Robert24

I think you're mistaking BMW,MERCEDES with the likes of Ferrari, Lamborghini.

BMW might be high end, but by no means can a 3 series be regarded as a luxury product. This isn't a ferrari california for gods sake.

People are still price sensitive when it comes to buying BMW,Mercedes, make it couple of 100 thousand baht more expensive, they'll have to settle for another brand.

BMW is a luxury brand....and in a country where many people cannot afford any vehicle whatsoever, a 3 series is most definitely considered a luxury product.

There are more cars in Thailand than there are in my home country.

Mercedes declared many years ago Thailand as their second best market after Germany.

that's just wrong. Mercedes-Benz sell about 15,000 cars p.a. in Thailand. In China alone last year, they sold rougly 1.3 million vehicles, nearly 100 times more than Thailand. By the way Benz sells about 330,000 vehicles per year in the US. So Thailand is way at the back on their Global list of Sales.

@Anthony5:

I think I mentioned it before. Prices of imported products would only decline if there is competition for the same product and sales volumes are high. In such a case, competitors would lower the price and increase their sales overall because customers would buy from them. However if there is little demand for the specific product and only very few players in the market selling this product, prices won't go. Why would a company lower prices in such a case? It doesn't make sense because you would only lower revenues.

I don't know if your observation is correct, I hardly ever go shopping in BigC etc. All I know is that if what you say is correct, you can make a killing by important goods and selling them cheaper than competition. Make sense?

Even if this was the case, for the average Joe it would not be so easy. Cost, red tape, etc etc, would just not be worth it.

If the likes of Giants like Tesco struggle in Thailand, as if any of us individuals can break into that side of the business.

It's actually not difficult to import products in Thailand. I've imported various things from China and Taiwan before and sold it again. Just start doing it, it's far easier than you think. And if this product is in demand and you can sell it say for 20% below the price of retailers like Makro, BiGC etc, then for sure you can make a killing from it.

However I suspect that the products referred to are probably low volume, low demand products. Or am I wrong? What groceries are imported and in high demand?

You imported food items for resale in Thailand?

Why I don't believe you.

For importing food items in Thailand you need a FDA approval which can take up to a year and loads and loads of paperwork.

NEXT.

I imported electronic items from Taiwan and Sports clothing from China, not food items. Never claimed that. You seem to be quite aggressive or grumpy... Just trying to explain you that rather complain about a situation you cannot change, why not see the business opportunity? Would help you look at the world in a different way.

It is very simple, there is no competition in Thailand, the prices are fixed by a few companies (family conglomerates) that own everything.

They farm the country and exploit the labor force and we all including Thais pay high prices so they can optimize profits.

It's not just foreign products that are expensive here also many Thai products are cheaper abroad than here.

That's not correct. Many industries are very competitive here. f&b industry, construction, electronic industry etc, banking, insurance etc.

Maybe you should start importing goods into Thailand. If your observation is correct, you could make a lot money.

May be you want to explain to me what's wrong with my observation.

I don't know if your observation is correct, I hardly ever go shopping in BigC etc. All I know is that if what you say is correct, you can make a killing by important goods and selling them cheaper than competition. Make sense?

Even if this was the case, for the average Joe it would not be so easy. Cost, red tape, etc etc, would just not be worth it.

If the likes of Giants like Tesco struggle in Thailand, as if any of us individuals can break into that side of the business.

It's actually not difficult to import products in Thailand. I've imported various things from China and Taiwan before and sold it again. Just start doing it, it's far easier than you think. And if this product is in demand and you can sell it say for 20% below the price of retailers like Makro, BiGC etc, then for sure you can make a killing from it.

However I suspect that the products referred to are probably low volume, low demand products. Or am I wrong? What groceries are imported and in high demand?

Price of BMW,Mercedes Benz etc should of gone down too, because of the very weak euro. But thats not the case either.

BMW and Mercedes dealers in Thailand are making a killer right now. 1 euro was 45thb 1 year ago, now it stands at 35thb.

2 points with regards to luxury products like BMW etc:

1) they are not price sensitive and generally producers of them have high margins on the products. For example whether your 5 series BM costs 100k more or less won't matter to the buyer. If they need buy one, they will.

2) I guess the majority of costs for BMs occur outside the Eurozone. Ie manufactured in China, raw materials in $ etc.

The guy has a very valid point, since western currencies lose their value, it should be cheaper to buy in thb.

Whats with people trying to make fun of him?

