Economic downtrend continues in Oct despite private consumption, tourism growth

[rooster59]

Economic downtrend continues in Oct despite private consumption, tourism growth

By The Nation

 

Private consumption indicators expanded at a higher pace compared with the previous month after temporarily benefiting from the government’s economic stimulus measures.

 

The Thai economy stayed on the path of deceleration in October, the Bank of Thailand said in a report yesterday (November 29).

 

 

The value of merchandise exports continued to contract, mainly due to the economic slowdown of trading partners, consistent with deterioration in manufacturing production and private investment indicators.

 

Public spending contracted again, after an expansion in September from capital expenditures. However, private consumption indicators expanded at a higher pace compared with the previous month after temporarily benefiting from the government’s economic stimulus measures.

 

New measures out to boost economic growth

 

The tourism sector also continued to grow. On the stability front, headline inflation edged lower on the back of falling energy prices while core inflation held steady. The seasonally adjusted unemployment rate slightly decreased, in line with the rising number of employed persons in agricultural sector. The current account registered a smaller surplus from trade balance while the capital and financial accounts posted a deficit from the asset position.

 

Details of the economic conditions are as follows:

 

The value of merchandise exports, both including and excluding gold, dropped by 5.0 per cent compared with the same period last year. The contraction of exports in several categories was due to 1) the economic slowdown of trading partners; 2) the continued downturn in electronic cycle without clear sign of recovery; and 3) the contraction of global crude oil prices, coupled with the temporary maintenance shutdown of oil refineries, leading to the contraction of petroleum-related products exports, both in terms of prices and quantity. Nevertheless, the value of exports in some categories, including agro-manufacturing products, electrical appliances, and automotive and parts, continued to expand, partly as substitution for Chinese products in the US market. In addition, the exports of hard disk drive grew for the first time in 12 months, thanks to the relocation of production base to Thailand. As a consequence of the merchandise exports contraction, manufacturing production continued to decline.

 

 

Private investment indicators continued to deteriorate from the same period last year, in line with weak domestic and external demand. Investment in machinery and equipment continued to contract from imports of capital goods, domestic machinery sales, and the number of newly-registered motor vehicles. Meanwhile, investment in construction in permitted areas for almost all purposes declined, consistent with subdued activities. Nevertheless, the permitted construction area for manufacturing purposes continued to grow.

 

The value of merchandise imports contracted by 9.2 per cent from the same period last year in almost every category, consistent with softening economic activities.

 

The contraction was attributable to the decrease in imports of raw materials and intermediate goods, particularly in 1) crude oil, due to the maintenance shutdown of oil refineries; and 2) electronic parts, partly owing to the high base effect in the previous year as well as the contraction in the exports of electronic products. In addition, after last month expansion, imports of consumer goods contracted, especially in seafood, mainly due to the high base effect in the previous year.

 

However, imports of capital goods accelerated due to imports of aircraft, ships, floating structures, and locomotive, though mostly in form of operational leasing. Excluding the category, the imports of capital goods continued to contract. Public spending, excluding transfers, contracted due to 1) central government’s capital expenditures, as the FY2020 budget has yet to be enforced; and 2) state enterprises’ capital expenditures, particularly disbursement of the Mass Rapid Transit Authority of Thailand (MRTA). Meanwhile, current expenditures continued to grow owing to the compensation of civil servants and purchases of goods and services.

 

Private consumption indicators expanded at a higher pace compared with the previous month but continued on a downward trend. This month, the private consumption indicators temporarily benefited from the government’s economic stimulus measures, boosting spending on non-durable goods and services.

 

 

On the other hand, spending on semi-durable and durable goods contracted, especially on vehicles, in line with weakening supporting factors, namely continued contraction in non-farm income, softer farm income growth, and lower consumer confidence, together with financial institutions’ tightening of credit standards for auto-leasing loans after credit quality deteriorated.

 

The number of foreign tourist arrivals continued to expand, rising 12.5 per cent compared with the same period last year. This was driven by 1) the low base effect from the tour boat incident in Phuket; and 2) the exemption of the visa on arrival fee, encouraging more visitors from China, India, and Taiwan. Additionally, the number of tourists from other Asian countries continued to grow such as those from South Korea, Japan, and Laos. The number of Malaysian visitors also rebounded from a temporary factor as Deepavali Holiday was celebrated at the end of October this year.

 

 

The current account surplus narrowed from trade balance as a result of the increase in merchandise imports value compared with the previous month. The overall capital and financial accounts registered a deficit from the asset position following the increase in Thai Other Depository Corporations’ (ODCs) deposits and Thai portfolio investment abroad.

 

Source: https://www.nationthailand.com/business/30378905

 

-- © Copyright The Nation Thailand 2019-11-30

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[saengd]

"The seasonally adjusted unemployment rate slightly decreased, in line with the rising number of employed persons in agricultural sector". 

