Kbank analyst paints grim picture as Thailand teeters on recession

[webfact]

Kbank analyst paints grim picture as Thailand teeters on recession

By The Nation

 

“We haven’t yet experienced recession, but we’re on the verge of it if we look at quarter-on-quarter growth of 0.1 per cent in the third quarter, the positive result coming from the downward revision for growth in the second,” said Kobsidthi.

 

The Thai economy is on the verge of a recession while the baht will remain strong, a financial analyst has warned.

 

Kobsidthi Silpachai, head of capital markets research at Kasikornbank, said it will be interesting to see whether Thailand’s economic growth slows in the fourth quarter compared to the third.

 

The economy expanded 2.4 per cent year-on-year, he noted, but quarter-on-quarter growth in the third quarter was just 0.1 per cent. 

 

Had the National Economic and Social Development Council not revised downward growth in the second quarter by 0.2 percentage point, quarter-on-quarter growth would have been negative, Kobsidthi said at a seminar hosted by Kasikornbank on Wednesday (November 27).

 

He said that the chance of the Thai economy entering a recession next year was now 20 per cent, up from the 15 per cent forecast earlier.

 

“We haven’t yet experienced recession, but we’re on the verge of it if we look at quarter-on-quarter growth of 0.1 per cent in the third quarter, the positive result coming from the downward revision for growth in the second,” said Kobsidthi.

 

“It is challenging for the Thai economy in the fourth quarter as we see signs of further economic weakening,” he pointed out.

 

The baht’s appreciation is meanwhile expected to continue, to around Bt30.5 per dollar by the end of this year, Bt29.75 in mid-2020 and Bt29.25 by the end of next year.

 

A relatively high current-account surplus, estimated to be $30 billion next year, would underpin the strong value of the baht, he said.

 

Continuation of the trade war between the United States and China will also help ensure the baht remains a safe haven for foreign investors.

 

The Kasikorn Research Centre has forecast economic growth next year of 2.7 per cent, down from 2.8 per cent in its previous projection.

 

The US-China trade war will hurt Thai exports, which are expected to contract by 2 per cent next year, compared with estimated 1 per cent fall this year.

 

Manufacturing and employment are unlikely to expand much next year, and Thailand is also facing a labour shortage as the average age of the population rises.

 

Government spending and stimulus packages can shore up the economy in the short run but cannot bring about a higher growth rate, Kobsidthi warned.

 

The number of foreign tourist arrivals will increase little because of the global economic slowdown. With China’s economy sluggish too, Beijing is expected to promote domestic tourism next year, resulting in a drop in Chinese visitors to Thailand, he noted.

 

Even with the Kingdom on the fiscal ropes, the Bank of Thailand is unlikely to lower its benchmark interest rate due to limited monetary space, Kobsidthi said. “The current 1.25 per cent rate is a historic low, and a further cut would not curb the baht’s rise.”

 

The central bank, however, will face considerable pressure next year to do something to boost the economy, he said.

 

Due to high volatility in the financial markets, many investors have sold off their Thai bonds. They are also required by the central bank to hold at least a limited amount of baht currency. 

 

Short-term bond holdings among foreigners has dropped to Bt50 billion from Bt107 billion – the level before the central bank imposed restrictive measures on the amount of baht that could be held, he said.

 

The outstanding maturity for short-term bonds held by foreigners is the lowest in 16 years, he noted.

 

Foreign holdings of long-term bonds have also decreased to Bt858 billion from Bt879 billion, he said.

 

Source: https://www.nationthailand.com/business/30378831

 

-- © Copyright The Nation Thailand 2019-11-28

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[Sticky Wicket]

Keep the good news coming!

[nev]

Even blind Freddie can see where all this is heading but will they react before it's  to late. 

[PAV123]

3 minutes ago, nev said:

Even blind Freddie can see where all this is heading but will they react before it's  to late. 

Freddie? He saw me last week... Fake news...

