Private consumption perked up 3.5 per cent year-on-year on the back of a 7.9-per-cent revival in vehicle purchases, while service exports jumped 14.7 per cent on the uptrend in foreign-tourist arrivals.
Year on year, merchandise exports showed growth of 0.4 per cent, but public-sector consumption in the quarter contracted 5.8 per cent on declines in expenses after strong state budget disbursements in the previous period, which saw a 1.5-per-cent rise, the EIC said.
Public investment expanded by 6.3 per cent, compared with 11.9 per cent in the second quarter, as fewer stimulus measures were in play.
Private investment shrank 0.5 per cent year on year, reflecting sluggish investment for manufacturing.
Construction of manufacturing plants fell 24.2 per cent, while investment in machinery dropped 0.5 per cent, reflecting still-weak private-sector confidence in the economy, the centre said.
Nalin Chutchotitham, an economist at HSBC’s Bangkok branch, said third-quarter GDP growth came in slightly below the market’s consensus forecast but above its expectation of 3.2 per cent year on year.
Gross domestic product grew 0.6 per cent quarter on quarter, a tad below second-quarter growth.
Exports of both goods and services contributed more to overall GDP growth in the third quarter, offsetting the lower contribution from domestic demand, which decelerated.
Private consumption and public investment remained key drivers of growth, in contrast to flattish private investment.
Growth appears to be on a steadier path now that the government has managed to get its infrastructure projects moving, although downside risks remain from global economic uncertainties and weakness in Thailand’s household income growth.
HSBC expects no more policy-rate cuts in the foreseeable future.
The NESDB reaffirmed its outlook for 2016 growth at 3.2 per cent, down from the prior 3.0-3.5 per cent, and expects 2017 growth to run at 3-4 per cent, supported by an improvement in exports, which HSBC projects at 2.4 per cent and continued growth of total consumption and public investment.
More public infrastructure projects have been approved and have progressed to the tendering process in recent months, especially for motorways, mass-transit systems and railways.
However, higher debt among households and small businesses is likely to remain a drag on domestic demand.
HSBC expects GDP growth to remain at a moderate pace in 2017 from the current forecast of 2.8 per cent before accelerating slightly in 2018.
With inflationary pressures limited, the Bank of Thailand will most probably maintain its policy interest rate at 1.5 per cent for the foreseeable future, it said.

Former president of Taiwan Mah Ying-jeou said: “We have been waiting for 13 years. Please do not let us wait for another 13 years to achieve our dream.”
At the World Chinese Economic Summit, Ma, in delivering his speech entitled “The Prospects for Closer Relations between Taiwan and the Asean Economies”, he urged Asean to implement non-exclusion of regional trade agreement.
He said trade should be profit-oriented. A non-exclusion trade agreement would benefit all parties.
He said Asean regional trade agreements, such as free trade agreements, have initiated exclusion policies under the requirements of World Trade Organisation. Under political and diplomatic factors, Taiwan has encountered various obstacles.
“We are unable to participate |in all the main regional trade |agreements,” he said.
Ma added: “I sincerely hope all Southeast Asia counties can support the move of including Taiwan into your free trade agreements, including the Trans-Pacific Partnership agreement, the Regional Comprehensive Economic Partnership and the Asia Pacific Free Trade Agreement. These collaboration would for sure benefit all people.
Taiwan is capable of playing a very important role in supply chain. We are also very advance in new technologies.”
He said when he was attending the East Asian Economic Forum organised by the World Economic Forum in Singapore, in his capacity as Taipei mayor in 2003, he gave a speech that touched on collaborations and integration with Asean economies and Taiwan’s wish to join.
During Ma’s eight years as Taiwan president, the country signed free trade agreements with China, Singapore and New Zealand.

