Economic & Commercial Report for the month of December 2015-Thailand
Business Sentiment
The Thai economy, during December 2015, gradually recovered at the pace close to expectations. The recovery was mainly supported by domestic spending and outstanding performance by Tourism sector, as numbers of tourist arrivals in December 2015 was alltime high. Private consumption also continued to show an uptrend on the back of a temporary rush for car purchases as Thais preferred to buy their new cars before increased excise tax become effective from beginning 2016. The overall recovery, however, continued to be weighed down by dull performance of merchandise exports as a result of the slowdown in the Chinese and ASEAN economies as well as the effect of global oil price slumps which pushed down prices of some export goods. Manufacturing production and private investment remained at low levels following weak external demand.
Government spending further expanded during December 2015. Government revenue also increased by about 8.4 percent compared to the same period last year, owing partly to revenue from 4G auction and an increased collection of excise tax revenue. Private consumption indicators have improved for the fifth consecutive month. Despite falling farm income, the steady growth in non-farm income together with the persistent decreases in energy prices have partly supported households’ purchasing power. The value of merchandise exports dropped by 9.1 percent compared to the same period last year mainly due to the economic slowdown in China and ASEAN countries and lower prices of oil-related products. GDP
The Thai economy in the third quarter of 2015 expanded by 2.9 percent, compared with a 2.8 percent growth in previous quarter. The NESDB has forecast a cumulative growth of 2.9 in Thai GDP during the year 2015 and a growth between 3-4 percent during 2016. The final data for GDP for the fourth quarter of 2015 and year 2015 are yet to be released. Inflation
As per the report of Thai Ministry of Commerce, Thailand's consumer prices fell for the 11th straight month in November. The Thai headline consumer price index fell 0.97% from a year ago, accelerating from the 0.77% drop in October. Thailand's core inflation, which excludes food and energy prices, increased 0.88% year-over-year and 0.05% month-over- month in November.
4. TOTAL THAILAND TRADE DURING THE MONTH OF JAN. – DEC, 2015 COMPARED WITH SAME PERIOD IN THE PREVIOUS YEAR AND BALANCE OF TRADE DURING THE PREVIOUS YEAR:
Trade during JAN. – DEC 2015
Trade during JAN.- DEC 2015
Rate of growth compared to same period in 2014
Total imports during 2014
Total exports during 2014
Balance of trade during 2014
(Amount in billion US$)
417.02
Total Tr. 417.02 Export: 215.38 Import: 202.65 Tr. Bal: 11.72
-8.40%
227.75
227.52
(-)0.23
Source: Ministry of Commerce, Govt. of Thailand 5. TOTAL TRADE IN US$ AND ITS GROWTH TO 20 COUNTRIES DURING THE PERIOD JAN. – DEC, 2015 (Amount in billion US$):
Sl. No.
Country
Thai imports
Thai exports
Total trade
China
41.07
23.74
64.81
Japan
31.24
20.08
51.32
USA
13.86
24.06
37.92
Malaysia
11.92
10.19
22.11
Singapore
7.16
8.76
15.92
Indonesia
6.56
7.83
14.39
Australia
4.21
9.77
13.98
Hong Kong
1.57
11.83
13.4
Vietnam
4.05
8.9
12.95
South Korea
7.16
4.1
11.26
United Arab Emirates
8.16
3.07
11.23
Taiwan
7.53
3.53
11.06
Germany
5.55
4.29
9.84
Netherlands
4.66
4.28
8.94
Philippines
2.36
6
8.36
India
2.62
5.3
7.92
Saudi Arabia
4.93
2.94
7.87
Myanmar
3.57
4.17
7.74
United Kingdom
2.55
3.82
6.37
Cambodia
0.63
4.96
5.59
6. TOTAL TRADE WITH INDIA
(Amount in billion US$)
Description
2010
2011
2012
2013
2014
JAN. – DEC, 2015
Total Trade
6.64
8.19
8.87
8.69
8.66
7.92
Export
4.39
5.18
5.47
5.19
5.62
5.30
Import
2.25
3.01
3.40
3.50
3.04
2.63
Trade Balance
2.14
2.17
2.07
1.69
2.58
2.67
Growth Rate %
34.23
23.29
8.20
-2.12
-0.37
-8.44
Source: Ministry of Commerce, Govt. of Thailand
7. TRADE FIGURES OF TOP 10 COMMODITIES WITH INDIA:
7 (a) Imports from India during the period JAN. – DEC, 2015
Sl No
Commodity
Import value (Value: billion US$)
Chemicals
0.403
Machinery & parts
0.274
Parts & accessories of vehicles
0.238
Jewellery including silver bars and gold
0.239
Medicinal and pharmaceutical products
0.181
Other metal ores, metal waste scrap and products
0.159
Fresh aquatic animal, Chilled & frozen
0.128
Vegetables & vegetable products
0.124
Electrical Machinery and parts
0.118
Iron Steel and products
0.80
Source: Ministry of Commerce, Govt. of Thailand
7 (b) Exports to India during the period JAN. – DEC, 2015
Sl. No.
