Thai economic growth remains fragile as GDP expands just 2.4 per cent

[webfact]

Thai economic growth remains fragile as GDP expands just 2.4 per cent

By The Nation

 

Thai economic growth remains fragile.

 

The National Economic and Social Development Council today (November 18) reported that gross domestic product expanded by 2.4 per cent, in the third quarter of 2019 compared to a rise of 2.3 per cent in the second quarter, driven mainly by increases in private and government final consumption expenditure and investment.

 

Exports and imports of goods, however, continued to  contracted. 

 

The state think-tank said that on the production side, the agricultural sector increased by 1.5 per cent in contrast to a fall of 1.3 per cent in 2019Q2 while the non-agricultural sector increased by 2.3 per cent, slowing down from a rise of 2.6 per cent in 2019Q2.

 

The deceleration was the result of a 1.5 per cent fall in the manufacturing sector attributed to a drop of export-oriented industries and a slow-down in domestic demand. However, the services sector increased by 3.8 per cent, led by tourism, namely accommodation and food service activities; wholesale and retail trade; repair of motor vehicles and motorcycles; and transportation and storage, which grew by 6.6 per cent 5.6 per cent and 2.5 per cent, respectively.

 

On the expenditure side, government final consumption expenditure, and gross fixed capital formation increased by 1.8 per cent and 2.8 per cent, compared to a rise of 1.1 per cent and 1.9 per cent in 2019Q2, respectively.

 

Private final consumption expenditure grew by 4.2 per cent, following a rise of 4.6 per cent in 2019Q2. For the external sector, exports and imports of goods decreased by 0.3 per cent and 7.7 per cent, respectively. After seasonal adjustment, the Thai economy in 2019Q3 expanded by 0.1 per cent (QoQ SA).

 

Private final consumption expenditure grew by 4.2 per cent,in comparison to a rise of 4.6 per cent in 2019Q2, contributed largely to an expansion of durable, semi-durable and non-durable items with a rise of 1.8 per cent, 1.9 per cent and 3.4 per cent, compared to a rise of 5.7 per cent, 3.0 per cent and 4.6 per cent in 2019Q2, respectively. Service items rose 6.4 per cent, accelerating from a rise of 4.7 per cent in 2019Q2.

 

General government final consumption expenditure increased by 1.8 per cent, accelerated from a 1.1 per cent rise in 2019Q2. That acceleration was attributed to an expansion of compensation of employees and purchases of goods and services with a rise of 1.2 per cent and 6.7 per cent, respectively, whereas social transfer in kind dropped by 3.6 per cent .

 

Gross fixed capital formation grew by 2.8 per cent, accelerated from a rise of 1.9 per cent in 2019Q2. Expansion came from private investment with a rise of 2.4 per cent, compared to a rise of 2.1 per cent in 2019Q2, due mainly to a 3.1 per cent expansion of machinery items.

 

Public investment accelerated by 3.7 per cent, compared to a rise of 1.4 per cent in 2019Q2, driven by an increase in construction and an improvement in machinery items .

 

Changes in inventories at current market prices in this quarter decreased with avalue of Bt12.7 billion . Gold, rice, cassava, and crude oil all saw a decline in stocks.

 

Goods and services balance at current market prices recorded a surplus of Bt435.1 billion , sourced by surpluses in goods and services with the value of Bt244.5 billion and Bt190.6 billion, respectively, added the NESDC.

 

Source: https://www.nationthailand.com/business/30378454

 

-- © Copyright The Nation Thailand 2019-11-18

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[kotsak]

They should count their blessing if it managed to expand that much.

 

[Pilotman]

1 minute ago, kotsak said:

They should count their blessing if it managed to expand that much.

 

yes indeed, such a growth rate in the western world would be deemed a massive improvement. Of course, in Asia, it is a bit of a downer and maybe the shape of things to come? 

[keith101]

31 minutes ago, webfact said:

After seasonal adjustment, the Thai economy in 2019Q3 expanded by 0.1 per cent (QoQ SA).

This says it all the Thai economy is slowing down 

 

[AussieBob18]

Quote:  ".......driven mainly by increases in private and government final consumption expenditure and investment."

