ASEAN KEY DESTINATIONS
Thai growth up
Gross domestic product rose 3.6 percent in the three months through June from a year earlier, up from a 3 percent pace in the first quarter, according to the median of 13 estimates in a Bloomberg News survey. The data are due on Aug. 22 at 9:30 a.m. local time.
Thai leader Yingluck Shinawatra plans to raise the minimum wage and pay farmers about 50 percent more for rice, policies that may further cushion growth while stoking inflation. The Bank of Thailand, which has called for “harmony” between fiscal and monetary policy, will raise rates for the seventh straight meeting next week, according to nine of 10 economists in another Bloomberg survey.
“While it’s fairly obvious that dark clouds continue to hover on the external front, the Thai economy looks set to remain relatively robust given the healthy growth of domestic segments,” said Wellian Wiranto, an economist at HSBC Holdings Plc in Singapore. “The central bank remains hawkish and continues to see that upside risks to inflation predominate over downside risks to growth.”
Yingluck became Thailand’s first female prime minister after her Pheu Thai party won the nation’s July 3 general election. Stocks and the currency subsequently climbed as the poll passed without protests in a country that has had nine coups and more than 20 prime ministers since 1946.
The benchmark SET Index of stocks is up 3.4 percent since the vote, while the baht has climbed 3 percent against the dollar, according to data compiled by Bloomberg.
The equity market and currency have held on to gains even as a global rout, sparked by concern that faltering U.S. and European growth may weaken the world economy, wiped about $6 trillion off shares worldwide this month. The SET Index fell 1.2 percent as of 10:37 a.m. local time today, while the currency was little changed.
Thailand would join neighboring Indonesia in reporting an acceleration in GDP growth, weathering global risks that have contributed to slowdowns in other Asian nations from Singapore to Taiwan.
The government doesn’t “want to look only at inflation” in determining economic policies, Yingluck said this week. She is due to announce them to parliament by Aug. 24. Pheu Thai has pledged to lower corporate taxes, almost double the minimum wage in some parts of the country, build rail lines and hand out free tablet computers to students.
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