DEAR FRIENDS and MEMBERS of the STCC Our Country Takes Pole Position Among Non-Asian Countries
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JUNE 2014 | SWISS-THAI CHAMBER OF COMMERCE | E-NEWSLETTER #47 TOP NEWS SUPPORTED BY Deutsche Bank: In Stall Speed DFDL: Here Comes the Sun Interview: Giovanni Dante Salce Swiss School: Football Friendly Matches Contribution: Kurt Wüthrich THE SWISS AMBASSADOR’S MESSAGE DEAR FRIENDS AND MEMBERS OF THE STCC Our country takes pole position among non-Asian countries. With goods worth USD 9,2 bil- SERVICE lion in 2013, Switzerland ex- ported more to Thailand than STCC CALENDAR countries like South Korea, Sin- Tuesday, 3rd June 2014: gapore, Indonesia, Germany or Joint Event with German- India. The total volume of bi- TCC: Economic Outlook 2015; lateral trade amounted to USD 11:00 Kempinski Hotel 10,7 billion. Swiss machinery, precision instruments, watches, Tuesday, 3rd–5th June 2014: pharmaceutical and chemical Kafka Festival @ Goethe Insti- CHRISTINE SCHRANER BURGENER products remain popular here. tute; Opening Ceremony 18:00 AMBASSADOR OF SWITZERLAND TO Also, on Foreign Direct Invest- Thursday, 12th June 2014: THE KINGDOM OF THAILAND ments (FDI), Switzerland takes STCC- Stamm, AMARI Boule- an eminent position. In 2013, vard Hotel, Sukhumvit Soi 5 For once, the STCC Board asked Switzerland advanced from the Friday, 13th June 2014: me to provide an introductory 10th to the 7th rank. The 150 SwissSchool Graduation Cere- message. While Thailand is go- Swiss companies located here mony, @RIS Minburi, 10–12hrs ing through a difficult phase, do employ over 55’000 work- Thursday, 19th June 2014: finding the right words is chal- ers. The Swiss have a distinct VOLVO Truck Factory Visit with lenging. passion for Thailand – not only BeluThai Chamber, start 07:45 for economic reasons. In 2013, If I am looking back, on a 199’923 Swiss tourists visited Sunday 22nd June 2014: positive note, I would like to Thailand marking an increase SWISSRail Business Brunch in underline how well the bilat- of 4.6 percent towards 2012. Mandarin Oriental @ 13:00 eral economic ties between Thailand reciprocated its affec- Thursday, 10th July 2014: Thailand and Switzerland had tion for Switzerland by increas- STCC- Stamm, AMARI Boule- developed throughout 2013: ing the number of Thai visitors vard Hotel, Sukhumvit Soi 5 Switzerland is Thailand’s 6th to Switzerland by 27 percent More details at most important trading partner (!), amounting to 71’134 trav- www.swissthai.com on Swiss exports to Thailand. elers. 01 JUNE 2014 | SWISS-THAI CHAMBER OF COMMERCE | E-NEWSLETTER #47 STCC PRESIDENTS MESSAGE SUPPORTED BY However, economic forecasts cannot be reduced to national for the current year have been economic interest; all human grim. Most worrying in this re- rights play a significant role. gard in my view is the fact that The history has shown that the current situation is likely successful economic and social to affect the FDI performance development is not sustainable of Thailand’s most important in a suppressed society. All hu- investors – Japan, the USA and man rights are based on prin- the UK – adding to the overall ciples of dignity and freedom. dampened investment climate. Therefore, my sincere wish for The statistics for 2014 are very Thailand is that full freedoms, likely to look different from the social equality, the rule of law ones of 2013. and a democracy that can work for all Thais can be established But I cannot talk today about as soon as possible. economic relations without expressing my concerns with Yours sincerely, regard to the actual political Christine Schraner Burgener situation. The Swiss govern- AMBASSADOR OF SWITZERLAND ment made a statementAdhesive a day TO THE KINGDOM & Sealant OF THAILAND TechnologiesTRINA after the coup, demanding the INTERNATIONAL military forces to respect the rule of law and allow the return *** to power of a democratically Contact the president: elected government. Economic Luzi A. Matzig rights and economic well-being (Lersan Misitsakul) MS Hybrid Polymer are closely interlinked with civ- President STCC il, political, social and cultural [email protected] best performing rights. International relations Tel. +66 (0) 2626 2121 window, door and facade SERVICE sealant. MEMBER DETAIL SoutheastUPDATES Asia Link Co., Ltd. Dowww.seal-ast.com you have changes among your delegatesT: 0 2732 or changes 2092 to your e-mail, mobile, telephone, or fax numbers? Please send all updates to [email protected] 02 JUNE 2014 | SWISS-THAI CHAMBER OF COMMERCE | E-NEWSLETTER #47 ECONOMY REPORT BY DEUTSCHE BANK IN STALL SPEED • Economic outlook: High fre- tend to come into play eventu- ployment or the BOP front, and quency data suggest that the ally. Prepared food price infla- auto and electronics exports, economy may well have con- tion (5.1%yoy in April vs. 3.7% along with tourism, seemed to tracted in the first quarter, in March) was the main contrib- be turning a corner, indices of which has prompted us to utor to the pick-up in CPI, but