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

Germany is the second largest importer and exporter of dried tea in EU. Hamburg, a seaport city in Germany, is famous as the Tea Capital and tea companies, Service providers such as laboratories and German Tea Association exist in this city. Germany use dried tea which is imported for domestic consumption and re-exports it to more than 100 countries, with 65% of its exports to EU. In Germany, green tea and black tea are the most commonly consumed, with an average of 28 liters per capita in 2020. 

German people prefer black tea and they use it by bombinating natural herbs, fruits and vegetables for health. 

Specialty teas are also being imported by German companies as high quality and unique aromatic teas and are chosen as a selection from tea consumers. Consumers are now more interested in drinking dry tea instead of coffee. It is important to get organic certification for Specialty Tea and Fair Trade Certificate has become a market requirement. Germany is also an important gateway for specialized tea in EU. The German Tea and Herbal Infusions Association is a merger of the German Tea Association and the Herbal Infusions Association since 2020.

Dry tea from Myanmar is imported by German companies which are Teegschwendner Company and Chardo Company. Myanmar Fermented Tea products are now available on the German online marketplace (www.teafood.de) and other Myanmar tea companies are working to expand their reach into the German retail and online markets. As tea products from Myanmar are specialty tea quality, Myanmar exporters will need to make efforts to expand their exports to Germany and Europe, where demand is high.

Source: www.myantrade.gov.mm

 KUALA LUMPUR (March 29): The Malaysia External Trade Development Corporation (Matrade) expects the country’s electrical and electronics (E&E) exports led by semiconductor devices and integrated circuits (ICs) to perform well this year, despite the ongoing pandemic challenges and the global risks of chip supply shortage.

“In years of accumulating experience serving multinational companies in Malaysia and abroad, Malaysian manufacturers will continue to serve as a manufacturing hub for the E&E sector in the region, to meet the demands from the global customers,” said Naim Abdul Rahman, the corporation’s director of E&E, ICT, machinery and equipment. 

Malaysia’s E&E trade performance continued its upward momentum in January and February, with E&E exports rising by 19.6% year-on-year to US$20.18 billion during the period, Naim said in a webinar titled “Boosting Malaysian SME's Competitiveness on the Global Stage” organised by SEMI Southeast Asia and Malaysia Semiconductor Industry Association on Tuesday (March 29).

In terms of major export products and markets, Naim said a similar trend is noticed whereby all top five export products recorded remarkable growth, while semiconductors remained as the largest E&E export products.

The top five export products for E&E include semiconductors and ICs; telecommunication equipment and parts; automatic data processing (ADP) machines; parts and accessories for office machines and ADP; and electrical machinery and apparatus.

By markets, Naim said Singapore was the largest, followed by the US, mainland China, Hong Kong and Vietnam.

“Matrade is always ready to connect Malaysian E&E companies with global customers and buyers wishing to outsource their E&E products and services for use back home or as support to their global operations,” he added.

SEMI Southeast Asia president Linda Tan told the webinar that the E&E industry is a key driver of Malaysia’s industrial development, contributing significantly to export earnings, investments and employment.

This, she said, stimulates the growth of new economic clusters, especially in relation to manufacturing related services such as testing and engineering.

“Small and medium enterprises (SMEs) form a crucial part of this industry, but to continue leveraging on the growth of the E&E, which by nature is a global ecosystem, SMEs must grow their presence beyond Malaysia,” she said.

Malaysia Productivity Corporation director-general Datuk Abdul Latif Abu Seman said the government will prioritise incorporating advanced technology among SMEs under 12th Malaysia Plan, serving as a powerful gamechanger for the economy.

“It enables SMEs to transform, compete and penetrate global markets. SMEs will be equipped with the skills to digitalise their business process with automation, big data and artificial intelligence, in line with the National Fourth Industrial Revolution Policy and Malaysia Digital Economy Blueprint,” he said.

Abdul Latif said SMEs require a larger pool of skilled talents equipped with the needed skill sets, which is vital in meeting the new competitive landscape.

“Clear and supportive policies, along with an optimum regulatory and business environment, are crucial to attracting more foreign direct investment that allows a higher degree of knowledge and technological diffusion between SMEs and larger firms,” he said.

Source: The Edge Market

KUALA LUMPUR (March 28): Malaysia and Indonesia will be the focus of international oils and fats trade this year, supported by the projection of a 4% world economic growth and higher demand for vegetable oils, said the Malaysian Palm Oil Council (MPOC).

Chief executive officer Wan Aishah Wan Hamid said demand for vegetable oils is growing in tandem with the economic recovery but supply disruption had caused vegetable oil prices to record high levels, especially over the past few months.

“Palm oil prices skyrocketed in February 2022 and established new record highs, supported by current low stocks and lower production in the two major palm oil-producing countries, Indonesia and Malaysia,” she said in her presentation during the Palm Oil Internet Seminar (Pointers) on Monday (March 28).

Themed “Assessing 2022: Managing Opportunities and Risks”, the seminar features six presentations covering topics such as supply and demand of oils and fats, prices and the market outlook, opportunities for palm oil in Central Asia and the Middle East and North Africa markets, among others.

The seminar runs from March 28 until April 1.

Wan Aishah noted that Indonesia and Malaysia contribute up to 85% of global palm oil production.

Among other vegetable oils globally, 30% of oils and fats production comes from Indonesia and Malaysia as well.

She said the MPOC forecast Malaysia’s crude palm oil (CPO) production to be at 18.9 million tonnes this year, up from 18.1 million tonnes last year.

Meanwhile, Indonesia’s CPO production is poised to derive at 47.1 million tonnes from last year’s 45.2 million tonnes.

On price forecasts over the medium term, she said the Russia-Ukraine conflict remains the single biggest factor in price direction.

CPO prices will likely remain between RM5,700 and RM6,300 per tonne until May this year if the conflict drags on, she said.

As for the long-term price outlook, Wan Aishah said lower-than-expected supplies, higher demand, volatility in Brent crude oil prices and geopolitical tensions remain key factors in determining price direction.

“It is forecast that there will be a price correction for all vegetable oils but only in the third quarter of 2022, but palm oil will likely be traded at the RM4,500 to RM5,500 per tonne level,” she shared.

Palm oil prices have been steadily rising since the third quarter of 2021 due to lower-than-expected production in both Malaysia and Indonesia.

The conflict between Russia and Ukraine has resulted in a demand surge for palm oil as it is the most abundantly available.

As a result, palm oil prices increased by 21% to US$1,990 (about RM8,384.86) per tonne on March 2, 2022 from the US$1,640 per tonne level registered on Feb 25, 2022.

Palm oil, which is usually traded at a discount to soybean oil, has seen the price gap narrowing and eventually trading at a premium to soybean oil from Feb 28 until March 7, 2022.

Sunflower oil prices increased abruptly to US$3,000 per tonne from March 8 until March 10, 2022.

As for export destinations for palm oil for January to February 2022, exports to India rose 32.56% to 409,465 tonnes, exports to China slipped 17.43% to 163,148 tonnes, and exports to Turkey jumped 125.96% to 160,104 tonnes.

Meanwhile, exports to the Netherlands eased 4.7% to 120,619 tonnes and for Kenya (the fifth top highest export destination of Malaysian palm oil) it soared 132.45% to 112,902 tonnes.

Exports of Malaysian palm oil to 10 countries for the first two months of 2022 improved to 2.26 million tonnes from 1.85 million tonnes in 2021, up by 22.16%.

Source : The Edge Market