Not making fun of him. I suspect his observation is to a very limited amount of products for which the sales volume is low and not much competition. I see many imported products have come down in price but granted they are not groceries in BigC.

So what is your topic about?

I would have thought that anyone, with a brain at least the size of a green pea, would be able to comprehend the text in the OP.

So for you only.

If foreign currencies get weaker against the Thai Baht, it is only logical that importing goods from those countries becomes cheaper in Thai baht terms, especially since also shipping cost have declined because of the 50% decline in oil prices.

So where is the logic the prices of imported goods increase instead of decrease.

The answer is very simple: this happens when markets are not efficient, i.e. Lack of competition. If there is a lot competition prices adjust right away.

So back to my comment: if you see a business opportunity like this you should grab it even if it's outside your comfort zone.

So what is your topic about?

Maybe you should start importing goods into Thailand. If your observation is correct, you could make a lot money.

May be you want to explain to me what's wrong with my observation.

I don't know if your observation is correct, I hardly ever go shopping in BigC etc. All I know is that if what you say is correct, you can make a killing by important goods and selling them cheaper than competition. Make sense?

Maybe you should start importing goods into Thailand. If your observation is correct, you could make a lot money.

On channel news asia I always here Thailand is the hub of asia economic i not want belive this 1st Singapore then 2. Malaysia and later Thailand !

The time Thailand was called the swiss of asia are over!

In terms of manufacturing industry, Thailand's economy is way ahead of Malaysia and Singapore. Also in terms of GDP, the ranking would be Thailand ahead of Malaysia and Singapore. Singapore has a strong service sector in the financial industry.

But with regards to the size of the economy in Asia neither Singapore, Malaysia or Thailand is no 1. No 1 is China followed by Japan. I'm sure CNA wouldn't mention anything else.

http://www.cnbc.com/id/102478587

Disinflation, low demand, crash a coming

If the BoT isn't supporting the baht, who is?

Springs to mind what the Swedish Central bank did with the Swedish crown in 1992, but here without the BoT trying to keep the value of the Thai baht.

According to news media, Thailand has 0% export growth, tourism in money is declining, investments in Thailand aren't growing.

What's the catch here?

Interest rates are relatively attractive compared to other currencies - this is why investors put money into Thai baht. This may change once the FED starts increasing rates but the market still sees this some time away.

Now I think it was mentioned before. The BoT have absolutely zero interest in a strong Thai baht. They would certainly prefer the baht to be weaker in order to help the export industry. It is investors that keep the baht strong. In a world where interest rates are zero or negative in many currencies big investors like the Thai baht.

Wouldn't investors be scared s-tless is the currency couldn't back up against real value, export, tourism, domestic production, domestic trading etc.?

I thought investors investing in real values, like properties, factories etc. would like to see a near 0% bank rate, or are you talking about currency investors only?

I think the big investors are real money asset managers like pension funds, asset managers, sovereign investors, etc. the likes of Black Rock, GIC, PIMCO etc. they are all searching for yield. And they can still get a decent yield here (be it in bonds, real estate or equities) compared to other currencies. And they see the Thai economy probably in a much different light otherwise they wouldn't invest here.

http://www.cnbc.com/id/102478587

Disinflation, low demand, crash a coming

If the BoT isn't supporting the baht, who is?

Springs to mind what the Swedish Central bank did with the Swedish crown in 1992, but here without the BoT trying to keep the value of the Thai baht.

According to news media, Thailand has 0% export growth, tourism in money is declining, investments in Thailand aren't growing.

What's the catch here?

Interest rates are relatively attractive compared to other currencies - this is why investors put money into Thai baht. This may change once the FED starts increasing rates but the market still sees this some time away.

Now I think it was mentioned before. The BoT have absolutely zero interest in a strong Thai baht. They would certainly prefer the baht to be weaker in order to help the export industry. It is investors that keep the baht strong. In a world where interest rates are zero or negative in many currencies big investors like the Thai baht.

"if exports grow by 0.4 percent, the growth rate will be 3.2 percent"

NO

Exports account for 70% of Thailand's GDP. If exports by value grow by only 0.4%, then 70% of the TOTAL GDP grows by 0.4% .

In order for the Total GDP growth rate to achieve 3.2%, the three factors of the Thai economy (domestic consumption, government spending, tourism) for the remaining 30% of the GDP must grow 10%. Domestic consumption is constrained by increasing historical levels of household debt; government investment in the economy has been restrained; and tourism is unpredictable at best. If any of the remaining economic three factors fall short of 10% growth, a higher growth rate beyond 10% must be achieved.

