Cambodia and Singapore have pledged to step up cooperation to bolster bilateral trade, after registering more than $5.2 billion last year, marking a nearly 50 per cent jump over 2020.

The commitment was made at a bilateral meeting on May 18 between Minister of Commerce Pan Sorasak and his Singaporean counterpart Gan Kim Yong in Bali, Indonesia.

Sorasak took the occasion to thank Gan for the Singaporean Ministry of Commerce and Industry’s support for Cambodia’s ASEAN chairmanship, pledging to work hard to spur bilateral trade.

“We are committed to continuing cooperation to bolster bilateral trade between Cambodia and Singapore, taking it to greater heights,” he said.

Both sides agreed to arrange an event soon in Singapore for stakeholders to share experiences and explore key areas of interest further in-depth, in hopes of improving the capacity of the private sector, especially Cambodia-based micro, small- and medium-sized enterprises (MSME).

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, suggested that the success of international trade hinges on the export portfolios of each country, adding that expansions in networks of business relationships correlate to more and stronger benefits.

Given its proximity to Cambodia and deep-sea ports, forging deeper relations with Singapore will improve freight transportation from Cambodia to the world, he said.

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Author: Hin Pisei
Source: The Phnom Penh Post 

Thai stocks extended losses on Monday as investors worry strong US jobs reports and the prolonged Russia-Ukraine war will drive the Federal Reserve to move with more aggressive and quicker rate hikes to fight inflation. The markets expect the war will keep energy prices high, making it more challenging for central banks globally to control inflation while the global economy slows.

Global stock markets on Monday continued to fall from the week before. The Nikkei 225 opened at 26,705.32, down 298.24, or 1.1%, while the SSE Composite Index opened at 2,990.20, down 11.36. or 0.37%. The Hong Kong stock markets were closed for a public holiday. According to Dow Jones market data, the Dow Jones Index fell for the sixth straight week, while the Nasdaq closed at its lowest level since 2020. The S&P500 Index also fell for the fifth straight week, the longest stretch since the second quarter of 2011.

The SET Index on Monday closed at 1,604.49, down 25.09 points or 1.54%, with trading worth 81.6 billion baht. Veeravat Virochpoka, vice-president of Finansia Syrus Securities, said investors are worried that the strong US job numbers will drive the Fed to accelerate interest rate hikes. Traders expect the Fed to raise interest rates by 0.75 percentage points at the next meeting, although Fed chairman Jerome Powell has denied it.

He said inflation could rise further due to the protracted war because long-term energy bans on Russia have failed to deter Russia from attacking Ukraine while oil prices keep rising. He said if the core inflation rate rises to 3-4%, the Bank of Thailand (BoT) may decide to raise interest rate by a quarter of a percentage point this year from 0.5% to 0.75%. However, the central bank will also take domestic economic conditions into consideration when deciding whether or not to raise the interest rate, Mr Veeravat said.

Prospects of rate hikes and monetary policy tightening amid high inflation usually drive investors to offload risky assets such as stocks and cryptocurrencies, resulting in price drops, he said. Mr Veeravat said the SET Index may fall below 1,600 points, and the next support level would be 1,570 points. For investment strategy in the short term, Finansia recommends consumer and hospital stocks.

Bitcoin dropped below US$34,000 on Monday to its lowest level in four months. Cryptocurrency will recover when inflation is lower and the economy recovers, he said. "The factors that worry investors the most are inflation and the war. We suggest holding more cash and waiting to invest during a period of market correction," Mr Veeravat said.

Sourse : Bangkok Post

The retail price of diesel in Greater Bangkok will remain capped at 32 baht per litre, as the government has tried to continue its energy subsidy measures to help alleviate people's hardship and reduce their cost of living. According to the director of the Oil Fuel Fund Office (Offo), Wisak Watanasap, the board on Monday agreed to continue capping the retail diesel price at 32 baht per litre for another week.

The government earlier decided to allow the price of diesel, which had been capped since October 2021, to gradually increase starting from early this month, with the price expected to increase to 33 baht per litre as of Monday morning. Mr Wisak said the Offo is scheduled to reassess the direction of the retail diesel price this Friday.

The actual retail price of diesel is now quoted at 43.5 baht per litre in Greater Bangkok including tax and levy collection. According to Offo, the state diesel subsidy has now risen to 11.35 baht per litre from 9.55 baht per litre a week ago and from 9.57 baht per litre two weeks ago, as global oil prices rise.

