World Bank Slashes Thai Growth Forecast To 4.3 Percent

[Jai Dee]

WB slashes Thai growth forecast to 4.3 per cent

The World Bank said Thursday it has slashed its projection for Thailand's economic growth to 4.3 per cent this year due to sagging investor confidence and slower exports.

The bank had originally predicted Thailand's gross domestic product (GDP) would grow by 4.6 per cent, already down from last year's 5.0 per cent, said Kazi Matin, a World Bank economist for Southeast Asia.

The revision puts the Thai economy among the worst performers in the region, trailing the expected 8.0 per cent growth in Vietnam, 9.6 per cent in China, 6.3 per cent in Indonesia, and 10.5 per cent in Cambodia.

Average economic growth across Southeast Asia is expected to be 5.6 per cent, the bank said.

Low investor confidence has put pressure on short-term prospects for the Thai economy, Matin said.

Following political disturbances in 2005 and the coup in 2006, investor confidence has steadily fallen, while controversial government policies such as capital controls and proposed changes to investment laws have scared foreign investors.

"Low investor confidence is the biggest weakness of the Thai economy," Matin told reporters at the release of the bank's annual report on Thailand.

A clear policy agenda is crucial in the near term to boost sagging confidence, he added.

"The signing of the Japan-Thailand free-trade agreement is already having a positive effect on investor confidence, even if the actual impact on exports and investment will only be felt after it is fully effective in October 2007," he said.

World Bank economist Kirida Bhaopichitr said exports, which account for two thirds of the Thai economy, are projected to grow by only 6.0 per cent in 2007, down from 9.0 per cent last year.

The decline was caused by slowing economies among key trading partners and a stronger exchange rate.

The Thai baht rose by 12 per cent over the last year, which hurt exports by making Thai products more expensive overseas and slashing the value of repatriated profits.

The currency is now trading just below 35 baht to the dollar.

"The baht should appreciate further this year with the current account continuing to be in surplus," Kirida told reporters.

"Baht appreciation should be slowed down if the existing low investor confidence improves, so that private investments could rebound," she added.

The World Bank forecast private investment for 2007 would be flat from last year while state investment would decline because of low budget disbursement.

Source: The Nation - 5 April 2007

[LaoPo]

WB slashes Thai growth forecast to 4.3 per cent

The World Bank said Thursday it has slashed its projection for Thailand's economic growth to 4.3 per cent this year due to sagging investor confidence and slower exports.

The bank had originally predicted Thailand's gross domestic product (GDP) would grow by 4.6 per cent, already down from last year's 5.0 per cent, said Kazi Matin, a World Bank economist for Southeast Asia.

The revision puts the Thai economy among the worst performers in the region, trailing the expected 8.0 per cent growth in Vietnam, 9.6 per cent in China, 6.3 per cent in Indonesia, and 10.5 per cent in Cambodia.

Average economic growth across Southeast Asia is expected to be 5.6 per cent, the bank said.

Low investor confidence has put pressure on short-term prospects for the Thai economy, Matin said.

Following political disturbances in 2005 and the coup in 2006, investor confidence has steadily fallen, while controversial government policies such as capital controls and proposed changes to investment laws have scared foreign investors.

"Low investor confidence is the biggest weakness of the Thai economy," Matin told reporters at the release of the bank's annual report on Thailand.

A clear policy agenda is crucial in the near term to boost sagging confidence, he added.

"The signing of the Japan-Thailand free-trade agreement is already having a positive effect on investor confidence, even if the actual impact on exports and investment will only be felt after it is fully effective in October 2007," he said.

World Bank economist Kirida Bhaopichitr said exports, which account for two thirds of the Thai economy, are projected to grow by only 6.0 per cent in 2007, down from 9.0 per cent last year.

The decline was caused by slowing economies among key trading partners and a stronger exchange rate.

The Thai baht rose by 12 per cent over the last year, which hurt exports by making Thai products more expensive overseas and slashing the value of repatriated profits.

The currency is now trading just below 35 baht to the dollar.

"The baht should appreciate further this year with the current account continuing to be in surplus," Kirida told reporters.

"Baht appreciation should be slowed down if the existing low investor confidence improves, so that private investments could rebound," she added.

The World Bank forecast private investment for 2007 would be flat from last year while state investment would decline because of low budget disbursement.

Source: The Nation - 5 April 2007

All in all, very bad news

LaoPo

[marquess]

I wonder if anyone in the Thai gov really cares, they seem to bring in alot of policies that they don't think through. And it is not they who suffer for it, after all what do foreigners know in comparison to Thai wisdom?

