BANGKOK: Concerns over the economy entering a technical recession have overshadowed the importance of addressing possible adverse effects on employment from the COVID-19 outbreak, says the Bank of Thailand.
“Sometimes we wear the hat of an analyst that concentrates so much on the technical aspects of our forecasts and calculations. If we realise it is a technical recession, it is only a technical calculation,” central bank governor Veerathai Santiprabhob told the Bangkok Post in an exclusive interview.
“We should emphasise more how best to help mitigate the impact of the outbreak on the Thai economy or Thai society.”
A technical recession is defined as two straight periods of quarterly contraction.
The employment market is facing a host of risks this year, with widespread drought, poor exports, the previous delay of the 2020 fiscal budget and the coronavirus outbreak weighing on jobs, warned the National Economic and Social Development Council (NESDC).
The NESDC reported 37.5 million people were employed in the fourth quarter of 2019, down 1.1% year-on-year. This marks the third consecutive quarter of decreases.
“It is unavoidable that certain segments of society will be significantly hit by the outbreak, particularly those in the tourism sector or small and medium-sized enterprises that have been affected by not only the outbreak, but also a series of adverse incidents since last year: trade tensions, the drought and the [previous] delay of the [fiscal 2020] budget,” said Mr Veerathai.
The tourism sector, which accounts for more than 10% of GDP and has been the growth engine in recent years, is bearing the brunt of the viral outbreak.
After a 2.5% rise in tourist arrivals in January, February’s figures likely slumped 40%, and a deeper decline is expected in March and April, Tourism Authority of Thailand Governor Yuthasak Supasorn told Reuters.
“To what extent we can mitigate the impact depends on the collaboration of various agencies. At this point, I think we all should realise that there is no one solution. It is a coordinated effort [and] an urgent effort from all parties to help those that have been impacted,” said Mr Veerathai.
At its first meeting in February, the central bank’s Monetary Policy Committee unanimously voted to lower the policy interest rate by 25 basis points to a historic low of 1%, seen as a preemptive move to shore up economic growth battered by the COVID-19 epidemic.
The Bank of Thailand has asked banks and non-bank financial institutions under its supervision to temporarily lower the minimum amount due on credit cards to below 10% of the outstanding balance and loosen the ceiling for personal loan credit lines in case of emergency for new coronavirus-hit debtors.
The Finance and the Tourism and Sports ministries were expected to unveil measures for Cabinet approval today (Mar 3) to stimulate tourism and aid those affected by COVID-19, but the announcement could be deferred to next week.
PHUKET: In an effort to address the slump in tourist numbers visiting the island, and the subsequent economic fall-out, Phuket has turned to social media for a helping hand.
The hashtag “Phuket OK” has been selected as the slogan as the island fights back against the effects of the China coronavirus COVID-19 and re-builds tourism confidence.
Phuket Vice Governor Supoj Rotreuang Na Nongkhai told The Phuket News this morning (Feb 26) that a brainstorming session was conducted on Monday (Feb 24) with lecturers from Prince of Songkla University Phuket Campus and representatives from the business community.
The outcome was #PhuketOK will be utilised moving forward via social media to entice tourists back to the island
“I realise just how impactful COVID-19 has been to the tourism industry here in Phuket and how the numbers have dropped considerably,” Vice Governor Supoj said.
“The tourists we are seeing now are amongst the final ones to visit and we can clearly see the negative impact this low number is having on tour guides, buses, vans, spas, hotels, and restaurants,” he added.
“This has had a significant impact on workers associated with the tourism industry, with many staff being laid off or being forced to take salary cuts.
“Now is the time for us to rise up and fight for ourselves. I believe this hashtag can help and my hope is there will be an increase in the number of people using it for online reviews and social media posts.”
Mr Supoj explained that the hashtag has been used via social media before but he was unsure who had initially created it.
“We do know it was only used in a small group,” he said.
