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Kbank analyst paints grim picture as Thailand teeters on recession


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"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"

 

Are they cooking the books?

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9 minutes ago, KhaoYai said:

How does that work then?

Mistranslation? I suspect what was actually said was something like: As long as the baht remains strong, the economy will be on the verge of a recession.

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32 minutes ago, denby45 said:

Simply apply the Thai equation:

few customers = put up prices

Few tourists = Strengthen the Baht

Lower GDP = Increase prices.

 

Den

 

You could have put "Strengthen the Baht" after each ... since that has the same affect.  This is the problem when policy is made "inside the bubble" ... here, let make this simple for Thai policy makers ... what if the value of your savings, and the value of future income ... decreased by 20% +?  What effect might that have on consumption patterns?  What if the price of the imports you wanted, increased by 20%?  Would you buy less?  It is YOUR currency!  Do what China, the USA, and others do ! Make it work in YOUR FAVOR!

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12 minutes ago, rickudon said:

Has hit our village. Wife's shop is now routinely taking under 3,000 baht a day - that hasn't happened more than a couple of days in the last 2 years.

Interesting.  May I ask what the shop's main source of income is, and what percentage of customers are Foreigners VS Thai?

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20 hours ago, bangkokequity said:

Interesting.  May I ask what the shop's main source of income is, and what percentage of customers are Foreigners VS Thai?

It is a typical small grocery shop, with significant alcohol sales. Customers are 99% Thai. Alcohol sales have dropped in the last month, plus snacks (crisps, sweets etc.) are being bought less frequently.

 

Although in the immediate area we had plenty of rain and most crops were harvestable, actual yields were low i think. 20 miles away, some rice crops failed completely. Poor harvests, rising prices and stagnant wages mean many families are cutting discretionary spending.

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Recession Triggers – The Big Four Indicators.

 

Consumer Credit - Up

Retail Sales Y on Y – Down

Consumer Confidence – Down

GDP Annual Growth Rate - Down

 

 

 

If you look at the enclosed Economic Indicator charts (Actual / Forecast) you could think as some OPs have stated that Thailand has been on the recession trend for some time; it's all a matter of how you interpret the numbers.

 

Knowing how Thailand always wants to present itself in the best light possible; no doubt the 40+ million tourists forecast for 2020 and onwards will be their shining light on the hill to offset all these disturbing metrics of a trending recession.  

 

I am no ecominist but the numbers don't look encouraging for Thailand. 

 

The next big recession metrics that will follow will be the number mortgage defaulters and the collapse of the housing market prices (long overdue) followed by a increase in the middle class unemployment rate. 

 

I doubt this current Government has the will or foresight on how to turn this recessionary trend around. 

Economic Indicators.pdf

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On 11/28/2019 at 7:20 PM, KhaoYai said:

How does that work then?

Recession means two consecutive quarters of negative growth, it doesn't mean that the trade surplus is erased completely nor that there are no tourists or capital inflows....the first of those three things would need to be realised for the Baht to fall naturally plus the remaining two would need to be severely impacted.

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On 12/2/2019 at 1:12 PM, berrec said:

Recession Triggers – The Big Four Indicators.

 

Consumer Credit - Up

Retail Sales Y on Y – Down

Consumer Confidence – Down

GDP Annual Growth Rate - Down

 

 

 

If you look at the enclosed Economic Indicator charts (Actual / Forecast) you could think as some OPs have stated that Thailand has been on the recession trend for some time; it's all a matter of how you interpret the numbers.

 

Knowing how Thailand always wants to present itself in the best light possible; no doubt the 40+ million tourists forecast for 2020 and onwards will be their shining light on the hill to offset all these disturbing metrics of a trending recession.  

 

I am no ecominist but the numbers don't look encouraging for Thailand. 

 

The next big recession metrics that will follow will be the number mortgage defaulters and the collapse of the housing market prices (long overdue) followed by a increase in the middle class unemployment rate. 

 

I doubt this current Government has the will or foresight on how to turn this recessionary trend around. 

Economic Indicators.pdf 242.95 kB · 5 downloads

I agree there is a recessionary trend but that trend is not unique when compared to other economies, I wonder therefore whether any action by Thailand alone can have a significant effect or whether this needs coordinated action to avert a global trend. It's easy to blame government for the problem but in reality Thai exports are only now coming off their highest ever levels, USD 19 bill. per month was last seen in 2016!

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Below is the IMF's Global GDP Growth map, it makes interesting reading:

 

https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

 

Thailand stands out when compared to GDP growth elsewhere in the region, the strength of THB being the key issue. 

 

But what's also important to understand is the lack of GDP growth in Western countries that are supplied by Thailand's exports which are their biggest exporter destinations.

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Funny thing about developing economies. One nation can easily steal another nation's growth. Further the money that is not earned fails to be able to be used for future capital to grow economy. It's lost wealth of a nation that for many reasons cannot be regained - lost forever.

 

Let's face it a few quarters of .01 growth is recession. Period.

 

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On 11/28/2019 at 10:26 AM, recom273 said:

I’m thinking, if you are not intending on returning, then it’s better to sit it out. Is it not? I’m sure it’s not a good time to buy GBP.
 

People with money and a ruthless business approach tend to prosper during a recession. My wife and I Intend to build a house in the future, surely the land with a half a million baht price tag, will become available at 300,000 as purse strings tighten. As building slows down, contractors will be Incentivized to give lower quotes to get work.  
 

Any thoughts?

Not in Thailand. Prices will go up. Need more money from the land sale to pay debts. No work so need to charge more.

 

Thailand not same your country...

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Uh the trade war is already calming down and us stocks performing great whole past month. And there’s already an agreement as for breexit. High chances baht won’t go under 30 as predicted. The only concern now Is usa elections. 

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3 hours ago, Drax said:

Uh the trade war is already calming down and us stocks performing great whole past month. And there’s already an agreement as for breexit. High chances baht won’t go under 30 as predicted. The only concern now Is usa elections. 

Brexit hasn't even begun and there's certainly no deal in sight, expect the Pound to sink to new depths before that happens.

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