On July 4, 2012 at 12.40pm at the Government House, Deputy PM and Finance Minister Kittirat Na-Ranong revealed after the 3rd/2012 meeting of working committee from 9 ministries to monitor European economic crisis chaired by Prime Minister Yingluck Shinawatra to brainstorm solution to handle European economic crisis which is now in a positive situation that the meeting agreed to launch measures to handle the situation so that Thailand will be least affected.
The measures include maintaining baht stability to ensure exporters’ competitiveness. Currently, baht is still stable with no sign of affecting domestic inflation. Export volume and amount to Europe are also stable. These measures are launched in order to prevent future effect. Overall, the essence of all the measures is to maintain stability in all economic aspects especially exchange rate. The recent slight weakening of baht helps export at a certain degree. For interest rate, domestic money market is still stable. For energy price, despite recent upward trend in global crude oil price, the government is still certain that they can control retail oil price with the support from energy fund when necessary. Thailand’s energy fund is still strong although in red, the number has decreased from THB 3 billion to 1.6 billion. For price of goods, inflation with or without energy price are still stable.
Deputy PM talked about the government’s macroeconomic policies that the most important part is government’s expense both in terms of annual budget and investment, now both numbers are still by target. The target investment disbursement set by the Ministry of Finance is 75% of total investment budget. The government is certain that this year’s number will be better than that of last year which was at 70%. For export, the government will target countries that aren’t affected by economic crisis such as ASEAN countries, East Asia, Middle East, and large markets in North America. Even if export amount to Europe decreases, export from these countries will help sustain the number.
For unemployment, currently the number is still low with high demand in the market resulting in unfilled positions. One of the major problems is unskilled labor or labor with unmatched skill. The Ministry of Labor, Ministry of Industry and Ministry of Education were assigned to develop skills of labor by providing various training to those unemployed.
Moreover, Deputy PM added about increasing tourism revenue as the percentage of total revenue of Thailand that the meeting brainstormed about several measures but one of the important measures was to re-open Don Meung airport which was scheduled on October 1, 2012 but the meeting agreed to shift the opening day to August 1, 2012. Incoming tourists will be better facilitated with both Don Meung and Suvarnabhumi airports.
For industrial sector, the meeting has discussed and finalized that three products may be affected by the economic crisis due to high export amount to Europe namely textile, jewelry and electronics. The Ministry of Finance was assigned to closely monitor these three sectors. Financial institutes under the control of the Ministry of Finance will support by providing loan and helping export to target countries. THB 10 billion loan limits and THB 4 billion revenue insurance were set for those companies.
For agricultural products, the meeting discussed about para rubber and agreed that the price of para rubber corresponds to the global crude oil price. Currently, the increase of para rubber price also corresponds to the increase in global crude oil price. However, the increase in para rubber price is slower that than of crude oil price. Hence, the Ministry of Agriculture and Cooperatives will closely follow the issue and cooperate with top para rubber exporters such as Indonesia, Malaysia and Vietnam so that para rubber price will be at the highest price possible. The demand in para rubber is still high but the decrease in price is the result of synthesized rubber.
Deputy PM ended the interview that political atmosphere is very important. Good political atmosphere will help ease the situation and measures to support economy will be easier to implement. Other countries still closely monitor Thailand’s political situation. Without natural disaster and political unrest, number of tourists this year will significantly improve although with the effect of European economic crisis.