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Finance Minister foreshadows slowing economy in 2019

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Finance Minister foreshadows slowing economy in 2019 | The Thaiger

“We expect the GDP growth for 2019 to be at least 4 per cent. However, the economic growth for 2019 is expected to be slower than 2018,”

Finance Minister Apisak Tantivorawong predicts Thailand will encounter slower economic growth in 2019,. The Minister cites uncertainty from the trade war between China and the US, the upcoming Thai election and a slump in tourism as the key factors.

The Nation reports that Apisak made the comments at an event organised by the engineering faculty of Chulalongkorn University.

“The peak of the current economic cycle was during the first two quarters of last year, followed by an acute slump in the third quarter. Given that consumption and private investment are still continuously growing, we expect the economy to continue to grow in 2019, but at a slower pace.”

The first two quarters of this year saw growth of 4.8 per cent year on year. The economy managed growth of only 3.3 per cent in the third quarter and a recovery is expected in the fourth quarter, but not at the pace seen for the first two quarters, Apisak said at the Chulalongkorn event, the Engineering Dinner Talk.

Growth in exports is also expected to slow in 2019. This is due to the lagging negative impact of the trade war between the US and China, with some of the consequences to be felt next year.

“Many have suggested that Thailand can gain from the trade war through replacing Chinese goods in the US market and manufacturers moving their production base from China to Thailand. However, in the long-term, the trade war will only hurt the Thai economy,” the minister said. This is because Thailand is deeply entrenched in the supply chain, which is affected by the tariffs imposed by the two economic giants, he said.

At the event, Apisak addressed the relationship between the upcoming election and growth in foreign direct investment in the Kingdom.

“After talking to many foreign investors, they have said that they are holding off investing in Thailand until after the election. This is because they fear that political stability will be damaged as a result of the election,” said Apisak.

The final key factor likely to contribute to slower economic growth in 2019 is the decline in tourism. Visitor numbers have slumped significantly since a boat accident near Phuket in the middle of this year.

In August, 867,000 Chinese tourists visited the Kingdom, down 11.7 per cent month on month. In September, only 648,000 came, marking an even steeper 14.89 per cent fall month on month, according to the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB).

Apisak said the boat accident – which claimed the lives of dozens of mostly Chinese tourists – had led many Chinese to question Thailand’s safety standards, but it was not the only cause of the fall in tourism numbers.

“Tourism has also fallen as a result of external factors which we cannot control,” he said.

“The slowing global economy has led key tourist groups visiting Thailand to decrease.

“The slowing of the Chinese economy as a result of the trade war and the weakening of the yuan currency have led to falls in the number of Chinese tourists globally.”

With the declines in exports and tourism, Apisak said investment in the Industry 4.0 policies championed by the government, with the Eastern Economic Corridor (EEC) as a major component, will be the key driver of growth in 2019.

“The EEC is expected to be a key focal point of investment in 2019,” Apisak said. “With strong private investment levels in 2018, we expect this trend to continue into next year. Public investment in infrastructure and transportation throughout the country will intensify in 2019.

“Meanwhile, foreign direct investment into the EEC is also expected to rise after the election in February next year.”

Finance Minister foreshadows slowing economy in 2019 | News by The Thaiger

Finance Minister Apisak Tantivorawong speaking at Chulalongkorn University

ORIGINAL STORY: The Nation



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BOI approves new rail services, new port investment

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BOI approves new rail services, new port investment | The Thaiger

PHOTO: Duangjai Asawachintachit, BOI secretary general

The Board of Investment of Thailand (BOI) has laid out strategies to boost the development of rail services and the country’s cruise tourism.

Duangjai Asawachintachit, BOI secretary general, says the latest BOI meeting chaired by the Prime Minister had resolved to instigate measures to attract investment in rail development and related infrastructure for continued economic growth.

According to Duangjai, investment projects for rail development and related sectors will be entitled to a tax break of 50% for the first three to five years of investment.

