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Bank of Thailand braces for trade war fallout

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Bank of Thailand braces for trade war fallout | The Thaiger

By Wichit Chaitrong

“The trade row has increased the uncertainties for Thailand’s economy because it could have a negative impact on Thai exports, businesses, employment, consumption and investment.”

Central bank keeps policy rate unchanged to facilitate growth; forecasts for GDP and export growth revised upwards amid weakening of the baht.

Protectionism, stirred by the trade disputes between the United States and China, remains the biggest risk to the Thai economy and was partly responsible for the Monetary Policy Committee (MPC) keeping the policy rate unchanged to further accommodate economic growth – this according to the central bank yesterday.

The majority of the MPC members yesterday voted to keep the policy rate at 1.5 per cent, as they were worried about the impact of trade tensions between the US and China on the local economy, said Jaturong Jantarangs, assistant governor of the Bank of Thailand (BOT).

“The members of the MPC are concerned about trade protectionism as the trade tension has intensified over the past few days, suggesting it is unlikely to end soon,” he said, referring to retaliatory tariffs between the world’s largest economies.

“The trade row has increased the uncertainties for Thailand’s economy because it could have a negative impact on Thai exports, businesses, employment, consumption and investment,” said Jaturong.

He said five members of MPC voted yesterday to keep the rate unchanged while one member voted to increase the rate by 0.25 percentage points.

“The threat of a trade war is among other reasons for keeping the rate low in order to facilitate growth,” he said.

Bank of Thailand braces for trade war fallout | News by The Thaiger

Current capital outflows from Thailand have not yet negatively impacted real economic sectors, as businesses are still able to raise funds at a low cost, but only a few companies pay slightly higher rates to issue bonds, he said.

The strengthening of the US dollar caused by the US rate hike has recently led to capital outflows from emerging markets including Thailand, he said, referring to foreign investors selling Thai stocks and bonds.

The capital outflow has led to the weakening of the baht against the US dollar. Year-to-date, the baht is at more or less at the same level as at the end of last year, he said, referring to the baht now weakening to more than 32 baht per dollar.

The baht had appreciated about 10 per cent last year and continued to rise about 3-4 per cent earlier this year, something exporters had complained about.

The central bank yesterday also upgraded the economic growth forecast for the year to 4.4, up from 4.1 per cent forecast in March, he said. Consumption has expanded but better economic conditions have not yet increased household revenue and employment across the board. And household debt remains high, he warned.

Private investment continued to expand partly because it was driven by public investment projects, he said. “The Eastern Economic Corridor [EEC] Initiative would further boost public investment but we have to see whether the projects suffer any delays,” he said.

Export is expected to grow at 9 per cent this year up from 7 per cent projected earlier, Jaturong added.

Prinn Panitchpakdi, managing director at CLSA Securities Thailand, said foreign institutional investors were more concerned about a potential escalation towards trade war and central banks around the world were tightening too much too soon. The strength of the US dollar coupled with the oil price trend does not help emerging markets, he said.

A clearer Thai political and election road map, the timely execution of public infrastructure investments, and progress on the EEC would place Thailand in a more favourable position compared to other Asean markets but the bigger global picture needs to get brighter first if foreigners are to slow down their selling, he noted.

“Most foreign investors appreciate an improvement in the corporate governance scorecard for most of the Thai listed firms but there remains some room for improvement especially with regard to genuine board independence, anti-corruption measures, and enforcement of competition law,” Prinn added.

Meanwhile, Soraphol Tulayasathien, director of Economic Stability Analysis Division at the Finance Ministry’s Fiscal Policy Office, said that the current fall in stock values were a result of short-term volatility as the market was reacting to the threat of a trade war.

Soraphol said the Thai economy was resilient to shoulder the impact of a volatile financial market. This is because the country has strong international reserves of US$212 billion (6.9 trillion baht), equivalent to 3.6 times short-term foreign debt or 9.8 times the monthly import value, he said.

Thailand has also diversified its export markets, and was not dependent only on China and the US.

Soraphol said the prospects for exports and tourism looked promising.

He did not expect the current bout of trade retaliation to escalate into a full-blown trade war and noted that most stock markets in Asia and the Stock Exchange of Thailand in yesterday’s trade had recovered some of previous day’s large losses. He expected China and the US to reach a compromise.

