Thai GDP growth to fall to 0.8 per cent, lowest in nine years: Tisco

[webfact]

Thai GDP growth to fall to 0.8 per cent, lowest in nine years: Tisco

By THE NATION

 

 

Thailand’s Gross Domestic Product (GDP) would grow by only 0.8 per cent this year, with high risk of contraction if the Covid-19 situation, drought, and the falling oil price become more severe or prolonged for the estimated period, Tisco Economic Strategy Unit (ESU) said.

 

Covid-19 patients outside China have risen to over 26,000, with a daily average of around 2,400 persons during March 1 to 8. “This average increased from 200 persons per day in February,” the ESU added.

 

Meanwhile, the average in China has decreased from 2,300 persons every day in February to 100 a day during March 1 to 8.

 

The Tisco unit said that the Covid-19 severity has been more intense than expected. Moreover, tourist numbers passing through the five major airports – Suvarnabhumi, Don Mueang, Chiang Mai, Hat Yai, and Phuket – contracted by 58 per cent (year on year) in March, while in February it contracted by 46 per cent.

 

“In this current fiscal year, tourists would be 32.5 million, decreasing by 7.3 million persons or 18 per cent from the last fiscal year," the ESU forecast.

The Tisco unit also cut its predicted domestic GDP from 1.7 per cent to 0.8 per cent, due to the contraction in tourism sector; supply disruption caused by China’s closed cities, and Thailand’s weakened demand.

 

“We estimate the Thai economy to contract year on year in the first and second quarters, and would expand in the second half of this year,” it said. 

 

Moreover, the economy’s downside risk has still been at a high level, and yearly GDP would contract due to numerous factors, namely, the drought, political situation, and lowered oil price, it added.

 

The lowered price of oil would decrease the fuel cost for households and businesses, especially for importing oil and fuel. “However, the lowered price is a negative factor for those countries whose economy depends on oil, such as Russia and those in the Middle East,” the ESU added.

 

During 2015-16, the lowered oil price decreased tourists from Russia and the Middle East in Thailand. Also, the lower price would decrease revenue earnings from exports, as well as from agricultural products, the ESU said.

 

Source: https://www.nationthailand.com/news/30383762

 

-- © Copyright The Nation Thailand 2020-03-10

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[Grumpy John]

I use guestimetes to.  Mine are on a personal level so no harm can come to the country or its people.  On the other hand an organisation spouting what can only be guestimetes could make a difficult situation worse...or a worse situation catastrophic!  If it helps reduce the value of the baht, keep up the good work folks.  ????

[RichardColeman]

17 minutes ago, webfact said:

The Tisco unit also cut its predicted domestic GDP from 1.7 per cent to 0.8 per cent, due to the contraction in tourism sector; supply disruption caused by China’s closed cities, and Thailand’s weakened demand.

So, these people in the asylum with 15% less tourists, a high baht , political issues, covid, nobody buying Thai goods, STILL project growth ? They must be based near a laughing gas manufacturer 

 

 

[Pedrogaz]

Those without rose colored glasses however may think 0.8% is way, way, way overstated. What is the use of think tanks and forecasts if they are only used to mislead.

Thailand is headed for an economic black eye. 

[Isaan sailor]

No way.  As long as the Baht remains well above 10-year averages—growth just ain’t happening.

[Brickbat]

So why is their Baht so strong? Who is believing in it? Smart expats have jumped ship.  Thais have no clue. The sky could fall and it would be a mai pen rai with a big smile.

[saengd]

4 minutes ago, Brickbat said:

So why is their Baht so strong? Who is believing in it? Smart expats have jumped ship.  Thais have no clue. The sky could fall and it would be a mai pen rai with a big smile.

Why is THB so strong: The problem with the Baht is current account strength which is mainly a function of the trade surplus, exports are higher than imports. Now tourist numbers have fallen and presumably exports will take also fall so in theory that should reduce the trade surplus. BUT because exports have reduced that means business is not as productive as it might be and people are earning less money, that means the demand for imports will also fall, the effect of those things is that exports will remain higher than imports albeit both will remain at a lower level than before.

 

Every year the Thai Government and BOT sells over a trillion Baht's worth of bonds, most of it is designed to finance budget debt. Bond sales are usually oversubscribed, Thai bonds are well regarded and considered to be good quality international debt.

