Thread: Bangkok Bank Foresees Slower Econ Growth in 2011

http://www.tannetwork.tv/tan/ViewData.aspx?DataID=1038846

Bangkok Bank Foresees Slower Econ Growth in 2011

UPDATE : 23 December 2010

Bangkok Bank is making several projections on the Thai economy next year, while advising the business sector to brace for price and exchange rate fluctuations.

Bangkok Bank's Chairman of the Executive Board, Kosit Panpiemras, said the Thai economy is expected to slow to 4 to 5 percent growth in 2011, compared to 7 percent this year.

He added that growth will be driven by factors other than exports, such as domestic consumption and agricultural investments.

Kosit said that although export is likely to slow down, there will not be a severe contraction, since demand in Asian markets is still robust.

The Bangkok Bank executive expressed little concern about inflation, but recommended that businesses prepare and adapt to fluctuations in prices and exchange rates.


In addition, Kosit revealed that due to high liquidity risks, financial institutions will likely spread their investments into international markets.

He predicts a loan growth of 5 to 7 percent next year, adding that the proportion of foreign loans in the bank's loan portfolio currently stands at 18 percent.

Kosit went on to say that public investment will take over exports as a key driver for economic growth in 2011.

He reported that his bank has been able to maintain the non-performing loan or NPL ratio at 4 percent, and will continue to keep it at this level, noting that new bad debts are very few due to the bank's stricter control of loan approvals.

The Bangkok Bank board chairman said the interest rate is on an upward trend, as the benchmark interest rate could go up from the current 2 percent to 2.5 percent.

Bangkok Post : NESDB: 3.0% growth in Q1

• Published: 23/05/2011 at 12:12 PM
• Online news: Economics

Thailand's gross domestic product in the first quarter of 2011 rose 3.0 per cent year-on-year, National Economic and Social Development Board secretary-general Arkom Termpitayapaisit said on Monday.

Mr Arkom said the GDP increase was attributed to the surging exports, at 27.4 per cent year-on-year despite the baht strengthening by 6.9 per cent.

Farm income increased with the agricultural sector expanding by 6.7 per cent.

There were 5.4 million tourist arrivals in the first quarter, while capital spending rose 3.4 per cent, thanks to an increase in the minimum wage, higher farm income and salary increases for state officials.

Private investment went up from 9.2 per cent in the fourth quarter of 2010 to 12.6 per cent in the first three months of this year.

The NESDB expected this year's GDP to increase between 3.5 and 4.5 per cent overall.

The supporting factors included the growing tourism industry, with expected arrivals at 18 million this year, the rising prices of agricultural products, the high liquidity in the economy and the expanding loan growth.

Consumer confidence and private investment were at an acceptable level, while the export sector remained strong as other competing countries, such as Vietnam, India and China, still faced high production costs.

Mr Arkom said the risk factors and limitations for this year were the fluctuating global economy, particularly in the United States after the US Federal Reserve stopped using Quantative Easing (QE2), the fragile state of the US real estate sector and its high household debt level.

The Europe's public debt remained high, while Japan had to deal with the repercussions from the massive earthquake and tsunami in March. China's inflation in the first four months of 2011 soared 5.1 per cent.

The global oil price range would likely increase to US$98 to $107 a barrel, from the previous $85 to $95 a barrel.

The NESDB forecaste that this year's inflation would be around 3.0 to 3.8 per cent, from the previous 2.8 to 3.8 per cent. The interest rate should increase to 3.5 per cent.

Mr Arkom called on the government to ensure that both consumers and producers are treated fairly when product prices are raised and to enhance the country's competitiveness.

Between 20 billion and 30 billion baht were likely to circulate in the economy during the election campaign. No political unrest was expected as the country is heading to an election under the democratic system, he said.

The new government should be set up in August, he added.