webfact Posted July 5, 2019 Share Posted July 5, 2019 Economists call for boost to consumer spending, stimulus measures in 2nd half to lift economy By PHUWIT LIMVIPHUWAT THE NATION From left: Jittipol Puksamatanan, chief market strategist of Krungthai Bank; Phacharaphot Nuntramas, senior vice president of Kungthai Bank’s Global Business Development and Strategy Group, and Mana Nimitvanich, first vice president of the bank’s Global Business Development and Strategy Group. The incoming government should undertake measures to stimulate spending among low-income earners under the welfare card policy and inject an additional Bt100 billion into the economy in the second half, say economists from Kungthai Bank’s Global Business Development and Strategy Group. “The most effective measure to stimulate the economy in the second half is to promote policies that directly target consumer spending,” Mana Nimitvanich, first vice president of the group, said on Thursday. He expects the next government to inject Bt50 billion to Bt100 billion into the economy by the year-end through policies to promote consumption such as offering welfare cards to low-income earners in the country. Boosting consumer spending is necessary to cushion the negative impact from the slowdown of exports since the beginning of this year, he said. “We have cut our GDP growth forecast for 2019 from 3.6 per cent to 3.3 per cent, due mainly to the ongoing US-China trade tensions, which have continued to damage Thai exports,” said Phacharaphot Nuntramas, senior vice president of the bank’s macro research unit. The group expects Thai exports to grow by a mere 0.8 per cent in 2019, down sharply from 7.7 per cent last year, largely due to the trade conflicts. The slashing of the export growth forecast is also due to the signing of the EU-Vietnam free trade agreement (EVFTA), which will make exports from Vietnam to the EU more competitive than Thai products. “Thai shipments to the EU account for up to 10 per cent of the country’s total exports,” Mana stated. However, he said, Thailand’s exports to the region have already been overtaken by Vietnam in recent years. With the EVFTA becoming active later this year, Vietnamese goods will be even more competitive than Thai products. Mana predicted that the EVFTA will cut into more than 1 per cent of total Thai exports in 2019. Both Thailand and Vietnam primarily export machinery and parts, electrical appliances and garments to the EU. With lower tariffs and cheaper prices under the free trade pact, Vietnamese exports may cut into Thailand’s existing market in the region, he explained. To cope with this issue, exporters should consider relocating their manufacturing base to Vietnam to capitalise on that country’s advantages in exports and leverage their lower cost of labour, Mana suggested. Meanwhile, public spending, which was touted as Thailand’s new engine for growth in 2019, has not been as high as expected. The Transport Ministry plans to invest Bt200 billion in infrastructure projects this year, Mana said. However, the bank’s assessment of various public infrastructure projects throughout the country estimates only Bt77 billion will actually be invested this year. “Of the Bt77 billion to be invested in transportation infrastructure this year, Bt50 billion will be spent on projects around the central region,” he stated. This means the impact of public investment in these projects will not be felt equally throughout the country. Furthermore, Bt77 billion would amount to only 0.1 of the country’s GDP, while exports, which have been in decline since the beginning of the year, account for 75 per cent. “Therefore, our assessment suggests that public investment will not be sufficient to offset Thailand’s slow economic growth in the second half,” Mana concluded. On the other hand, Thailand’s financial markets have been reacting well to the global financial trends, the group stated. Central banks around the world have signalled cuts in interest rates. The group said the Bank of Thailand is expected to maintain the policy rate at 1.75 per cent throughout 2019 and 2020, as inflation stays low. It does not anticipate the policy rate to be raised, as that may lead to a further strengthening of the baht, making Thai exports even less competitive. The central bank's current stance, compared to last year's trend of rate increases, has improved investor confidence and prospects are positive for the rest of 2019, given that Thailand’s political situation remains stable, said Jittipol Puksamatanan, chief market strategist of Krungthai Bank. Jittipol added that the baht will remain strong throughout the year, thanks to the Kingdom’s high current account surplus. Jittipol predicted that the currency would rise to Bt30.25/dollar by the year-end. Source: http://www.nationthailand.com/business/30372328 -- © Copyright The Nation Thailand 2019-07-05 Follow Thaivisa on LINE for breaking Thailand news and visa info Link to comment Share on other sites More sharing options...
Popular Post BestB Posted July 5, 2019 Popular Post Share Posted July 5, 2019 Exporters should relocate to Vietnam is his advice? So if all exporters relocate to Vietnam what exactly is Thailand going to do and survive ? 6 1 3 Link to comment Share on other sites More sharing options...
Popular Post GeorgeCross Posted July 5, 2019 Popular Post Share Posted July 5, 2019 odd that once again trade wars are blamed, but other countries in the region are not having issues and in fact are growing and overtaking thailand. doesn't take a genius to work out the problem then must be something specific to thailand.. baht strength maybe? but what do i know? i'm not an 'economist' 5 5 Link to comment Share on other sites More sharing options...
