The government should come up with not only short-term measures, but also medium and long-term plans to cope with the impact of the global oil price surge and the Russia-Ukraine war, according to industrialists in various sectors.

They propose the administration also focus on creating more jobs, redesigning national energy management, and making the business sector more self-reliant as ways to support the overall economy and help people survive the impact of economic uncertainties over the long haul.

BEYOND SHORT-TERM RELIEF

The cabinet recently approved a list of 10 measures to counterbalance the fuel price spike. The measures are expected to last from May until July.

Though it agrees with the measures, the Federation of Thai Industries (FTI) wants the government to start thinking about efforts that will enable businesses to be more self-reliant once the package of measures aimed at easing the cost of living expires.

The measures help households and businesses, especially those in the retail and transport sectors, but they are insufficient because the country needs medium and long-term plans to cope with the impact of the global oil price surge and the Russia-Ukraine war, said the federation.

These two problems have dealt a blow to the Thai economy, which is still staggering from the economic effects of the pandemic.

While an urgent economic cure is required for Thailand, it is more important that additional actions be taken to fully restore the economy, especially in terms of helping pandemic-ravaged tourism operators and small and medium-sized enterprises (SMEs), said Supant Mongkolsuthree, chairman of the FTI.

The business sector should eventually become more self-reliant, depending less on the state's fiscal-monetary injections, he said.

"Don't forget that if a huge amount of budget is spent to solve certain problems, authorities can hardly avoid causing a burden on the country's coffers," said Mr Supant.

This may result in a lack of opportunity in dealing with other problems, he said.

Mr Supant suggested the government help SMEs better cope with their debts so they can manage their money and keep operating their businesses over the long term.

The government should use the energy price crisis as an opportunity to redesign national energy management by using more renewable energy and reducing dependence on fossil fuels, he said.

In the tourism sector, authorities should seriously consider abandoning the mandatory Test & Go scheme, a Covid-19 screening measure that requires foreign travelers to undergo RT-PCR tests in Thailand, said Mr Supant.

This measure runs counter to the message of truly reopening Thailand to tourists, he said.

Foreign visitors who are fully vaccinated want unfettered travel that will not incur additional costs, said Mr Supant.

Source : Bangkok Post

Thailand’s Finance Minister Arkhom Termpittayapaisith has revoked the business licenses of two financially-troubled Thai insurance companies, Southeast Insurance and Thai Insurance, effective today (Friday), following a massive amount of COVID-19 claims.

Secretary-General of the Office of the Insurance Commission (OIC) Suttipol Taweechaikarn said that the finance minister had no choice but to close the businesses, because their shareholders have refused to increase the capital.

He said that the two insurance companies now have more liabilities than assets, due to claims for compensation from many customers who took out the two firms’ “Found, Paid, Done” COVID-19 insurance policies.

The compensation claims mounted as COVID-19 spread, to the extent that their liabilities have outstripped their assets

The OIC secretary-general said that the insurance reserves and capital funding ratio of the two firms are below what is required by law, the companies have unreasonably delayed compensation payments to their customers and they have failed to record compensation payments as required, forcing the OIC to propose the revocation of their licenses.

In January, Thai Group Holdings, the parent company of Southeast Insurance, notified the Stock Exchange of Thailand of its board’s decision to wind the insurance company up and to return its operating license to the insurance registrar. The move was, however, rejected by the OIC on the grounds that it cannot simply shut down the business unilaterally without approval from the OIC.

Suttipol said that the OIC has been trying hard to solve the financial problems of the two companies for the benefit of their customers, but without success. He admitted that the revocation of the licenses will affect only the COVID-19 policy holders, whereas other life and non-life insurance policies have been transferred to other providers. Southeast Insurance still owes 13 billion baht in compensation, whereas Thai Insurance owes 4.6 billion baht.

source : Thai PBS WORLD

Ending weeks of speculation, the Bank of Thailand (BOT) and the Securities and Exchange Commission (SEC) on March 24 put in place new regulations governing the digital assets business, effectively curbing their ambitious outreach.

