Monetary easing, oil in focus at BOT
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THE Bank of Thailand had already anticipated the International Monetary Fund's mark-down of likely global economic expansion this year, so its external focus is on the repercussions from crashing oil prices, quantitative easing in the eurozone and Japan,
Chirathep Senivongs Na Ayudhya, spokesman for the central bank, said the IMF’s decision to downgrade its global growth forecast shows that there are multi-speed recoveries among developed economies – sluggish in EU and Japan and peppier in the United States.
The slowdown of China’s growth last year – the lowest pace since 1990 – was also expected by the central bank, but it believes that China’s economy will continue to gather steam from the expansion of domestic consumption and the government’s acceleration of investment in infrastructure.
The Thai Industries Sentiment Index (TISI) reached a 14-month high in December following the increase of domestic sales during the New Year and the Motor Expo last month, while the low oil prices have also contributed to the rise of the index by leading to decreased production costs, according to the Federation of Thai industries.
Suparat Sirisuwannangkura, vice chairman of the FTI, said the survey of 1,153 operators from 42 industries found that TISI reached climbed 3 points to 92.7 in December from 89.7 in November, thanks to robust domestic sales of fashions, food and electric appliances over the New Year and of cars over the Motor Expo.
However, a TISI score below 100 still indicates weak confidence.
“The index has improved but it has not reached the 100 mark while the index for industries’ confidence in the next three months is lower because industries that concentrate on exports are concerned about the state of the global economy and the cancellation of Thailand’s GSP (generalised system of preferences) privileges,” he said.
The industries confidence index for the next three months slipped from 107.1 in November to 106.1 in December.
Despite the increase of the overall TISI in December, there was one region where confidence decreased – the South. It was hit by falling rubber prices, falling latex production due partly to floods and falling orders for rubber gloves from the United States and Japan.
The seafood industry also ran into storms, which make it harder to catch tuna, while orders for squid and frozen shrimp from Europe and Russia also decreased, he added.
Surapong Paisitpattanapong, FTI’s vice chairman and spokesman for its Automotive Industry Club, said car production failed to reach the target of 2.1 million units last year. Only 1.88 million were assembled but car sales in December were at a 12 month high of 89,504 cars thanks to the Motor Expo.
Car output contracted by 23.49 per cent last year due to tepid domestic sales but export expansion remained relatively the same at 0.08 per cent.
Production of cars for shipment abroad was 1.12 million units, or 59.7 per cent of total production, while the actual number of cars exported was 1.13 million units worth Bt527.423 billion.
The auto industry contributes 4 per cent of gross domestic product while car exports account for 13-14 per cent of total exports.