Commodity
Export value (Value: billion US$)
Polymers of ethylene, propylene, etc. in primary forms
0.573
Chemical Products
0.484
Motor cars, parts & accessories
0.349
Spark ignition reciprocating internal combustion piston engines & parts thereof
0.317
Iron & steel and their products
0.282
Machinery and parts thereof
0.274
Air-conditioning machines and parts thereof
0.265
Precious Stones and jewellery
0.241
Automatic data processing machines & parts thereof
0.185
Rubber
0.181
Source: Ministry of Commerce, Govt. of Thailand
8. MAJOR INVESTMENTS IN THAILAND 8 (a) According to latest available data, the Board of Investment, Thailand approved 2237 projects during January – December 2015 with a total investment of 809.38 billion baht (USD 23.63 billion). Out of 2237 projects, 235.85 were 100% foreign investments, 300.39 JVs and 273.14 were 100% Thai investment.
8 (b) INVESTMENT FROM INDIA TO THAILAND Several Indian companies are operating in Thailand. Indian FDI into Thailand is around US$ 2 billion since 1970s. Year wise investment figures for the last three years are as under:
Year
No. and value of applications for FDI proposals/projects received
No. and value of applications for FDI proposals/projects approved
2011
Thirteen (13) with total value of 3180.3 million baht [US$ 106 million]
Fifteen (15) with total value of 1693 million baht [US $ 56 million]
Twenty five (25) applications worth 6100 million baht (US$ 197 million)
2013
Seventeen (17) applications worth 5296 million baht (US$ 173 million)
Sixteen (16) applications worth 1621 million baht (US$ 53 million)
2014
Twenty two (22) applications for projects worth 2479 million baht (US$ 76.32million)
Thirteen(13) applications worth 2061 million baht (US$ 63.45 million) were approved
2015[Jan.-Dec]
Seven (07) application for project worth 140 million baht (US$ 4.12million)
Fifteen (15) applications worth 1285 million baht (US$ 37.53 million) were approved
Major investments from India to Thailand were seen in the following sectors: (1) Agricultural products (2) Minerals & Ceramics (3) Light Industry (4) Metal Products and Machinery (5) Electric and Electronic products (6) Chemical & Paper (7) Textiles.
8 (c) INVESTMENTS FROM THAILAND TO INDIA Actual inflow of FDI from Thailand into India from April 2000 to Sept 2015 (for the period data is available) is registered as US $212.51 million. Break-up of yearly FDI from Thailand to India for the last three years is as under:
Year
FDI inflow (in million USD)
2012
11.55
2013
60.89
2014
23.72
2015 [Jan. – Sept.]