The authorities made it clear that the move was aimed at protecting investors and guarding against financial stability.

The crux of the measure was prohibiting the use of digital assets, such as cryptocurrency and tokens, as a means of payment. Those involved in the digital asset business, whether they are digital exchanges, brokers, dealers, investment advisers, ICO portals or fund managers are barred from creating infrastructure that could facilitate the use of cryptocurrency as a means of payment for goods and services.

They are prohibited from arranging e-wallets that could serve as a payment tool. The law goes into effect from April 1. Players in the field are barred from advertising about services of digital assets to pay for goods and services. The central bank has also imposed a limit on banks’ investment in digital assets; investment by a bank cannot exceed 3 percent of its capital.

The additional rules come as regulators are increasingly concerned about the rising investment in digital assets considered to be unsound or even harmful to retail young investors who do not understand the associated risks.

“Enthusiasm for digital assets in Thai society is high, actually we could say that it is very high,” said Roong Malikamas, BOT’s assistant governor.

She referred to the spike in investors opening accounts to trade in digital assets. From 2020 to 2021, the number of trading accounts went up more than three times, from 700,000 to 2.27 million. The number of cryptocurrency holders in Thailand tops the world list.

The ratio of cryptocurrency holders to internet users is as high as 20.1 percent, double the world average of 10.2 percent. The number of businesses engaging in this new industry is also rising. Thailand has eight digital asset exchanges and seven ICO Portals. In addition, more and more commercial banks and other types of financial institutions have expressed their intention to invest in digital assets, Roong noted.

Sourse : Thai PBS WORLD

The Finance Ministry plans to revise its 2022 forecast for Thai economic growth next month, focusing on the impact of rising inflation and spiking energy prices, says a ministry source who requested anonymity.

The ministry is worried the Russia-Ukraine war will affect its target for foreign tourist arrivals this year, the source said.

In January the ministry projected 2022 economic growth in the range of 3.5-4.5%, with average growth of 4%, based on the assumption of rising domestic spending following an improvement in the global pandemic situation.

That month the ministry also forecast a 4.5% expansion in private consumption for 2022 and the arrival of 7 million foreign tourists. Exports are expected to post growth of 3.6% based on recovering global demand.

Thailand's exports surged by 16.2% year-on-year in February, which was higher than expected, the commerce minister said on Thursday. Reuters said its own poll forecast a 10.2% rise in February, following January's 8% increase.

The ministry source said next month the global credit rating agency Moody's will assess the country's rating. The ministry is confident it can service state debt in the long run, although the government has borrowed heavily, to the tune of 1.5 trillion baht over the past two years.

The government collected net revenue of 911 billion baht during the first five months of fiscal 2022, surpassing the target by 46 billion baht.

Last year S&P Global Ratings maintained Thailand's sovereign credit rating at BBB+ and rates the country's economy as having a stable outlook.

Sourse : Bangkok Post

BENGALURU, March 28 - Thailand's central bank will not raise interest rates from a record low for more than a year in a bid to support an economy still struggling to recover from the pandemic despite a jump in inflation, a Reuters poll found.

While inflation in the tourism-dependent economy hit a 13-year high in February, driven mainly by higher energy prices, policymakers expect price pressures to be temporary.

But Russia's invasion of Ukraine has triggered a spike in global energy and food prices that will make it harder for the Bank of Thailand (BOT) to contain inflation, as found by other central banks who until recently said high inflation was transitory.

Still, the BOT was expected to keep its policy accommodative to revive growth which has yet to return to pre-pandemic levels due to a subdued tourism recovery and tighter mobility restrictions.

All 22 economists in a March 16-25 Reuters poll predicted the BOT would leave its one-day repurchase rate (THCBIR=ECI) at a record low of 0.50% at its March 30 meeting. Median forecasts showed no change in rates until the second quarter of 2023.