“But now we want this tagline to be used much more extensively on social media via platforms such as Facebook, YouTube, Instagram, blogs and elsewhere.
“The hope is it can become viral and help our tourism industry recover,” Mr Supoj concluded.
BANGKOK: Tourist arrivals in Thailand rose 5.92% in November from a year earlier, after increasing 12.51% in the previous month, the Tourism and Sports Ministry said in a statement on Wednesday (Dec 25).
The ministry said foreign visitors accounted for 3.35 million last month, a rise of 5.92% from the 3.1mn recorded during the same period of last year.
Visitors from China, Thailand’s biggest source of tourists, jumped 18.33% in November year-on-year, after October’s 27.81% surge, due partly to last year’s comparatively low figures. Tourists from other Asean members came second at 9.5mn, up from 9mn, a 4.7% rise year-on-year.
A total of 3.36mn tourists in November spent B167 billion, up 2.98% from a year earlier.
In the January-November period, overall tourist arrivals totalled 35.87mn, up 4.44% from a year earlier.
Foreign tourist receipts make up about 12% of Thailand’s gross domestic product.
BANGKOK: The economic Cabinet on Friday approved a new round of tourism measures, aiming for the number of foreign visitors to reach 39.8 million and generate B2.04 trillion baht this year.
Kobsak Pootrakool, Deputy Secretary-General to Prime Minister Prayut Chan-o-cha for Political Affairs, said the new tourism stimulus measures cover both short-term measures for this year and some for 2020. They will be submitted for Cabinet approval next week.
The government also set a target to attract 41.8 million foreign visitors and generate B2.2trn in tourism revenue next year.
Mr Kobsak said the short-term measures include free re-entry visas for foreign tourists who visit neighbouring countries by land, increased value-added tax (VAT) refund agents, more downturn VAT refund venues and VAT refunds in cash on the spot.
A measure to make it easier for the 150,000 expatriates in the country to travel nationwide without reporting to the authorities as required by Section 37 of the 1979 Immigration Act, also known as TM30, will also be introduced.
The rule requires foreigners who receive a long-term visas to report within 24 hours to authorities when they travel to other provinces that are not their residence.
Expats are also required to report their whereabouts every 90 days to the authorities.
Thailand charges B2,000 for single-entry visas lasting three months.
Companies will also be allowed to claim deductions of up to two times expenses if they organise seminars in the country.
Mr Kobsak said the government will open checkpoints with Laos and Malaysia around the clock during weekends and long holidays. This measure is to last three months.
The Amazing Thailand Grand Sale is planned for three months – from Nov 1 to January – with discounts of up to 70%, Mr Kobsak said. Some 400 shops are expected to participate, up from 200 last year.
The event helped raise the spending of foreign visitors to B2,800 per day per person last year from normal spending of B1,250 per day.
For medium- and long-term measures, Mr Kobsak said the government aims to improve the standards of accommodation and safety, as well as increase the number of world heritage tourism spots.
Yuthasak Supasorn, governor of the Tourism Authority of Thailand, said his agency and related agencies will introduce mega events to lure foreign visitors and increase their spending.
These events include the Ultra-Trail, Amazing Thailand Marathon Series, MotoGP and Super GT races.
Concert events will include Tomorrow Land, Electric Daisy Carnival and the Ultra Music Festival.
BANGKOK: The Cabinet on Monday approved a slightly higher budget of B3.2 trillion for the 2020 fiscal year to bolster the economy, which is growing at its weakest pace in nearly five years.
The first reading of the bill in parliament is scheduled for next week, but it is not expected to be passed into law for four more months due to political delays. The fiscal year began on Oct 1.
“The budget bill has been approved by the cabinet and it will be submitted to parliament today,” Prime Minister Prayut Chan-o-cha told reporters.
Overall spending will be about 7% higher than the previous year’s B3trn, with a deficit projected at B469 billion, or 2.6% of gross domestic product (GDP), up from the previous year’s B450bn gap.
