Bank of Thailand adjusts GDP forecast downwards citing political uncertainty and household debt

[snoop1130]

Bank of Thailand adjusts GDP forecast downwards citing political uncertainty and household debt

By Phuwit Limviphuwat 
The Nation

 

 

The Bank of Thailand’s governor, Veerathai Santiprabhob, cautioned that the economy could be harmed by further delays in the formation of the new government as well as the rising level of household debt.

 

The Bank of Thailand (BOT) has adjusted downwards its GDP forecast for 2019 amid rising uncertainties about Thailand’s political situation and the US-China trade war.

 

The central bank also cautioned that the country’s financial stability is at risk from the alarming increase of household debt nationwide.

 

The central bank has lowered its GDP forecast for 2019 from 4 per cent to 3.8 per cent after 4.1 per cent growth in 2018.

 

“The political uncertainty is a key concern for the growth of the economy. The baseline case for our predictions is that the forming of a new government will not be delayed and that the pace of economic growth will start to pick up in the second half of the year,” said Veerathai Santiprabhob, the BOT’s governor, during this morning's “Analyst Meeting” seminar organised by the BOT.

 

However, if there are delays in the formation of the new government, new government projects in 2020 may be postponed due to hiccups in the government budget. The budget issue, along with the damages the continuation of political uncertainty will do to business sentiment in the country, may negatively impact the Thai economy, he explained.

 

“In the past three years, exports have been the key driver of economic growth. However, after mid-2018, export growth has slowed at a fast rate and this will be reflected in the annual economic growth of the Kingdom,” said Titanun Mallikamas, assistant governor of the central bank’s monetary group.

 

From now on, the growth engine of the country will be powered by tourism and investments, he said.

 

The BOT predicts that tourists visiting the country will reach 40.4 million in 2019, a slight increase over last year’s 40 million visitors. However, he cautions that due to the weakening global economic condition, the average spending per tourist may decrease.

 

The central bank further predicts that investment from the public and private sectors will continue to perform well, with public investment forecast to grow by 6.1 per cent in 2019 and private investment by 4.4 per cent.

 

Factors pushing investments include the Board of Investment (BOI)’s tax incentives to foreign investors looking to invest in the country’s Eastern Economic Corridor (EEC) and the government’s infrastructure projects funded by Public-Private Partnerships, Titanun explained.

 

However, BOT officials cautioned that the financial stability of the Kingdom has shown worrying signs, particularly through the rise of household debt.

 

In the third and fourth quarters of 2018, household debt rose by 8.4 per cent and 9.4 per cent respectively. Household debt comprises mortgages, automotive debt, credit card debt and personal debt, all of which has been increasing at an alarming rate, with automotive debt increasing most significantly by 12.5 per cent and 12.6 per cent in the two quarters, he said.

 

“Household debt has been growing at a worrying rate and presents a risk to the financial stability of the country as well as the entire economy, as it may damage the productivity of the workforce in the long-run,” Veerathai added.

 

Source: http://www.nationmultimedia.com/detail/Economy/30367968

 

-- © Copyright The Nation 2019-04-19

[RotMahKid]

45 minutes ago, snoop1130 said:

However, he cautions that due to the weakening global economic condition

and the stronger getting Thai Baht the average spending per tourist may decrease. He just forgot that as most of Thai politicians do.

Thailand's Thai Baht is much stronger then a few years ago and the prices are rising also, so what do they expect?

[nickstav]

Easy to buy a new car....no money down....low or no interest...Oh, but I have to pay every month???

[Prissana Pescud]

Most people in Thailand would have difficulty to get a bank loan.

But so easy to buy a big flash car. (or a small one,)

Every one of the thousands of small villages tends to look after all the inhabitants. 

Not so the small and large cities where basic culture is failing.

I can't blame Thai people for wanting to live better.

But mostly it seems to be a culture that wants to be an Olympic runner before it has learned to walk.

[Srikcir]

16 hours ago, snoop1130 said:

The central bank has lowered its GDP forecast for 2019 from 4 per cent to 3.8 per cent

Keep trying BOT, eventually you'll catch up with reality:

April 12, 2019

• "The SCB [Siam Commercial Bank]’s Economic Intelligence Center (EIC) first executive vice-president Yunyong Thaicharoen, has revealed the center has reduced its growth projection for the Thai economy this year to 3.6% from a previous expectation of 3.8%, due to the decreasing trends of the export sector affected by global economic conditions, a trade dispute between the United States and China, and the International Monetary Fund’s (IMF) latest global economic growth projection reduced to 3.3%." 

https://forum.thaivisa.com/topic/1094746-thai-economy-shows-good-performance-scb/?utm_source=newsletter-20190412-0608&utm_medium=email&utm_campaign=news

 

 

[Srikcir]

16 hours ago, snoop1130 said:

From now on, the growth engine of the country will be powered by tourism and investments

Make that foreign direct investment, foreign loans and foreign tourists.