 

I bet that the vast majority was Government expenditure and investment - all paid for by debt/loans - with little real private expensitures.  They are trying to make it look like there is growth, but all they are measuring is their own expenditures.  They even admitted it when they said that the recent 1000 Baht rebate scheme was done to increase economic growth figures. 

 

There is only so much smoke and mirrors that will work, before a financial storm comes and blows it all away, leaving the truth about the Thai economy - it is shrinking (IMO). All this false economic growth fulled by more and more expenditures by Govt will eventually bite back.  IMO it is just a matter of time and the longer the 'correction' takes, the harder the bite will be.

 

When the Thai Baht crashed in 1997 it lead to a financial crisis in SEAsia.  This time round, the other regional economies are in a much stronger position, and I dont see Thailand taking anyone else down this time - mainly only themselves. 

 

[CNXexpat]

The problem is, that the Thai economic grows (much) less than the neighbor countries. Below minimum 3,5% is not enough for a 2nd world country.

[steven100]

Actually it's not that bad considering how other neighbors such as Australia who have achieved worse figures and given how there is a global downturn everywhere.

[humbug]

there is no way i will believe these figures, its straight out of the book of lies from the CCP, if its -2.4% they are lucky

[rkidlad]

17 minutes ago, steven100 said:

Actually it's not that bad considering how other neighbors such as Australia who have achieved worse figures and given how there is a global downturn everywhere.

Complete false equivalence. Australia isn't a developing country. 

[JimGant]

17 minutes ago, AussieBob18 said:

This time round, the other regional economies are in a much stronger position, and I dont see Thailand taking anyone else down this time

https://www.aseanbriefing.com/news/2019/02/07/thailands-investment-outlook-for-2019.html

 

"Thailand's economy is driven by strong domestic demand. ... It is ranked 27 out of 190 economies and second among its ASEAN neighbors, after Malaysia. Thailand is an upper-middle income country, with the lowest levels of extreme poverty as measured by the International Poverty Line (IPL).Feb 7, 2019"

 

Please do your homework; the fundamentals are sound (current account, debt-to-gdp ratio, etc). Yes, the world is experiencing recession; but Thailand is well holding its own in this environment. With their low debt ratio, could they not do more with economic stimulus? Indeed. And by all accounts, that's where they're heading.

 

No, Thailand has learned a lot since 1997. That scenario will not repeat.

 

[Brickbat]

17 minutes ago, JimGant said:

https://www.aseanbriefing.com/news/2019/02/07/thailands-investment-outlook-for-2019.html

 

"Thailand's economy is driven by strong domestic demand. ... It is ranked 27 out of 190 economies and second among its ASEAN neighbors, after Malaysia. Thailand is an upper-middle income country, with the lowest levels of extreme poverty as measured by the International Poverty Line (IPL).Feb 7, 2019"

 

Please do your homework; the fundamentals are sound (current account, debt-to-gdp ratio, etc). Yes, the world is experiencing recession; but Thailand is well holding its own in this environment. With their low debt ratio, could they not do more with economic stimulus? Indeed. And by all accounts, that's where they're heading.

 

No, Thailand has learned a lot since 1997. That scenario will not repeat.

 

 

18 minutes ago, JimGant said:

https://www.aseanbriefing.com/news/2019/02/07/thailands-investment-outlook-for-2019.html

 

"Thailand's economy is driven by strong domestic demand. ... It is ranked 27 out of 190 economies and second among its ASEAN neighbors, after Malaysia. Thailand is an upper-middle income country, with the lowest levels of extreme poverty as measured by the International Poverty Line (IPL).Feb 7, 2019"

 

Please do your homework; the fundamentals are sound (current account, debt-to-gdp ratio, etc). Yes, the world is experiencing recession; but Thailand is well holding its own in this environment. With their low debt ratio, could they not do more with economic stimulus? Indeed. And by all accounts, that's where they're heading.

 

No, Thailand has learned a lot since 1997. That scenario will not repeat.