Government investments are projected at B656bn, or 20.5% of all spending, up from last year’s B649bn.
The budget bill is expected to be effective in early February, after gaining all approvals and the King’s endorsement in late January, Budget Bureau chief Dechapiwat Na Songkhla told Reuters.
The budget has been delayed because the country only had its new Cabinet in July after March’s general election.
The budget bill needs to pass three readings in the lower house of parliament, in which the government has a fragile majority. The first reading is scheduled for Oct 17-18, and second and third readings in early January.
Last week, Gen Prayut said he hoped the bill would be passed, otherwise “people in the whole country will suffer, farmers will suffer, not only me”.
Nomura economist Charnon Boonnuch in Singapore said the slim majority “poses some threat” to the bill being approved.
“Any failure will not only imply a further slowdown in government spending but also heightened political uncertainty,” he said.
Bank of Thailand Governor Veerathai Santiprabhob told Reuters on Friday that there were some projects such as public-private partnerships and investments by state-owned enterprises that were not constrained by the budget.
Like many of its trade-reliant neighbours in Asia, Thailand’s exports have been hit hard by slowing global demand and the escalating US-China trade war.
While waiting for the new budget, officials have said there will be some funds carried over from the past year, while current expenditure can proceed as usual. The government has also asked state enterprises, which use a financial year, to speed up their investments.
The government in August launched a B300bn stimulus package, and said it would introduce more.
The central bank recently cut its 2019 growth forecast to 2.8% from 3.3%. Last year’s growth was 4.1%, which lagged most regional peers.
PHUKET: The Phuket Vegetarian Festival this year is expected to generate B2 billion in tourism revenue, Phuket Governor Phakaphong Tavipatana has revealed.
Speaking during a television interview yesterday (Sept 27), Governor Phakaphong explained that the festival this year coincides with China’s “Golden Week” of holidays, including China’s National Day, a week when many mainland Chinese travel abroad.
Governor Phakaphong noted, “A lot of Chinese people from neighboring countries such as Singapore and Malaysia come to visit the Phuket Vegetarian Festival, and many Thais have realised that they have not seen the festival and come to experience it for themselves. This together brings a significant tourism boost to the province.
“The Tourism Authority of Thailand (TAT) promotes the festival every year, but this year has pushed its campaign across every form of media, resulting in a large amount of interest.
“Occupancy rates at hotels in Phuket Town and areas near shrines have been at about 65%, but we expect the number to rise sharply as the festival begins. Most people these days book at the last minute,” he added.
The government’s national “Taste and Shop” domestic tourism campaign is also likely to play a part in the predicted boost in the number of tourists coming to Phuket for the festival, and the subsequent boost in tourism revenues.
“Many people are still cautious about their spending. The economic situation has not yet fully recovered, but the government’s ‘Taste and Shop’ campaign is likely to stimulate general spending, including travel, goods and services,” he said.
With the mainstay of tourists expected to arrive for the festival coming from China, Malaysia, Singapore, Vietnam, Myanmar and Indonesia, the boost in spending on the island is expected to benefit all tourism operators, the Governor said.
“After the major expenses of paying the tour operator and accommodation, the second main expense for tourists will be food,” he said.
“All the stalls in front of shrines selling vegetarian dishes, as well as hotels and stores near shrines, will benefit,” he added.
BANGKOK: The Excise Department estimates the second phase of the tax hike on sugar-sweetened beverages, effective from Oct 1, will contribute an additional B1.5 billion a year to state coffers.
The sugary drink tax now generates B2bn a year for the government, Excise Department deputy spokesman Nattakorn Utensut said.
The tax on sugary drinks was from Sept 16, 2017 with a goal of lowering sugar consumption. The rate is set to rise on a gradual basis in four stages: Sept 16, 2017 to Sept 30, 2019; Oct 1, 2019 to Sept 30, 2021; Oct 1, 2021 to Sept 30, 2023; and from Oct 1, 2023.
