What happened this week 22/06 – 26/06
Thailand
- BoT slices growth outlook to 3% – The Bank of Thailand has slashed its economic growth forecast for this year to 3%, saying export growth has slowed, private consumption remains tepid, and private investment is weak. It is the fourth cut to the 2015 growth forecast by the central bank. Last June, it projected growth of 5.5% before cutting that to 4.8% in September, 4% in January and 3.8% in March. (Bangkok Post, 20/6/15)
- Bank of Thailand warns of threat from slow growth – Risks from the slow domestic economic recovery could hurt the private sector’s financial position and debt-servicing ability as well as add risks to financial institutions, says the Bank of Thailand. (Bangkok Post, 23/6/15)
- Govt mulls future of SRT’s Makkasan complex, minister says – Finance Minister Sommai Phasee said yesterday that the government was brainstorming the future of the State Railway of Thailand’s 500-rai (80-hectare) Makkasan complex, and a 100-year concession including a 50-year extension is one of the scenarios being bandied about. (The Nation, 23/6/15)
- More loans to SMEs under maximum guarantee – The Cabinet is expected to approve the new TCG maximum, which was proposed by the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) to the Office of SMEs Promotion. OSMEP agreed with the idea on Friday and forwarded it to the Cabinet. Supant Monkolsuthree, chairman of the Federation of Thai Industries and a member of the JSCCIB, said the Cabinet was expected to spend two weeks considering the proposal as a short-term measure to help SMEs access bank loans. The 30-percent loan guarantees will be terminated at the end of 2016, he said. (The Nation, 23/6/15)
- Thailand’s Industrial Sentiment Slumps Further in May – Thailand’s industrial confidence weakened further to a one-year low in May due to economic concerns and weak purchasing power, according to the Federation of Thai Industries. The FTI said Tuesday that its monthly survey shows the Thai Industries Sentiment Index slipped for the fifth consecutive month to 85.4 in May, from 86.2 in April. (Nasdaq, 22/6/15)
- Drought is more severe than expected: BoT – Methee Supapong, director of the central bank’s Domestic Economy Department said the BoT is monitoring the effect of the drought to farmers’ incomes as the drought is more severe than expected. (Bangkok Biz, 25/6/15)
- Drought to wither GDP – The worsening drought is expected to shave half a percentage point off the country’s full-year GDP growth, adding another blow to the already-fragile economic recovery and pressuring policymakers to ramp up stimulus measures. (Bangkok Post, 26/6/15
Globally
- Williams Sees Fed Liftoff in 2015 as Job Market ‘Nearly Healed’ – John Williams, president of the Federal Reserve Bank of San Francisco, said the central bank is likely to raise interest rates this year as the economy reaches full employment, though he’s troubled by low inflation. (Bloomberg, 19/6/15)
- Greece Sets Off for Crunch EU Talks on ‘Definitive’ Solution – Greek Prime Minister Alexis Tsipras is heading to Brussels for back-to-back meetings, culminating in an emergency summit Monday that could decide his nation’s future in the euro. (Bloomberg, 21/6/15)
- China’s logistics growth steady in first five months – China’s logistics industry grew steady in the first five months of this year amid industrial restructuring and weak economic growth, a report showed on Saturday. The total value of social logistics goods in January-May expanded by 5.5 percent year on year to 84.5 trillion yuan (about 13.8 trillion U.S. dollars), according to the latest data from the China Federation of Logistics and Purchasing (CFLP). (Xinhua, 20/6/15)
- Chinese entrepreneur confidence dips in Q2 – Chinese entrepreneurs’ confidence in the domestic economy dipped in the second quarter amid downward economic pressure, the central bank announced Friday. The Entrepreneur Confidence Index stands at 58.3 in Q2, down 0.9 points compared with last quarter and falling 6.6 points year on year, according to a survey released by the People’s Bank of China. (Xinhua, 19/6/15)
- Japan’s central bank maintains monetary easing policy, economic assessment – The bank of Japan (BOJ) on Friday decided to keep its current monetary policy and assessment of the economy, saying the domestic economy is recovering modestly despite consumer prices remain low, local media reported. (Xinhua, 19/6/15)
- U.S. Existing-Home Sales Increase 5.1% in May – Sales of previously owned homes surged in May, buoyed in part by the return of younger buyers who had long struggled to find a path into the market. The pace of existing-home sales rose 5.1% last month from April to a seasonally adjusted rate of 5.35 million, the National Association of Realtors said Monday. Sales for April were revised up to 5.09 million from an initially reported 5.04 million. (WSJ, 22/6/15)
- U.S. economy still running below trend in May, Chicago Fed indicator shows – The U.S. economy was still running below trend in May, according to the Chicago Fed’s national activity index released Monday. The index, a weighted average of 85 different economic indicators, edged up to negative 0.17 from negative 0.19, and the three-month average edged up to negative 0.16 from negative 0.20. A zero reading shows the U.S. economy is running at its trend rate of growth, and readings in the three-month average below negative 0.70 indicate a recession has likely begun. (Market Watch, 22/6/15)
- U.S. consumption not accelerated after winter slowdown: New York Fed – U.S. real consumption expenditures have not shown signs of significant pickup from their winter slowdown, the New York Federal Reserve said in a report that was launched on Monday. In its June edition of “U.S. Economy in a Snapshot,” the regional U.S. central bank said growth in consumption “has been tepid despite better weather, ongoing improvement in labor market conditions and lower energy prices from a year ago.” (Reuters, 22/6/15)