private consumption and in- revise the 2014 GDP growth we see conditions in place for vestment remained in contrac- forecast down to 2.5%. further inflation in the coming tion territory. Indeed, weak months. Weaker baht, firming growth momentum may diffuse • Main risks: The political situ- fuel prices, and concerns about some of the inflationary risks ation continues to loom large El Nino affecting food produc- later this year. as a major drag to consump- tion, can all contribute to in- tion and investment. The risk flation heading past 3% in the Clearly the ongoing political is things could get worse this next few months. conflict continues to weigh summer as yet another elec- heavily on expectations and tion is planned, opposition While inflation has bottomed, outlook. There is also little sup- to the timing of which has it’s not clear if the economy port from fiscal as disbursement already been vocalized by the has troughed. In its recently has lagged considerably due to opposition. published report on economic the political situation and ad- and monetary conditions, the verse judicial ruling on various The 2.45% inflation print for Bank of Thailand saw condi- public sector activities. The April (core inflation: 1.7%) was tions weakening in March vis-à- outlook for the economy relies not surprising. Inflation can re- vis February, with both external heavily on the political situ- main subdued for only so long and domestic demand subdued. ation, but there is some room even in the presence of weak Although there was little to be for optimism for the second demand as supply side factors concerned about on the em- quarter as exports and tourism 03 JUNE 2014 | SWISS-THAI CHAMBER OF COMMERCE | E-NEWSLETTER #47 ECONOMY REPORT BY DEUTSCHE BANK are likely to pick up. Q1, however, looks like a wash. Indeed, we think that Thailand’s economy likely contracted in Q1, continuing on a path of weakness that has been charted for nearly a year. The index of value-added production declined by 10.6%yoy in March, which was the twelfth con- secutive month of contraction of the series; the index of capacity utilization was down 9.8%yoy at the same period while the index of shipment was down 13.1%yoy; electricity generation was down 6.8%yoy through February. Measures gauging consumer and investor senti- ment were also down sharply. Based on this data- flow indicating very weak domestic demand, and poor exports data through March, we estimate that the economy contracted by 1.5%yoy in Q1. Based on this, we have revised down the 2014 annual average growth forecast to 2.5%. Lower economic growth will be driven by weak con- sumption and investment; even trade will likely be anemic in the first half of the year. Risk of weak growth external accounts may be mitigated though as weak exports and imports go hand-in-hand. Three key factors have driv- en the weak Thai economic performance, in our view. First, with the expiration of various one- off supporting measures (car buying scheme, rice 04 JUNE 2014 | SWISS-THAI CHAMBER OF COMMERCE | E-NEWSLETTER #47 ECONOMY REPORT BY DEUTSCHE BANK pledging scheme, and post- showing signs of a turnaround. flood reconstruction), and the Note that over the past couple rise in household debt (nearly of decades Thailand’s econ- 80% of GDP), some fatigue in omy has become increasing- the economy was inevitable. ly more reliant on trade (see Second, the ongoing political chart below), with trade share uncertainty has caused delays of GDP far exceeding that of and cancellations in consump- consumption or investment. tion and investment decisions Since we remain confident of and soured external investor a pick-up in global demand, sentiments. Third, exports we still see a growth rebound have disappointed so far this despite a poor first quarter year, unlike the performance and lingering political risk. of Thailand’s peers in the re- gion (i.e. Malaysia, the Phil- The other area of positive de- ippines, and Singapore), with velopment could be tourism. key export items such agricul- If the political situation does ture and electronics products not worsen, the still in negative growth terri- summer season could see a tory. spike in arrivals and hotel oc- cupancy, giving the economy Looking ahead, the external a rare respite. We understand sector remains a major poten- that visitor arrivals picked up tial source of support. Exports in later April and early May. could bottom with a rise in partner country demand, es- Taimur Baig, pecially China and EU. Region- Singapore, ally, auto demand is already +65 6423 8681 Chiang Mai Sunrise 05 JUNE 2014 | SWISS-THAI CHAMBER OF COMMERCE | E-NEWSLETTER #47 NEWS BY DFDL HERE COMES THE SUN Solar power is an extremely country. As expected, Thailand The current target for solar en- popular concept these days; in- has an enormous solar power ergy under the AEDP is to in- terestingly humans have been generation potential with solar crease generation, by 2021, to harnessing the power of the sun irradiance levels ranging be- 2,500 megawatts (“MW”).