 

From the horse’s mouth. Domestic demand is fuelled by cheap money. And poor lending standards. It will crumble. Unsustainable. The Governor warns....

https://www.thaiexaminer.com/thai-news-foreigners/2019/09/18/personal-debt-thailand-bank-governor-suffiency-economic-thinking-young-thai-people/

[Destiny1990]

 

 

[AussieBob18]

57 minutes ago, JimGant said:

https://www.aseanbriefing.com/news/2019/02/07/thailands-investment-outlook-for-2019.html

"Thailand's economy is driven by strong domestic demand. ... It is ranked 27 out of 190 economies and second among its ASEAN neighbors, after Malaysia. Thailand is an upper-middle income country, with the lowest levels of extreme poverty as measured by the International Poverty Line (IPL).Feb 7, 2019"

Please do your homework; the fundamentals are sound (current account, debt-to-gdp ratio, etc). Yes, the world is experiencing recession; but Thailand is well holding its own in this environment. With their low debt ratio, could they not do more with economic stimulus? Indeed. And by all accounts, that's where they're heading.

No, Thailand has learned a lot since 1997. That scenario will not repeat.

 

You will have to do a lot better than quote an organisation that has a very strong vested interest in the strong economic performance of Asean countries.  I can show you hundreds of quotes from financial organisations similarly vested, just days before every single financial crisis going back to the 1920s - none of them saw them coming.

 

Thailand's foreign debt is unsustainable:

And their economic figures are being fudged by an unaccountable Junta that is used to getting away with it.  But when the curtain is eventually pulled back................

   

[Halfaboy]

Are the figure on the right axis in millions of THB ?

 

To me it looks like a substantial increase of the foreign debt in a relatively short time and this increase cannot continue in this way for a long time.

[Isaan sailor]

You can't have it both ways, Thailand.  Either you partner up with the ChiComs, and continue to watch the economy contract -- or you stay independent and reject Chinese colonialization, and watch the economy flourish again. 

[Cake Monster]

" expansion of goods and services at 6.7 % rise "

Is that Thai speak for " We have bought a load of War Machines and this is the real cost "

[hotchilli]

4 hours ago, webfact said:

The state think-tank said

Bubble burst bubble burst bubble burst !

[Jonnapat]

Is there no economic news that will have an effect on the strength of the baht?

[30la]

Important is, that you believe what you say, Thailand has been in a terrible depression for more than 8 years now, telling lies does not improve the situation!

[30la]

49 minutes ago, hotchilli said:

Bubble burst bubble burst bubble burst !

BOOMMMMMM!

[JimGant]

2 hours ago, AussieBob18 said:

Thailand's foreign debt is unsustainable:

 

And their economic figures are being fudged by an unaccountable Junta that is used to getting away with it.  But when the curtain is eventually pulled back...............

You can't look at those numbers in isolation. As a percent of GDP, Thailand wins kudos -- and has maneuvering room to increase infrastructure investment.

 

Quote

The Managing Director and Global Head of Sovereign Ratings for Fitch Ratings, James McCormack, said today that Thai economic growth this year stood at 3%, which was a little lower than the 3.2% projection, due to the global economic volatility, but Thailand is still one of 12 only countries around the world with a positive outlook. Most countries’ ratings have been downgraded, while the agency sees that the Thai economy and its fiscal status remain strong. The country’s debt-to-GDP ratio stands at 40 to 42%. Although the government plans to take out more loans to implement new infrastructure projects, it is not likely to exceed the debt ceiling, which is set at 60%. Furthermore, such investments will help improve the country’s competitiveness.

https://thainews.prd.go.th/en/news/detail/TCATG191002194704586

These numbers are from Fitch, not the junta. So I guess your glass totally empty theory -- holds no water......

 

Why are so many on this forum so negative when it comes to the Thai economy --  is it because you're in total disbelief that a military takeover could have any positives? I guess that's it. For those folks, I wish you could have Yingluckless back....then you couldn't whine about the current state of affairs. Sigh.

[JimGant]

1 hour ago, Jonnapat said:

Is there no economic news that will have an effect on the strength of the baht?

Yeah, when bad news outweighs good news about the Thai economy. Apparently, world investment gurus don't monitor the postings here on Thai Visa. Imagine.