- Greece offers new proposals to avert default, creditors see hope – Greece took a step back from the abyss on Monday with the presentation of new budget proposals that euro zone leaders welcomed as a basis for a possible agreement in the coming days to unlock frozen aid and avert a looming default. European Council President Donald Tusk, who chaired an emergency summit of leaders of the 19-nation currency bloc, called the Greek proposals “a positive step forward”. He said the aim was to have the Eurogroup finance ministers approve a cash-forreform package on Wednesday evening and put it to euro zone leaders for final endorsement on Thursday morning. (Reuters, 23/6/15)
- ECB again increases emergency liquidity reserve for Greek banks – The European Central Bank (ECB) again increased emergency liquidity funds for Greece’s banks Monday, according to a Greek bank source who said the ECB may renew the hike “at any time” if necessary. The new increase of the ECB’s Emergency Liquidity Assistance (ELA) was the third since Wednesday and came as Greek savers continued withdrawing their money in large volumes from the country’s banks. (Economic Times, 22/6/15)
- U.S. Q1 GDP revised to 0.2 percent contraction – The contraction of the U.S. economy in the first quarter was less severe than previously estimated, the latest data from the U.S. Commerce Department showed on Wednesday. U.S. real gross domestic product (GDP) decreased at an annual rate of 0.2 percent in the first quarter this year, according to the Commerce Department’s final estimate. The revision showed exports decreased less than previously estimated, while personal consumption expenditures (PCE) were stronger. (Xinhua, 24/6/15)
- Eurozone talks on Greece to continue on Thursday – The eurozone’s Greece talks didn’t reach agreement late Wednesday and is set to restart on Thursday. “We have not reached agreement yet,” Eurogroup President Jeroen Dijsselbloem told reporters. “But we are determined to continue our work towards doing what is necessary.” “We will now adjourn the meeting and reconvene at one p.m. tomorrow,” he added. (Xinhua, 25/6/15)
- China to remove regulation on loan-to-deposit ratio – The State Council on Wednesday passed a draft amendment to China’s Banking Law that gives banks more freedom to lend by removing the 75 percent loan-to-deposit ratio stipulation. The ratio will instead be seen as a liquidity-monitoring indicator, according to a statement released after an executive meeting chaired by Premier Li Keqiang. The move will enable financial institutions to increase lending to agriculture, small and micro-businesses, the statement said. (Xinhua, 25/6/15)
- China to invest big in aviation – China’s aviation regulator has unveiled a plan for majorinvestment in aviation projects at home as the country’s latest effort to prop up flagging economic growth and strengthen Asian trade infrastructure. Around 500 billion yuan (81.78 billion U.S. dollars) will be invested in 193 domestic projects this year, Li Jiaxiang, director of the Civil Aviation Administration of China, said Wednesday during an aviation forum in Beijing. (Xinhua, 24/6/15)
- U.S. Consumer Spending Soared 0.9% in May – Americans boosted spending in May at the fastest rate in almost six years, the latest sign the economy is rebounding from a brutal winter. Personal spending, which measures what consumers spend on everything from cars to medical care, jumped a seasonally adjusted 0.9% from a month earlier, the Commerce Department said Thursday. That marked the biggest increase since August 2009. Spending rose 0.1% in April, a revision from the government’s initial estimate of no growth. (WSJ, 25/6/15)
- U.S. Jobless Claims Tick Up, but Still Reflect Robust Labor Market – The number of Americans filing new applications for unemployment benefits ticked upward last week, but remained at a historically low level. Initial claims for jobless benefits, a measure of layoffs across the U.S. economy, increased by 3,000 to a seasonally adjusted 271,000 in the week ended June 20, the Labor Department said Thursday. Economists surveyed by The Wall Street Journal has expected 273,000 new claims. (WSJ, 25/6/15)
- Markit ‘flash’ US services PMI falls to 54.8 – The US service sector lost momentum in June with the Markit ‘flash’ US Services PMI Business Activity Index falling to 54.8 from 56.2 in May. (Stock Market Wire, 25/6/15)
- Greece bailout talks break down again – Talks on the Greek debt crisis between eurozone finance ministers have ground to a halt after Athens rejected counter-proposals from its creditors. Eurozone finance ministers came to Brussels for an emergency meeting but failed to bridge their differences with Greece, in the fourth diplomatic failure in eight days. The EU commissioner for economic and financial affairs, Pierre Moscovici, said Greece and its creditors were still at loggerheads over reforms to Greek pensions and VAT rates, which lenders want to be toughened as a quid pro quo for giving Athens further bailout funds. (The Guardian, 25/6/15)
- UK car production up in May as domestic demand surges – British car production rose in May compared to the same month last year due to a double-digit rise in demand from domestic buyers, an industry body said on Thursday. Total production rose 2.3 percent to 119,338 cars in May on the back of a 13.3 percent rise in the number of models built for the British market, the Society of Motor Manufacturers and Traders (SMMT) said. (Reuters, 25/6/15)
- Central bank injects 35 bln into market – The People’s Bank of China, China’s central bank, has injected 35 billion yuan (5.7 billion U.S. dollars) into the money market through open market operations, it announced on Thursday. (Xinhua, 25/6/15)