Political uncertainty weighs on Thai economic growth

[webfact]

Political uncertainty weighs on Thai economic growth

 

 

Thai economic growth next year is unlikely to pass 4 percent as economists have recently revised the growth downward because the Thai exports are facing strong headwinds amid local political uncertainty.

 

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) last week lowered the economic growth forecast for 2019 from 4.0-4.3 percent initially to 3.7-4 percent due to worse-than-expected export performance. It also decreased the export growth projection from 5-7 to 3-5 percent.

 

JSCCIB called for political parties to follow the rules to bring about political stability. Otherwise, the economic growth this year can be worse because the revised figures have not taken into account the political factor.

 

Full story: https://www.thaipbsworld.com/political-uncertainty-weighs-on-thai-economic-growth/

 

-- © Copyright Thai PBS 

[Redline]

I call for a new vote with thousands of international observers 

[Longcut]

Maybe time to reign in the baht?

[Srikcir]

5 hours ago, webfact said:

because the Thai exports are facing strong headwinds amid local political uncertainty

"admid political uncertainty" is an understatement.

Recently stated by Finance Minister Apisak Tantivorawong there has been a drop in the Consumer Confidence Index, the first drop in the past three months. http://www.nationmultimedia.com/detail/breakingnews/30367258

I suspect that even with Prayut's appointment as the next PM, there will continue to be a decrease in the CCI as the Thai consumer has repeatedly indicated dissatisfaction with his domestic economic performance.

5 hours ago, webfact said:

JSCCIB called for political parties to follow the rules to bring about political stability.

As Prayut is a registered candidate for PM and leader of a political party, he too must follow the rules.

But he exempts himself from the rules as Chief of the NCPO by responding with "accelerated public investment in infrastructure projects in order to shore up economy during political transition" (ditto link).

Prayut in effect further "muddies" (if not stagnate) the economic waters for any different future head of government than himself by continued government long-term loans from foreign nations to finance infrastructure projects that only exist though bypassing current rules, regulations and laws by invoking Article 44, ie., EEC development and high speed train routes.

But I don't expect the JSCCIB to focus on Prayut as a politician.

[Lodestone]

4 hours ago, Longcut said:

Maybe time to reign in the baht?

What's been driving the baht up in value is foreign investment, largely real estate in the condo market. Thailand is number three in the world (after the U.S. and Australia) for foreign REI. That combined with now established competition for commodities exports -- rice exports down almost 30% with a big part of that coming from Vietnam -- is a big brake on GDP.

[Cadbury]

7 hours ago, webfact said:

Political uncertainty weighs on Thai economic growth

With all this junta orchestrated electoral chicanery foreign investors are going to be very wary about getting into bed with a "democratic" junta and inherit all the risks that go with it. Having a volatile PM armed with Article 44 which overrules all trade agreements is also a big negative.

Malaysia and Vietnam must surely be looking much more attractive with stable governments and a more energetic and lower cost labour force. 

One gets the impression Thailand is on an economic downhill slide. More and more they are relying on tourism (refer speech by Somkid) to compensate for other economic losses; while at the same time destroying and vandalising the places that draw the tourists. Tourists will eventually tire of risking life and limb coming to see a country covered in garbage and smothered in smoke and smog. 

https://forum.thaivisa.com/topic/1093499-services-can-make-up-for-trade-slump-somkid-says/

 

[Pilotman]

48 minutes ago, Cadbury said:

With all this junta orchestrated electoral chicanery foreign investors are going to be very wary about getting into bed with a "democratic" junta and inherit all the risks that go with it. Having a volatile PM armed with Article 44 which overrules all trade agreements is also a big negative.

Malaysia and Vietnam must surely be looking much more attractive with stable governments and a more energetic and lower cost labour force. 