The BOI also approved measures to stimulate the cruise tourism business, with the aim of attracting more tourists to the kingdom.

Moreover, the BOI has introduced a plan to attract aerospace investment to U-Tapao Airport in 2019 as part of the Eastern Economic Corridor (EEC) project, as the EEC Office is planning to develop an “Aerotropolis” which will stretch over 30 kilometers from the airport.

Additionally, the meeting endorsed the 7-year strategic investment promotion plan, spanning 2015 to 2021, which it is anticipated will contribute 418 billion baht to the country’s GDP.

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Chinese foreign policy – On track

The Thaiger

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Chinese foreign policy – On track | The Thaiger

by Nikkei Asia Review

“When Japanese trading house Itochu and train maker Hitachi withdrew from a soon-to-be-decided $7 billion tender for a high-speed rail project near Bangkok, it appeared to be another victory for China and its grand plans to connect Southeast Asia with railways.

Thailand has for decades been the centerpiece of Tokyo’s strategy for Southeast Asia, and long-discussed plans to build extensive shinkansen-style rail lines in the country’s east and north were meant to cement the relationship between the two nations.

But while Japan’s ambitions have been stalled by disagreements about financing and other details, Beijing has managed to push ahead with construction of a separate high-speed rail line in northern Thailand. To some, the rail projects are a symbol of China’s growing influence in a country where Japan had spent decades building ties.”

The article predicts that the Chinese investment into South East Asian rail services is part of its broader ‘belt and road’ policy that is stretching out into new routes and connecting regions, and China, with hitherto remote parts of the asian continent.

“China’s high-speed rail ambitions in Southeast Asia don’t end in Bangkok, however. Under its planned 3,000-km pan-Asian railway network, Chinese rail lines will extend even further south, stretching through Malaysia and feeding into Singapore.”

Chinese foreign policy - On track | News by The Thaiger

China’s reach southwards will allow it to exert greater political influence on places like Singapore which, for now, still retains strong connections to Washington. Investing in high-speed railways all the way from China’s borders to the tip of the Malay Peninsula is a lot more than just an economic investment, it’s a high-profile symbol of China’s new influence in the region where issues such as ‘Taiwan’ and it’s demands in the South China Sea have caused prickly negotiations with the ASEAN countries.

But to reach Singapore, China must first get Malaysia on side…

“A dramatic recent shift in Malaysian politics has put China’s plans for Singapore on hold, however. After his election in May, Malaysian Prime Minister Mahathir Mohamad decided to hold up “for now” the $20 billion 688-km east coast rail line connecting southern Thailand to Kuala Lumpur, and postpone for two years a 350-km high-speed rail link between the Malaysian capital and Singapore.”

The article says that these ‘investments’ are actually just loans for high-priced infrastructure that often cannot be repaid by smaller economies….

“China typically provides loans, not grants, for foreign infrastructure projects, and takes possession of the project if the recipient is unable to repay its debt – as happened with a port in Sri Lanka. Such instances have prompted critics in the West to accuse China of practicing ‘debt diplomacy’.”

Read more of this fascinating and important article from Nikkei Asia Review HERE.

Chinese foreign policy - On track | News by The Thaiger

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Thailand opens doors to cryptocurrencies – Thaiger Bites

The Thaiger

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Thailand opens doors to cryptocurrencies – Thaiger Bites | The Thaiger

Divisions are forming across Asia with regards to cryptocurrencies. Some nations such as China are constantly stomping on anything to do with crypto assets but others, Thailand being the latest, are opening their digital doors to the fledgling industry.

Over the past year Thailand has warmed to crypto and this latest raft of official licenses is a big boost to the industry in the country and region as a whole. Military rulers and the central bank remains wary which is no surprise and have issued warnings to investors. Overall though the sentiment is positive and an official ICO portal has even been proposed by the SEC.

Read more about this story from News BTC HERE.

(Thaiger Bites provides these short snippets for stories we believe of interest to our readers)

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