The key groups with sharp quarter-on-quarter drops in net profit include construction materials, construction, residential development (as a result of seasonal effects and government-stimulus impacts), and energy.
Those with year-on-year and quarter-on-quarter increases in 3Q16 included food, banks and non-bank financial institutions, retail, hospital, and electronic parts.
The listed companies’ combined net profit for the first nine months of 2016 was Bt672 billion, up 40 per cent year on year, given a low base last year. The figure accounts for 76.2 per cent of this year’s net-profit estimate.
After 3Q16 earnings announcements, we revised our net-profit estimates by 2.63 and 1.06 per cent respectively for this year and next. The revision came mostly from PTT, which has seen better-than-expected profit from its gas-separation plants. This year, there are also more positive extraordinary items. We expect this year’s profit to total Bt883 billion or Bt92.52 a share and next year’s Bt950 billion or Bt99.54 a share.
Based on the market earning yield gap of 4.75 per cent, equivalent to PER (price-to-earning ratio) of 16 times, the SET Index target is 1,481 points this year and 1,595-1,600 points next year with expected return of about 6.7 per cent from now to the end of next year.
We still weigh on construction stocks because of positive financial flows from tenders for a number of the government’s large projects. After the tenders, construction will start, and that will result in positive developments for construction firms, which will realise income according each project’s progress.
Stock picks: CK (Ch Karnchang, fair value Bt37.50), a big construction company all set for the tenders; UNIQ (Unique Engineering and Construction, FV@Bt25), on expectation for consistent, positive development of profitability and a chance for upcoming tenders; and SYNTEC (Syntec Construction, FV@Bt4.90).
The poultry-export business is also interesting. Recently, South Korea permitted imports of chicken meat from 12 plants in Thailand and will permit 18 more next year. Stock pick: GFPT (FV@Bt19).

Prakit Sirivattanaket
Vice President
Kasikorn Securities

It’s certain that US interest rates will rise after Federal Reserve chairwoman Janet Yellen’s November 17 statement confirming that the policy rate will increase if US economic figures remain close to their targets, with the next increases on a gradual basis.
Yellen recommended stimulus through production capability rather than fiscal policy, while insisting she would not resign before the end of her term in 2018. She reiterated that the Fed must stay independent for its policy implementations without any political interference, and opposed the abolition of Dodd-Frank legislation. Obviously, the Fed’s direction remains the same, while some of it contradicts President-elect Donald Trump’s stated policies. We will follow whether or not the Fed can resist pressure from the new administration and Congress.
In regard to a US rate rise in December, Fed fund futures surged to 96 per cent. The money markets responded instantly, with the US Dollar Index surpassing 100 to a 13-year high of 101.06.
The Japanese yen weakened to a seven-month low of 110.24 per dollar. The Thai currency depreciated to 35.44 per dollar.
It’s the same for the bond markets. US 10-year bond yield soared to a 2016 high of 2.302 per cent and pulled up bond yields around the world. This is positive for BLA (Bangkok Life Assurance), whose price is low at Bt55.5. Its targeted price is Bt60.
Capital may flow out of the Stock Exchange of Thailand as a result of pressure from the US dollar and baht and foreign investors will continue their positions as net sellers of Thai stocks.
Since September 23, foreign investors have sold a net Bt45 billion, or 30 per cent of their accumulated purchases in the purchase round. Foreign investors are forecast to sell Bt30 billion more (accumulated sell will rise to Bt75 billion or 50 per cent of the purchase round).
The estimated sales are expected to pressure the SET Index by 39 points and, as a result, the support line will be 1,435 points. This support line is attractive for long-term investment, given its expected PER (price-to-earning ratio) at 14 times based on next year’s estimated EPS (earnings per share) at Bt102.7 (about 1,437.8 points).
The SET Index is expected to take on a bearish mood in a range of 1,467-1,476 points. In the short term, speculate in MSCI and SET50 plays, KCE (KCE Electronics) and BJC (Berli Jucker), and wait to increase investment when the SET Index nears 1,438 points.
Focus on accumulation following the investment theme of stocks that gain from depreciation of the baht (KCE) and those gaining from the interest-rate uptrend (BLA).

“More foreign investors are coming to Vietnam, but are not able to catch up with the character of the new emerging market |with its unstable policies,” Le Hai Binh, deputy chairman of the Viet Nam Electronic Commerce Association, said at the Viet Nam Start-up forum.
The forum was held during Global Entrepreneurship Week, |an event celebrated in more |than 160 countries by 10 million people.
Huynh Viet Phuong, head of the representative office of Viet Nam Internet in Ho Chi Minh city said “challenges for foreign investors are our advantages. This is a strength for Vietnamese start-ups and you don’t need to worry about their money or experience”, although its was suggested start-ups have quality-control measures, know who their customers are and not do business in a hurry.
Around 95 per cent of start-ups in Silicon Valley in the US failed because they did not have the right development trend,” Lucy Keoni, a US start-up expert, said.
She stressed the role of investors and trainers in guiding start-up owners and staff. Binh added: “This is the same for Vietnamese start-ups. Before starting business operations, you should set out your development path.”
Huynh Ngoc Duy, CEO of Mat Bao JSC, said Vietnamese start-ups dare not share their ideas because they are afraid of them being stolen, but it is not fully true.
By 2020, Vietnam plans to have at least 1 million enterprises, with the private economic sector contributing 45-50 per cent of GDP. TRAFFIC’s research has identified e-commerce as an important area to target to reduce wildlife trafficking. The Viet Nam Startup Forum is a key way to reach companies entering the sector.
In June, TRAFFIC conducted a 23-day rapid assessment of the top eight e-commerce websites in Vietnam to determine the prevalence of wildlife sales online. For 30 minutes each day, TRAFFIC searched for wildlife products that ranged from birds and lizards to rhino horn and ivory.
Over the course of the assessment, TRAFFIC found 180 advertisements for wildlife – 64 per cent of which advertised illegal commodities.