What could possibly go wrong with that kind of reliance for GDP growth?

• Finance Minister Apisak Tantivorawong recently said that he was more concerned about a delay of new private investment. “We have learned from many investors, in particular foreign investors, who say that they will wait until the political uncertainty becomes clear,” http://www.nationmultimedia.com/detail/breakingnews/30367258

[BestB]

Just yesterday BOT stated growth is on track and more if government is formed by June.

 

what has happened in past 24 hours to do a full u turn and now talk about financial stability being at risk?

[overherebc]

5 minutes ago, BestB said:

Just yesterday BOT stated growth is on track and more if government is formed by June.

 

what has happened in past 24 hours to do a full u turn and now talk about financial stability being at risk?

Someone somewhere was told a U-turn would be a good idea???

[Sonhia]

What was the recent report put out by Visa concerning the speeding power of Thai nationals... 

 

Fickle

[Oziex1]

1 hour ago, BestB said:

Just yesterday BOT stated growth is on track and more if government is formed by June.

 

what has happened in past 24 hours to do a full u turn and now talk about financial stability being at risk?

Yes I read that as well,  but this common with the news threads here.  Time after time one story is in direct contradiction of the following.

It's up, it's down, it's fine it's not?

A constant battle between the truth and the manufactured face saving angle.

[Krataiboy]

Easy borrowing and low interest rates are teeing us up for another global financial meltdown, with far fewer fixes than last time.  Thailand, with its mounting public and private debt, is certain to suffer from any new credit crunch.

 

https://www.abc.net.au/news/2018-10-04/world-vulnerable-to-another-financial-meltdown-warns-imf/10337490

 

[malagateddy]

Easy borrowing and low interest rates are teeing us up for another global financial meltdown, with far fewer fixes than last time.  Thailand, with its mounting public and private debt, is certain to suffer from any new credit crunch.
 
https://www.abc.net.au/news/2018-10-04/world-vulnerable-to-another-financial-meltdown-warns-imf/10337490
 

I agree sadly a recession is looming..add on trade wars..in certain eu member state countries..youth unemployment is an utter disgrace and to a certain extent..I 100% blame the euro..a financial straitjacket to suit the globalist multi-nationalists.

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[Eric Loh]

The Thai economy has been harmed since the coup. What is it so hard to understand that every coup dealt a body blow to economy. We nose dived to GDP growth in 2014 to 0.7% and since then struggled to achieve the growth of past and previous elected governments. When we hit such a low GDP base, anything above was spun as positive. To put salt to injury, the junta messed up the election to stay in power and created even more harmed to the economy. They embarked on excessive defense spending rather than put more money to creat productivity like in education and healthcare. They spurged on large infrastructure spending without determining if they will be profitable. The political uncertainty scared off FDI which went to Vietnam and other neighboring countries. Pity that the BOT is not forthright in condemning the junta and coups in general for harming the economy. 

[bomber]

33 minutes ago, malagateddy said:

I agree sadly a recession is looming..add on trade wars..in certain eu member state countries..youth unemployment is an utter disgrace and to a certain extent..I 100% blame the euro..a financial straitjacket to suit the globalist multi-nationalists.

Sent from my SM-G7102 using Thailand Forum - Thaivisa mobile app
 

youth unemployment in 2 small EU nations isnt going to cause a repeat of the financial crisis,and neither is any particular currency,but you cannot get your germany/EU paranoia out of your head,low to zero interest rates and household debt are the main reasons and the UK scores highly in each,£15k and rising and thats before mortgages,brexit and trade wars also wont help, wake up man

Edited April 20, 2019 by bomber

[malagateddy]

Fully awake old boy..if eg portugal had stayed with the escuda and greece the drachma they would have been able to kick start their respective economys to help their own people..but wait..both of these countries were/are eu subsidy junkie states.

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[UKresonant]

18 hours ago, nickstav said:

Easy to buy a new car....no money down....low or no interest...Oh, but I have to pay every month???

So does that finance ultimately come from the major banks, via the finance companies, in 400000 baht increments????? Do you think there will be another car crash?????

[zydeco]

Not going to invest any place where Beijing controls the economy and foreign policy.

[mommysboy]

Real GDP- not the same as the one the ordinary Joe lives under.  That one is prefixed with a minus sign.

[RotBenz8888]

23 hours ago, snoop1130 said:

The Bank of Thailand (BOT) has adjusted downwards its GDP forecast for 2019

If they actually admit this, things must be pretty bad.

[malagateddy]

If they actually admit this, things must be pretty bad.