Matzzon Posted July 5, 2019 Share Posted July 5, 2019 9 minutes ago, webfact said: The incoming government should undertake measures to stimulate spending among low-income earners under the welfare card policy and inject an additional Bt100 billion into the economy in the second half, say economists from Kungthai Bank’s Global Business Development and Strategy Group. That´s great! Why don´t include all from low-income earners up to middle-income earners? Give´em all some of your stimulus. Do not try to inform and correct the problem. Let´s all borrow more money and higher our spending of money we actually don´t own. When payback comes knocking on the door, then just try to borrow some more cash to your borrowed cash-stack! They clearly can´t handle it and they know for sure that they started a ship sailing into the strongest possible of winds, but they still refuse to turn around. 2 Link to comment Share on other sites More sharing options...
Popular Post ExpatPH Posted July 5, 2019 Popular Post Share Posted July 5, 2019 This news coming only few weeks after news that household debt was at all time record high. Other news today, Thailand asked China to invest more. Need a boost? Easen visa regulations of all types, get rid of 90 days report and 400/800k. Not to mention, stop denials at airports. I know, logic fail. 'Baht will remain strong rest of the year', will do wonders for higher tourist arrivals? Out of words 4 Link to comment Share on other sites More sharing options...
Greenside Posted July 5, 2019 Share Posted July 5, 2019 (edited) Isn't Thailand struggling with a huge and growing domestic debt crisis? (ExpatPH beat me to that by about 2 seconds!) Edited July 5, 2019 by Greenside 1 Link to comment Share on other sites More sharing options...
Popular Post HiSoLowSoNoSo Posted July 5, 2019 Popular Post Share Posted July 5, 2019 Best boost would be to kick out the Military from ruling the place. 6 1 Link to comment Share on other sites More sharing options...
Popular Post Eric Loh Posted July 5, 2019 Popular Post Share Posted July 5, 2019 1 hour ago, webfact said: He expects the next government to inject Bt50 billion to Bt100 billion into the economy by the year-end The next government is the same as the last junta government that mismanaged the economy to the current sorry state and headed by the same non inspiring leader. Not expecting much from this same incompetent lot. 3 Link to comment Share on other sites More sharing options...
bkk6060 Posted July 5, 2019 Share Posted July 5, 2019 1 hour ago, BestB said: So if all exporters relocate to Vietnam what exactly is Thailand going to do and survive ? ?? It is simple economics and was certainly explained in the article. 1 Link to comment Share on other sites More sharing options...
Popular Post lipflipper Posted July 5, 2019 Popular Post Share Posted July 5, 2019 To boost the sagging Thai economy would take a crane of epic size. Consumer confidence is falling like a rock, household debt is on the rise, rice sales are falling and of course the exports overall are in freefall. The Thai economy is nothing more than a house of cards kept alive by the face saving actions of the Bank of Thailand. The chickens are about to come home to roost.Sent from my CMR-AL19 using Thailand Forum - Thaivisa mobile app 5 Link to comment Share on other sites More sharing options...
Mavideol Posted July 5, 2019 Share Posted July 5, 2019 2 hours ago, BestB said: Exporters should relocate to Vietnam is his advice? So if all exporters relocate to Vietnam what exactly is Thailand going to do and survive ? follow TAT estimates and bring in NO cheap tourists from India, Bangladesh, Sri Lanka, Africa, China and maybe appreciate the baht a little more and all will be fixed 555 2 Link to comment Share on other sites More sharing options...
Mavideol Posted July 5, 2019 Share Posted July 5, 2019 2 hours ago, webfact said: “The most effective measure to stimulate the economy in the second half is to promote policies that directly target consumer spending,” how can they target consumer spending increase if people (consumers) have no money to spend, baht it's to low, if the depreciate it we (expats) will have more spending power and can help the stimulation 1 Link to comment Share on other sites More sharing options...
Popular Post Matzzon Posted July 5, 2019 Popular Post Share Posted July 5, 2019 1 hour ago, ExpatPH said: Need a boost? Nah, after reading this. I need booze! 4 Link to comment Share on other sites More sharing options...
Popular Post Cadbury Posted July 5, 2019 Popular Post Share Posted July 5, 2019 2 hours ago, webfact said: The slashing of the export growth forecast is also due to the signing of the EU-Vietnam free trade agreement (EVFTA), which will make exports from Vietnam to the EU more competitive than Thai products. Apart from the potential losses coming from the Vietnam/EU Free Trade Agreement it has been reported that Vietnam has just risen to No. 8 on the chart of the biggest exporters to the US. Meanwhile Thailand's GDP growth slows to a 4 year low while Vietnam's growth is running at a rate twice that of Thailand. But rather than blame the incompetence of a military government or political instability or the high baht it is always the trade war between China and the US that is trotted out as the excuse. By the way, what happened to the 100 billion baht Thai Niyom vote buying money? Surely that should have stimulated something apart from greedy official's bank accounts and new car sales. Thailand is on an economic downhill slippery slope. 7 1 Link to comment Share on other sites More sharing options...