Severance pay is not required if the employee resigns by himself or by herself. Nevertheless, if it is established that the employee resigns as a result of relocation of work premises initiated by the employer and the relocation substantially affects the normal livelihood of the employee or the employee’s family, the employee may refuse to be relocated to the new location and instead choose to resign.
In this case, the resigning employee will also be entitled to special severance pay at a rate no less than the rate of severance pay offered in the case of termination if the employee informs the employer of his or her resignation within 30 days of the employer’s relocation notification date or the relocation date (if the employer fails to notify).
Based on past court precedents, this special severance pay provision has been interpreted very strictly and narrowly. Relocation refers to the process involving an employer closing a business premise in its entirety and subsequently opening another new premise in a different location, as opposed to an employer simply assigning an employee to work in another existing premise or branch. For example, if an employer has two offices, one in Bangkok and the other in Chiang Mai, and the employer assigns an employee based in the Bangkok office to work in the Chiang Mai office without closing the Bangkok office, this would not be considered a relocation that would entitle the resigned employees substantially affected by such relocation to special severance pay.
Interestingly, the recent Supreme Court decision has gone one step further in analysing whether a scenario such as the scenario previously mentioned would be considered a “relocation” for the purpose of determining whether the special severance pay will be triggered. This court tends to take the approach that protects the right to special severance pay of affected employees, while also taking into account the employer’s bad faith and intention.
In this case, the employer’s headquarters had originally been in Bangkok. However, in 2006, the employer had set up another office in Samut Sakhon and also changed its headquarters from Bangkok to the Samut Sakhon office while keeping both premises in operation. Afterwards, the employer gradually ordered its employees to be relocated to its new headquarters in Samut Sakhon. All of the employees were eventually relocated within a span of approximately two years from the date of the first relocation. The employer finally closed its Bangkok office.
It would seem that this case would not fall within the court’s interpretation of “relocation” and is only a case of assigning employees to work at another existing business premise based on past Supreme Court decisions given that the Bangkok office was still operating |at the time when all relocations was taking place. Thus, the affected employees should not have been entitled to special severance pay under the law. Interestingly, the employer also cited various past Supreme Court decisions in |supporting its argument of a |narrow interpretation given to “relocation”.
Nevertheless, the Supreme Court took into account two important facts. First is the fact that the employer changed its headquarters from Bangkok to its new office in Samut Sakhon and second and more importantly, is the fact that the Bangkok office was closed right after all of the employees had been relocated. The court held the view that such actions combined to show the true intention of the employer, which was to close the Bangkok office and relocate the employees to the Samut Sakhon office. Hence, this was deemed a case of “relocation” under the law whereby special severance is required to be paid to employees who are substantially affected and chose to resign from their jobs.
This Supreme Court decision addressed the loophole that would allow some employers to get around the special severance pay requirement by piercing through all the facts to discover the employer’s true intention. It is prudent for companies to ensure that in the case of relocation under the law, special severance is required to be paid to employees whose livelihood and whose family’s livelihood are adversely affected by the relocation. Failure to comply with the special severance pay requirement could subject the employer and its responsible directors to a maximum of six months’ imprisonment and/or a fine of Bt100,000 plus an interest of 15 per cent of the outstanding special severance pay until it is fully paid.