One gets the impression Thailand is on an economic downhill slide. More and more they are relying on tourism (refer speech by Somkid) to compensate for other economic losses; while at the same time destroying and vandalising the places that draw the tourists. Tourists will eventually tire of risking life and limb coming to see a country covered in garbage and smothered in smoke and smog. 

https://forum.thaivisa.com/topic/1093499-services-can-make-up-for-trade-slump-somkid-says/

 

if you lived where I do, East of Ban Chang, you would maybe not have that opinion.  The place is booming, with new infrastructure and hundreds of new Asian backed businesses operating in and around MataPhut. The EEC is a reality.  Western investment may be going down, but looking at the company names around the place, Chinese and Japanese investment is alive and well.  I would say that there may be a re balancing going on, maybe, with Asian partners predominating , on favourable terms from the Thais.  

[NCC1701A]

3 minutes ago, Pilotman said:

if you lived where I do, East of Ban Chang, you would maybe not have that opinion. 

same for Hua Hin. Dodging Mercedes and cement trucks on my Click all day. 

[Cadbury]

19 minutes ago, Pilotman said:

if you lived where I do, East of Ban Chang, you would maybe not have that opinion.  The place is booming, with new infrastructure and hundreds of new Asian backed businesses operating in and around MataPhut. The EEC is a reality.  Western investment may be going down, but looking at the company names around the place, Chinese and Japanese investment is alive and well.  I would say that there may be a re balancing going on, maybe, with Asian partners predominating , on favourable terms from the Thais.  

I don't doubt you at all. I see the same as you. Planet Thailand may seem to be doing OK but it's neighbours seem to be outstripping them in terms of productivity, growth and foreign investment. And what the neighbours are getting is what Thailand is NOT getting. 

I spend half my time in both Vietnam and Thailand have have the opportunity to compare both. As an example of the whole country I would estimate that activity in Vietnam in cities like Hanoi, Hai Phong and Hai Duong would be double or triple that of what I see in and around Thailand. For example Hai Phong in 2017 had a regional GDP of 15.5%. Thailand has 32.5m tourists annually but by comparison Hai Phong City alone has about a quarter of that number, thanks to Halong Bay.  

Because of the China/US tariff row tariff free industrial zones are being opened up in Vietnam and Chinese factories are transferring production into these zones.

Tall buildings in Hanoi seem to go up at twice the speed of those in Bangkok and the number of productive grunts I see working on building sites are far more than I see on similar sites in Thailand. With a population of around 96 million Vietnam has a reliable workforce at hand whereas Thailand is relying more and more on dodgy imported workers to compensate for "unavailable" or lazy Thai workers..

I have no doubt Thailand's economy will trundle along on the dreams and incompetence of the military leadership but they will bring little hope for the future.  

[Pilotman]

4 minutes ago, Cadbury said:

I don't doubt you at all. I see the same as you. Planet Thailand may seem to be doing OK but it's neighbours seem to be outstripping them in terms of productivity, growth and foreign investment. And what the neighbours are getting is what Thailand is NOT getting. 

I spend half my time in both Vietnam and Thailand have have the opportunity to compare both. As an example of the whole country I would estimate that activity in Vietnam in cities like Hanoi, Hai Phong and Hai Duong would be double or triple that of what I see in and around Thailand. For example Hai Phong in 2017 had a regional GDP of 15.5%. Thailand has 32.5m tourists annually but by comparison Hai Phong City alone has about a quarter of that number, thanks to Halong Bay.  

Because of the China/US tariff row tariff free industrial zones are being opened up in Vietnam and Chinese factories are transferring production into these zones.

Tall buildings in Hanoi seem to go up at twice the speed of those in Bangkok and the number of productive grunts I see working on building sites are far more than I see on similar sites in Thailand. With a population of around 96 million Vietnam has a reliable workforce at hand whereas Thailand is relying more and more on dodgy imported workers to compensate for "unavailable" or lazy Thai workers..

I have no doubt Thailand's economy will trundle along on the dreams and incompetence of the military leadership but they will bring little hope for the future.  

I agree.  Its only a matter of time before Vietnam and Cambodia overtake Thailand in the economic development stakes.  Ironic when you think that 50 years ago those two countries were war ravaged and the Thais mainly stayed out of it, just as they did in WW2.