As of Sunday, the Oil Fuel Fund, which provides the subsidy, was 66.6 billion baht in the red, 33.2 billion baht of which was for oil and 33.4 billion baht of which was for cooking gas. Mr Wisak said Offo is also accelerating obtaining a 20-billion-baht loan, possibly by June, to maintain the fund's liquidity.

State-run Government Savings Bank and Krungthai Bank are on Offo's shortlist as potential loan providers. Last month, the cabinet approved an additional loan of 10 billion baht on top of a former loan to keep the fund operational.

Mr Wisak said that global oil prices traditionally decline after the end of the winter season, but they are still on the rise due to the protracted Russia-Ukraine war. The Oil Fuel Fund currently spends a combined 860 billion baht per day to subside energy prices, 781 million baht of which is used to subsidise oil prices and 78.8 billion for the LPG price subsidy.

Wattanapong Kurovat, director-general of the Energy Policy and Planning Office, said energy authorities are expected to discuss the possibility of lowering the content of methyl ester (ME), also known as purified biodiesel (B100), in biodiesel from 5% or 5 baht now. Costly ME is now quoted at 62.74 baht per litre, doubling the diesel prices. Every 1% reduction in ME content in diesel could lower the retail price by 0.25 baht per litre.

The new proportion of ME content in diesel will not be confirmed until this Friday. Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow said the authorities are planning to lower electricity tariffs by adding up long-term contract purchases of liquefied natural gas from costly purchases in the spot market.

Sourse : Bangkok Post

Indonesia recorded a surplus of $4.53 billion in March to continue a run of a positive trade balance for the 23rd month in a row, the Central Statistics Agency, or BPS announced on Monday.

The country’s exports grew by 29.42 percent to $26.5 billion compared with the previous month, while imports increased by 32.01 percent to $21.97 billion.

During the first quarter of the year, the overall trade surplus reached $9.33 billion.

Deficit with Russia and Ukraine
BPS Head Margo Yuwono said Indonesia saw a deficit in the bilateral trade with warring countries Russia and Ukraine.

“Indonesia’s trade balance with Russia saw a deficit of $204.6 million on our side from January through March, and we also had a deficit of $13.5 million with Ukraine,” Margo said.

Indonesia’s exports to Russia dropped by 48.7 percent to $399.6 million in the first quarter of the year compared to the same period of last year.

Source: Jakarta Globe

BANGKOK, May 2 (Reuters) - The leaders of Japan and Thailand announced a new defence agreement on Monday as well as plans to upgrade their economic relations, as Japanese Prime Minister Fumio Kishida wrapped up the last leg of a three-nation tour of Southeast Asia.

The agreement would facilitate the transfer of defence hardware and technology from Japan to Thailand, which has one of the region's biggest and most equipped armies and a long history of ties with the United States military. Further details of the deal were not disclosed.

"This will help improve national defence and support investment from Japan in this activity which is an important goal for Thailand," Thai Prime Minister Prayuth Chan-ocha said in a joint statement read alongside Kishida.

Prayuth said he discussed improvements in supply chains and the drafting of a five-year economic partnership with Japan, Thailand's biggest investor.

Southeast Asia has for decades been an important region for Japan, hosting some of its biggest names in industry, from infrastructure, engineering and industrial zones to the manufacturing of vehicles and electronics.

The region remains a battleground between the United States, Japan's close ally, and rival China, Southeast Asia's biggest trade partner. On his three-day trip Kishida also visited Vietnam and Indonesia, where Japanese firms maintain a large presence.

As the leader of Asia's sole member of the Group of Seven (G7), Kishida discussed Russia's invasion of Ukraine during his trip to Southeast Asia, where only one nation - Singapore - has joined sanctions against Moscow. Russia calls its actions in Ukraine a "special operation".

Nine Southeast Asian countries backed a United Nations resolution in March condemning the invasion, however, and Kishida thanked Prayuth for Thailand's support.

"I agreed with Prime Minister Prayuth that in any region the violation of sovereignty and territorial integrity, or unilateral changes to the status quo with force, should not be tolerated," he said.

Noriyuki Shikata, Japan's Cabinet Secretary for Public Affairs, earlier on Monday told reporters that Tokyo would be extending a 50 billion yen ($385 million) loan to support Thailand's COVID mitigation efforts.

($1 = 129.9400 yen)

Sourse : Reuters

Indonesia's manufacturing sector expansion has accelerated in April thanks to improving economic activities that spur employment and purchasing activity, according to the latest S&P Global Purchasing Manager Index, or PMI, data. 

