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TRADE

Thai goods less exposed to Europe

20/06/2012 
Darana Chudasri

Thai exporters should prepare backup plans even though the debt crisis in the euro zone is expected to have less effect on the Thai economy than on others in Asean, says the Kasikorn Research Center (KResearch).

Managing director Charl Kengchon said the euro-zone crisis will probably take years to resolve, resulting from the use of the same currency by countries with different economic structures. 

Integration has focused on monetary policy, while fiscal policy has been separately managed and implemented, hindering the zone from proceeding in a uniform direction. 

Furthermore, the EU has yet to set clear criteria for maintaining membership. It cannot force members to exit.

"Exporters who rely largely on the euro market face uncertainty for two years ahead," said Dr Charl.

Hence, the impact is not so severe. The prolonged problem means more time for businesses to adjust to the hardship.

Deputy managing director Pimonwan Mahujchariyawong said exporters must begin to think about new markets, especially emerging countries

"Exports to EU markets shrank by 15.4% in the first four months," she said.

For the whole year, they are expected to be eroded by 5%, while exports to Asean are expected to grow by 17%. The contribution of Asean to export income in three years is expected to reach 30%, up from 24% now.

She said the impact on tourism and investment remain unclear. The number of European visitors in the first five months rose by 11%, higher than the 7.3% increase in all foreign tourists. Applications seeking investment promotion from European countries rose by 221%. 

KResearch is maintaining its projection of 5% growth in gross domestic product, within a range of 4.5% to 6%. 

The euro-zone crisis remains a big risk factor whose effects could spread to other countries.

Inflation is expected to decline in the second half to 3.5%, down from a previous estimate of 3.9.

The uncertainty in the euro zone will lead the Bank of Thailand to maintain its policy rate through the end of the year.

Dr Charl predicts the euro crisis will continue to shake global money markets, capital markets and fund flows, but that the Bank of Thailand will handle such volatility.

Thailand's economy remains healthy with its vast liquidity enough to cope with capital outflow, he said.

(Source: Bangkok Post, TRADE, Thai goods less exposed to Europe, 20/06/2012, Darana Chudasri, link) 

Economics Vocabulary

eurozone crisis - Same as "European sovereign debt crisis"

European sovereign debt crisis -an ongoing financial crisis that has made it difficult or impossible for some countries in the euro area (especially Greece) to re-finance their government debt without the assistance of third parties" (See Wikipedia)

debt - an amount of money that you owe หนี้
crisis - an urgent, difficult or dangerous situation วิกฤตการณ์  วิกฤต
debt crisis - when the government, companies or people of a country have difficulties paying back money they borrowed in the past

sovereign - a country that rules itself (not a colony or protectorate of another country)
sovereign state

sovereign debt - the money borrowed and owed by the government of a country
sovereign debt crisis - sovereign default, "a failure or refusal of a government of a country (sovereign state) to pay back its debt in full" (See Wikipedia)

exposed - not protected from something ได้รับ ได้สัมผัส (แดด หรือสารพิษ เป็นต้น)

Thai goods less exposed to Europe

backup - a second one you can use, if the first one fails (if something goes wrong and you cannot use the first one, then use the backup)
backup plans

expected - believe will happen คาดว่า (จะเกิดขึ้น)

Thai exporters should prepare backup plans even though the debt crisis in the euro zone is expected to have less effect on the Thai economy than on others in Asean, says the Kasikorn Research Center (KResearch).

resolve - to solve a problem, or to find a satisfactory way of dealing with it แก้ไขปัญหา
resolve problem
resolve crisis

the euro-zone crisis will probably take years to resolve

currency - a widely used money accepted for exchange of goods in an economy เงินตรา (See Wikipedia)

Managing director Charl Kengchon said the euro-zone crisis will probably take years to resolve, resulting from the use of the same currency by countries with different economic structures. 

integration - bringing many parts together into one whole (so that they all work together well)

policy - a plan of action to guide decisions and achieve outcomes (See Wikipedia) นโยบาย
monetary policy - the central bank policy of controlling the amount of money and credit (money available to borrow, loans) in the econom and most important the long-term inflation rate by setting a policy interest rate (See Wikipedia)

fiscal - related to government spending; connected with the government budget, i.e., public money เกี่ยวกับงบประมาณ
fiscal policy - (See Wikipedia)

separately - not done together; each one done without the other 
separately managed

implemented - when a plan is put into action, actually doing the things in a plan
hindering - stopping or preventing normal functioning

proceed - move forward, go towards some place or goal
uniform - the same throughout, regular, does not vary
proceeding in a uniform direction  - move forward in one direction

