ASEAN Markets will fall today after US investors rejected to so called bail out of Spain.
U.S. stocks fell on Monday as Europe’s aid package for Spanish banks did little to alleviate investor concerns about the euro zone’s finances and the slowdown in the global economy.
The Dow Jones industrial average .DJI fell 141.91 points, or 1.13 percent, to 12,412.29. The S&P 500 Index .SPX dropped 16.66 points, or 1.26 percent, to 1,309.00. The Nasdaq Composite .IXIC lost 48.69 points, or 1.70 percent, to 2,809.73.
The Thai economy appears to be well-positioned to take advantage of additional stimulus that may be injected into the global economy, in addition to strong, domestically-derived growth.
Thailand’s export-driven economy usually vacillates with the global economy because of its dependence on external demand. However, government spending to rebuild infrastructure in the wake of last year’s disastrous flooding has buoyed the Thai economy when other export-reliant economies around the globe have suffered.
Building on this foundation of domestic demand, Thailand looks ready to take advantage of global stimulus packages, both confirmed and hypothetical.
The Chinese government has already enacted stimulus to promote slumping growth on the Mainland. As China is one of Thailand’s largest trading partners, the Southeast Asian economy will likely benefit from the residual effects of such measures.
With the United States and Europe mulling over their own potential stimulus packages, the implementation of such economic catalysts would be a net positive for Thailand’s exports. As a result of stimulus rumors, the Thai baht has strengthened over the past week .
For those considering Thailand, it is imperative to incorporate the political situation into your investment thesis. The country’s political stability is feeble; with an awkward transition in the monarchy looming on the horizon. The government could potentially have trouble maintaining order given the grievances of the so-called “Red Shirt” faction that caused 87 deaths in 2010, and last year’s opposition win in the general election.
The success of the Thai economy, evidently, is contingent upon the health of the global economy. It is probably too early to jump into THD; however, once the euro zone is able to bring some order and/or clarity to its crisis, the Thai economy is well positioned to take advantage of a return to growth.
Singapore’s economy will experience growth slower than in the last 10 years.
This, against the backdrop of a more developed economy, internal resources constraints and fierce competition from the region.
But Singapore needs to strive for growth to improve the collective well-being of its people.
Prime Minister Lee Hsien Loong said this at the Economic Society of Singapore’s annual dinner on Friday evening.
Since 2003, Singapore’s economy grew an average 6.3 per cent per year.
Mr Lee said: “Singapore cannot avoid slower growth in the next decade and beyond. This is natural because we are now more developed and we are also running up against land and labour constraints, especially as we reduce the inflow of foreign workers.
“Plus competition is fiercer, not only from hundreds of millions of hungry workers in the emerging economies, but also from new technologies that will transform industries all over the world.”
Mr Lee noted that some Singaporeans may desire slower growth, but deliberately slowing growth beyond Singapore’s economic potential could have irreversible consequences.
“For Singapore, slow growth will mean fewer new investments. Good jobs will be scarcer, and unemployment will be higher,” he said.
“Enterprising and talented Singaporeans will be lured away by the opportunities and the incomes they can earn in other leading cities. Low-income workers will be hardest hit, just as they were each time our economy slowed down in the last decade. Over time, our confidence will be dented.”
The government is also prioritising low-income Singaporeans through skills upgrading and sharing productivity gains.
Low-income households are also not neglected.
According to Mr Lee, a low-income household will receive more than S$500,000 in transfers from the government over a lifetime.
And to boost their assets more than incomes, Mr Lee said the bottom 20 per cent of households have an average of more than S$200,000 of equity in their HDB flat.
To continue doing so, he pointed out that Singapore must have a successful thriving economy to improve the collective well-being of its people.
But Mr Lee cautioned that the Singapore government must strike a balance between raising social spending and taxes.
Expenditure has so far been 17 per cent of GDP including defence, while tax revenue is only 15 per cent of GDP.
Source: Economist Shayne Heffernan of www.livetradingnews.com Market Outlook
- “Singapore’s future among the leading global cities” (todayonline.com)
- WB forecasts Thai economy to grow 4.5 per cent (icrindia.wordpress.com)