[nausea]

Whatever, the key sentence here is:

23 minutes ago, webfact said:

The baht’s appreciation is meanwhile expected to continue,

Suck it up Thai people, and ex-pats. Now who's benefiting from all this - the rich are getting richer and the poor are getting poorer, purely coincidental I'm sure, not like there'd be manipulation or anything.

[PatOngo]

re·ces·sion

/rəˈseSH(ə)n/

noun

 

 

 

1. 1.

   a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

    

   I guess they have a different definition here!

    

    

Edited November 27, 2019 by PatOngo

[lkv]

2 hours ago, webfact said:

Thailand teeters on recession

Congratulations. Long overdue.

[PatOngo]

By alien definition, they've been in recession since April! 

[Cadbury]

2 hours ago, webfact said:

Kbank analyst paints grim picture as Thailand teeters on recession..........Government spending and stimulus packages can shore up the economy in the short run but cannot bring about a higher growth rate, Kobsidthi warned.

Even though Kobsidthi is the bearer of bad news it is refreshing to hear from someone who discusses the situation realistically in a down-to-earth and clear-sighted way. 

As opposed to and in contradiction of the usual ministerial dribble about economic salvation from the unimaginative and repetitive "eat, spend and shop", easy loans and wasteful helicopter money programmes.

 

 

[mok199]

The thai think tank can surely come up with a new 'STIMULOUS'' to transform this worn out old country into a new vibrant sexy tourist magnet....prrrrrrrr

[Fex Bluse]

40 minutes ago, PatOngo said:

re·ces·sion

/rəˈseSH(ə)n/

noun

 

 

 

1. 1.

   a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

    

   I guess they have a different definition here!

    

    

As with everything, 

 

"Thailand not same same you country!"

 

Thailand is special, in every way, all the time.

[PatOngo]

3 minutes ago, Fex Bluse said:

As with everything, 

 

"Thailand not same same you country!"

 

Thailand is special, in every way, all the time.

Yes, not in recession, in denial!

[Liverpudlian]

Jeeeeezz ! morning coffee here and a pig just swooped by over my head !!

[30la]

Do not want or, pretend not to see that Thailand has been in recession for years now, which is becoming more and more critical.
All your analyzes are worthless because they are based on totally wrong numbers!
Go around your country, talk to people who are directly affected by the recession, easy to stay in an air-conditioned office, take government-dictated numbers and make a positive picture of the situation.

[Colabamumbai]

How can they predict a strong Baht into the new year?  Manipulating the currency markets.

[Colabamumbai]

29 minutes ago, mok199 said:

The thai think tank can surely come up with a new 'STIMULOUS'' to transform this worn out old country into a new vibrant sexy tourist magnet....prrrrrrrr

Marijuana sales are the answer.

[realfunster]

1 hour ago, PatOngo said:

re·ces·sion

/rəˈseSH(ə)n/

noun

 

 

 

1. 1.

   a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

    

   I guess they have a different definition here!

    

    

In the UK, recession has always been considered as 2 consecutive quarters of negative growth (I.e below zero - overall gdp decreasing rather than growing at a slow rate).
The definition you provided is consistent with this, so no, Thailand is not (yet) experiencing a fall in overall gdp and meeting these criteria of recession but the growth rate is slowing considerably. 
Clearly, with Q3’19 only being quarterly growth of 0.1%, they are teetering on the brink..

 

Edited November 28, 2019 by realfunster
Spelling

[hansnl]

2 hours ago, nausea said:

Whatever, the key sentence here is:

Suck it up Thai people, and ex-pats. Now who's benefiting from all this - the rich are getting richer and the poor are getting poorer, purely coincidental I'm sure, not like there'd be manipulation or anything.

The rich getting richer and the poor getting poorer is a worldwide thing.

[worgeordie]

Teflon Thailand going into recession !, not when the PM

gets TAT"s best statistician,to juggle the numbers,it will

become one of the best performing countries in the World.

regards Worgeordie

[nickstav]

The chance of Thailand entering a recession is 20%, I know very little about economics, but I wouldn't call 20% chance teetering.

