CARI Captures Issue 602: Thailand to hold general elections on 14 May, 2023
THAILAND
Thailand’s upcoming general election to be held on 14 May 2023
(15 April 2023) Thailand’s upcoming general election will be held on 14 May, 2023, with the contest expected to be mainly between incumbent Prayuth Chan-Ocha from the United Thai Nation Party and Paetongtarn Shinawatra of the Pheu Thai Party. The upcoming election is largely seen as a contest between the pro-establishment groups of the ruling military-backed coalition and a pro-democracy camp of opposition parties. Candidates from more than 60 parties have registered for the election to the 500-seat House of Representatives, where 400 members will be elected using first-past-the-post while the remaining will be picked using proportional representation. The prime minister will be chosen by these 500 lawmakers from the House of Representatives as well as the 250 members of the Senate.
INDONESIA
Indonesia’s central bank keeps rates unchanged for third straight meeting
On 18 April, 2023, Bank Indonesia (BI) left the seven-day reverse repurchase rate unchanged at 5.75%. This is the third straight meeting in which it kept its benchmark interest rates unchanged. BI’s governor noted that the current benchmark level remained sufficient to keep core inflation within BI’s 2% to 4% target range and steer headline inflation to within the same target band sooner than previously estimated. Headline inflation was measured at 4.9% in March 2023, and it is projected to fall below 4% starting August 2023. BI had previously expected headline inflation to return to target in September 2023. BI has raised rates by 225 basis points between August and January 2023 in order to tackle inflation, which shot up this year due to high global food and energy prices.
MALAYSIA
Malaysia’s exports fall by 1.4% year-on-year in March 2023, marking first contraction since August 2020
(19 April 2023) Malaysia’s exports fell by 1.4% year-on-year in March 2023, marking the first contraction since August 2020 amidst slowing global demand. Exports fell to US$29.3 billion, according to a statement by Malaysia’s Ministry of Investment, Trade and Industry. Exports of electrical and electronics products, which accounted for 39% of Malaysia’s total, fell by 4.4% year-on-year, while palm oil and related agricultural products dropped by 14.2%. Malaysia’s imports fell by 1.8%, contributing to its trade surplus widening to US$6.0 billion. Exports to China dropped 6.2% on lower electrical and electronics shipments. Meanwhile, exports to the US increased by 7.5%.
SINGAPORE
Home sales in Singapore rise to six-month high in March 2023
(17 March 2023) According to figures from the Urban Redevelopment Authority, home sales in Singapore rose to a six-month high in March 2023. Purchases of new private apartments increased to 492 units in March, the third month of gains following the plunge to a 14-year-low in December 2022 due to a lack of project launches discouraging buyers. Despite a recent move by the government to raise taxes for buyers of high-end properties in February 2022, demand for housing has yet to dampen. According to Bloomberg Intelligence, home prices could rise by as much as 5% in 2023 after having risen by 3.2% in the first quarter of this year. This is attributed to higher rents and favorable supply-demand dynamics.
CAMBODIA
Cambodia collects US$1.9 billion in tax revenue in first quarter of 2023
(17 April 2023) Cambodia collected US$1.9 billion in tax revenue in the first quarter of 2023, an increase of 2% year-on-year. The General Department of Taxation (GDT), which focuses on collecting internal taxes, collected some US$1.34 billion in tax revenue during the first quarter, up 6.3% from the US$1.26 billion collected in the same period in 2022. Meanwhile, the General Department of Customs and Excise (GDCE), which collects taxes on goods entering and leaving the country, collected some US$564 million in customs and excise revenue during the first quarter, a year-on-year decrease of more than 5% from US$597 million dollars. The GDCE stated that automobiles and machinery topped the list of customs and excise revenue sources at 36.3%, followed by general goods at 32.9%, petroleum at 24%, and construction materials as well as miscellaneous fees at 6.8%.