Bank of Thailand braces for trade war fallout | News by The Thaiger

STORY: The Nation

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Crime

Phuket police arrest meth dealer, discover drugs valued at 15 million baht

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Phuket police arrest meth dealer, discover drugs valued at 15 million baht | The Thaiger

PHOTO: Newshawk Phuket

Drugs valued at 15 million baht have been seized in a drug crackdown in Phuket. On October 22, Phuket police, along with Phuket Governor Pakkapong Tawipat, reported to the media about a drug crackdown that ended up with a total seizure valued around 15 million baht.

Earlier, the police received a report from an undercover agent that a woman named ‘Ying’ or ‘Suthicha Thirawut’ was a local drug dealer trading drugs in Phuket area, so police planned to purchase drugs from the woman. They contacted Ying through another woman named ‘Noina’, Ying’s close friend. Around 10pm on October 20, police bought 1 gram of crystal methamphetamine from Noina before arresting Ying and another man, Thanet Thongtan, at the Naka Condominium.

The two confessed that they receive the drug from a man who they weren’t able to name, in order to sell in Phuket. They were paid 40,000 – 50,000 baht per time and admitted to police that they have done this for the man three times already. This time, the drugs hadn’t been sold to customers as they were arrested before being able to make a sale.

Apart from 2.4 kilograms of crystal methamphetamine, valued around 4.8 million baht, the police also discovered 76,800 methamphetamine pills, worth around 11 million baht.

The three are now assisting Phuket police with their enquires related to the case.

SOURCE: Newshawk Phuket

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Business

Out of 37 countries, Thailand has the worst pension system, says Bloomberg

May Taylor

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Out of 37 countries, Thailand has the worst pension system, says Bloomberg | The Thaiger

Thai Residents reports that on Sunday, Bloomberg published an article on the world’s best pension systems, using information gathered from the 2019 Melbourne Mercer Global Pensions Index.

The survey looked at the pension systems of 37 countries with metrics including employee rights, savings, the number of homeowners, growth of assets, and growth of the economy. The purpose of the analysis was to determine what was needed to improve state pension systems and to gauge the level of confidence citizens had in their state pension system.

The Netherlands and Denmark were found to have the world’s best state pensions, with Australia, Finland, Sweden, Norway, Singapore, New Zealand, Canada, and Chile next. Out of all 37 countries, Thailand finished last, with what the report described as an extremely ineffective and ambiguous system.

“Thailand was in the bottom slot and should introduce a minimum level of mandatory retirement savings and increase support for the poorest.”

Out of 37 countries, Thailand has the worst pension system, says Bloomberg | News by The Thaiger

Photo: WorkpointNews

Thai Residents states that only those employed within the government system in Thailand are eligible for a pension based on salary. For most Thai citizens, pension amounts vary from 600 baht to 1,000 baht a month, depending on the recipient’s age.

A report carried out by The Securities and Exchange Commission (SEC) advises Thai citizens to have at least 4 million baht saved by the time they retire, but Thai Residents reports that 60% of Thai retirees have less than 1 million baht in savings, with one in three citizens who have reached retirement age are forced to continue working in order to survive.

SOURCE: thairesidents.com

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Crime

Immigration police arrest German man in connection with death of German woman in Pattaya

May Taylor

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Immigration police arrest German man in connection with death of German woman in Pattaya | The Thaiger

A German man who has overstayed his visa has been arrested in Pattaya in connection with the death of a German woman found dead in a canal in Chonburi province.

The Pattaya News reports the dead woman as 77 year old Marg und Schaefer and says she ran a bar with the man who was taken into custody on Tuesday.

The alarm was raised when Ms Schaefer’s family in Germany contacted German police when they were unable to contact her. German authorities then contacted the police in Thailand, who tracked down the man after finding his visa had expired in June 2017. He is believed to be 52 years of age and known only as Mr Richard.

It’s understood the arrested man is also facing fraud charges in his home country and fled to Thailand after allegedly conning several elderly women out of more than 6,000 euros.

Police have questioned his Thai girlfriend, who claims Ms Schaefer died in January after falling in the bathroom. She says Mr Richard then disposed of her body in a canal in Chonburi, adding that he had been spending the German woman’s pension fund on a daily basis.

A warrant was issued for the man when Ms Schaefer’s body was found in the canal on January 12 and he was eventually tracked down to a rented house earlier this week. He denies all charges against him.

It’s understood the police will be using DNA testing to confirm how Ms Schaefer died.

SOURCE: thepattayanews.com

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