“We agree to a council of economic ministers chaired by the Prime Minister and it is a consensus among deputy prime ministers to work together to screen and put forward economic policies,” Prime Minister General Prayut Chan-o-cha said after the first Cabinet meeting yesterday.

He said the council will address the issue of policy coordination since different deputy prime ministers oversee different ministries, the problems of policy coordination may occur .

He said the Finance Ministry is currently considering a short-term economic stimulus package, aimed at boosting domestic consumption, tourism, accelerating budget disbursement by state agencies and state-owned enterprises.

The package will fall in line with government outlays for fiscal 2020, focusing on accelerating public investment in both large and small projects. Public spending will also come under a five-year plan, which will be submitted for Cabinet approval shortly.

Government spokesperson Naruemon Pinyasinwan said the council of economic ministers will be chaired by Prime Minister Prayut with three Deputy Prime Ministers – Somkid Jatusripitak, Jurin Laksanawisit and Anutin Charnvirakul acting as vice chairmen.

Ministers from 11 ministries would serve as committee members including Finance Minister Uttama Savanayana, Transport Minister Saksayam Chidchob and Energy Minister Sontirat Sontijirawong.

Assigned by the Cabinet, the council of economic ministers have the authorities to screen policies concerning economic affairs such as trade, investment, tax, fiscal, tourism, logistics and energy, agriculture, education and technology, she said.

It also has the authority to make policy recommendations for the Cabinet approval. It could invite ministers, state officials or other committee to provide information.

Sontirat said the council will be a key mechanism for the coalition government working on economic issues. It plans to hold the first meeting next Monday. The council of economic ministers was initiated in 1980s during the tenure of the late Prime Minister Prem Tinsulanonda.

Meanwhile, Dechapiwat Na Songkhla , director of Budget Bureau said the Finance Ministry, Bank of Thailand, National Economic and Social Development Council and Budget Bureau will meet on August 2 to discuss the framework of the budget for FY2020. The total expenditures is estimated at Bt3.2 trillion with a deficit of Bt450 billion.

The draft budget bill will be submitted to the Cabinet for approval on August 6. The government plans to continue to run a budget deficit as it wants to boost infrastructure investment, stimulate local consumption amid the ongoing slide in exports .

Many research houses have downgraded their economic growth projection from around 4 per cent to 3 per cent this year.

Ronadol Numnonda, deputy governor of BOT’s Financial Institutions Stability, said that by yearend the central bank will launch DSR regulations for commercial banks and financial institutions to use as a standard for lending. At present, the lending criteria varies from bank to bank and this may lead to future debt problems.

“The purpose of the regulations is to urge commercial banks and financial institutions to consider risk factors thoroughly before granting loans,” he said. “For instance, we need to consider whether or not the borrowers can repay, and if they have adequate net income to support themselves and their family. This will prevent people from building their debt burden, which will affect their savings and livelihood on a long-term basis. If implemented correctly, DSR can essentially reduce the number of non-performing loans [NPL] of banks and financial institutions.”

Furthermore, DSR regulations will provide more clarity on what can be counted as income, expenses and debt. This will also make it easier for people to apply for a loan, especially the low-income earners who have no collateral.

Meanwhile, Kiatnakin Bank said the group who need to prevent their household debt from spiking are those who earn less than Bt30,000 per month, new graduates and retirees.

Philip Chen Chong Tan, Kiatnakin Bank’s president, said he agrees with the BOT’s policy of ensuring loans are given out responsibly, adding that banks and financial institutions should be especially careful when granting loans to the above three groups, as they have a tendency to be spendthrifts.

“During a preliminary discussion between BOT, Thai Bankers’ Association and commercial banks, it was agreed that DSR for those earning less than Bt30,000 per month will be 70 per cent, which means they must maintain their debts at a level where they can pay off their loan with a maximum of 70 per cent of their income, while reserving the remaining 30 per cent for their monthly expenses. This rate, however, has to be adjusted in the future,” he said.