 

Historically in Thailand, when the economy takes a downturn, people return to their roots and start farming again.

 

The remainder suggests that economic contraction is in line with global trading conditions, the current account surplus shrinks as exports shrink. But nice to have two strings to the bow, once again Thailand falls back on tourist numbers which have increased (seasonally), will be interesting to see what happens in March or so.

 

 

[Cadbury]

1 hour ago, saengd said:

"The seasonally adjusted unemployment rate slightly decreased, in line with the rising number of employed persons in agricultural sector". 

 

Historically in Thailand, when the economy takes a downturn, people return to their roots and start farming again.

 

The remainder suggests that economic contraction is in line with global trading conditions, the current account surplus shrinks as exports shrink. But nice to have two strings to the bow, once again Thailand falls back on tourist numbers which have increased (seasonally), will be interesting to see what happens in March or so.

 

 

The Thai economy is an export driven economy. That seems to be the real root of the problem given what has now become an unhealthy and consistent pattern of falls in export value. To quote:

"The value of merchandise exports continued to contract, mainly due to the economic slowdown of trading partners, consistent with deterioration in manufacturing production and private investment indicators.......The value of merchandise exports, both including and excluding gold, dropped by 5.0 per cent".

They talk grandly, as TAT always does, of the increased non spending tourist arrival (Chinese and Indians) numbers as if that will save the day. Diddling around with repeated and unimaginative stimulus programmes like "travel, spend, eat and shop" might at best only give temporary relief.

Likewise, reliance on FTAs with basket case countries like Turkey won't help much either. 

And still they obstinately refuse in this story to make any comment of the high baht. 

https://forum.thaivisa.com/topic/1136197-thai-central-bank-chief-says-worried-about-rapid-baht-gains/

One thing I believe hasn't helped and that is Prayut playing at being an economist and appointing himself as head of the economic team while relegating the experienced Somkid to nothing more than a salesman for the EEC. Maybe it is proving now Prayut has bitten off more than he can chew.

 

Yes indeed, interesting days ahead. 

Edited November 30, 2019 by Cadbury

[upena]

Except tourism is down - don't believe the numbers from TAT. Arrivals are not always tourists and TAT has absolutely no idea how much tourists spend - domestic or international. Whenever the Thai Government uses numbers, they are telling lies.

[Isaan sailor]

This what happens when you hitch your wagon up to the ChiComs.  They dump hot money into Thai bonds.  This jacks the Baht, increases USD reserves to historic levels, and devastates the economy.  No worries, though. Thailand gets submarines and Belt & Road bullet trains.

Need proof? Look at today’s exchange charts.  Chinese Yuan up, USD down—in reverse, but identical patterns.

[saengd]

2 hours ago, Isaan sailor said:

This what happens when you hitch your wagon up to the ChiComs.  They dump hot money into Thai bonds.  This jacks the Baht, increases USD reserves to historic levels, and devastates the economy.  No worries, though. Thailand gets submarines and Belt & Road bullet trains.

Need proof? Look at today’s exchange charts.  Chinese Yuan up, USD down—in reverse, but identical patterns.

When the Chinese buys Thai bonds do you think they use USD or the YUAN? One will cause the THB to increase in value, the other will not. I'm pretty certain China would use YUAN for that purpose, especially since they insist on being paid in USD for the hi speed rail link contract. So no, Chicoms buying bonds will not increase USD reserves and it will not strengthen THB.

 

Friday night Forex numbers, as mentioned previously, are notoriously unreliable since many dealers will square their positions in advance of the weekend, far better to look at the M-F trend/movements.

[Skeptic7]

Good! Hope it downtrend continues indefinitely. 

[saengd]

7 minutes ago, Skeptic7 said:

Good! Hope it downtrend continues indefinitely. 

You understand it would be the Thai people who would suffer as a result, not the people in power?

[Skeptic7]

7 minutes ago, saengd said:

You understand it would be the Thai people who would suffer as a result, not the people in power?

Yes...but my Thai people would be better off. And you understand it's not like my wishing for it is gonna make it happen. I'm not a magic man...much as I wish that were true! 

[Cadbury]

23 minutes ago, Skeptic7 said:

Good! Hope it downtrend continues indefinitely. 

Latest figure I have today is 30.18/dollar.

Growing in value by the day. Predictions are that it will go to below 30 starting in the new year. The high baht is the export killer despite what some people deny.

