Asian markets rose Monday as a further easing of lockdowns around the world offset another round of data highlighting the sharp economic pain being inflicted by the virus.

Traders also looked past a warning from the head of the Federal Reserve that a full recovery would likely not come until next year, warning that a vaccine would be needed to get things back to normal.

With infection and death rates falling in some of the worst-hit countries, governments are slowly allowing businesses to reopen and people to venture out again, with top-tier football even returning in Germany — albeit in empty stadiums.

And California’s governor said the state was 75 percent up and running, New York is also lifting the shutters in some regions, and Apple said almost 100 of its stores were now open.

“With the worst of the pandemic likely behind us, central bank supported equity markets are unlikely to re-test their lows,” said Seema Shah at Principal Global Investors.

But she added that “while reopening momentum may well carry risk assets a bit higher over the near term, the tepid economic recovery and deep uncertainty over the virus outlook argue against a pivot to more risk-on positioning”.

Tokyo went into the break 0.7 percent higher, and Hong Kong, Shanghai and Seoul all rose 0.6 percent.

Sydney gained more than one percent, Singapore and Wellington each added 0.7 percent and Jakarta edged up 0.2 percent.

“The good news for the market and the economy as a whole is that businesses worldwide are reopening, albeit in fits and starts,” said AxiCorp’s Stephen Innes.

“While restaurants are opening at minimal capacity and mall traffic remains depressed, traffic congestion is beginning to tick significantly higher, suggesting that people feel confident in leaving their homes. Indeed, this is huge as the global recovery will fall 100 percent on the back of consumer confidence.”

AxiCorp’s Stephen Innes

Short downturn

The gains come despite a flurry of downbeat economic data, including Monday’s news that Japan had fallen into its first recession since 2015. While the January-March contraction was not as bad as expected, observers warned the current quarter would likely be much worse.

That followed a warning from Fed boss Jerome Powell that the US economy could “easily” collapse 20-30 percent this quarter, and unemployment could peak at 20 to 25 percent, though he added “it should be a much shorter downturn than you would associate with the 1930s” during the Great Depression.

“Market reaction to these dire data releases what short lived, suggesting investors are now placing more value on forward looking indicators rather than real economic prints, which we all know have been…

Source link : Asian equities climb as countries slowly reopen by Agence France-Presse

BANGKOK(NNT) – Due to the impacts of COVID -19, the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) expects the Thai economy to contract 3-5 percent in 2020.

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) forecast is less than the International Monetary Fund (IMF)’s prediction of between 6 – 7 percent, because the government and various agencies have remedial measures in progress.

These include the easing of the restrictions on enterprises, allowing them to reopen their business and gradually improve or recover economic activity. The economic outlook in the second half of the year may be lower than the first half.

However, the said estimation must be under the assumption that there is no new outbreak of COVID-19 in Thailand or overseas.

Mr. Supant Mongkolsuthree, President of the Federation of Thai Industries (FTI), as the Chairman of JSCCIB, thanked the government sector for approval of 11 out of 34 proposals on measures about tax, finance, labor and public utilities to restore and rehabilitate the business sector.

There are currently another 11 measures underway. For the rest, the JSCCIB will send letters to the responsible agencies to ask them to expedite further action.

The government is expected to launch the second batch of measures to ease restrictions on businesses in mid-May.

It is likely to cover large businesses and department stores and will benefit the Thai economy. Today, the Ministry of Public Health will invite entrepreneurs from each association to discuss various measures which can be rolled out nationwide.

The post JSCCIB expects Thai economy to contract by 3-5% this year appeared first on Thailand Business News.

Source link : JSCCIB expects Thai economy to contract by 3-5% this year by National News Bureau of Thailand

Regarding the government’s financial aid of 5,000 baht per farm household for three months, the Bank for Agriculture and Agricultural Cooperatives (BAAC) is now ready to transfer the cash subsidy to 10 million registered farmers, who have been affected by COVID-19.