[mikebell]

4 hours ago, webfact said:

They are also required by the central bank to hold at least a limited amount of baht currency. 

Retirees cannot spend any of their 800,000 for FIVE months of the year so no wonder local industries/services are suffering.  I've had to cut down on my spending drastically.

[soalbundy]

3 hours ago, nausea said:

Whatever, the key sentence here is:

Suck it up Thai people, and ex-pats. Now who's benefiting from all this - the rich are getting richer and the poor are getting poorer, purely coincidental I'm sure, not like there'd be manipulation or anything.

So not much difference to the West then, People worldwide will only wake up when existence becomes unattainable but the powers that be are clever enough to keep us down but not out after all said and done the wealthy are wealthy because the plebs keep them so.

[howbri]

Recessions and depressions are aLWAYS caused by government

[Chongalulu]

13 minutes ago, nickstav said:

The chance of Thailand entering a recession is 20%, I know very little about economics, but I wouldn't call 20% chance teetering.

Not so much 'teetering' as 'tittering ' when listening to the prognoses of TAT and other deluded officials.

[Cadbury]

1 hour ago, Colabamumbai said:

How can they predict a strong Baht into the new year?  Manipulating the currency markets.

Probably the same way some others are predicting a stronger baht in the New Year.

Month	Open	Low-High	Close	Mo,%	Total,%
2019
Nov	30.16	29.77-30.67	30.22	0.2%	0.2%
Dec	30.22	29.77-30.67	30.22	0.0%	0.2%
2020
Jan	30.22	29.35-30.25	29.80	-1.4%	-1.2%
Feb	29.80	29.34-30.24	29.79	-0.0%	-1.2%
Mar	29.79	29.08-29.96	29.52	-0.9%	-2.1%
Apr	29.52	29.29-30.19	29.74	0.7%	-1.4%
May	29.74	28.50-29.74	28.93	-2.7%	-4.1%
Jun	28.93	28.16-29.02	28.59	-1.2%	-5.2%
Jul	28.59	28.32-29.18	28.75	0.6%	-4.7%
Aug	28.75	28.44-29.30	28.87	0.4%	-4.3%
Sep	28.87	28.75-29.63	29.19	1.1%	-3.2%
Oct	29.19	27.89-29.19	28.31	-3.0%	-6.1%
Nov	28.31	27.75-28.59	28.17	-0.5%	-6.6%
Dec	28.17	28.17-29.29	28.86	2.4%	-4.3%

https://longforecast.com/usd-to-bht-today-forecast

[Borzandy]

2 hours ago, PatOngo said:

re·ces·sion

/rəˈseSH(ə)n/

noun

 

 

 

1. 1.

   a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

    

   I guess they have a different definition here!

    

    

In this case recession means going back to prehistory

[RichardColeman]

4 hours ago, webfact said:

He said that the chance of the Thai economy entering a recession next year was now 20 per cent, up from the 15 per cent forecast earlier.

Only 20% - Well, he's about 80% out on that one. Unless of course he knows who is doing the massaging 

[3421abc]

1 hour ago, Colabamumbai said:

How can they predict a strong Baht into the new year?  Manipulating the currency markets.

You got it the way around. The thai central bank used to manipulate the baht for a long time by buying dollars overseas and bringing here. Now the US treasury is cracking down on the practice of currency manipulation so they cannot do it anymore and they are panicking.

 

[milesinnz]

“The current 1.25 per cent rate is a historic low, and a further cut would not curb the baht’s rise.” ... so what reason has the Thai central Bank for not lowering it ?.. they should just drop it to 0.5 % and see what happens.. how could this make things worse than what they are now ? There is plenty the government can do, they just choose not for for some bizarre reasons. Maybe the sacred cow has been lying ?

[d2b2]

Teetering? More like running jump.