BestB Posted July 5, 2019 Share Posted July 5, 2019 47 minutes ago, bkk6060 said: ?? It is simple economics and was certainly explained in the article. Why do not you explain it to me 2 Link to comment Share on other sites More sharing options...
marko kok prong Posted July 5, 2019 Share Posted July 5, 2019 As an expat i am okay,but i feel sorry for ordinary Thai's,things have become more expensive, hear the bottom has fallen out of sugar,rice and rubber,as the Baht's strength has decimated export's of such commodities,one positive is i have noted much less sugar cane being planted,was absolute murder this year,i would clean my pool,go out,when i got back it would be full of the black snow again,i now employ a pool man twice a week for cleaning,pools are nice but damned hard work. 1 Link to comment Share on other sites More sharing options...
Popular Post zydeco Posted July 5, 2019 Popular Post Share Posted July 5, 2019 Sure would like to help the Thai economy through some consumer purchases. But Thai Immigration has tied up 400,000 baht of my money permanently for the retirement extension and additional 400,000 for five months of the year. All money that could be boosting the economy. Now, just sitting in a Thai bank. Great planning, guys. 4 1 Link to comment Share on other sites More sharing options...
30la Posted July 5, 2019 Share Posted July 5, 2019 Strange, the banks never say to evaluate the Baht in the right way but only to spend more money so that inflation grows, so those who pay are always the same! 2 Link to comment Share on other sites More sharing options...
Popular Post FarFlungFalang Posted July 5, 2019 Popular Post Share Posted July 5, 2019 Nothing will fix a high Baht like a high Baht! It will crash,can't say when but I reckon it will be a bumpy landing when it does. 4 Link to comment Share on other sites More sharing options...
KiChakayan Posted July 5, 2019 Share Posted July 5, 2019 In other words: the industrious Vietnamese are beginning to worry the complacent and lazy Thai b....ds. 2 Link to comment Share on other sites More sharing options...
Isaan sailor Posted July 5, 2019 Share Posted July 5, 2019 How about BoT giving money to shore up expats, export industry and tourism—since they seem to prefer a high Baht? 1 Link to comment Share on other sites More sharing options...
Isaan sailor Posted July 5, 2019 Share Posted July 5, 2019 Thailand needs to de-couple from China, so they can compete for all American businesses now leaving China—for Vietnam and Taiwan. Unfortunately they have a very high Baht, which could explain my original premise. 2 Link to comment Share on other sites More sharing options...
expatfromwyoming Posted July 5, 2019 Share Posted July 5, 2019 I for one will not obey!! Link to comment Share on other sites More sharing options...
aqua4 Posted July 5, 2019 Share Posted July 5, 2019 11 hours ago, webfact said: The incoming government should undertake measures to stimulate spending among low-income earners under the welfare card policy and inject an additional Bt100 billion into the economy in the second half, say economists from Kungthai Bank’s Global Business Development and Strategy Group. People are broke! Quote With a debt mountain of 12.17 trillion baht ($372 billion) at the end of March, the equivalent of 77.6 percent of gross domestic product, Thai households are among the biggest borrowers in Asia and they are finding it increasingly difficult to keep up with payments. Quote Non-performing mortgages, defined as those that have not been serviced in more than three months, were 3.39 percent of total home loans at the end of the second quarter, the highest level since the end of the global financial crisis in 2009. https://www.reuters.com/article/us-thailand-economy-debt/as-debt-levels-rise-more-thais-struggle-to-keep-up-idUSKCN1LF0CQ 1 1 Link to comment Share on other sites More sharing options...
Popular Post neeray Posted July 5, 2019 Popular Post Share Posted July 5, 2019 12 hours ago, webfact said: Meanwhile, public spending, which was touted as Thailand’s new engine for growth in 2019, has not been as high as expected. Already stated by another poster. But ............. the public can't spend if there's nothing in their pockets to spend. Answer: Less graft, less unnecessary "big" expenditures (army toys), lower baht, increase tourism and expat community through less hassling, stop depending on Chinese, hold a new "free and fair" election which will help restore confidence in Thailand by returning "happiness to the people". The "game" game is up, Thailand is (going) down. 3 Link to comment Share on other sites More sharing options...
Popular Post Redline Posted July 5, 2019 Popular Post Share Posted July 5, 2019 Thailand is cutting off its own head, and asking others to help stop the bleeding (China). So, they want the government to give needy people money to give back to the rich, thus the status quo. The boat is sinking, and the captain is listening to himself talk 2 1 Link to comment Share on other sites More sharing options...
Mavideol Posted July 6, 2019 Share Posted July 6, 2019 Travel agencies, hotels and anybody in Thailand depending on the tourism industry are worried and complaining but it's like talking to a wall, junta has its agenda and nothing/nobody will change that Link to comment Share on other sites More sharing options...
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