Indonesia's S&P Global Indonesia manufacturing PMI rose to 51.9, increasing from 51.3 in March and marking the ninth consecutive month of the country's manufacturing sector expansion. A reading above 50 reflects an expansion from the previous month, and conversely, below 50 signals a contraction.

That was also the quickest rate of development since January, as the country dropped off restrictions after the Covid-19 third wave, driven by the Omicron variant, subsided

“The expansion of Indonesia’s manufacturing sector continued in April and at a stronger pace," Jingyi Pan, an economics associate director at S&P Global, said in a statement on Wednesday.  

"An improvement in economic conditions was reflected by stronger upturns in both demand and production, which was a positive sign," Pan said. 

In April, manufacturing production rose quicker, boosted by growing client demand.

While the increase in output was slight, it was the quickest in three months, while new orders also increased since March. Globally, foreign demand increased steadily. However, several enterprises indicated that the situation in Ukraine weighed on total new foreign business. 

“That said, supply issues persisted with longer lead times reported even as Covid-19 disruptions appeared to have eased in April," Pan said. 

Still, Pan warned against price pressures, which worsened last month and could strain production moving forward.

“At the same time, business confidence fell sharply over April, and it will be worth monitoring the impact of higher inflationary pressures. With that said, the increase in purchasing activity and, importantly, the solid expansion of workforce numbers continued to reflect some confidence from firms for the near-term,” Pan said. 

Source: Jakarta Globe

As Thailand's largest trading partner, China has been a major export market for Thailand's various products, a crucial supplier of certain raw materials, components and intermediate products, and an important FDI source for Thailand.

BANGKOK, April 29 (Xinhua) -- China has strong economic resilience and sufficient policy room to deal with downward pressures, while its stable growth is of great significance for Thailand's economic recovery, said a Thai scholar.

As Thailand's largest trading partner, China has been a major export market for Thailand's various products, a crucial supplier of certain raw materials, components and intermediate products, as well as an important source of foreign direct investment for Thailand, Tang Zhimin, director of China ASEAN Studies at the Bangkok-based Panyapiwat Institute of Management, said in an interview with Xinhua.

Tang said Thailand's tourism sector, one of the country's major growth drivers that was hit hard by the pandemic, still takes time to recover, making the country more dependent on exports as the main engine of growth.

"The importance of the Chinese economy's steady operation to Thailand's economic development is self-evident," he said.

The Chinese economy got off to a steady start in the first quarter of 2022, expanding 4.8 percent from one year earlier, despite challenges from an increasingly complex international environment and the resurgence of COVID-19 cases at home.

The hard-won growth, accelerating from the previous quarter and beating the expectations of most economists and market observers, is "quite a good performance," Tang said.

The stable growth of the Chinese economy means its demand for Thai agricultural products and other commodities will increase steadily, which is important for Thailand's economic recovery, he said.

Although there are rising downward pressures on the economy, China has sufficient room to maneuver on fiscal policy to avert a slowdown, he said.

For the longer term, Tang said supported by the innovation-driven development strategy, China's industrial upgrading continued apace and led to strong growth in high-tech sectors such as the high-tech manufacturing and equipment manufacturing industries, laying a solid foundation for the country's high-quality development.

He said China's massive domestic market, resilient industrial and supply chains as well as innovative entrepreneurs are also favorable factors sustaining the country's long-term development.

Sourse : Xinhua

BANGKOK, April 29 (Reuters) - When 23-year-old Norwegian Anastasia Johansen and her boyfriend were planning their first vacation in two years, they considered going to Thailand but chose nearby Vietnam instead, for its simpler entry rules on the coronavirus. "The regulations to enter Thailand ... were complicated to me and we had to pay for the hefty PCR test," Johansen said.

Thailand, one of the world's tourism destinations before the pandemic, was among the first nations in Asia to reopen its borders to vaccinated visitors last year with limited quarantine norms, hailed at the time as a model for re-opening. But as regional peers have eased entry requirements, Thailand has clung to a cumbersome process.

"Whichever (country) offers easy, smooth, less complicated procedures wins my heart," said Johansen. Tourism professionals say Thailand's complicated entry rules are now holding back recovery in an industry that contributed 12% of GDP before the pandemic.

Forward bookings for 2022 show Thailand reaching 25% of pre-pandemic levels, behind levels of 72% and 65% each for Singapore and the Philippines. Many blame the Thailand Pass pre-entry approval system, which can take up to seven days, although the government recently vowed to streamline it.