Month	Open	Low-High	Close	Mo,%	Total,%
2019
Nov	30.16	29.73-30.63	30.18	0.1%	0.1%
Dec	30.18	29.73-30.63	30.18	0.0%	0.1%
2020
Jan	30.18	29.32-30.22	29.77	-1.4%	-1.3%
Feb	29.77	29.31-30.21	29.76	-0.0%	-1.3%
Mar	29.76	29.05-29.93	29.49	-0.9%	-2.2%
Apr	29.49	29.26-30.16	29.71	0.7%	-1.5%
May	29.71	28.47-29.71	28.90	-2.7%	-4.2%
Jun	28.90	28.13-28.99	28.56	-1.2%	-5.3%
Jul	28.56	28.29-29.15	28.72	0.6%	-4.8%
Aug	28.72	28.41-29.27	28.84	0.4%	-4.4%
Sep	28.84	28.72-29.60	29.16	1.1%	-3.3%
Oct	29.16	27.87-29.16	28.29	-3.0%	-6.2%
Nov	28.29	27.73-28.57	28.15	-0.5%	-6.7%
Dec	28.15	28.15-29.27	28.84	2.5%	-4.4%

[RichardColeman]

9 hours ago, rooster59 said:

The number of Malaysian visitors also rebounded from a temporary factor as Deepavali Holiday

Bet that made a huge jump in the figures !

[Nice Boyd]

6 hours ago, Isaan sailor said:

This what happens when you hitch your wagon up to the ChiComs.  They dump hot money into Thai bonds.  This jacks the Baht, increases USD reserves to historic levels, and devastates the economy.  No worries, though. Thailand gets submarines and Belt & Road bullet trains.

Need proof? Look at today’s exchange charts.  Chinese Yuan up, USD down—in reverse, but identical patterns.

Maybe they can latch onto a Debt Trap and give away Phuket or Southern Thailand so they can build their Canal ala ???????? Panama

[saengd]

3 hours ago, Cadbury said:

Latest figure I have today is 30.18/dollar.

Growing in value by the day. Predictions are that it will go to below 30 starting in the new year. The high baht is the export killer despite what some people deny.

Month	Open	Low-High	Close	Mo,%	Total,%
2019
Nov	30.16	29.73-30.63	30.18	0.1%	0.1%
Dec	30.18	29.73-30.63	30.18	0.0%	0.1%
2020
Jan	30.18	29.32-30.22	29.77	-1.4%	-1.3%
Feb	29.77	29.31-30.21	29.76	-0.0%	-1.3%
Mar	29.76	29.05-29.93	29.49	-0.9%	-2.2%
Apr	29.49	29.26-30.16	29.71	0.7%	-1.5%
May	29.71	28.47-29.71	28.90	-2.7%	-4.2%
Jun	28.90	28.13-28.99	28.56	-1.2%	-5.3%
Jul	28.56	28.29-29.15	28.72	0.6%	-4.8%
Aug	28.72	28.41-29.27	28.84	0.4%	-4.4%
Sep	28.84	28.72-29.60	29.16	1.1%	-3.3%
Oct	29.16	27.87-29.16	28.29	-3.0%	-6.2%
Nov	28.29	27.73-28.57	28.15	-0.5%	-6.7%
Dec	28.15	28.15-29.27	28.84	2.5%	-4.4%

If anyone could forecast an exchange rate even close to reasonably accurately, that far ahead, they would be wildly rich, personally I think the chart is a bunch of tosh!

[Cadbury]

2 hours ago, saengd said:

If anyone could forecast an exchange rate even close to reasonably accurately, that far ahead, they would be wildly rich, personally I think the chart is a bunch of tosh!

So what would be your forecast of the baht exchange rate be next week ....oh knowledgeable one! Please share your opinion with us.

Trying to defend the indefensible will only work for a short time for junta lovers.

Sadly you and the believers have run out of time. It is good night nurse as they say.

[Srikcir]

17 hours ago, rooster59 said:

private consumption indicators expanded at a higher pace compared with the previous month after temporarily benefiting from the government’s economic stimulus measures.

Which means the indicators have been artificially manipulated and as such are FAKE.

The reality is inescapable:

17 hours ago, rooster59 said:

On the other hand, spending on semi-durable and durable goods contracted, especially on vehicles, in line with weakening supporting factors, namely continued contraction in non-farm income, softer farm income growth, and lower consumer confidence

17 hours ago, rooster59 said:

Public spending contracted again

Prayut's "Pop Tart" populism programs may taste good in the short term but cannot sustain a healthy economy in the long term.

[BestB]

9 hours ago, Cadbury said:

Latest figure I have today is 30.18/dollar.

Growing in value by the day. Predictions are that it will go to below 30 starting in the new year. The high baht is the export killer despite what some people deny.

