ASEAN KEY DESTINATIONS
Thai warning on interest rates
The Bank of Thailand should beware of the impact of higher interest rates on the costs of exporters at a time when oil prices and wages are already causing pressure, says the National Economic and Social Development Board (NESDB).
Exports account for 70 percent of Thailand's gross domestic product and are vital to achieving growth projected this year at between 3.5 percent and 4.5 percent, said Arkhom Termpittayapaisith, secretary-general of the state planning agency.
Economic growth in 2010 is expected to exceed projections of 7.9 percent, helped by a 28.6 percent rise in the dollar value of exports. Growth in the first nine months was 9.3 percent. The NESDB will release official 2010 figures in the third week of February.
Mr. Arkhom said exports would remain healthy this year, though growth would not be as dramatic as in 2010, with strong demand from Asia offsetting weak demand in the US and Europe. Exporters, therefore, should focus on differentiating their products from those of competitors, he said.
Challenges facing exporters include issues of food security and energy, the drive to green industry, climate change, an ageing society and economic integration among neighbouring countries.
Companies using bioplastics, producing energy-saving products or serving ageing people will have opportunities to become leaders, he said.
The threats for Thailand include weak infrastructure, quality of human resourdhces and a lack of science and technology development, he added.
As well, Thai logistic costs are high at 18 percent of GDP. Businesses are encouraged to use more rail transport to save costs.
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