The BAAC President, Apirom Sukprasert, explained the process behind the 5,000-baht cash handout scheme. Once the BAAC receives verified information about the 10 million registered farmers from the Ministry of Agriculture and Cooperatives, the bank will transfer 5,000 baht to their bank accounts for three months, starting May 15 this year.

About 1 million farmers will receive the financial assistance per day.

Farmers who already have a bank account with the BAAC do not need to open another account, while those without a BAAC account can provide their financial information at เยียวยาเกษตรกร.com, starting May 7.

Eligible recipients include farmers who have registered with the Department of Agricultural Extension, the Department of Fisheries and the Department of Livestock Development, as well as newly registered farmers.

However, they must not be associated with the government’s 5,000-baht cash handout for workers affected by the COVID-19 crisis.

The post Thailand to pay 5,000 baht compensation to 10 million farmers appeared first on Thailand Business News.

Source link : Thailand to pay 5,000 baht compensation to 10 million farmers by National News Bureau of Thailand

The coronavirus pandemic (COVID-19) has touched people from all walks of life. Across Thailand, children have been home from school, employees have been working from home, and business owners have struggled to remain viable.

All of us have been learning to conduct our daily lives. The less fortunate have lost their jobs or incomes and must seek alternative livelihoods.

And this poses the question, how can Thailand limit the impact on its economy by expanding safety nets for the vulnerable and rethinking social protection?

COVID-19 will worsen an already challenging situation for households facing droughts, stagnant wage growth, and rising poverty.  Poverty rates had risen already in 2016 and 2018, according to the World Bank’s report, Taking the Pulse of Poverty and Inequality in Thailand report. Now, as economic activity declines, job and income loss will likely worsen household welfare. 

Declining incomes pose a serious challenge for poverty reduction

Labor market income represents a significant share of households’ income, and declines will reduce their ability to pay bills and satisfy basic needs.

Income from remittances is also important – more so than public assistance income – but with migrants unable to work, this source of funds is also expected to decline. With low savings, there is little space for households to smooth consumption to cope with the income shock.

More than half of workers in Thailand are informal, meaning they are not covered by a social security scheme and are particularly vulnerable.

In 2018, there were an estimated 21.2 million informal and 17.1 million formal workers. Besides agriculture, with a 92% informality rate, jobs in commerce have the second highest rate of informality at 60%.

Thailand’s social protection system faces several challenges

Thailand’s social protection system faces several challenges in the face of these emerging needs.

Spending on social protection lags behind other countries: in 2015, Thailand spent an estimated 3.7% of GDP on it, compared to 6.3% in Vietnam and China and 10.1% in high-income Korea.

Unlike China, Malaysia, Mexico and other upper-middle-income countries, Thailand lacks a generalized safety net program for the poor, though the existing welfare card scheme is a step in this direction. 

The government has taken important steps to confront the economic challenges facing households. It has introduced a series of fiscal and monetary packages beginning in January, with the most recent announced in early April.

Fiscal and monetary packages

The announced policy measures total approximately 15% of GDP,…

Source link : Covid-19, poverty, social protection and the Thai economy by World Bank

Oil prices rallied Thursday, helping boost equity markets, on fresh tensions between the US and Iran, but investors continued to fret over the uncertain economic outlook despite the coronavirus pandemic showing signs of slowing.

With devastation wrought on economies around the world, some governments are turning their attention to easing tough restrictions that have been imposed on billions of people over the past weeks.

But observers say the route out of the crisis remains uncertain, while the head of the World Health Organization warned the end was still a long way off.

Asian markets enjoyed a welcome advance

Tokyo, Mumbai and Jakarta were all more than one percent higher, while Seoul added one percent and Hong Kong gained 0.5 percent.

Taipei, Singapore, Manila, Bangkok and Wellington were also higher, though Shanghai and Sydney both slipped slightly. London, Paris and Frankfurt were all up in early trade.