Unless exports drastically increase by mid-year 2015, Thailand is facing deflation.

I can follow the logic in what you are saying with exception of your last sentence that if exports not grow a lot that this would lead to deflation. Can you articulate how you come up with this conclusion? What is the correlation of inflation or deflation to the growth of exports?

Hey Thailand welcome to the rest of the world.

I do hope you quit supporting the Thai baht so much, and let it slump a bit

toward the real value of Baht versus USA dollar.

Just saying!

What is USA govt debt to gdp now? 80%? 85? Go look up Thailand and understand why the USD is so weak.

the $ has been strong (not weak) against most other currencies including the Thai baht. Have a look at $ index chart in post 120.

Currency valuations have little correlation to the debt to GDP ratios.

Ok, I understand that.....now, when will the baht drop against other currencies? I am talking a significant drop, not half a point

I think it is being manipulated for some reason possibly pegged to the American dollar. I notice it rises and falls in tandem with the USA greenback. Bad news takes time to filter into exchange rates. I am waiting for a big move to bring money over.

No peg with the US$. As previously mentioned, the baht has weakened considerably against the US$ from 29 to now above 32. The problem is the baht relative strength to other Asian currencies and the Euro.

Stop telling people the exchange rate was 29 TBH for one US$, I'm getting paid in US$ and during three years now, the US$ have never been lower than 31 except for a quick drop at one point but BoT quickly called in the troops.

Maybe you should look at the charts of the USD/THB rate in post 120 and 121 to remind you of the times of the rate below 30. or maybe you remember the fight between the former Finance minister Kittirat with the BoT about the strength of the baht vs the $. remember?

I remain perplexed as to why so many expats complain about the high baht. You could do what any other sane business savvy individual has done ... leave and find a place that offers better value for your money. What bitch about the price of bread in one store when a store not 2 minutes away is selling it for half price? Are you all totally stupid?

The Thai economy is going down the toilet fast, over-inflated currency with a dropping GDP. It's like going to the cinema and the place is burning down around you but you insist on staying so you can see the end of the movie.

And they say the Thais are dumb.

GDP is not dropping. Thai GDP is growing somewhere between 3-4% p.a.

Yet the Thai Baht grows stronger every day making Exporting harder and with a strong baht surely tourism must drop as well but what do i know .................................

The baht is linked to the US dollar - if you look at historical rates of both against the pound, they correlate almost exactly. The BOT presumably keeps the baht in line with the dollar, at least until that strategy is unsustainable.

The baht is not linked to the $ nor does BoT keep the baht in line with $. the currency swings in the $/ THB movements are evidence for this.

It has not been pegged to the US dollar since 1997 so you are off target on that one.

Its pegged to a Basket of Currencies: US$ , BP, and EUR

The weighting is heaviest with the US$

There is No peg to a basket of currencies or any single currency.

Why does the baht so closely follow the USD if it hasn't been pegged in nearly 20 years?

I'd appreciate a "Currency Exchange for Dummies" answer. I've only just reached the point when I can convert baht to USD in my head without having a dumbfounded look on my face. Math was never exactly my strong suit.

do you call these fluctuations "closely follow"?

USD THB.jpg

Perhaps I worded it poorly. It seems like (see the graphics I posted above) that the when the USD gets weaker (i.e. - 2013) the baht follows it down. And as the USD gets stronger (i.e. - since 2013) the baht follows it back up. Also, I'm not talking about over 20 years, just in the past few years. I'm looking more at the trend than at the exact exchange rate.

Someone up in the thread said something about the BoT buying in USD. Maybe that has something to do with it? Or, like I said, I'm not exactly mathematically inclined. It could be that I'm seeing something that doesn't exist.

Don't worry. Take a look at the Thai foreign exchange reserves. They are almost out of money so will not be buying much anymore. Unless they get a loan. China and Russia don't look like a good choice to ask for money nor does the ECB and America is still miffed.

Laos picked beer and we all know what Colorado picked. Maybe casino gambling in Pattaya? I don't see any other quick source of money to buy all the necessities.

Macau last year in baht 1,485,000,000,000

Foreign currency reserves of the BoT are at about $148bn. I think they have a lot of fire power left if needed. Not sure where you get the idea the BoT is out of ammunition in terms of foreign currency reserves.

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

One is reminded of the great crook duo of 97/98 - the Banharn-Chavalit Tango.

Cranes dotted the skylines of Bangkok and Pattaya.