The Excise Department has classified sugar content in beverages into six levels based on a volume of 100 millilitres: below six grammes, 6-8g, 8-10g, 10-14g, 14-18g and more than 18g.
From Oct 1, 2019 to Sept 30, 2021, the tax was on beverages with sugar content of 10g to below 14g will be raised to B1 from 50 satang (B0.50) per the 100ml bottle. For 14g to below 18g the tax will be increased to B3 from B1, and starting from 18g it will rise to B5 from B1.
The tax exemption for drinks containing sugar content of below 6g will remain in place, and the levies on those with 6g to below 8g, and 8g to below 10g remain unchanged at 10 satang and 30 satang, respectively.
Mr Nattakorn believes the new excise tax rate will prompt sugary beverage manufacturers to make their products less sweet.
The number of sugary drink products that have reduced sugar has risen to 200-300 from 60-70 before the levy was introduced two years ago. The sugar content of some fizzy drinks has been reduced to below 10g per 100ml bottle to avoid higher tax bills.
Courtesy: Published at The Phuket News on September 15, 2019 by Bangkok Post
The Thai baht continues to be the best performing currency in Asia. The Thai currency is riding a 6-year high against the USD and, this year, has surged 8% against the US currency.
But the strong baht is causing knock-on effects to the rest of the Thai economy, battering exports and stifling tourist growth. Economists note Thailand’s solid economic fundamentals and stability, the current account surplus and high foreign reserves, together, are reasons the baht is so attractive to investors and currency speculators.
So what can be done by Thai public servants and Bank of Thailand lever-pullers to dampen speculation on the poplar currency? In July 2019, the BOT lowered the cap on the outstanding balance of non-resident accounts by a third and cut its supply of three and six-month bonds at auctions in July and August. The BOT has also signalled plans to further relax restrictions on outward portfolio investment by Thai investors, which could stem currency appreciation.
Then in August 2019, the BOT cut the policy rate by 25 basis points from 1.75 to 1.5%, a shift in the BOT policy stance since raising the rate by 25 basis points eight months before.
The large amount of foreign exchange reserves (39.9% of the Thai GDP and over 200% of the IMF’s standard reserve adequacy metric) may put Thailand on the US watch list for currency manipulators. But overall, bold intervention by the BOT is unlikely despite the current challenges.
Economist say that to try and tame offshore fund inflows, which are currently causing a rapid appreciation of the baht, could be effective at least in the short to medium term. But they warn that capital controls also have long-lasting adverse consequences, affecting the country’s economic credibility and financial markets.
The most requested measure by Thailand’s business sector is for the BOT to cut the policy rate again. A common belief is that further rate cuts would make the Thai baht less attractive for foreign investors, reducing pressure on the baht.
The bottomline for Thailand’s central bank should not be to subsidise a cheap export sales strategy if it interferes with the BOT’s main priority of economic stability. Exchange rate fluctuations are a modern fact of life for a floated international currency.
As Sir Isaac said, more in reference to gravity than international currency trading, “what goes up must come down.” Eventually.
Courtesy: Published at The Thaiger on September 5, 2019
Deputy PM Somkid Jatusripitak says he is confident Thailand’s gross domestic product will pick up in the fourth quarter as a result of the launch of 316 billion baht economic stimulus package from the Thai government.
He claims the new rice price guarantee scheme will also assist the agricultural sector.
The Cabinet approved the new packages at its Tuesday meeting. The National Rice Policy Committee approved a budget of 21 billion baht to guarantee the price of rice harvested in 2019 and 2020 the following day.
Somkid recently held a meeting with the Bank of Thailand and Finance Ministry to discuss a plan to set up a joint committee to steer the Thai economy.
Meanwhile, Standard Chartered Bank has downgraded its 2019 GDP growth forecast for Thailand to 3% from 3.3%. The bank expects growth in the second half to improve from a weak 2.6% in the first half.