[LaoPo]

I wonder if anyone in the Thai gov really cares, they seem to bring in alot of policies that they don't think through. And it is not they who suffer for it, after all what do foreigners know in comparison to Thai wisdom?

You're right...what do we, as Farang, know about Thai wisdom?

But that's -Thai- wisdom about life in general, not wisdom in economics, because that's exactly what's lacking.

And, to your question about if anyone in the Thai government really cares...?

My guess: power, power and power; after that money, money and money and 'lose face' or not.

I think there's only one Man who -fully- understands and really cares about Thailand.....but He has no real power.

LaoPo

[Galong]

Why is the baht so strong in light of all the lack of confidence in the economy? I just can't get my head around it.

I think that a big slide in the baht's strength would perhaps help open the eyes of the powers-that-be. And, as I'm fat with US dollars at the moment, the sooner the better

[Falux2]

Only children won't understand that the US weakens the dollar to export more and import less.

[chownah]

I think that people are partly correct in saying that the military dicatorship ruling the country doesn't care so much about these sorts of things. Toxin's policies encouraged western influence in Thailand and we now have a dictatorship that encourages the opposite. In spite of their cries to the contrary, the dictatorships interpretation of "sufficiency economy" is to a great extent isolationism...but pragmatic isolationism. The dictatorship in power represents the old guard to a large extent and their view of the social structure is that raising me up AND PUTTING THE GENERAL POPULATION DOWN is what gives them the most power and satisfaction in life. Foreign economic influence was getting out of control in that it was usurping the power of the old guard and empowering some of what the old guard would refer to as the general population....those who rightfully (in thier view) belong in a lower rung of Thai society. The talk of establishing Buddhism as the national religion and changing the name of the country back to Siam are symptoms of the old guard's collective psyche's desire to recreate the class stratification like the old days.

Of course all of this is only my personal opinion on all this and I can not support it with any facts....its all just imaginary I guess.

Edited April 6, 2007 by chownah

[Falux2]

I think that people are partly correct in saying that the military dicatorship ruling the country doesn't care so much about these sorts of things. Toxin's policies encouraged western influence in Thailand and we now have a dictatorship that encourages the opposite. In spite of their cries to the contrary, the dictatorships interpretation of "sufficiency economy" is to a great extent isolationism...but pragmatic isolationism. The dictatorship in power represents the old guard to a large extent and their view of the social structure is that raising me up AND PUTTING THE GENERAL POPULATION DOWN is what gives them the most power and satisfaction in life. Foreign economic influence was getting out of control in that it was usurping the power of the old guard and empowering some of what the old guard would refer to as the general population....those who rightfully belong in a lower rung of Thai society. The talk of establishing Buddhism as the national religion and changing the name of the country back to Siam are symptoms of the old guards collective psyches desire to recreate the class stratification like the old days.

Of course all of this is only my personal opinion on all this and I can not support it with any facts....its all just imaginary I guess.

My humble IQ of 167 has no idea what you are talking about. isolationism? Thais are Thais, and they do not grasp the concept of mondialism.

[cdnvic]

4.3% growth is still a pretty decent figure. Why's everyone talking like its the onset of an other depression?

[Prakanong]

4.3% growth is still a pretty decent figure. Why's everyone talking like its the onset of an other depression?

Indeed - in days of old it would have signalled a "Take off" in Rostow's terms (I think it was him) to an industrial revolution

I think its the comparitive growth compared with other SE Asian nations that is seen as not a good thing.

Thailand once had very high growth rates 97-11% if I remember correctly) - maybe those days are over now but they still need high rates to keep a comparitive position as their neighbours play catch up or even scoot further ahead.

Get an elected govt who knows what they are doing with economic policies to encourage investment and growth and they can be on the right teack again

[ThaiGoon]

My humble IQ of 167 has no idea what you are talking about. isolationism? Thais are Thais, and they do not grasp the concept of mondialism.

IMHO, Chownah probably meant the kind of isolationism that just led them (the currnt gov't) to sign an FTA with Japan despite strong criticisms and protests.

[LaoPo]

Only children won't understand that the US weakens the dollar to export more and import less.

I see.

Is that why the US has the highest deficit in the world ?

LaoPo

[Falux2]

My humble IQ of 167 has no idea what you are talking about. isolationism? Thais are Thais, and they do not grasp the concept of mondialism.

IMHO, Chownah probably meant the kind of isolationism that just led them (the currnt gov't) to sign an FTA with Japan despite strong criticisms and protests.