Tens of thousands of condos and apartments where the profit was never to be taken in the sale of the units - but in the planning, designing, building and financing stages.

and "THEY" are building hundreds of thousands of these "Lead Balloons" again.

Drive by in the evening....a tiny number of lights are on - no sales.

So the Property Market Lead Balloon will, as usual lead the way,

Hopefully this will drop the baht by at least 50% - if PRC allow that to happen.

Against this - the euro is in free fall. If Greece leaves the toxic eurozone - and hopefully fully defaults French banks will start falling like rotten plums - and Germany will be happy, smug and content.

Until Target2 arrives on the heels of Grexit - T2 the Nemesis of Merkel's campaign to undermine the value of German savers by propping up a corrupt and incompetently managed currency.

When the German people learn what Merkel and Schaueble have been doing - they will be put out of office. As one wag at ECB said,"There won't be enough lamposts in all of Frankfurt for us."

Euro will drop to $0.65 maybe a lot less. Which stymies any drop in the Thai Baht.

Then the other Asian currencies will need to adjust - and before long there is likely to be a terrible mess.

Watch gold sales and the Italian Debt repayments.

I can support some of what you say but there are a few points you are wrong:

1) French banks do not hold Greek debt anymore. They were highly exposed in the last Euro crisis but have since sold all of their Greek debt to the ECB. Most of Greek debt is held by the ECB.

2) contagion risk from GREXIT is overestimated. Draghi has all tools in his hands to manage government bond market of Spain, Italy, France etc. He only needs to say that and market participants will remain quiet.

3) I think a 0.80 rate of the Euro vs $ is a more realistic currency target in my opinion than the 0.65$. At least I will close my short Euro positions at this level:)

Don't France and Germany hold the majority (14 and 17 %) of the ECB?

Sure but who cares if the ECB is loosing money because of a Greek default. Or the ECB could just change the terms of the debt with Greece. I.e. Allow them not to pay interest or extend the loan duration. Whatever they do, ECB can manage the situation without a financial contagion to other vulnerable countries in Europe

Not only Thailand, the WTO and other international agencies are all dropping the world economic outlook numbers. http://uk.reuters.com/article/2015/04/14/uk-global-economy-trade-idUKKBN0N50V820150414

Yes they are and its only April

Maybe I'm wrong but I have somewhat a contrarian view of the Global economy forecasts. I personally think economic growth in China and subsequently across the world will pick up in the second half of this year. Have a look at the Chinese stock market. A nice leading indicator in terms of where the economy is going. Again I might be wrong but I certainly recommend to be long Chinese equities now.

The world is not in a recession ,but much worse in a depression that stands for a deepening in recession/ level beyond.So how can you expect growth.[/

Sorry but there is no depression in the world. By definition a depression is a very deep and prolonged recession characterized by negative economic growth over years, very high unemployment, reduced debt availability etc. People usually refer to the 1930s as an example for a depression. Hope this helps people understand the terms recession and depression better.

Your basing your opinion on questionable numbers being given out by governments that want to sugar coat everything. Governments have strayed so far off of the mark of governing us its astounding. They have come out blatantly in the corner of big business. Just check the real cost of living versus the pittance of an increase they give us in our pension checks. When going over the unemployment figures check out the people on food stamps, people that have just given up looking for work the underemployed and so on. Look at how they are printing money and flooding the world with it including the stock markets its all Ponzi scheme. Companies spend their profits not on creating jobs but by buying back their shares thus reducing the number available for purchase and thus driving up the price of the remaining shares. Last year 4 trillion dollars worth of shares were retired by companies. 1% of the population control half of the wealth. There is much more but my fingers are getting tired.

Agree with most of what you said, ie the fact companies are raising debt at low cost to buy back shares, the ultra low interest rates, printing of money and that some economic data points are questionable. Yet I hope you would agree that neither Thailand nor the U.S. Is in a recession and for sure there is no depression. I mean people should really study the 1930s to understand what a depression is. Our economic activity is far better than what we saw then.

Ok, I understand that.....now, when will the baht drop against other currencies? I am talking a significant drop, not half a point

I think it is being manipulated for some reason possibly pegged to the American dollar. I notice it rises and falls in tandem with the USA greenback. Bad news takes time to filter into exchange rates. I am waiting for a big move to bring money over.

No peg with the US$. As previously mentioned, the baht has weakened considerably against the US$ from 29 to now above 32. The problem is the baht relative strength to other Asian currencies and the Euro.