Editor:
   Chiratas Nivatpumin

   Co-ordination:
   Tony McAuley, Taksina Isarabhakdi
   Copy Editing:
    Eric Baker, Piers Evans, Gregory     
    Lowe, Taksina Isarabhakdi, Tony
    McAuley
    Cover and Graphics:
    Sataporn Kawewong

    Design and layout:
    Napaporn Suktrakul, Chantiya
    Potayarom

    Production co-ordination:
    Veman Ittihiranwong
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

 

 

 

 
Economic review MID-YEAR 2009
Price $ 6.00
What’s that sound the prime minister hears? Could it be green shoots stirring in the tropical breeze?

Faint though it maybe, the buzz is building in Bangkok and capitals elsewhere that the economy has nowhere to go but up from now on.

Some observers are curbing their enthusiasm given the economic figures, which make grim reading.

While Thailand’s economy hasn’t plumbed the double-digit contraction depths of 12 years ago, the 7.1% drop in first quarter GDP and persistent declines of 20% or more in all-important export revenue have been cause for alarm.

Did we mention the colours red or yellow? The economy is bad enough, and no one needs anymore excitement on the political front to complicate matters.

So who will lead the climb back into the black? Count the private sector out for now.

Few companies are willing to commit to new investment until they see concrete signs of new demand.

Local banks remain equally nervous about lending, despite being in tip-top health compared with their peers in many other countries. That leaves the spender of last resort, the government.

Prime Minister Abhisit Vejjajivaandhis cabinet are banking on big-ticket projects funded by heavy borrowing to provide the wind needed to stir the green shoots of recovery to life.
 
 
 
 

ECONOMY
Toward a new path
Improving education is paramount if Thailand wants to make the shift away from an export-based model

 

CENTRAL BANK VIEW
‘Improvement does not mean recovery’
Show me the data, says central bank chief, who is keeping the Champagne on ice for now.

 

Green shoots or yellow weeds?
While it’s too early to say that a lasting recovery is in sight, things are at least stabilising

 

FISCAL POLICY
Don’t count the money yet
Economic pickup won’t translate into revenue for a while, say fiscal planners, who caution that budget deficits are likely until 2013.

 

Elixir for economic woes
The government is committed to a new investment plan worth 1.43 trillion baht over the next three years to revitalise an economy paralysed by contraction in world tradeanddomestic political turmoil.

 

Dicing with debt
While few question the strategy of raising public spending in the downturn, Thailand could be wrong
to emulate the policies of economies with more effective tax systems.

 
 

TRADE
Propping a shaky pillar
IIndustries are sending an SOS as the country’s major economic driver buckles under the weight of the crisis

 

Dark days for Thai exports
Thailand’s exports have gloomy prospects until next year, as they could contract asmuch as 17-20% in 2009, according to the private sector.

 
 

AGRICULTURE
Nurturing the green shoots
After a price windfall in 2008, followed by a hard landing in the early part of 2009, the farm sector is scrambling
to keep the green shoots alive on barren economic land.

 
 

BANKING
Pay it forward
Banks must try harder to balance risks with social responsibility and lend more during hard times

 
 

STOCKS
Divining the market
Analysts are split on whether the market will continue to rally or face a correction, but more volatility is expected
for the second half.

 

REGULATION & FUTURES
Market liberalisation on track
Regulators remain committed to demutualising the SET and creating an Asean trading board.

 

TFEX continues to prosper with merger on the horizon
Even as the Stock Exchange of Thailand struggled to regain its footing in the first half, the Thailand Futures
Exchange continued to prosper.

 
 

INSURANCE
There’s still life in insurance
Life products will fuel the local industry’s growth and profitability this year as other sectors such as vehicle
coverage could take a hit from the slumping economy.

 

New risks under the microscope
As Thailand becomes embroiled in unprecedented risks associated with natural disaster, newregulations
andpolitical chaos, an industrybody pledges to hire international experts to study unfamiliar risks, relevant pricing structure,andenterprise riskmanagement.

 
 

PROPERTY
The last remaining wildcard
Developers have rediscovered their bearings but they have yet another hurdle to deal with

 

All quiet on the foreign front
Foreign demand for Thai property remains depressed and a long way from rebounding due to uncertainties
over the global economy, weaker confidence in Thai politics and unclear foreign-ownership policies.

 
 

INDUSTRY
Hope returns as orders revive
The second quarter of the year has brought a hint of optimism for the beleaguered manufacturing sector

 

ELECTRONICS & INVESTMENT POLICY
Hard disks see soft recovery
Electronics companies are starting to believe the worst could be over, although some fear the export rebound triggered by depleted inventories cannot be sustained.

 

Prying open investors’ wallets gets tougher for BoI
With industries worldwide and in Thailand seeing little need to add capacity amid weak demand, the job of the Board of Investment (BoI) has become tougher.

 
 

LOGISTICS
Rocky road to recovery
The return of expensive oil has threatened to hijack the fragile recovery in the logistics sector.

 

Rougher water ahead
A recovery in shipping rates has not convinced the shipping industry to forecast plain sailing over the rest of the year.

 
 

EMPLOYMENT
The changing job landscape
Employers are being much more selective but recruiters say demand for positions still exists in a few sectors.

 

Land logistics thrive as firms cut costs
Land logistics have gained a windfall from the faltering global economy as more companies have been opting for road and rail freight to trim costs, operators say.

 
 

AUTOMOBILES
Easing off the brakes a bit
Better second half foreseen but recent pain inflicted on the long local supply chain could take longer to repair

 
 

ENERGY
Rebound or another spin?
No matter whether the latest round of costly oil is sustainable, policymakers need to stick to their green plans

 

PETROLEUM & MINING
Underdog has its day
Having failed to capitalise on soaring oil prices while its rivals raced ahead, Bangchak is now reaping the benefits of its conservative approach in the downturn.

 

Mining for black gold
Soaring oil prices have given Banpu a smooth ride through the crisis but this is no cause for complacency for Thailand’s biggest coal miner.

 
 

MEDIA & ADVERTISING
Ad budgets working harder and smarter
When times are tough, creativity is less important than crafting messages that really sell

 

ENTERTAINMENT
TV bucks media trend
The top executive of BEC World Plc, the operator of Channel 3, shares the same view as other businesspeople do that the Thai economy should recover near the end of this year.

 

Coming soon: Big-screen revival
Vicha Poolvaraluck, chairman of Major Cineplex Group Plc, the nation’s biggest cinema chain, accepts that his company is not immune to an economic slowdown. To keep business afloat, he is putting a big effort into promotional campaigns to attract newmoviegoers and keep them spending on food and other products once they’re in the theatre.

 
 

TELECOMMUNICATIONS
Generation next, but when?
Everyone agrees communication technology is a big economic driver. Finding someone to steer is the problem

 

Mixed signals
The continuing development of Thailand’s telecommunications industry must overcome government inaction and market saturation, as well as the challenge of the slowdown.

 
 

TOURISM
Caught in the eye of the storm
With battles on all fronts, local operators are struggling to stay afloat by counting on niche, emerging markets

 

Surviving the slump
Hotels must be flexible in pricing and attracting new markets to make it through the downturn.

 
 

RETAILING
More cheer at the checkout counter
Retailers see signs of an improving spending mood despite a sluggish first half.

 

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