Integration has focused on monetary policy, while fiscal policy has been separately managed and implemented, hindering the zone from proceeding in a uniform direction. 

criteria - a standard that is used for judging something or for making a decision about something บรรทัดฐาน  (See glossary)
clear - easy to understand
clear criteria - an easy to use standard 

set clear criteria for maintaining membership

force - 1. make people do something; 2. strong and violent action กำลัง ความรุนแรง
exit - leaving a place ทางออก

force members to exit - make people leave the group

Furthermore, the EU has yet to set clear criteria for maintaining membership. It cannot force members to exit. "Exporters who rely largely on the euro market face uncertainty for two years ahead," said Dr Charl.

impact - an effect or influence ผลกระทบ
severe - very serious and worrying ที่รุนแรง ที่น่าเป็นห่วง

so severe - very severe
not so severe - not very severe; a little severe or a middle range of severity

the impact is not so severe

prolonged - continuing for a long time ยืดเวลาออกไป
prolonged problem - a problem that exists for a long time

hardship - when life is difficult and unpleasant (usually due to a lack of money)

adjust - to change something slightly, especially to make it more correct, effective, or suitable ปรับ
adjust to the hardship - make changes to live with your difficult life

emerging countries - emerging market countries, countries that are growing rapidly and industrializing (See Wikipedia)

Hence, the impact is not so severe. The prolonged problem means more time for businesses to adjust to the hardship. Deputy managing director Pimonwan Mahujchariyawong said exporters must begin to think about new markets, especially emerging countries "Exports to EU markets shrank by 15.4% in the first four months," she said.

eroded - reduced slowly

contribution - the part or percentage of the total coming from one thing (here: exports)

income - money that people receive from work or some other source, used for household consumption and savings
export income - income from exports

contribution of Asean to export income

For the whole year, they are expected to be eroded by 5%, while exports to Asean are expected to grow by 17%. The contribution of Asean to export income in three years is expected to reach 30%, up from 24% now.

investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
investment promotion - when the government reduces taxes or gives other benefits so that companies will invest in the country

applications seeking investment promotion

She said the impact on tourism and investment remain unclear. The number of European visitors in the first five months rose by 11%, higher than the 7.3% increase in all foreign tourists. Applications seeking investment promotion from European countries rose by 221%. 

Gross Domestic Product (GDP) - the total value of all the goods and services produced by a country in one year 

projection - guessing a future amount; a calculation or guess about the future based on information that you have การคาดคะเน
projection of 5% growth in gross domestic product

range - all the numbers between two numbers
within a range of 4.5% to 6%. 

KResearch is maintaining its projection of 5% growth in gross domestic product, within a range of 4.5% to 6%. 

risk - danger, how likely or possible it is for a bad event that causes harm and damage ความเสี่ยง
factor - a fact or situation which influences the result of something ปัจจัย

risk factor - one thing causing danger in a situation
big risk factor

remains a big risk factor - is still causing danger 

spread - to gradually affect or cover a larger area แพร่หลาย, แพร่กระจาย แพร่กระจายไปทั่ว
could spread to other countries

The euro-zone crisis remains a big risk factor whose effects could spread to other countries.

estimate - guess amount to say what you think an amount or value is or will be คาดคะเน ยประมาณ

Inflation is expected to decline in the second half to 3.5%, down from a previous estimate of 3.9.

policy rate - the official interest rate that the central bank (BOT) sets to control the supply of money and credit in the economy and also the inflation rate

maintain - to keep รักษา
maintain policy rate - keep the official central bank interest rate at the same level

The uncertainty in the euro zone will lead the Bank of Thailand to maintain its policy rate through the end of the year.

global - throughout the world ทั่วโลก
capital - money invested in a business (See glossary)

money markets - the activity of buying and selling loans between banks for short periods of time such as certificates of deposit or government treasury bills, also the buying and selling of foreign money (See Wikipedia)
global money markets

capital markets - the group of markets and stock exchanges where companies and governments sell shares, bonds to get the money they need for running their business as well as making investments in new businesses (See Wikipedia)

fund - money provided for something เงินทุน กองทุน
fund flows - money passing from one place to another place

volatility - changing suddenly and unexpectedly (bad because it makes it difficult to make decisions) ความไม่แน่นอน

Dr Charl predicts the euro crisis will continue to shake global money markets, capital markets and fund flows, but that the Bank of Thailand will handle such volatility.

liquidity - the amount of cash and loans available in the economy สภาพคล่อง

vast - very large, of great size กว้างใหญ่, มหาศาล
vast liquidity

cope - to deal successfully with a difficult situation or problem รับมือกับ
cope with capital outflow

Thailand's economy remains healthy with its vast liquidity enough to cope with capital outflow, he said.

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