THE PHILIPPINES
Remittances from overseas Filipino workers fall to lowest level in nine months in February 2023
(19 August 2023) Remittances from overseas Filipino workers (OFW) fell to their lowest level in nine months in February 2023 due to the waning global economic recovery. According to data by the Bangko Sentral ng Pilipinas (BSP), personal remittances rose by 2.4% to US$2.86 billion in February from US$2.79 billion in the same month in 2022. Personal remittances grew by 3% to US$5.93 billion in the first two months from $US5.76 billion in the same period in 2022. In terms of the sources of the remittances, the US posted the highest share with 41.6%, followed by Singapore at 7.3%, Saudi Arabia at 5.5%, Japan at 5.3%, the United Kingdom at 4.7%, the United Arab Emirates at 3.7%, and Canada at 3.2%. The slowdown in OFW remittances was attributed in part to the weaker peso exchange rate that partly reduced the need to send more remittances.
VIET NAM
Government to raise green economy contribution to GDP to US$300 billion by 2050
(19 April 2023) According to Viet Nam’s Minister of Planning and Investment, Viet Nam is set to raise the green economy’s contribution to the GDP from US$6.7 billion in 2020 to US$300 billion by 2050. Green growth is considered a long-term option in balancing the need to reduce greenhouse gas emissions and sustaining economic growth. The Prime Minister has been advised to issue the National Strategy on Green Growth for the 2021-2030 period, with a vision till 2050, and the National Action Plan on Green Growth for the period 2021-2030. Research by the Boston Consulting Group showed that the transition of the wind and solar power industries alone could contribute US$70 – US$80 billion to GDP and directly create about 90,000-105,000 jobs.
RCEP Monitor
CHINA
China can gradually reduce amount and frequency of currency interventions, according to central bank governor
(16 April 2023) The governor of the People’s Bank of China (PBOC) stated that China could gradually begin to reduce the amount and frequency of its currency interventions. The governor stated that the central bank would seek to guide monetary policy so that real interest rates move slightly below the potential growth rate. The governor stressed that authorities must allow market forces to drive yuan moves more. China has managed to keep inflation relatively stable at around 2% through exchange-rate and monetary policies, with the country currently pursuing a “balanced” current account rather than running a surplus. The governor also noted that should richer countries cooperate with regard to the debt woes of some low and middle-income countries, then they will be able to ‘equally and fairly share the burden’.
SOUTH KOREA, JAPAN
South Korean and Japanese finance ministers to hold bilateral meeting in early May 2023
(17 April 2023) South Korea and Japan’s finance ministers will hold a bilateral meeting in early May 2023 for the first time in seven years, heralding closer cooperation in economic policy that has been hampered by a recent diplomatic spat. Both ministers will meet on the sidelines of the upcoming Asian Development Bank (ADB) annual meetings, due to be held from 2th – 5th May 2023 in Incheon, South Korea. Until recently, regular annual meetings between both ministers had been suspended due to a diplomatic spat over wartime history. In March 2023, at a summit between South Korean President Yoon Suk Yeol and Japanese Prime Minister Fumio Kishida, both countries promised to put aside historical grievances and work together to counter regional security challenges. It is unknown if both finance ministers will discuss resuming a bilateral currency swap arrangement, which last expired in February 2015.
SOUTH KOREA
South Korea looking to foreign workers to resolve collapsing population
(16 April 2023) South Korea is looking to bring in foreign workers to resolve its collapsing population. Despite the government spending US$212 billion over the past 15 years to arrest its population decline, South Korea’s birthrate continues to fall, with the average number of children a South Korean woman gives birth to during her lifetime hitting a record low of 0.78 in 2022. In Seoul, the number was measured at 0.59. In 2004, the government began accepting low-skilled foreign workers. South Korea’s foreign workers’ program is very top-down, with the government controlling the entire process of employment from hiring recruits, placing them in jobs, then returning them back to their home country. South Korea had about 49,000 long-staying foreign nationals living in the country in 1990. The total number of foreign residents, including those staying for less than 90 days, increased to 2.52 million by the end of 2019, making up 4.9% of South Korea’s total population.