Thailand not in recession, just growing below potential: central bank governor

 

Thailand's Central Bank Governor Veerathai Santiprabhob speaks during an interview with Reuters at the Bank of Thailand in Bangkok, Thailand, October 4, 2019. REUTERS/Matthew Tostevin/File Photo

 

BANGKOK (Reuters) - Thailand's economy is not experiencing recession but is growing slowly and below potential, central bank chief Veerathai Santiprabhob told reporters and analysts on Thursday, adding that the country also faced structural issues.

 

Last month, the central bank cut its 2019 economic growth forecast to 2.8% from 3.3%, as exports weakened amid rising global trade tension. Last year's growth was 4.1%.

 

-- © Copyright Reuters 2019-10-10

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Not recession because as I understand it you need 2 consecutive periods of negative growth

That being said, slower growth rates are certainly one of the first signs of a recession.

 

Edited October 10, 20196 yr by Chelseafan

Tell that to the PM....if he will listen

Yep, I will believe this man. By the look of the photo, he´s not looking worried at all.

he has to save face somehow, lying is the easiest way of course as most of the people running govt departments etc have shown. Cant admit they have got it wrong can they.....

I'd have spun it as the good old classic "Massive negative growth".

7 minutes ago, seajae said:

he has to save face somehow, lying is the easiest way of course as most of the people running govt departments etc have shown. Cant admit they have got it wrong can they.....

it blows me away that lying is considered saving face. ????

 

ahhhh what......

not in recession, just growing below potential: What an interesting viewpoint, rather like my bank balance. 

And Peter Dinklage is not a dwarf. He is just growing below his potential. 

Like all countries in the world, even Thailand has learned very well to hide the truth, we are in full recession and those who realize it are only the minor classes!

21 minutes ago, 30la said:

Like all countries in the world, even Thailand has learned very well to hide the truth, we are in full recession and those who realize it are only the minor classes!

So what is your definition of "full recession"?

Is that the economic equivalent of me claiming that I am too short for my weight?

There was an interesting article in Bloomberg a few days ago about how thailand has almost no options to weaken the Baht, weakening interest rates will have little effect, opening the flood gates and investing heavily in infrastructure would be one way but it takes time. There are so few safe havens where one can still make a profit in the world that Thailand with its huge foreign reserves and relative stability makes it an obvious choice to invest or park money. The article said that the Bahts strength still has a long way to run. 

6 minutes ago, soalbundy said:

There was an interesting article in Bloomberg a few days ago about how thailand has almost no options to weaken the Baht, weakening interest rates will have little effect, opening the flood gates and investing heavily in infrastructure would be one way but it takes time. There are so few safe havens where one can still make a profit in the world that Thailand with its huge foreign reserves and relative stability makes it an obvious choice to invest or park money. The article said that the Bahts strength still has a long way to run. 

Sharp post.  

A surefire way to know if Thailand is in recession or not ...

What I have been doing for many years: pick up plastic bottles and cans of beer and juice that thai people throw from their cars, trucks and motorcycles ..
I notice that for a few months there have been a lot less;
One might think that the ecological fiber has finally illuminated them;
not at all ;
Just see how they leave the fairgrounds after the weekly market.
In fact they have less money to spend; these drinks are relatively expensive; on the other hand we find many more bottles of drinking water, bottles much cheaper than cans.

8 minutes ago, soalbundy said:

weakening interest rates will have little effect

unless the interest are negative as it is in Europe;
the more money you deposit, the less you earn ...

Smart man. Tourism is not in slump just not doing as well as it could .

 

business are not loosing money, just not making as much as they use to .

 

exports are not down. Just selling not as much 

6 minutes ago, Assurancetourix said:

unless the interest are negative as it is in Europe;
the more money you deposit, the less you earn ...

but even that hasn't collapsed the European market. Thailand can hardly go from +1.5% to -0.5% without the Americans screeching "currency manipulator" not withstanding the high consumer debt which would only get worse.

24 minutes ago, soalbundy said:

There was an interesting article in Bloomberg a few days ago about how thailand has almost no options to weaken the Baht, weakening interest rates will have little effect, opening the flood gates and investing heavily in infrastructure would be one way but it takes time. There are so few safe havens where one can still make a profit in the world that Thailand with its huge foreign reserves and relative stability makes it an obvious choice to invest or park money. The article said that the Bahts strength still has a long way to run. 

Not this time, I believe....The run has been shaping up to a finish for months now....

 

15 hours ago, snoop1130 said:

not in recession, just growing below potential

I use that excuse after a few beers

Thank you for the chuckle.  Just like a couple of years ago when the Bangkok governor said there were no floods just water that needed to be moved.

George Orwell would have been delighted by the phrase.

Is this the same gentleman who publicly confessed that the Bank of Thailand cannot do anything against the strengthening of the Baht? 

As a non-banker I would do away with transfer restrictions (ever tried to send USD 500 overseas for the payment of a health insurance or a pension plan?). Even if I had the money I could not legally invest money outside Thailand without a tremendous run-for-my-life through the Thai bureaucracy combined with the commercial banks inefficiency, copy machines and all sorts of transaction-irrelevant documentation. 

Utter poppycock! The entire world is in an economic crises and "Thailand" is NOT a "stand alone!"

Sure not a recession in technical terms but judging from the consecutive decline in consumer spending and lowering export, it sure feel like recession. 

Vertically challenged......

2 hours ago, George Aylesham said:

George Orwell would have been delighted by the phrase.

He was a smart man and would likely have understood it.  The economy is still growing, and at over a 2% rate in real terms.  That is growth.  It may be slower growth than before, but it is not a recession.  A recession is technically defined as two consecutive quarters of decline.  You dig, trig?

6 hours ago, soalbundy said:

There was an interesting article in Bloomberg a few days ago about how thailand has almost no options to weaken the Baht, weakening interest rates will have little effect, opening the flood gates and investing heavily in infrastructure would be one way but it takes time. There are so few safe havens where one can still make a profit in the world that Thailand with its huge foreign reserves and relative stability makes it an obvious choice to invest or park money. The article said that the Bahts strength still has a long way to run. 

These types of buildups always end in a huge move. Usual timeframe seems to be about 5-10 years. Good investment timeframe, after that, they'll execute an exodus to the next place.

Phrasing it as he has is deflection. A developing Asian economy should not be contemplating recession but the forecast drop in growth from over 4% is very significant. Look at it in context of Thailand’s neighbours/competitors and it is worrying.

 

An emerging economy needs stronger growth than what Thailand is showing at the moment. The current low growth (sub 3%) rate is effectively stagnation for this type economy. Thailand is going to be stuck in a Middle Income Trap with no way out, if the current situation does not radically change.