"The red tape is killing us," said Bill Barnett, the managing director of hospitality consultancy C9 Hotelworks.

"If you're in Singapore and want to come to Thailand for the weekend, it's not easy. Those short-term trips matter."

American Kiran Stallone, who is visiting family in Thailand, said getting the Thailand Pass required proof of vaccination, insurance coverage of at least $20,000 and reservations at a qualified hotel, all submitted on a Thai government website.

"The government website was hard to navigate, and I had to seek outside help," Stallone added. Stallone said she was told to avoid some steps known to cause submission glitches that would delay her application.

The website does not allow users to save progress or return to previous pages and rejects PDF files. A Facebook group on the Thailand Pass has ballooned to 90,000 members, with would-be travellers asking anxious questions about changing flights, new entry rules and some venting frustration over rejected applications. Similar forums have also emerged on sites such as TripAdvisor.

YOU SHALL NOT PASS

Thailand received 39.9 million visitors in 2019 when Bangkok, the capital, was named the world's most visited city. That year, Singapore and the Philippines recorded 19.1 million and 8.26 million arrivals respectively. Thailand aims to attract 5 million to 10 million visitors this year, but critics call its Thailand Pass system an unnecessary obstacle.

"It’s uncompetitive for Thailand and complicated for travellers ... who lose all flexibility," hotel tycoon William Heinecke, chairman of Minor International Pcl (MINT.BK), told Reuters.

An approved Thailand Pass can only be used one week before or after the date indicated. The tourism council also said the system's requirement of individually filed documentation made it tougher for tour operators to bring in groups. Thailand’s coronavirus taskforce spokesperson, Taweesin Visanuyothin, said tourist arrivals have been increasing as measures were relaxed and recognised that domestic infections outnumbered those from abroad. However, Thailand's staggered approach to relaxing the rules has also caused confusion.

Entry for vaccinated tourists with limited quarantine resumed in February after a brief suspension over the Omicron variant. At the time, travellers had to take at least three COVID-19 polymerase chain reaction (PCR) tests; one each before departure, on arrival and on the fifth day of their stay. In March, that final test was replaced with a rapid antigen test and insurance coverage was dropped to $20,000 from $50,000. In April, the pre-departure PCR test was scrapped.

From next month, insurance of $10,000 is required but tests for vaccinated travellers and advance hotel bookings have been dropped.

Course : Reuters

Singapore, April 07, 2022 — Moody’s Investors Service (“Moody’s”) has today affirmed the Government of Thailand’s Baa1 issuer and local currency senior unsecured ratings and maintained the outlook at stable. Moody’s has also affirmed Thailand’s foreign currency commercial paper rating at P-2.

The affirmation of the Baa1 ratings reflects Moody’s expectations that Thailand will continue to display economic resiliency to future shocks, underpinned by its large and diverse economy and strong macroeconomic policy effectiveness.

The rating also takes into account material downward pressure on the economy’s growth potential from rapid population ageing and likely long-term economic scarring from the pandemic.

Thailand’s fiscal metrics to remain stronger than most Baa-rated peers

While Moody’s expects Thailand’s government debt to increase and remain markedly higher than pre-pandemic norms, leaving the government with weakened fiscal strength for some time, Thailand’s fiscal metrics will still be stronger than most Baa-rated peers. Further, Moody’s assesses it likely that the government will quicken its pace of fiscal consolidation in the next two to three years once the economic recovery takes hold.

Balanced risks to Thailand’s credit profile

The stable outlook indicates balanced risks to Thailand’s credit profile. Thailand’s economic strength may benefit from productivity gains, including through the ramp-up of the Eastern Economic Corridor to a greater extent than Moody’s currently expects.

By contrast, the economic and social costs of ageing and Thailand’s capacity to absorb them have yet to be tested. Meanwhile, the authorities’ track record of effective macroeconomic policies, including prudent fiscal policies, despite noise in the political landscape, contributes to the stable outlook.

Thailand’s local and foreign currency country ceilings remain unchanged at Aa3 and A1, respectively. The four-notch gap between the local currency ceiling and sovereign rating reflects a balance between the country’s strong external balances and effective institutions, against the government’s relatively large footprint in the economy and moderate political risks.

The one notch gap between the foreign currency ceiling and the local currency ceiling takes into account Thailand’s history of imposing capital controls, although its low external indebtedness and high policy effectiveness reduce the risks of potential transfer and convertibility restrictions in very low-probability scenarios of the government seeing a need to impose them.

Sourse : Thailand Business News