 

Who Believes it: Bonds sell at a price relative to their face value, duration and coupon rate. In very simple terms and by way of an exaggerated example they say, here's a clutch of bonds worth say 1 million baht, paying 3% interest, redeemable in ten years, in ten years time we will give you your 1 million back again, in the meantime we'll pay you 3% interest per year.

 

Over 17% of all bond sales are to foreign entities, large banks, insurance companies, governments etc, people who understand finance, economics and investments.

 

Do you think those companies/people would buy Thai bonds on that sort of scale if they had even the slightest whiff that somebody might be playing with the figures or if they even suspected that the Baht was being manipulated?

 

[Brickbat]

8 minutes ago, saengd said:

Why is THB so strong: The problem with the Baht is current account strength which is mainly a function of the trade surplus, exports are higher than imports. Now tourist numbers have fallen and presumably exports will take also fall so in theory that should reduce the trade surplus. BUT because exports have reduced that means business is not as productive as it might be and people are earning less money, that means the demand for imports will also fall, the effect of those things is that exports will remain higher than imports albeit both will remain at a lower level than before.

 

Every year the Thai Government and BOT sells over a trillion Baht's worth of bonds, most of it is designed to finance budget debt. Bond sales are usually oversubscribed, Thai bonds are well regarded and considered to be good quality international debt.

 

Who Believes it: Bonds sell at a price relative to their face value, duration and coupon rate. In very simple terms and by way of an exaggerated example they say, here's a clutch of bonds worth say 1 million baht, paying 3% interest, redeemable in ten years, in ten years time we will give you your 1 million back again, in the meantime we'll pay you 3% interest per year.

 

Over 17% of all bond sales are to foreign entities, large banks, insurance companies, governments etc, people who understand finance, economics and investments.

 

Do you think those companies/people would buy Thai bonds on that sort of scale if they had even the slightest whiff that somebody might be playing with the figures or if they even suspected that the Baht was being manipulated?

 

So the Govt will end up like it’s people, over their heads in debt. Which could eventually send this baht into free fall when this inevitable gfc occurs. Just wondering. Gdp forecast now down to .08% for 2020. That’s a serious drop. 

[hotchilli]

18 hours ago, webfact said:

Thailand’s Gross Domestic Product (GDP) would grow by only 0.8 per cent this year,

Grow????

Watch the drop

[saengd]

10 minutes ago, Brickbat said:

So the Govt will end up like it’s people, over their heads in debt. Which could eventually send this baht into free fall when this inevitable gfc occurs. Just wondering. Gdp forecast now down to .08% for 2020. That’s a serious drop. 

Thailands GDP will likely fall for the next couple of quarters which technically will put them in a recession. But they'll be in good company along with at least a quarter of the western world!

 

I forgot to add regarding debt: Thailand external debt is about 41% of GDP, one of the lowest in the world. It's so low that the IMF actively encouraged them to operate a budget surplus in order to build out infrastructure and whilst they did so, it was far smaller than IMF and World Bank would have liked. Exactly how you think any of that might cause the Baht to go into free fall, only you will understand!

Edited March 11, 2020 by saengd

[Brickbat]

2 minutes ago, saengd said:

Thailands GDP will likely fall for the next couple of quarters which technically will put them in a recession. But they'll be in good company along with at least a quarter of the western world!

I seriously doubt they can manage the upcoming storm. Way too much debt and foreclosures will be rampant. The world dropping interest rates will add to this madness of borrowing like drunken sailors. 

[saengd]

Just now, Brickbat said:

I seriously doubt they can manage the upcoming storm. Way too much debt and foreclosures will be rampant. The world dropping interest rates will add to this madness of borrowing like drunken sailors. 

42% of GDP is way too much debt is it....really? You should read up more on the subject, it's negligible, especially when it's backed by a years worth of GDP in the savings account!

[Brickbat]

25 minutes ago, saengd said:

Over 17% of all bond sales are to foreign entities, large banks, insurance companies, governments etc, people who understand finance, economics and investments.

Really? In the last gfc, do you know how much mum n dad money was lost by these “ people who understand finance” ? Trillions! 

[saengd]

3 minutes ago, Brickbat said:

Really? In the last gfc, do you know how much mum n dad money was lost by these “ people who understand finance” ? Trillions! 

People shouldn't invest in things they don't understand, the banks knew what they were selling!

