January 14, 2021 Thai Enquirer Summary Economic News • The
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January 14, 2021 Thai Enquirer Summary Economic News The government’s planned allocation of the 3,500-baht monthly financial assistance for 2 months (February-March) to 35 million people to ease financial burden of the public from the Covid-19 pandemic has drew mixed reaction from various parties. The Ministry of Finance said it had money to fund the allocation for only 2 months enough to cover 35 million people because the government has to “tighten its budget”. Krisada Chinavicharana, the finance permanent secretary, confirmed that around 14 million people will not receive the cash handout under the “Rao Chana” relief project. These people are 3 million civil servants, employees of state enterprises and 11 million people who insured under Section 33 of the Social Security Act and higher income earners according to assessments by the Finance Ministry. The opposition Pheu Thai Party slammed the government’s plan to provide cash giveaways of 3,500 baht a month for 2 months to people affected by the outbreak, saying that the amount promised is insufficient to help ease their economic hardship. In a statement issued yesterday, Pheu Thai proposed cash subsidies of 6,000 baht a month for 3 months for informal workers not covered by the social security scheme like freelancers and farmers in Red Zone provinces and 5,000 baht per month for 3 months for those outside the Red Zone provinces. The party also proposed the creation of an SME Credit Fund, with 1 trillion baht to be extended to SMEs, without going through commercial financial institutions. United front for Democracy against Dictatorship (UDD) chair Jatuporn Promphan described the new round of this financial relief package as “hideous”. Believing that the new wave of the outbreak is more severe than the 1st round, Jatuporn questioned the government’s idea of giving away the 3,500 baht monthly cash subsidy for only 2 months, compared with the 1st round of the outbreak which saw eligible members of the public being provided with 5,000 baht for 3 months. The UDD chair called on the government to revise its decision and asked it to raise the amount of cash subsidy to 5,000 baht for 3 months. He also called for embattled Prime Minister Gen Prayut Chan-o-cha to tell the truth to the public if the government is running out of money. Meanwhile, Thanavath Phonvichai, director of the Economic and Business Forecasting Centre at the University of the Thai Chamber of Commerce (UTCC) hailed the free cash handout package as an appropriate measure taken by the government. Thailand is estimated to lose 100 billion baht in income per month, says the UTCC. It further predicted that Thailand would lose around 300-400 billion baht if the outbreak situation prolongs for 1.5-3 months. UTCC however, believes that the government will be able to rein in the outbreak situation by February this year, sending the economic loss to stand at around 150-200 billion baht. As a result, Thailand will likely see an economic contraction of 2.2 per cent, rather than 2.8 per cent predicted earlier. The cash handout scheme is expected to inject no less than 70 billion baht into the economy which should be sufficient enough to sustain the fallout, Thanavath said. The Digital Economy and Society (DES) Ministry said it is negotiating with mobile phone providers to allow mobile phone users to download and use free data when using the Covid-19 contact-tracing app “Mor Chana” on their smartphones for 3 months starting from January 11. TMB Analytics estimates that the new wave of the Covid-19 outbreak will wipe 140 billion baht off Thailand’s trade and tourism revenue which account for 22 per cent of Thailand’s gross domestic product (GDP) and 6.9 million jobs. It said the biggest economic fallout would be felt by the maximum control zones concentrating in the central and eastern red-zone provinces where trade and tourism accounts for 23 per cent of GDP. It forecast the fresh outbreak, which began in mid-December, would cost these provinces 128 billion baht. The top 3 worst impacted provinces would be Bangkok, which would lose 81.424 billion, Chonburi 15.463 billion and Phuket 2.799 billion. TMB Analytics suggested the government should issue remedial measures to support business operators including shops, restaurants and entertainment venues. SET-listed developer Land & Houses Plc (LH) scaled down its residential launches this year to 12 projects, down 25% from last year, worth a combined 20.7 billion baht. Managing director Adisorn Thananan-narapool said the company expects to have 28 billion baht in presales and 30 billion in revenue from residential sales by the end of 2021. The investment budget this year exceeds last year's, totaling 