I'd call that Opportunistic.

[LaoPo]

4.3% growth is still a pretty decent figure. Why's everyone talking like its the onset of an other depression?

You're right, in the eyes of a Western economy/country.

But not in the eyes of a Far Eastern economy like the countries, mentioned before.

LaoPo

[Prakanong]

My humble IQ of 167 has no idea what you are talking about. isolationism? Thais are Thais, and they do not grasp the concept of mondialism.

IMHO, Chownah probably meant the kind of isolationism that just led them (the currnt gov't) to sign an FTA with Japan despite strong criticisms and protests.

I'd call that Opportunistic.

Do not worry - Thaigoon would put a positive spin and say black was really white in relation to Thailand!

Pity the poor chap - he is only a boy and experience plus the education he is getting now will temper that immature intellect!!

[Falux2]

Only children won't understand that the US weakens the dollar to export more and import less.

I see.

Is that why the US has the highest deficit in the world ?

LaoPo

The US is fighting the most expensive war ever, and the House of Senate doesn't back it up. So it's a good idea to keep the dollar low to let the American economy run. I personally don't know a single person who'd actually buy any American things, if it wasn't for the fact that the dollar reducwed from 43 to 33 in a year.

[ThaiGoon]

Do not worry - Thaigoon would put a positive spin and say black was really white in relation to Thailand!

Pity the poor chap - he is only a boy and experience plus the education he is getting now will temper that immature intellect!!

Thanks for adding this kind of intelligent and informative input into the discussion.

[LaoPo]

Only children won't understand that the US weakens the dollar to export more and import less.

I see.

Is that why the US has the highest deficit in the world ?

LaoPo

The US is fighting the most expensive war ever, and the House of Senate doesn't back it up. So it's a good idea to keep the dollar low to let the American economy run. I personally don't know a single person who'd actually buy any American things, if it wasn't for the fact that the dollar reducwed from 43 to 33 in a year.

I rest my case with an economist like yourself, with an IQ of 167.

That would even leave Albert Einstein pale-white.

I salute you.

LaoPo

[Falux2]

Thanks, Ladprao

You are my hero

[rcm]

Only children won't understand that the US weakens the dollar to export more and import less.

I see.

Is that why the US has the highest deficit in the world ?

LaoPo

The US is fighting the most expensive war ever, and the House of Senate doesn't back it up.

It was a war they (US) started ....now they should pay for it don't they? No hard feelings but the US would have the highest deficit with or without the (pointless and self initiated ) war....right?

rcm

[Falux2]

The US is seeking for oil, and any excuse is good enough. I'm not protecting muslims here who on their own fight for oil also...

[jts-khorat]

In spite of their cries to the contrary, the dictatorships interpretation of "sufficiency economy" is to a great extent isolationism...but pragmatic isolationism.

The dictatorship in power represents the old guard to a large extent and their view of the social structure is that raising me up AND PUTTING THE GENERAL POPULATION DOWN is what gives them the most power and satisfaction in life.

Foreign economic influence was getting out of control in that it was usurping the power of the old guard and empowering some of what the old guard would refer to as the general population....those who rightfully (in their view) belong in a lower rung of Thai society.

The talk of establishing Buddhism as the national religion and changing the name of the country back to Siam are symptoms of the old guard's collective psyche's desire to recreate the class stratification like the old days.

Chownah, I though your analysis pretty spot-on. And the Bangkok old guard does not need to care if the economy suffers a little (or even a lot) if they can push the newcomers back to where they belong.

After the stock market crashed, it was local money who bought the stocks dumped by foreign investors (guess whose money that was?); reopening Don Mueang puts incredible revenues right back to the military. The list goes on and on and not much makes sense for the country as a whole...

TiT -- or:

Maybe dangerous to say it, but putting a little bit a different spin on the ultra-conservative side of it and the urge to go back to a better past (may one call it Siam with a completely different form of government), the coup was backed pretty fast by -- WHO?

[LivinLOS]

Only children won't understand that the US weakens the dollar to export more and import less.

I see.

Is that why the US has the highest deficit in the world ?

LaoPo

Yes they are desperately trying to devalue the USD to both curb inmports and devalue the debt..

Makes perfect sense..

However they have a tightrope of an orderly decline without a dollar collapse.. Thats the tough part..

[Dakhar]

Finance Minister Chalongphob Susangkarn (ฉลองภพ สุสังกร์กาญจน์) is confident Asean region can be upgraded as Asean Economic Community within 2015.

