Thai first-quarter GDP 'not good'; second quarter will be worse - deputy PM

[webfact]

Thai first-quarter GDP 'not good'; second quarter will be worse - deputy PM

 

FILE PHOTO: Thailand's Deputy Prime Minister Somkid Jatusripitak speaks during a seminar on fintech in Bangkok, Thailand, June 14, 2017. REUTERS/Chaiwat Subprasom

 

BANGKOK (Reuters) - Thailand's economic performance in the first quarter is not good and the current quarter will be worse as the southeast Asian nation faces the full impact of the coronavirus pandemic, the deputy prime minister said on Friday.

 

The key economic drivers of exports and tourism are weak as the global economy is not good, so the government needs to boost the domestic economy, Somkid Jatusripitak told a briefing.

 

He did not give specific forecasts. Official first-quarter gross domestic product data will be released on May 18.

 

Southeast Asia's second-largest economy may have contracted by at least 5% in the first quarter and could shrink by 3%-5% in the whole of 2020 - which would be the worst year since the 1997-98 Asian financial crisis, according to business groups.

 

In a bid to alleviate the impact of the coronavirus, the government has introduced economic measures worth billions of dollars, including its latest 1.9 trillion baht ($58.8 billion)package approved last month.

 

Somkid said he would seek cabinet approval next week for rules to spend on projects aimed at lifting community activity and helping jobless workers returning to the farm sector.

 

Up to 10 million people may lose their jobs because of the outbreak, according to the Thai Chamber of Commerce.

 

The state-owned Bank for Agriculture and Agricultural Cooperatives will propose a 55 billion-baht fund to rebuild the rural economy and will lend 480 billion baht to community development projects, its president said on Friday.

 

Consumer confidence sank to a record low in April, with no sign of improvement, hit by the coronavirus outbreak, a university survey showed on Friday.

 

Thailand has reported a total of 3,000 infections and 55 deaths since the outbreak emerged in January. It imposed lockdowns to tackle the epidemic but started reopening some businesses on Sunday.

 

(Reporting by Kitipong Thaichareon; Writing by Orathai Sriring; Editing by Clarence Fernandez)

 

-- © Copyright Reuters 2020-05-08

 

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[colinneil]

Hey Somkid, you ever though of being a contestant on Mastermind?

[OnTheGround]

The rest of year 2020 and most likely also next year will see a decline of 20-80% in different sectors.

 

I would respect them more if they told the truth:

The outlook in poor for the next 2 years. We must increase 5k handout to all 28 million applicants. We must finance this from the countrys reserve in foreign currency. We must reopen society and let people go back to work step-by-step as soon as possible from this month. We must create new jobs in road maintenance and infrastructure, and employ millions of people.

 

 

 

Then, I waked up and realised this dream will never come true.

 

[BobbyL]

so the government needs to boost the domestic economy

 

Must be time for another Chim Shop whatever campaign I think. 

[Walker88]

1st Quarter GDP won't be too bad, in a relative sense, perhaps down about 5%. Tourism was pretty slow, but the flight restrictions for tourists did not come in until 22 March.

 

2nd Q will be ugly, probably in excess of a 30% tumble. Save for those left behind, tourism (17.7% of Thai economy in 2019) was non-existent.  Shops and stores being shuttered left online as the sole outlet for non-food sales and services. Even auto production was slashed.

 

-30% is probably generous. Unemployment is pushing 10 million, and 5000 baht/month to a few million people who earn on average 250% of that figure barely keeps things afloat.

 

Longer term there will be continued hits to Tourism, even if the borders are open again, and exports will hit a long term decline as more and more nations decide to bring manufacturing and production back home in order to maximize employment and insure supply lines. Even a sizeable level of FX reserves can be eaten up pretty quickly.

 

Thailand is either going to have to rethink its economic model, or else adjust to a substantially reduced standard of living. The property market is likely to get hit badly, since prices are driven on the margin, and debt will force a lot of selling to go along with the existing excess supply. A 50% decline in condo prices would not be a surprise over the next 3 years, which would impact bank asset quality.

[yellowboat]

2 hours ago, webfact said:

so the government needs to boost the domestic economy, Somkid Jatusripitak told a briefing.

It is just that easy.  Well, if there was not so much household debt, if the entire wealth of the country was not concentrated among a few wealthy, inbred families,  and if exports did not account for 67% of the economy and tourism not 18%,  there might be a chance.  Would love to hear the "how", but we all know he has no vision or creativity. 

 

Car parts market looks hopeful, as many in the US and other places will not be able to buy new cars for a few years.  They will have to fix what they are driving now.  Food will work in Thailand's favor.

 

 

[tonray]

In other news the Thai baht strengthens against the US dollar... Sigh. 

[Jimbo2014]

3 hours ago, webfact said:

not good and the current quarter will be worse

Not good and worse are certainly words econmists use - but usually with some context.  Perhaps not the time to make more laybuys on Subs.  Time to think about tourism, lower pollution, care for the environment.  Thailand can win again.

[Jcord1]

Why not wait for the actual data to come out then make the speech?

Everyone already knows things are bad now.

[RichardColeman]

Not to worry, the Chinese will be rushing in like Custer and the 7th Cavalry in a month or so

[hotchilli]

6 hours ago, webfact said:

Thailand's economic performance in the first quarter is not good and the current quarter will be worse as the southeast Asian nation faces the full impact of the coronavirus pandemic, the deputy prime minister said on Friday.

Of course the high baht value is of no concern now that Coronavirus can be blamed.

[hotchilli]

18 hours ago, Walker88 said:

Longer term there will be continued hits to Tourism, even if the borders are open again, and exports will hit a long term decline as more and more nations decide to bring manufacturing and production back home in order to maximize employment and insure supply lines.

Thailand relies on a huge chunk of manufacturing for other countries, which has bolstered employment for years.
If they start to pull the plug, coupled with low tourism for another year or two Thailand is in big trouble.

[tonray]

1 hour ago, hotchilli said:

Thailand relies on a huge chunk of manufacturing for other countries, which has bolstered employment for years.
If they start to pull the plug, coupled with low tourism for another year or two Thailand is in big trouble.

From over 33 to under 32 in less than a month.......the market not getting the message apparently