Month	Open	Low-High	Close	Mo,%	Total,%
2019
Nov	30.16	29.73-30.63	30.18	0.1%	0.1%
Dec	30.18	29.73-30.63	30.18	0.0%	0.1%
2020
Jan	30.18	29.32-30.22	29.77	-1.4%	-1.3%
Feb	29.77	29.31-30.21	29.76	-0.0%	-1.3%
Mar	29.76	29.05-29.93	29.49	-0.9%	-2.2%
Apr	29.49	29.26-30.16	29.71	0.7%	-1.5%
May	29.71	28.47-29.71	28.90	-2.7%	-4.2%
Jun	28.90	28.13-28.99	28.56	-1.2%	-5.3%
Jul	28.56	28.29-29.15	28.72	0.6%	-4.8%
Aug	28.72	28.41-29.27	28.84	0.4%	-4.4%
Sep	28.84	28.72-29.60	29.16	1.1%	-3.3%
Oct	29.16	27.87-29.16	28.29	-3.0%	-6.2%
Nov	28.29	27.73-28.57	28.15	-0.5%	-6.7%
Dec	28.15	28.15-29.27	28.84	2.5%	-4.4%

the just above 30 is the cash rate, if you do credit card purchase its already below 30.

 

Its interesting to note that BOT is releasing such damning figures and outlook, while ministries continue to toot how great economy is doing.

 

I am starting to think BOT having its hand twisted from getting into action to curb in the baht by higher powers.

 

May be its Big Prayuts pride as he did say Thai would be new International language and everyone will be rich

 

May be he does not understand 10 000 baht will remain 10 000 baht in thailand and will buy just as much or even less as before.:)

[saengd]

5 hours ago, Cadbury said:

So what would be your forecast of the baht exchange rate be next week ....oh knowledgeable one! Please share your opinion with us.

Trying to defend the indefensible will only work for a short time for junta lovers.

Sadly you and the believers have run out of time. It is good night nurse as they say.

Whatever are you talking about....believers, run out of time!!!

 

I make no predictions on any ex. rate, neither am I defending anything, I just know very well that trying to calculate an ex. rate for any pair, one year ahead is akin to voodoo!

[Cadbury]

2 hours ago, saengd said:

Whatever are you talking about....believers, run out of time!!!

 

I make no predictions on any ex. rate, neither am I defending anything, I just know very well that trying to calculate an ex. rate for any pair, one year ahead is akin to voodoo!

In one month's time it will be next year. Go on, have a stab at the baht rate for March next year. There is nothing to lose by it! 

You being an expert it would be nice to know what you think it might be when compared to what other experts think. 

The Thai Central Bank chief thinks is going to gain in value and is very concerned. Is he talking voodoo nonsense? What do you think of his opinion?

https://forum.thaivisa.com/topic/1136197-thai-central-bank-chief-says-worried-about-rapid-baht-gains/

 

[saengd]

2 hours ago, Cadbury said:

In one month's time it will be next year. Go on, have a stab at the baht rate for March next year. There is nothing to lose by it! 

You being an expert it would be nice to know what you think it might be when compared to what other experts think. 

The Thai Central Bank chief thinks is going to gain in value and is very concerned. Is he talking voodoo nonsense? What do you think of his opinion?

https://forum.thaivisa.com/topic/1136197-thai-central-bank-chief-says-worried-about-rapid-baht-gains/

 

I think you know that it's practically impossible to do that unless any answer is heavily quantified and the results displayed in such a wide range that it would make any answer appear ridiculous, for example:

 

Will China and the US implement a solution to the trade war quickly?

Will Trump be impeached and a new president installed?

Will Thailand implement or fully abolish capital controls?

Will the overnight interbank rates of the two countries diverge?

Will inflation rear its head, especially in the US?

Would BOT consider moving to a hard peg or even a fully floating rate as a means of solving the current problem?

Will the outcome of the UK elections have a negative impact on global growth, Brexit vs a Labour government?

What will happen to global growth period, is it falling off a cliff or is this just a dip in the road?

Will water shortage in 202 kill Thai agricultural exports?

 

....and potentially tens or hundreds more questions that need to be answered before a rate can even begin to guessed at. It's easy to come up with the questions that need answers, answering correctly however is something else entirely. 

 

At one end of the scale a lot of the issues above could end positively, on the other they don't, the difference could be extreme as a spread of say 25/38 or more.

 

This is a useful read on the subject you're trying to grapple with:

 

https://reader.elsevier.com/reader/sd/pii/S2212567115012770?token=FEBB2345EC9FADE053315CC3E7B2F638DF0A8F19852F1773F679481B084542D51B8ABEF85D9A63182984C78D73086116

 

BTW for those people calling the BOT governor and politicians idiots because they don't have a solution to the problem, they also need to know the answers to the questions above, do you!

 

 

Edited November 30, 2019 by saengd

[metisdead]

A post containing a disallowed reference to the current government has been removed. 

[Blue bruce]

Just returned from a trip to the US. Exchanged US dollars  at K Bank at Swampy.

Exchange rate on Nov. 25 was 28.84 per US dollar