Pridiyathorn sees export recovery in Q1 next year
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Former deputy prime minister and finance minister MR Pridiyathorn Devakula expects Thai exports to stage a recovery in the first quarter of 2014 on the back of the global economic recovery.
Speaking at the ethical issue forum held by the Thai Chamber of Commerce, Pridiyathorn said yesterday that the global economy could improve if the United States sailed through its budget crisis, as the US economy was consistently improving with lower unemployment.
The European economy had turned around to expand 1 per cent in the past two months with a lower unemployment rate. Japan grew 4 per cent in the previous quarter. China expanded 8.5 per cent in the third quarter, higher than the previous two quarters, after the state’s capital injection.
In light of such external factors, Thai exports would likely improve in the fourth quarter of this year and the first quarter of next year, Pridiyathorn said.
However, to promote the Thai economy, the government may need to rush disbursement of the budget for fiscal year 2013, he said.
There may be no big investment in the manufacturing sector and investment may not expand as fast as in the past, given higher wages and saturation in manufacturing, Pridiyathorn said.
As the agricultural sector has grown with more sustainability in the past five to six years, the public sector may have related agencies provide communities assistance for more income generation through the One Tambon One Product business, in addition to agriculture, he said.
If communities are supported to earn income from both agricultural products and community businesses, the Thai economy will grow with stability, driven by higher purchasing power and more income distribution, he said.
He also urged the government to pay attention to education development as there was a problem of insufficient teaching materials, concentration of competent teachers in big cities and inefficient textbooks in rural schools.
Pridiyathorn backed the idea of Thailand establishing a sovereign wealth fund.
The former central bank chief said the Bank of Thailand had mulled this option for some time.
“It’s possible to set up a sovereign wealth fund. We need to look at which part of the foreign reserves should be set aside for the fund investment,” he said.
Of the US$200-billion foreign exchange reserves, about $140 billion are for banking and the remaining $60 billion for the Thai currency’s backup.
The central bank may set aside only $30 billion out of the total baht backup that has no debts, Pridiyathorn said, adding it was also possible to have a $140-billion reserve for such investment.
In response to a query on bond issuance in the country, he said that it might be a good idea as local lending could carry attractive interest rates and bond issuance could also strengthen the Thai bond market.
