s Domestic Currency Issuer Rating at A-. Here too, the rating outlook is stable.

According to its statement, Thailand’s economic fundamentals are underpinned by the agglomeration of manufacturing sectors, centred on electronics/electric appliances and automobiles, through foreign direct investment. The implementation of aggressive measures for industrial development will likely continue to help maintain its mid- to long-term growth potential.

R&I believes that fiscal management will remain sound, with the Fiscal Responsibility Act in place. The current account balance has been consistently in surplus, and overall, concern over the external position is limited.

On the political front, the statement noted that the country had returned to civilian rule after a general election and was heading toward normalization, which R&I views positively.

In consideration of these factors, R&I has upgraded the Foreign Currency Issuer Rating to A- and affirmed the Domestic Currency Issuer Rating at A-.

Thailand’s real gross domestic product (GDP) growth accelerated in 2017 and 2018 on the back of the buoyant global economy. However, the economy has been decelerating due to the lower contribution of exports since the latter half of 2018 stemming from the US-China trade friction, as well as the slowdown of the growth of foreign tourist numbers. This suggests that the growth rates for 2019 and 2020 may be held down temporarily.

The current government intends to push ahead with infrastructure development based on large-scale economic stimulus measures and bring in foreign investments, the statement noted, adding that eyes will be on whether the political environment remains facilitative so that the government is able to implement its envisaged economic measures.

Thanks to a recovery in trade surpluses and consistent, increasing surpluses in the services account mainly stemming from strong tourism revenues, the current account remains substantially in surplus relative to GDP. The current account surplus is expected to narrow moderately because of domestic investment that will be driven by large infrastructure projects. Supported by ample foreign reserves relative to external debt, foreign currency liquidity is of little concern.

The central government’s fiscal deficits have been on an upward trend since FY2011 (from October

2010 to September 2011). To strengthen a fiscal discipline framework, in April 2018 the government introduced the Fiscal Responsibility Act, which constitutes a comprehensive fiscal management policy. While a prudent fiscal management stance has already been in place as exemplified by the voluntary establishment of a debt ceiling, the government decided to reinforce the framework through the legislation. With outstanding debt staying relatively low as a percentage of GDP, there is no particular concern about funding. Fiscal risk is contained, in R&I’s view.

With growth in the labour force population leveling off, development of higher value-added industries is essential for boosting economic growth toward an exit from the middle income trap. R&I positively views the current government’s commitment to fostering industries from the long-term perspective through development of the Eastern Economic Corridor and other initiatives.

While restoration of civilian rule and continuity in economic measures are positive factors in evaluation of creditworthiness, solving the root causes of the political conflict, including urban-rural income disparity, is not easy. R&I will keep an eye on future political developments.

This year, global management consultancy Bain & Company has joined in as a lead research partner, as Google and Temasek continue to track the growth of the internet economy in the region.

The latest “e-Conomy SEA 2019” report from this study shows that Southeast Asia’s internet economy reached $100 billion for the first time this year, with 360 million people now linked up to cyberspace – 100 million more than just four years ago.

The region’s internet economy in terms of gross merchandise value currently only accounts for 3.7 per cent of the national GDP, lower than United States’ 6.5 per cent in 2016. This represents a huge opportunity for accelerated growth.

The report forecast that by 2025, the regional internet economy will have tripled to $300 billion.

For Thailand, the internet economy hit $16 billion in 2019, making it the second largest in Southeast Asia after Indonesia. It has been growing at 29 per cent per year and is expected to reach $50 billion by 2025.

Online travel (flights, hotels, vacation rentals) remains the largest segment in Thailand and is the most mature, with $7.2 billion in gross bookings value in 2019, growing at 17 per cent CAGR (compound annual growth rate).

E-commerce hits new heights

E-commerce is the largest and fastest growing segment in Southeast Asia. In Thailand it has shown the most accelerated growth at 54 per cent CAGR since 2015, reaching $5 billion in 2019 and is expected to hit $18 billion by 2025.

Online media (advertising, gaming, subscriptions and music and video on demand) is also growing rapidly in Thailand at 39 per cent CAGR to reach $3 billion and is set to reach $7 billion by 2025.

This is driven by the high levels of engagement on social media and video platforms among Thais.

Ride hailing in Thailand reached $1.3 billion in 2019, growing at 36 per cent CAGR since 2015.

Opportunities are spreading beyond big cities.

To date, seven major metropolitan areas have been making up more than 50 per cent of Southeast Asia’s internet economy, despite accounting for just 15 per cent of the total population.

However, by 2025, it is forecast to grow twice as fast outside cities as well, creating new jobs, opportunities as well as greater demand for education and training.

While the region’s internet economy has experienced a surge in fundraising over the last four years, funding for Thai start-ups has dried up, especially in the later stages.

This information was shared by Google Thailand’s interim country manager April Srivikorn at a roundtable in Thailand on October 31.

More insights on this year’s report are available on Think with Google.