23.12
Thai investments are mainly in infrastructure, real estate, food processing sectors, chemicals, hotel and hospitality sector. [Source: DIPP, MOC, GOI]
8(d) INVESTMENT NEWS According to Thai Board of Investment, during the period January – December, 2015, 1151 applications of Foreign Direct Investment with investment value of 493.690 billion Baht(US$ 14.42 billion) were approved which showed an increase in applications by 26.21 percent (from 912 applications during Jan-Dec 2014) and increase in value by 2.11 percent (from 483.511 billion Baht during Jan-Dec. 2014). Out of total 1151 approved applications, 698 were 100% foreign investment. Japan remained largest foreign investor in Thailand with investment of 148.964 billion Baht (US$ 4.35 billion) and the second was the Singapore with 40.838 billion baht(US$ 1.19 billion). Indonesia was third with 32.642 billion baht (US$ 0.95billion).
9. INDIA’S INVESTMENT INTERESTS Indian investments since 2005 have been seen primarily in Agricultural Products, Minerals and Ceramics, Light Industries/Textiles, Metal Products and Machinery, Electric and Electrical Products, Chemicals and Paper and Services.
10. THE TOP FIVE PRINCIPAL IMPORT SOURCES & INDIA DURING THE PERIOD OF JAN. – DEC, 2015:
Sl. No.
Country
Import value (Billion US$)
1
China
41.07
2
Japan
31.24
3
USA
13.86
4
Malaysia
11.92
5
UAE
8.16
18.
India
2.63
Source: Ministry of Commerce, Govt. of Thailand 11. THE TOP FIVE PRINCIPAL EXPORT DESTINATIONS & INDIA DURING THE PERIOD OF JAN. –DEC, 2015:
Sl No
Country
Export value (billion US$)
1
USA
24.06
2
China
23.74
3
Japan
20.08
4
Hong Kong
11.83
5
Malaysia
10.19
11.
India
5.30
Source: Ministry of Commerce, Govt. of Thailand 12. THE TOP FIVE PRINCIPAL IMPORT ITEMS OF THAILAND DURING THE PERIOD OF JAN. – DEC, 2015:
Sl No
Commodity
Import Value (billion US$)
India’s share (billion US$)
1
Machinery & Parts
19.55
0.274
2
Crude Oil
19.52
-
3
Electrical machinery and parts
15.82
0.118
4
Chemicals
13.11
0.403
5
Iron, Steel & products
10.55
0.80
Source: Ministry of Commerce, Govt. of Thailand 13. THE TOP FIVE PRINCIPAL EXPORT ITEMS OF THAILAND DURING THE PERIOD OF JAN. –DEC, 2015:
Sl. No.
Commodity
Export Value (billion US$)
India’s share (billion US$)
1
Motor cars, parts & accessories
23.64
0.349
2
Automatic data processing machines and parts thereof
16.10
0.185
3
Precious stones and jewelry
10.44
0.241
4
Polymers of ethylene, propylene etc. in primary forms
7.63
0.573
5
Refine fuels
7.511
0.028
Source: Ministry of Commerce, Govt. of Thailand 14. BILATERAL NEWS/NEWS ON INDIA
15. ECONOMIC/INDUSTRY NEWS FROM THAILAND
Gov continues to support Thai industries of high growth potential Source: NNT News, 7th December 2015
The government aims to support industries with high potential for growth in Thailand; they're categorized as a “supercluster” of industries, and consist of companies producing automobile parts, electronic and telecommunications equipment, petrochemical and environmental-friendly chemical products, tech items, food innovations and medical equipment. Director-General of the Department of Industrial Promotion Somchai Harnhirun, has revealed that materials and equipment providers play a crucial role in the growth of supercluster industries. There are currently over 400,000 companies involved in producing such materials and equipment. However, most of these companies are experiencing a capital shortage due to the high cost of having to import technology from overseas as well as a low allocation of resources and commitment to research and innovation. The Department has therefore spent a total of 23 million Baht through nine assistance programs that have helped companies reduce their principal expenditure by no less than 500 million Baht. In order to establish continuity in this process, Mr. Somchai said his department would allocate 37 million Baht next year for existing as well as new projects designed to boost the potential of companies. The department’s goal for next year is to reach out to no fewer than 150 companies and enhance their potential by as much as 15 percent.