[Brickbat]

1 minute ago, saengd said:

People shouldn't invest in things they don't understand, the banks knew what they were selling!

They were big Pension Funds. Mums n Dads have no clue . Or choice 

[saengd]

1 minute ago, Brickbat said:

They were big Pension Funds. Mums n Dads have no clue . Or choice 

I'm pretty sure you'll find that banks et al are somewhat more cautious about things today and especially if they buying and not selling, which was the purpose of all this banter in the first place, those institutions doing due diligence  on what they buy, or at least understanding it very well. Let's face it, most people who claim the Baht is being manipulated simply parrot the phrase because it sounds good, they have no understanding how forex or economics works and are unable to defend the statement with even a simple level of supporting detail..

[Brickbat]

11 minutes ago, saengd said:

42% of GDP is way too much debt is it....really? You should read up more on the subject, it's negligible, especially when it's backed by a years worth of GDP in the savings account!

It’s closer to 80%. Acc to Tisco

“ 

Thailand’s Gross Domestic Product (GDP) would grow by only 0.8 per cent this year, with high risk of contraction if the Covid-19 situation, drought, and the falling oil price become more severe or prolonged for the estimated period.

Tisco Economic Strategy Unit (ESU) 

[Brickbat]

1 minute ago, saengd said:

I'm pretty sure you'll find that banks et al are somewhat more cautious about things today and especially if they buying and not selling, which was the purpose of all this banter in the first place, those institutions doing due diligence  on what they buy, or at least understanding it very well. Let's face it, most people who claim the Baht is being manipulated simply parrot the phrase because it sounds good, they have no understanding how forex or economics works and are unable to defend the statement with even a simple level of supporting detail..

Whatever the reason, you have to agree that they must be able to have some control and that this current strength can only keep hurting the economy whilst benefitting the very few who are cash rich. 

[saengd]

2 minutes ago, Brickbat said:

It’s closer to 80%. Acc to Tisco

“ 

Thailand’s Gross Domestic Product (GDP) would grow by only 0.8 per cent this year, with high risk of contraction if the Covid-19 situation, drought, and the falling oil price become more severe or prolonged for the estimated period.

Tisco Economic Strategy Unit (ESU) 

Rubbish.

 

https://countryeconomy.com/national-debt/thailand

https://www.ceicdata.com/en/indicator/thailand/government-debt--of-nominal-gdp

[saengd]

1 minute ago, Brickbat said:

Whatever the reason, you have to agree that they must be able to have some control and that this current strength can only keep hurting the economy whilst benefitting the very few who are cash rich. 

BOT operates a managed float, it's called the dirty peg and the same is operated by loads of other countries. Instead of being hard pegged or allowed to float freely, a managed float means the currency is in a middle ground that is soft pegged to USD and allowed to be managed within a range. Remember that THB must also be managed against ASEAN currencies also hence the need for flexibility..

[Brickbat]

1 minute ago, saengd said:

BOT operates a managed float, it's called the dirty peg and the same is operated by loads of other countries. Instead of being hard pegged or allowed to float freely, a managed float means the currency is in a middle ground that is soft pegged to USD and allowed to be managed within a range. Remember that THB must also be managed against ASEAN currencies also hence the need for flexibility..

Tisco is a USD 3.4 Billion bank. Not “ rubbish”

And....if the baht were to freely float, it would likely free fall

[saengd]

1 minute ago, Brickbat said:

Tisco is a USD 3.4 Billion bank. Not “ rubbish”

And....if the baht were to freely float, it would likely free fall

Tisco is not rubbish, your statement that government debt was 80% of GDP was! And also, only 4% of that debt is foreign debt, the rest of it arises in Thailand so there is nor currency or overseas implication.

 

And you don't understand how the FOREX system works either it seems! If the value of THB was being falsely declared by BOT every morning the FOREX market would catch sight of that and as a result a secondary market would develop offshore using a different rate. Dealers and brokers would not be willing to transact at an exchange rate that was not agreed. That secondary market has opened up in the past during times of stress, particularly when BOT imposed a withholding tax on short term FDI, to date the FOREX market has agreed with BOT every day.

 

 

 

 

[Hank Gunn]

40 minutes ago, saengd said:

Thailands GDP will likely fall for the next couple of quarters which technically will put them in a recession. But they'll be in good company along with at least a quarter of the western world!