Perhaps they understand that another massive financial crash is not too far away..perhaps also they know that trade wars will have an effect on the thai economy.
It's not rocket science.

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[bomber]

6 hours ago, malagateddy said:

Fully awake old boy..if eg portugal had stayed with the escuda and greece the drachma they would have been able to kick start their respective economys to help their own people..but wait..both of these countries were/are eu subsidy junkie states.

Sent from my SM-G7102 using Thailand Forum - Thaivisa mobile app
 

you totally contradict yourself,you claim both should not of joined the EU/euro but if they are milking the EU like you say they wouldnt be getting their milk had they not joined,they cannot have both,please state which of the 2 would of been the best option in your opinion,btw the vast majority of portuguse are happy in the EU,Greece as we have been through on here upteen times was its own worst enemy and lived the dream it could never afford then blamed the EU once it had bankrupt ITSELF

[bomber]

46 minutes ago, malagateddy said:

Perhaps they understand that another massive financial crash is not too far away..perhaps also they know that trade wars will have an effect on the thai economy.
It's not rocket science.

Sent from my SM-G7102 using Thailand Forum - Thaivisa mobile app
 

trade wars very rarely return a winner,big don thinks he can win but he has little chance,same same brexit,all dreams by chancers thinking it might be better if we tried his that or the other.

[malagateddy]

you totally contradict yourself,you claim both should not of joined the EU/euro but if they are milking the EU like you say they wouldnt be getting their milk had they not joined,they cannot have both,please state which of the 2 would of been the best option in your opinion,btw the vast majority of portuguse are happy in the EU,Greece as we have been through on here upteen times was its own worst enemy and lived the dream it could never afford then blamed the EU once it had bankrupt ITSELF

The eu could possibly have worked as a small group of nations who BRING SOMETHING to the table..but only as a free trade association.
Of course the eu jobsworth fanatics could never stop in their quest for their ultimate sim..a united states of europe.
Why not read about the EU DECEIT in todays daily express. ... ted heath of morning cloud and jersey holidays fame..and his underlings at that time.
We..the British voters were lied to at that time..BIG TIME.
Rule Brittania old boy[emoji6]

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[malagateddy]

trade wars very rarely return a winner,big don thinks he can win but he has little chance,same same brexit,all dreams by chancers thinking it might be better if we tried his that or the other.

The topic is the Bank of Thailand..not the Donald!!!

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[bomber]

1 hour ago, malagateddy said:

The eu could possibly have worked as a small group of nations who BRING SOMETHING to the table..but only as a free trade association.
Of course the eu jobsworth fanatics could never stop in their quest for their ultimate sim..a united states of europe.
Why not read about the EU DECEIT in todays daily express. ... ted heath of morning cloud and jersey holidays fame..and his underlings at that time.
We..the British voters were lied to at that time..BIG TIME.
Rule Brittania old boy

Sent from my SM-G7102 using Thailand Forum - Thaivisa mobile app
 

britannia hasnt ruled for a long time,once again you choose to live in the past,ted heath ???? iam too young to remember him and your too young to remember when britannia ruled the waves ????

[bomber]

2 hours ago, malagateddy said:

Perhaps they understand that another massive financial crash is not too far away..perhaps also they know that trade wars will have an effect on the thai economy.
It's not rocket science.

Sent from my SM-G7102 using Thailand Forum - Thaivisa mobile app
 

if the thai economy crashes will you be sending the wife back to work? they will be needing some good office workers to get the country back on its feet again.

Edited April 20, 2019 by bomber

[malagateddy]

if the thai economy crashes will you be sending the wife back to work? they will be needing some good office workers to get the country back on its feet again.

The Thai economy is quite robust..financially we are comfortable..a nice position to be in..unlike half of the eu subsidy junkie member states citizens.
Ask yourself this..how long do you think the hard pressed german taxpayers will tolerate being the brussels atm for all the subsidy junkie eu states??
Back to the footie I go
Thailand can cope with an economic downturn imo..but with france and germany teetering inti recession..oh dear..how sad..never mind



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[bomber]

6 minutes ago, malagateddy said:

The Thai economy is quite robust..financially we are comfortable..a nice position to be in..unlike half of the eu subsidy junkie member states citizens.
Ask yourself this..how long do you think the hard pressed german taxpayers will tolerate being the brussels atm for all the subsidy junkie eu states??
Back to the footie I go
Thailand can cope with an economic downturn imo..but with france and germany teetering inti recession..oh dear..how sad..never mind



Sent from my SM-G7102 using Thailand Forum - Thaivisa mobile app
 

french and germans will always be richer than brits,and they are more sensible with their money

[mommysboy]

The fact is most developed economies are in trouble, and Thailand is also not in a position to withstand a downturn, as there is a high level of personal debt.