Thailand signs agreement with the European Aviation Safety Agency on aviation safety Source: NNT News, 8th December 2015
The Civil Aviation Authority of Thailand (CAA) has established an agreement to cooperate with the European Aviation Safety Agency (EASA) to upgrade Thailand’s aviation safety standards. Minister of Transport presided over the signing ceremony of the agreement on aviation safety made between Thailand’s CAA and the EASA. The cooperation is focused on the creation of regulations and the exchange of officials with the implementation of EASA’s concepts, procedures, regulations, implementations, and documentation as a guideline for Thailand’s aviation safety regulation. The cooperation also calls for the reorganization of Thailand’s agency responsible for regulating civil aviation, as well as enhancing officials' capability, in order to improve the Kingdom's efficiency and safety in civil aviation.
10 committees appointed to promote economic growth Source: NNT News, 14th December 2015
According to Thai Chamber of Commerce Chairman, some committees would focus on promoting the use of innovative technology, raising national revenue, helping small and medium enterprises (SMEs), providing skills training for students, improving the economy at the grassroots level and boosting tourism. Other committees are expected to promote exports and overseas investments, amend laws to support economic prosperity, develop an industrial cluster and modernize agriculture. Each committee would be chaired by executives from 24 large organizations in the country. The list of these committees would be proposed to Prime Minister Gen Prayut Chan-o-cha and Deputy Prime Minister for economic affairs Somkid Jatusripitak for approval.
16. ECONOMIC AND BUSINESS NEWS RELATED TO OTHER COUNTRIES
Dawei development gains Japan nod Source: Bangkok Post, 15th December 2015
Myanmar's long-awaited multibillion-dollar Dawei megaproject has inched forward, with Japan signing a shareholder's agreement in a special purpose vehicle that runs the project.Japan, through the Japan Bank for International Cooperation, signed the deal with Thailand's Neighbouring Countries Economic Development Cooperation Agency and Myanmar's National Planning and Economic Development Ministry, under which the JBIC would hold equal shares in the Dawei SEZ Development Co. Deputy Prime Minister Somkid Jatusripitak called the move significant, saying Japan's commitment to the development of the Dawei project covering 196 square kilometres would instil confidence among investors. Transport Minister Arkhom Termpittayapaisith said Italian-Thai Development Plc, Rojana Industrial Park Plc and LNG Plus International, developers that had already agreed to work on the project, were required to start construction of the industrial estate's first phase by next March. Finance permanent secretary Somchai Sujjapongse said Myanmar wanted to accelerate investment in Dawei, as 78 companies were interested in using it as a production base 70 Thai and eight Japanese. The Japanese government intends to build a four-lane road linking Kanchanaburi province with Dawei, he said.
Thailand-China ties affirmed at meeting
Source: Bangkok Post, 18th December 2015
Thailand and China agreed to double bilateral trade to US$120 billion over the next five years from an estimated $60 billion at the end of this year. China also showed strong intentions to invest in 10 industries targeted by the Thai government for promotion as clusters. The two countries agreed to establish a joint committee to ease investment and address obstacles. The 10 targeted industries are next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services. Deputy Prime Minister Somkid Jatusripitak said the agreement was reached yesterday during the fourth meeting of the Joint Committee on Trade, Investment and Economic Cooperation between Thailand and China. He said the two countries also agreed to speed up medium-speed rail development linking Nong Khai and Bangkok. Construction is scheduled to begin next year Thailand's foreign reserves amount to $157 billion, with short-term foreign debt worth $55 billion. Wang Yong, a Chinese state councilor, hailed the strong industrial structures of China and Thailand, saying they could offer each other support. The Chinese government is willing to help Thailand as part of China's One Belt, One Road initiative, which envisions a 21st-century trade-related update of the old Silk Road. BoI secretary-general Hiranya Sujinai predicted Chinese investment would grow every year.