Suriyong Tungsuwan, the author, is partner and head of employment practice group Baker & McKenzie. suriyong.tungsuwan@bakermckenzie.com

Ho Chi Minh City metro underground section bid approved
The management board of Vietnam’s Ho Chi Minh City urban railway projects held a groundbreaking ceremony for the construction of an underground segment from Ben Thanh station to the municipal Opera House of the metro route No 1.
The joint venture by Sumitomo Mitsui and Cienco 4 won the bid with an offer of 4.85 trillion Vietnamese dong (Bt7.5 billion).
According to Le Nguyen Minh Quang, head of the management board, the package will build the four-basement Ben Thanh central station and a 515-metre tunnel from Ben Thanh station to the municipal Opera House station under Le Loi Street.
Le Van Khoa, vice chairman of the HCM City People’s Committee, emphasised the significance of the kicking off of the bidding package, as it is the last package of metro route No 1.
Completing the package means completion of the project to put the whole route into operation by 2020, he said.
Metro route No 1 is 19.7km long and has a total investment of $2.49 billion funded by the Japan International Cooperation Agency. – Viet Nam News

Indonesia promotes financial inclusion with new strategy
Indonesian President Joko Widodo expected the new financial inclusion strategy would help the country increase the proportion of its citizens who have bank accounts from 36 per cent to 75 per cent by 2019.
The Indonesian government introduced a coordinated national strategy to promote financial inclusion in an effort to open up access to banking services for more people.
The so-called National Strategy for Financial Inclusion (SNKI) will focus on six pillars: financial education, public financing facilities, financial information mapping, supportive regulations, distribution networks and intermediation facilities and consumer protection.
President “Joko” Jokowi Widodo said he expects the strategy would help Indonesia, home to more than 250 million people, increase the proportion of its citizens who have bank accounts from the current 36 per cent to 75 per cent by 2019.
“There are many citizens who have no bank accounts. This makes it |difficult for them to get access to loans from banks or financial institutions,” the president said at the State Palace during the ceremony to launch the |SNKI.
The success of the implementation of SNKI, which was jointly prepared by Bank Indonesia, the Finance Ministry and the National Team for the Acceleration of Poverty Alleviation, will also help the government to channel the money from its social assistance programmes to the public more effectively, Jokowi said. – The Jakarta Post

Indonesia urges Vietnam to have same wage standard
Indonesia used the occasion of the Asia-Pacific Economic Cooperation (Apec) Summit in Lima, which kicked off on Saturday, to meet with its main industrial rival in Southeast Asia, Vietnam, to discuss the possibility of the two countries having the same wage standard for workers.
The initiative comes in the wake of many investors having left Indonesia |in the past year after learning that Vietnam offers cheaper labour for |industry.
Accompanying Kalla during the meeting, Industry Minister Airlangga Hartarto said that “having the same wage standard for workers would support the development of human resources in the two countries”.
“We proposed an initiative to establish a joint platform with regard to a wage standard in the industrial sector so that both Indonesia and Vietnam will not be confronted by investors with regard to which country offers cheaper wage for workers,” Airlangga said in Lima on Friday.
The minister said that the same wage standard for workers would support Apec’s goal of encouraging its 21 member countries to support human development in the Asia Pacific region, adding that Vietnam would consider Indonesia’s proposal.
It is expected that representatives from both countries after the Apec concludes yesterday will conduct meetings in the future to discuss the Indonesian proposal in detail. – The Jakarta Post

In a report released last week titled “Americas and Asia Pacific: Shift in US Policies Could Dampen Trade and Investment, Weaken Growth”, Moody’s said that “while the nature of policies under the next US administration is uncertain, President-elect Donald Trump’s campaign proposals indicate that a shift involving lower US imports and foreign direct investment, and curbs to immigration is possible.
“While we expect trade agreements that have already been implemented to remain in place, US policies going forward could incentivise onshoring – the repatriation of jobs at overseas-based suppliers back to the US – and a focus on domestic production and sourcing. The countries that are most reliant on exports of high value-added goods and services, which would offer greatest onshoring potential, are more vulnerable to a potential shift in US trade policies,” the debt watcher said.
“India and the Philippines could also suffer in the event of policies that disincentivised foreign sourcing of business services. These two Asian countries are the biggest BPO destinations in the world. In the Philippines, the BPO sector is among the largest dollar earners, seen to surpass cash remittances from overseas Filipinos in the coming years.”
As for Trump’s plan to tighten US immigration rules, Moody’s said it |could curb remittances. “A tightening in immigration rules in the US |would over time dampen growth in remittances from foreign workers, which are significant for some economies in Latin America and Asia-Pacific,” it said.
“In Asia-Pacific, exposure to remittances is smaller, although they still provide an important source of income for a number of countries. Remittances from the US are largest for the Philippines and Vietnam at 3.3 per cent and 3.8 per cent of GDP, and 9.2 per cent and 4.1 per cent of current account receipts, respectively,” according to Moody’s.
The Philippines and Vietnam are nonetheless expected to withstand any negative impact on remittance flows from the US, Moody’s said.