Both countries are happy with the cooperation and improved relations seen in the last four years, having agreed to the result of the 7th Session of the Joint Thai – Russian Commission on Bilateral Cooperation for creating a practical framework for the near future.

Don will ask Russia to raise the import volume of Thai agricultural produce and food items. It will also seek an easing of the country’s strict verification process on the remaining Thai seafood and meat products.

He will also invite Russian investment in the Eastern Economic Corridor (EEC) project and S-Curve industry.

Russian support is also sought for the FTA negotiations between Thailand and Eurasian Economic Union.

According to The Federation of Thai Industries report, Russian businessmen had been invited to explore investment opportunity in the EEC, specially in the petrochemicals, energy, pharmaceuticals, digital logistics,and cyber security system sectors.

It has also affirmed the long-term foreign currency deposit ratings of Bangkok Bank Plc (BBL), Bank of Ayudhya (BAY), Government Housing Bank (GHB), and United Overseas Bank (Thai) or UOBT at Baa1.

At the same time, Moody’s has upgraded TMB Bank (TMB)’s long-term foreign currency deposit rating to Baa1 from Baa2.

Further, Moody’s affirmed the long-term foreign currency senior unsecured programme rating of BBL, Export-Import Bank of Thailand (EXIMT), KBank, KTB and SCB at (P)Baa1, and the long-term foreign currency senior unsecured rating of EXIMT at Baa1 while the long-term foreign currency senior unsecured programme rating of TMB was upgraded to (P)Baa1 from (P)Baa2.

Moody’s has also upgraded the Baseline Credit Assessments (BCA) and adjusted BCAs of BBL, KBank and SCB to baa1 from baa2, and those of KTB and TMB to baa3 from ba1.

The BCA and adjusted BCA of UOBT were upgraded to baa3 and a3 from ba1 and baa1 respectively. The BCAs and adjusted BCAs of these six banks were upgraded because they maintained good financial fundamentals despite the challenging credit cycle in Thailand. For SCBT, Moody’s affirmed the adjusted BCA at baa2. The BCAs and adjusted BCAs of BAY, CIMBT, EXIMT, and GHB were unaffected by today’s rating actions.

The long-term counterparty risk ratings (CRR) and counterparty risk assessment (CRA) of BBL, KBank and SCB were upgraded to A3 and A3(cr) from Baa1 and Baa1(cr) respectively. It affirmed the long-term CRR and CRA of KTB, SCBT and TMB at Baa1 and Baa1(cr) respectively.

Moody’s also upgraded the long-term CRR and CRA of UOBT to A2 and A2(cr) from A3 and A3(cr) respectively. The CRRs and CRAs of BAY, CIMBT, EXIMT, and GHB were unaffected by today’s (July 30) rating actions.

Moody’s changed the outlook on the long-term ratings of nine of the 11 Thai banks — with the exception of SCBT and TMB — to positive from stable. The outlook on the long-term ratings of SCBT is maintained at stable, while that of TMB is maintained at positive.

The changes in outlooks on the nine Thai banks follow Moody’s affirmation of Thailand’s Baa1 sovereign rating, and change in the outlook for the sovereign’s rating to positive from stable on 25 July 25, 2019.

Meanwhile, Fitch Ratings rated Thai banks’ asset quality stable with further growth in capital.

The first-half financial results of listed Thai banks were stable, with trends in asset quality and profitability broadly supportive of credit growth, Fitch Ratings says.

Loan growth fell short of estimates, reflecting continued subdued business sentiment and consumer confidence. However, profitability and stability of returns are expected for the remainder of 2019, with a continued gradual buildup of capital to guard against downside risks as well as upcoming regulatory measures, such as IFRS9 implementation in 2020.

Credit growth for Thai banks was much lower than expected at 1 per cent for the first half of this year, reflecting a lack of demand and conservative underwriting. While expected to improve, it will likely trail Fitch’s full-year forecast of 7 per cent given the current trends, with increased preservation of capital as a result.