“Make no mistake: we have a long way to go. This virus will be with us for a long time,” Tedros Adhanom Ghebreyesus told a virtual press conference.

Wall Street jumped Wednesday, tracking a surge in oil prices that saw WTI for June delivery jump 19 percent.

The commodity extended gains in Asian trade, with WTI climbing more than 14 percent at one point and Brent adding almost 12 percent before easing slightly.

The surge came after a tough week on oil markets, with WTI for May delivery crashing below $0.00.

Phillip Futures cited “heightened risk in the Middle East” after US President Donald Trump said on Twitter he had “instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea”.

Iran, meanwhile, said it put its first military satellite into orbit. Washington alleges the space programme is a cover to develop ballistic missiles.

The tensions offset news of another surge in US stockpiles, including at the Cushing, Oklahoma hub where analysts say there is little remaining space.

Phillip Futures, however, said the Trump tweet was likely a move to boost prices as US shale had been badly hit by the oil crisis.

With demand for the commodity almost non-existent and facilities close to full, expectations are for more volatility to come.

Global markets had been enjoying a healthy rally in recent weeks, thanks to trillions of dollars of stimulus and signs of slowing in the disease that had allowed leaders to consider easing lockdowns.

But the oil crisis and concerns about the length of the global economic recovery have brought dealers back to Earth following weeks of big gains.

Arduous road to recovery

“The broader market’s attention is now turning away from the trajectory of…

Source link : Asian stocks rally As Oil Prices Rebound by Agence France-Presse

Covid-19 crisis could be worse than the Global Financial Crisis, and Asia is not immune, says the IMF. While there is huge uncertainty about 2020 growth prospects, and even more so about the 2021 outlook, the impact of the coronavirus on the region will—across the board—be severe and unprecedented.

Unlike the US and other major economies, emerging and developing Asia is likely to be the only region with a positive growth rate in 2020, averaging at 1 per cent.

But according to IMF latest projection, Thailand could stand as the worst performer among its Asean peers with a staggering drop of 6.7 % of its GDP. Singapore would be the second worst performer with a -3.5% GDP forecast for 2020.

Shutdowns from the pandemic could trigger a tsunami of job losses in Thailand especially for employees who don’t have a regular salary, low-paid workers and people without a written contract.

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) says that as much as 7 million workers could be out of a job by June because of shutdowns from the pandemic.

Vietnam has emerged as the Asean’s best performer in the report at 2.7% growth, followed by Myanmar at 1.8% growth.

Growth in Asia is expected to stall at zero percent in 2020. This is the worst growth performance in almost 60 years, including during the Global Financial Crisis (4.7 percent) and the Asian Financial Crisis (1.3 percent). That said, Asia still looks to fare better than other regions in terms of activity.

“World Economic Outlook: The Great Lockdown” IMF report

The Bank of Thailand also trimmed its growth outlook last month to a 5.3% contraction and also predicted a contraction in every quarter, with the deepest from April to June.

To mitigate the negative economic impact on employers and employees in the sectors most affected by the outbreak of COVID-19, the Thai government has already approved a series of financial and fiscal relief measures.

Strong growth predicted for 2021

According to the IMF, prospects for 2021, while highly uncertain, are for strong growth, and Thailand’s economy is projected for a strong rebound at 6.1% in 2021.

If containment measures work, and with substantial policy stimulus to reduce “scarring,” growth in Asia is expected to rebound strongly—more so than during the Global Financial Crisis.

Assuming the pandemic fades in the second half of 2020 and that policy actions taken around the world are effective in preventing widespread firm bankruptcies, extended job losses, and system-wide financial strains, the IMF also projects global growth in 2021 to rebound to 5.8 percent.

Source link : IMF sees Thailand’s growth down 6.7 percent in 2020 by Olivier Languepin

The inflation rate of the Thai economy has been reduced sharply by lower oil prices and a lesser demand for goods due to the COVID-19 pandemic.