During the meeting attended by Finance Ministers from 10 Asean member countries, Mr. Chalongphob says the meeting will touch on financial problems. The solutions are aimed at leading the cooperation for creating economic stability. The cooperation includes the development of securities, the cooperation of finance and currency exchange, and the opening of free finance market.

He believes if Asean is able to accomplish in placing economic stability, the plan to develop Asean region as Asean Economic Community will succeed within 2015.

The Minister of Finance adds the meeting of Finance Ministers from Asean member countries will provide opportunities for Asean member countries to exchange their views and mobilize ideas to speed up the project.

World Bank gives Thailand a target of 4% growth.... They are a kind bunch of folks. Wow to be surpased by Cambodia! Simply amazing.

[wintermute]

Do not worry - Thaigoon would put a positive spin and say black was really white in relation to Thailand!

Pity the poor chap - he is only a boy and experience plus the education he is getting now will temper that immature intellect!!

Thanks for adding this kind of intelligent and informative input into the discussion.

Pot calling the kettle black. You rarely (if ever) add anything substantial to debates. You're usually also the first one to resort to name calling and various slurs.

Edited April 6, 2007 by wintermute

[Ned]

All discussion of the Thai political situation on forums like this and in the local media are just sounding so hollow and pointless. Imagine talking about US politics for example without being able to discuss activities at the White House.

[bingobongo]

I think that people are partly correct in saying that the military dicatorship ruling the country doesn't care so much about these sorts of things. Toxin's policies encouraged western influence in Thailand and we now have a dictatorship that encourages the opposite. In spite of their cries to the contrary, the dictatorships interpretation of "sufficiency economy" is to a great extent isolationism...but pragmatic isolationism. The dictatorship in power represents the old guard to a large extent and their view of the social structure is that raising me up AND PUTTING THE GENERAL POPULATION DOWN is what gives them the most power and satisfaction in life. Foreign economic influence was getting out of control in that it was usurping the power of the old guard and empowering some of what the old guard would refer to as the general population....those who rightfully belong in a lower rung of Thai society. The talk of establishing Buddhism as the national religion and changing the name of the country back to Siam are symptoms of the old guards collective psyches desire to recreate the class stratification like the old days.

Of course all of this is only my personal opinion on all this and I can not support it with any facts....its all just imaginary I guess.

My humble IQ of 167 has no idea what you are talking about. isolationism? Thais are Thais, and they do not grasp the concept of mondialism.

I am truly thankful that a person with 167 IQ would post his genius on this board, so I have to ask, is the 167 IQ measured in baht or $?

[LaoPo]

I think that people are partly correct in saying that the military dicatorship ruling the country doesn't care so much about these sorts of things. Toxin's policies encouraged western influence in Thailand and we now have a dictatorship that encourages the opposite. In spite of their cries to the contrary, the dictatorships interpretation of "sufficiency economy" is to a great extent isolationism...but pragmatic isolationism. The dictatorship in power represents the old guard to a large extent and their view of the social structure is that raising me up AND PUTTING THE GENERAL POPULATION DOWN is what gives them the most power and satisfaction in life. Foreign economic influence was getting out of control in that it was usurping the power of the old guard and empowering some of what the old guard would refer to as the general population....those who rightfully belong in a lower rung of Thai society. The talk of establishing Buddhism as the national religion and changing the name of the country back to Siam are symptoms of the old guards collective psyches desire to recreate the class stratification like the old days.

Of course all of this is only my personal opinion on all this and I can not support it with any facts....its all just imaginary I guess.

My humble IQ of 167 has no idea what you are talking about. isolationism? Thais are Thais, and they do not grasp the concept of mondialism.

I am truly thankful that a person with 167 IQ would post his genius on this board, so I have to ask, is the 167 IQ measured in baht or $?

LaoPo

[bonobo]

Why does all posting here about the strength of the baht revolve around the dollar?  When I speak to my partners about this (we have lost many sales because of the increase in the baht), they like to blame it on Bush.  However, that ignores the rise in strength of the baht against the yen, euro, won, yuan, etc.  Are all these due to US policy?  Seems to me that the yen and the yuan have been able to manage their currencies against the dollar, and the baht's rise with regards to the euro can't be because of US policies.

I was a business professor for 10 years, teaching MBA and doctoral candidates, so I am not totally ignorant about monetary theory. But the continued strengthening of the baht baffles me. I just don't get it.

 

[ThaiGoon]

Pot calling the kettle black. You rarely (if ever) add anything substantial to debates. You're usually also the first one to resort to name calling and various slurs.

Oh irony....