Cheap steel imports to face probes Source: Bangkok Post, 23rd December 2015
The government will soon consider anti-dumping duties on high-carbon steel wire imported from China. It will also soon launch an anti-dumping probe into imports of hot-rolled steel sheet and steel tubes and pipe from China and South Korea. Commerce Minister Apiradi Tantraporn said the investigations were prompted by complaints from local steel makers that the surge in imports had harmed domestic production. In a meeting yesterday, the anti-dumping and countervailing committee found the complaints to be valid and considered it imperative to proceed with the probes. The committee also approved an anti-dumping investigation into imports of coiled and uncoiled hot-rolled steel from Brazil, Iran and Turkey. Mrs Apiradi said the Foreign Trade Department would soon declare the probes and later their outcomes. An anti-dumping measure is a trade regulation used by many countries to prevent local industries from being hurt by cheap imports that are "dumped" on the market. Dumping is when the export price of a good is lower than the domestic price and could signal export subsidies or other trade procedures enabling the export price to be lower. Under Thailand's legal procedures, local producers must file dumping complaints with the Commerce Ministry against foreign companies whose export price is below the domestic price in their homeland. If the investigation determines dumping did occur, the Commerce Ministry will impose an anti-dumping tariff on the imports, normally equal to the price gap. Many Thai steel companies are complaining of plunging sales on the back of weak purchasing power from a tepid global economy. They say their situation has been worsened by cheap Chinese steel being dumped in Thailand. Thailand imported 12 million tons of steel from China last year, up from 7 million in each of the previous two years.
Thailand asks China to increase rail project spending Source: Bangkok Post, 25th December 2015
Uncertainty remains in the Thai-Chinese railway development project linking Nong Khai and Bangkok after Thailand came up with a new proposal asking China to increase its investment. Given China's affluence, the government has asked China to invest in civil works, trains and operating systems in the construction of the railway, Deputy Prime Minister Somkid Jatusripitak said. Thailand signed an agreement with the Chinese government last December to build an 873-kilometre double-track route from the northeastern province of Nong Khai to the industrial area of Map Ta Phut in Rayong province, passing through Bangkok. The rail line will carry medium-speed trains accommodating mostly freight or goods deliveries. It will cost about 400 billion baht. Under a draft cooperation framework for the project approved by the cabinet on Nov 17, Thailand and China will establish special vehicle companies to run the train system, train operations and maintenance and repair services. The project's development will be based on the engineering, procurement, construction method in which Thailand is the project owner, while China designs, procures and constructs track systems and equipment. China will be responsible for construction that requires high technology such as tunnels, bridges and the rail operating system. Thailand will be in charge of environmental impact assessments, civil works, land expropriation, electricity supply and equipment support for construction. Rail operation and maintenance will be divided into three phases, with China fully responsible for the first three years after completion. In years four to seven Thailand and China will have equal responsibility, while after seven years Thailand will take over full responsibility, with China serving as an adviser to the project. Under the framework, China will provide training for Thai officials. The framework will have a five-year term and can be extended if the two governments agree. Mr Somkid said the Transport Ministry would ask Chinese authorities to clarify the investment costs after China estimated the joint project would cost up to 500 billion baht.
17. EVENTS/MEETINGS ORGANISEDBY THE EMBASSY DURING THE MONTH OF DEC-2015:
Meeting with members from the Mizoram Legislative Assembly
A delegation of Members from the Mizoram Legislative Assembly comprising Shri Lalrinliana Sailo, Shri Vanlalzawma, Shri R. Vanlalvena, Kumari Vanlalawmpuii Chawngthu met Ambassador Harsh Vardhan Shringla on 9 December 2015 at the Embassy. The delegation discussed issues related to connectivity between North East India and South East Asia, in particular the India-Myanmar Thailand Trilateral Highway and the Kaladan Multimodal Transit Transport Project.
18. TRADE ENQUIRIES HANDLED BY THE EMBASSY DURING THE MONTH OF DEC-2015: From Thailand: 2 From India: 38 [Approximately 100 trade enquiries attended over telephone]
19. BUSINESS VISAS ISSUED IN DECEMBER 2015: 595
Source: Commercial Section, Embassy of India, Bangkok