This situation has caused the March 2020 inflation rate to recede to 0.54 percent, marking the first recession in 33 months, and the lowest inflation rate in 51 months. The country’s inflation rate this year is now expected to drop to 0.6 percent, from the previous projection of 0.8 percent growth.

The Trade Policy and Strategy Office (TPSO) has revealed the Thai economy’s inflation rate in March 2020 was a negative 0.54 percent, making the overall rate for Q1 2020 0.41 percent higher than the previous year.

TPSO’s Director General Pimchanok Vonkorpon said today the global economic implications of the COVID-19 pandemic and the falling energy price have been the main factors affecting inflation in this year’s first quarter, however there is still no indication as to when these issues will be resolved.

The inflation rate in Q2 is expected to continue receding through to the second half of the year.

The Ministry of Commerce has readjusted the 2020 inflation rate projection to a negative 0.6 percent, within a range of -1.0 to -0.2 percent. The inflation rate this year was initially expected to be 0.8 percent, within a range of 0.4 to 1.2 percent.

Pricing of some products such as limes and chicken eggs has recently risen due to the drought disaster and panic buying. This situation allowed fresh food items to grow at 2.46 percent, albeit the lowest performance in a year. This is due to lower demand from fewer tourists, and the closure of shops and schools.

The pricing of instant meals, condiments, and personal items is still stable, with variations resulting from promotions by modern trade retailers.

The post March inflation hits 51-month low at -0.54 percent appeared first on Thailand Business News.

Source link : March inflation hits 51-month low at -0.54 percent by National News Bureau of Thailand

 Regional economic growth in developing Asia will decline sharply in 2020 due to the effects of the novel coronavirus (COVID-19) pandemic, before recovering in 2021, according to the Asian Development Outlook (ADO) 2020, the Asian Development Bank’s (ADB) annual flagship economic publication.

Excluding Asia’s high-income newly industrialized economies, growth will drop from 5.7% to 2.4% this year before recovering to 6.7% next year, says ADB.

Nine Asian economies that rely on tourism and commodities are likely to shrink, the ADB said, and the hardest hit would be Thailand. 

These economies are: Thailand (-4.8%), Hong Kong (-3.3%), the Maldives (-3.0%), Timor Leste (-2.0%), Fiji (-4.9%), Vanuatu (-1.0%), Cook Islands (-2.2%), Palau (-4.5%) and Samoa (-3.0%).

Restrained largely by slowing exports, Thailand posted paltry growth at 2.4% last year. GDP growth is likely to slow further to –4.8% this year but could pick up to 2.5% in 2021. Risks to the growth forecast remain tilted to the downside as COVID-19 could be especially damaging to an economy heavily dependent on international trade and tourism.

Southeast Asia will track the PRC and decelerate to 1.0% growth in 2020

All economies in the subregion will endure a growth slowdown in 2020 because of COVID-19 and a consequent global slump, especially given their strong trade and investment ties with a slowing PRC.

Thailand, the second-largest economy in the subregion, will likely contract by 4.8% this year, continuing a steady slide in recent years.

Growth in Southeast Asia will decelerate from 4.4% in 2019 to 1.0% in 2020 before rebounding to 4.7% in 2021. All 11 economies in the subregion will post lower growth in 2020 than in 2019 because of COVID-19, especially considering the subregion’s strong trade and investment ties with the PRC.

Indonesia, the largest economy in the subregion, will decelerate from 5.0% in 2019 to 2.5% this year and bounce back to 5.0% in 2021. Tourism-dependent Thailand, the second largest economy in the subregion, is forecast to reverse 2.4% expansion in 2019 with 4.8% contraction before recovering to 2.5% in 2021.

The post Covid-19 to cut Asian growth to 2.2%, Thailand -4.8% (ADB) appeared first on Thailand Business News.

Source link : Covid-19 to cut Asian growth to 2.2%, Thailand -4.8% (ADB) by Boris Sullivan