Thailand’s exports moved up by over 10% in February, the first expansion in the last 13 months, largely owing to a boom in gold shipments, according to Deputy Minister for Commerce Suvit Maesincee.
Suvit said the value of Thai exports in February stood at US$18.99 billion, representing a 10.27% increase month-on-month, reported the National News Bureau of Thailand (NNT).
The main factor contributing to the rise, he said, was the hike in the gold export volumes which skyrocketed by 1,051% year-on-year, thanks to the increasing price of gold in the world market.
As a result, he said, the total value of Thai exports in February was the world’s fourth highest, while noting that the Ministry of Commerce expects this year’s export growth to be around 5%.
Industry confidence sinks
However, Thai entrepreneurs are less upbeat about the industry sector’s prospects as their confidence level in February 2016 decreased for the second consecutive month on the heels of lower purchasing power and drought in the country.
The Federation of Thai Industries said the results of a survey on the confidence of industrial entrepreneurs in February 2016 stood at 85.1%, down from 86.3% in January this year. Apart from reduced purchasing ability and the dry spell, the worsened liquidity of SMEs and the global economic slowdown were the other factors that held back industrial entrepreneurs from increasing their investment expansion activity, the survey found.
The poll also showed that entrepreneurs wanted the government to urgently stimulate consumption and investment in infrastructure in order to propel the economy in the second quarter . They suggested that the government impose financial measures to help them increase access to capital sources.
As for the automotive industry, car exports in February totaled 104,679 units, a fall of 5.73% from the same period last year. However, the segment’s export value increased by 11.62%.
Policy shift in trade tactics
Meanwhile, the Department of International Trade Promotion has announced it will adopt a policy shift in line with the government’s economic reform agenda.
Minister of Commerce Apiradee Tantraporn said at a recent event that Thailand’s international trade strategy in the next five years will focus on the creative economy and the service sector. The government will also develop the capacity of small and medium enterprises and increase the ease of trading in preparation for the digital economy.
As for exports, the minister said the ministry has revised its policy to now focus on product development and new markets.
Tax cut for the innovative
As this developed, the Ministry of Science and Technology announced a 300% tax deduction for companies that support research, development, and innovation.
Minister of Science and Technology Pichet Durongkaveroj has made known that the government will offer the tax deduction to private companies that will invest in innovative endeavors.
The minister stated that his ministry has created mechanisms to support the private sector in conducting research and development as they are major factors for competitiveness.
On top of the tax deduction, the ministry is also offering to limit revenue tax for small and medium enterprises to only 10% payable in two installments, exempt “new growth engine” businesses from entity taxes, and pass out innovation coupons which companies may use as funds when investing in innovation.
The 300% tax deduction incentive is available to businesses with revenue under THB50 million, while those exceeding the figure can access lesser deductions. The program will be running for five years and may be extended if proven to be effective.
Photo: Gregory Lesturgez