 

I forgot to add regarding debt: Thailand external debt is about 41% of GDP, one of the lowest in the world. It's so low that the IMF actively encouraged them to operate a budget surplus in order to build out infrastructure and whilst they did so, it was far smaller than IMF and World Bank would have liked. Exactly how you think any of that might cause the Baht to go into free fall, only you will understand!

Agree with most of what you say but wouldn’t the IMF had encouraged them to operate a budget deficit in order to build out infrastructure?

[Ventenio]

wow....so many economists here.

 

show me a post years ago where you predicted something correctly

 

 

[saengd]

Just now, Hank Gunn said:

Agree with most of what you say but wouldn’t the IMF had encouraged them to operate a budget deficit in order to build out infrastructure?

Hahaha. yes, thanks. Sorry, that's exactly what I should have written, I was testing you to see if you were paying attention....(joke)

 

OK so you get 10 points for spotting that one, stay tuned because there'll be more!

[saengd]

29 minutes ago, Ventenio said:

wow....so many economists here.

 

show me a post years ago where you predicted something correctly

 

 

Between 2007 and 2018 on TVF I said continuously that GBP/THB would fall to 40, +/- 5%, I started saying that when it was around 70 in 2007. Everyone thought I was a loon, a crazyman but I kept on saying....eventually people stopped saying anything. 

 

https://forum.thaivisa.com/topic/155648-gbp-sterling/?do=findComment&comment=1676612

Edited March 11, 2020 by saengd

[Brickbat]

17 minutes ago, saengd said:

Tisco is not rubbish, your statement that government debt was 80% of GDP was! And also, only 4% of that debt is foreign debt, the rest of it arises in Thailand so there is nor currency or overseas implication.

 

And you don't understand how the FOREX system works either it seems! If the value of THB was being falsely declared by BOT every morning the FOREX market would catch sight of that and as a result a secondary market would develop offshore using a different rate. Dealers and brokers would not be willing to transact at an exchange rate that was not agreed. That secondary market has opened up in the past during times of stress, particularly when BOT imposed a withholding tax on short term FDI, to date the FOREX market has agreed with BOT every day.

 

 

 

 

80% was Tisco’s no. Here’s another

Looking forward, we estimate Households Debt To GDP in Thailand to stand at 76.80 in 12 months time. In the long-term, the ThailandHouseholds Debt To GDP is projected to trend around 76.80 percent of GDP in 2021, according to our econometric models.

https://tradingeconomics.com › hous...

Thailand Households Debt To GDP | 1991-2019 Data | 2020-2022 ...

[saengd]

1 minute ago, Brickbat said:

80% was Tisco’s no. Here’s another

Looking forward, we estimate Households Debt To GDP in Thailand to stand at 76.80 in 12 months time. In the long-term, the ThailandHouseholds Debt To GDP is projected to trend around 76.80 percent of GDP in 2021, according to our econometric models.

https://tradingeconomics.com › hous...

Thailand Households Debt To GDP | 1991-2019 Data | 2020-2022 ...

Yes agreed. But consumer or household debt is a very different beast to government debt. Consumer debt is the money lent by banks and finance houses to citizens to buy houses and cars etc. Government debt is money owed by the country as a result of budget deficits, ie, over budget.

[robblok]

37 minutes ago, Brickbat said:

80% was Tisco’s no. Here’s another

Looking forward, we estimate Households Debt To GDP in Thailand to stand at 76.80 in 12 months time. In the long-term, the ThailandHouseholds Debt To GDP is projected to trend around 76.80 percent of GDP in 2021, according to our econometric models.

https://tradingeconomics.com › hous...

Thailand Households Debt To GDP | 1991-2019 Data | 2020-2022 ...

In this discussion you have shown that you are absolutely not knowledgeable and that @seangd knows his stuff. I too know my stuff as I worked at as stock trading firm and understand that if the bad was propped up it would be visible in trades and so on.

 

You now come up with household debt while we were talking government debt. That really shows tha tyou have no clue and are just one of those guys with their strange theories that hopes that the baht will freefall. 

[robblok]

35 minutes ago, saengd said:

Yes agreed. But consumer or household debt is a very different beast to government debt. Consumer debt is the money lent by banks and finance houses to citizens to buy houses and cars etc. Government debt is money owed by the country as a result of budget deficits, ie, over budget.

the guy has no clue what he is talking about. I wonder if he has any economic background.