Anemic retail lending saw growth falling to 3.1 per cent for the first half , down from 7.8 per cent year on year due to slowing auto sales and the Bank of Thailand’s (BOT) tightening of loan-to-value measures on mortgages that became effective in April. Corporate lending also encountered pressure, with mounting delays of approval for new infrastructure projects.

The country’s GDP is expected to fall to 3.3 per cent this year from 4.1 per cent in 2018 before moderating to 3.5 per cent in 2020. Continued infrastructure project delays and lower investment by export-oriented firms remain downside risks, as does further escalation of the trade war.

Listed Thai banks’ asset quality has been stable with an impaired loan ratio of 3.7 per cent as of June 30, 2019. More of the same is expected for the rest of the year. Downside risks could come from small to medium enterprise (SME), residential mortgage and auto loans segments, which have relatively high debt levels and a reduced capacity to withstand shocks. However, we do not expect a substantial increase in asset quality risk under current economic conditions, aided by the BOT’s recent macro-prudential regulations and the banks’ high loan loss reserves, with allowances at 152 per cent of impaired loans.

Core net interest margins are expected to be stable in the near term. Market expectations are for interest rates to be little changed while the low levels of credit growth should not pressure banks’ liquidity given the system’s liquidity coverage ratio stood at 173 per cent as of May 2019. We expect earnings trends going forward to be driven by fee income and credit costs.

Return on assets for listed banks was 1.3 per cent as of June 31, down just 2 bps year on year but aided by a substantial decline in provisioning expense amid solid capital buffers and the expectation of credit improvement.

At the same time, lower credit provisions helped offset higher employment costs, investment in operations and IT and the significant reduction in non-interest income, pressured by lower insurance premiums due to regulatory changes.

Hence, expenses as a percentage of income rose to 46.2 per cent versus 44.3 per cent year on year and are expected to remain elevated in the near term.

The band is currently occupied by Thaicom, the operator of Thaicom satellites.

NBTC secretary-general Takorn Tantasith said today (July 30) that he would ask the board to recall the band from the Digital Economy and Society Ministry, which granted it to Thaicom for the company’s satellite services.

He added that the recall would not affect Thaicom’s operations as it would have sufficient bandwidth left on this band to continue services.

The NBTC plans to hold two multi-band auctions as part of its 5G development policy. The first will consist of higher frequency bands, such as 26-28 GHz, followed by the middle bands (averaging 2600 MHz) and the lower 700 MHz band.

For the second auction, middle bands of 3400–3600 MHz and 1800 MHz will be released at the same time.

“We are continuing to boost border trade so it can achieve the Bt1.6-trillion target by the end of the year,” he said.

However, he added that exports accounted for Bt381.7 billion of the total trade, which was 0.98 per cent less from the same period last year, while imports accounted for Bt304.73 billion, recording a 3.97 per cent rise from the same period of last year.

The top three countries involved in border trade this year are Malaysia, where transactions in first half valued Bt271.6 billion or 2.43 per cent less from the same period last year, followed by Myanmar worth Bt102.2 billion and Laos worth Bt99.39 billion.

Thailand’s exports have dropped due to the appreciation of the baht and the US-China trade war, Adul said.

However, he said he is confident that border trade will achieve the Bt1.6-trillion target by the end of this year thanks mainly to his department’s policy to promote trade in southern border provinces.

The department is also revising its business plan for 2020-2022 by aiming for an average 15-per-cent growth per annum, he said.

The centre director Ath Pisalvanich said today (Tuesday) that the export value was expected to reach about US$251.338 billion (Bt3.956 trillion) this year.

However, exports in the second half are expected to expand 1.6 per cent year on year to $128.367 billion, driven by the government’s support.

The factors to be monitored in the second half include such risks as the trend of a declining global economy, the US-China trade war, the trending appreciation of the baht and the volatile global price of oil.