"Under the hood of an unchanged policy rate, the MPC is likely to deliberate on rising inflationary pressures amid elevated commodity prices and supply shocks, against a backdrop of a fragile economy that is facing high uncertainties and downside risks from geopolitics and the pandemic," said Chua Han Teng, economist at DBS.

The BOT was predicted to raise rates to 0.75% in the second quarter of next year, making it the last Southeast Asian central bank to raise interest rates.

However, there was a near split among economists with six of 13 expecting no change to rates in the second quarter of next year, indicating weak conviction about the central bank's policy direction.

Among the remaining seven, four were in line with the median view, two expected rates to reach 1.00% with a lone voice predicting 1.25%.

"The current situation makes it increasingly difficult for policymakers to strike a balance between managing risks to economic growth and price stability," said Somprawin Manprasert, chief economist at Bank of Ayudhya.

Sourse : Reuters

ASEAN developed the Report on "Measuring Progress - Financial Inclusion in Selected ASEAN Countries 2021" under the leadership and guidance of the Working Committee on Financial Inclusion (WC-FINC) and with the support of the UN Capital Development Fund (UNCDF).

The report serves as an annual reflection on the progress of measurable indicators on financial inclusion based on an assessment of data availability and collection processes at the national level.

The publication is available here.

Thailand is financially stable despite the Covid-19 crisis and global economic woes, the government spokesman said on Sunday.

Spokesman Thanakorn Wangboonkongchana said the country is economically strong even though the government has had to offer subsidies to ease the burden on citizens affected by the pandemic and global oil crisis. He added that the country’s financial stability has been maintained because the government has implemented support measures under strict financial discipline.

Thanakorn added that the country’s financial stability is evident from the fact that the treasury had about 418.59 billion baht in cash for the first five months of the 2022 fiscal year (October 2021-February 2022).

During these five months, the Finance Ministry earned about 901.44 billion baht in revenue, while government spending came in at 1.43 trillion baht, forcing it to borrow 394.47 billion baht to offset the deficit.

The spokesman added that the government had made provisions for a budget deficit of 700 billion baht for the 2022 fiscal year and the more than 400 billion baht cash in the treasury was in line with its plan to maintain a reserve of 400 billion to 500 billion baht.

The spokesman said the government was confident that its revenue for the entire fiscal year would meet the target of 2.4 trillion baht, adding that the country’s foreign exchange reserve is also strong at US$245 billion.

Thanakorn added that the government was able to keep the price of consumer goods stable and the inflation at a manageable rate.

Rising global energy prices pushed inflation up to 3 per cent in January and 5 per cent in February. However, if the rising price of fuel is not taken into account, then the rate of inflation comes in at 0.5 per cent in January and 1.8 per cent in February, he said.

The spokesman added that the government has set up 10 measures to help mitigate the burden on people affected by the rising prices of fuel and consumer goods, adding that the measures are adjusted according to the situation.

He added that the rate of unemployment dropped to 1.6 per cent in the fourth quarter last year when the government loosened Covid-19 restrictions in November. Its Rao Tiew Duay Kan (We Travel Together) co-payment tourism scheme also helped create jobs.

He went on to say that the export sector has been improving since 2021 after the factory quarantine policy was implemented, allowing factories to resume operations.

Thanakorn said the value of exports in 2021 rose by about 17-20 per cent and is expected to expand by another 5-10 per cent this year.

He added that Thailand can expect to enjoy economic growth this year thanks to agriculture and border trade as these two sectors have not been affected by Covid-19. He pointed out that Asean countries still require consumer goods made from agricultural products made in Thailand.

The spokesman said growth would also be fuelled by export and government spending, as well as the expansion of investment by the private sector, especially in the electric vehicle industry thanks to supportive measures offered by the government.

Sourse : THE NATION THAILAND