11 billion baht with 6 billion allocated for land purchases for residential development, and 5 billion for rental properties. Last year LH launched 16 new residential projects worth a combined 28.6 billion baht, and invested 6.8 billion baht, lower than the 11 billion originally planned in January 2020. Thai Airways International Plc (THAI) acting president Chansin Treenuchagron has reassured the public that the carrier is working to ensure its rehabilitation plan will be submitted by its “specified timeframe”. The Thai flag carrier said on 5 January that it would submit the plan by February 2, after being granted a 1-month extension to a previous deadline of January 2. The plan requires approval by the airline’s creditors. “THAI would like to reassure to the public that THAI’s rehabilitation plan is still in progress without any interruption under supervision of the Central Bankruptcy Court due to the ongoing circulation of news regarding the rehabilitation plan of Thai which may cause public confusion,” Chansin said in a statement. The Thai Bond Market Association (TBMA) is confident in the direction of the Thai bond market in 2021, assessing that private companies will continue to raise capitals through the bond market in the long run to boost liquidity amid uncertainty. TBMA president Tada Phutthitada believes that the impact of the new wave of the outbreak on the bond market will likely be lesser than the 1st round. The association sees new corporate bond issues of 700 billion-750 billion baht this year, after a 36% drop to 684 billion baht last year as more firms sought other funding sources. Meanwhile, the country’s benchmark interest rate is unlikely to fall further this year, Tada said, adding that Thailand’s policy interest rate should remain steady at a record low of 0.5 per cent this year, as liquidity is not an issue, Mazda is upbeat about 2020 sales prospects. Chanchai Trakarnudomsuk, president of Mazda Sales Thailand, hailed various assistance measures rolled out by the government to help drive the economy amid challenging economic circumstances. As a result, the auto sector saw better-than- expected sales volumes at year-end. Domestic car sales dropped 20 per cent to 790,000 vehicles last year. Mazda also predicts the number of domestic car sales of 840,000 units in 2021, up slightly by 6 per cent from last year but warns of another wave of the outbreak as an uncontrollable factor that could dim this prospect. Political News If there is any country that needs a lesson on how not to do things, they should make the Royal Thai Police as a case study. The Royal Thai Police last night ‘abducted’ a 1st year student at Thammasat University’s dormitory, on grounds of breaking the Lese Majeste laws (112). The apprehending of the ‘New Sirichai’ a 1st year student at Thammasat University has prompted the gradually slowing student protest movement to pick up today as the ‘friends’ of ‘New Sirichai’ have gathered at the police station where the young student is being held. The reports suggest that Khlong Luang police in Pathum Thani arrested New Sirichai, a fresh man at Puey Ungphakorn School of Development Studies, for violating Section 112 of the Criminal Code of the lese majeste law in the middle of last night at 23.00 hrs. New Sirichai is expected to be taken and be detained at the Border Patrol Police Region 1 office on the same night, according to the Thai Lawyers for Human Rights (TLHR). New Sirichai is a member of the United Front of Thammasat and Demonstration (UFTD). A pix of New Sirichai Embattled Prime Minister Gen Prayut Chan-o-cha yesterday asked the public for cooperation when talking about the country’s problems with gambling dens and drug use. He said no one can do this all by themselves, even a hundred prime ministers will not be able to do it if everyone does not work together. Gen Prayut’s comments came after gambling dens in Rayong, Chonburi and Chanthaburi were found to have contributed to the new wave of the spread pf the coronavirus outbreak in the country starting in mid-December. Commenting on the issue of the ongoing deaths (another 3 deaths were reported yesterday) from misuse of drugs, The new drug cocktail called “Yah K-Nom Phong”, or “K-Powdered Milk” which is linked to many deaths in Bangkok over the weekend, Gen Prayut said that he did not understand why some people are using the new drug cocktail as he put it, “I do not understand why they are taking it and why do they have to take it which is the problem. This is why I said it is all started with the needs of the people”. Yesterday, Gen Prayut gave the greenlight to provincial administration organisations (PAOs) to supply Covid-19 vaccines to local people but most importantly that vaccine must receive approval from the Thai Food and Drug Administration (FDA).