According to the National Economic and Social Development Council, the country’s GDP expanded 2.3 per cent in the second quarter compared to the previous quarter’s growth of 2.8 per cent.
According to the Finance Ministry, the country’s debt level in the next five years is expected to be 46.73%, while the GDP next year is expected to expand by 3.5%, then 3.6% in 2021, 3.8% in 2022 and 4% in 2023.
Courtesy: Published at The Thaiger on August 23, 2019 by The Nation
BANGKOK: The Cabinet yesterday (Aug 20) gave the green light to a B316-billion stimulus package deemed vital to boosting the country’s economic growth by 0.5-0.6 percentage points this year.
According to Finance Minister Uttama Savanayana, the stimulus package consists of three main groups of measures: additional allowances to low-income earners and the elderly; a debt suspension scheme for farmers afflicted by the drought crisis; and efforts to mitigate the impact of the global slowdown on the Thai economy.
As part of the stimulus package, the Cabinet also agreed to extend until next April a measure that waives fees for visas on arrival issued to tourists from 19 countries. A waiver for 21 countries is due to expire on Oct 31.
The Cabinet rejected a contentious proposal to allow visa-free entry for visitors from China and India, citing security concerns.
Boost to GDP
The Fiscal Policy Office estimates that GDP growth will get a 0.5-percentage-point boost from the raft of stimulus measures, bringing Thailand’s growth to 3.5% this year.
Stripping out the economic stimulus package, the country’s GDP growth would come in at 3% in 2019, compared with last year’s 4.1%, said director-general Lavaron Sangsnit.
The latest forecast is based on an assumption that the country’s exports will contract by 0.9% this year, he said.
The Finance Ministry’s think tank in April downgraded the economic growth outlook to 3.8% from 4% as slower global growth took a toll on exports.
The Finance Ministry has prepared a budget of B19-20bn to fund the B1,000 giveaway for travel in tourism destinations outside of home provinces and a 15% cash rebate of up to B30,000 on tourism-related spending.
To be eligible for the B1,000 cash handout and rebate, Thais aged 18 and up are required to sign up at the Tourism Authority of Thailand’s website from Sept 23 to Nov 15.
The registrants will receive an SMS to confirm their privileges within three business days. They are then required to download the Pao Tang mobile app from Krungthai Bank (KTB) to receive B1,000 and the rebate to be paid by the government.
In the event that registrants fail to use the B1,000 cash giveaway in identified provinces within two weeks of receiving the SMS, they cannot spend the money in the app.
For the cash rebate, registrants must transfer money to the Pao Tang app and spend on food, accommodation and One Tambon, One Product items at 100,000 shops equipped with electronic data capture (EDC) machines.
Registrants can spend up to B30,000 in any provinces outside their home province by Nov 30. They will receive the money back in the mobile app in December.
Cash splurge ready
Under the stimulus package, the Comptroller-General’s Department will give additional allowances worth a combined B20bn to state welfare smartcard holders via e-wallet by early September, said director-general Suttirat Rattanachot.
Recipients are able to use the extra allowances to pay for consumer products at Thong Fah Pracharath shops equipped with EDC terminals or through the Tung Ngen mobile banking app; keep the money as savings; or make withdrawals at KTB ATMs.
Given that the additional allowance has no restrictions on the spending period, the money can be withdrawn and spent any time, Ms Suttirat said.
In addition, 14.6 million welfare recipients will receive an extra B500 monthly allowance during August to September; 5 million elderly who are welfare smartcard holders will get an extra B500 monthly allowance over the same period; and parents who are welfare recipients will receive B300 for each child for two months.
Kalin Sarasin, chairman of the Thai Chamber of Commerce, hailed the stimulus plan, saying it will deliver a boost to spending power, particularly for low-income earners. He said the tourism stimulus will help boost spending, particularly in the provinces.
Mr Kalin suggested state agencies hold more meetings in provincial areas to help distribute income to local residents.