State of economy worse than initially estimated: BOT

[webfact]

State of economy worse than initially estimated: BOT

By THE NATION

 

 

The economy will be highly unpredictable due to the global slowdown and the state of financial markets, Titanun Mallikamas, the Bank of Thailand (BOT)’s assistant governor of the monetary policy committee, said on Wednesday (June 3).

 

He added that the economy will contract more than initially estimated, and there are concerns that the baht will strengthen further and adversely affect economic recovery. 

 

Meanwhile, the country’s current account had run into a US$700-million deficit in April. If the account did not include gold, then it would have been imbalanced by $3.1 billion. This is the highest contraction in 20 years.

 

In the next phase, the rising price of oil and limits on the arrival of foreign tourists will continue reducing the current account surplus. 

 

Titanun added that the current account should be closer to the balance point at least until the tourism sector recovers.

 

The committee will publish an estimation of economic expansion, inflation rate and the current account in its next meeting on June 24. 

 

Source: https://www.nationthailand.com/news/30389002

 

-- © Copyright The Nation Thailand 2020-06-03

 

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[whiteman]

nz $ has strengthened over this week first time over 20 for some time

 

Edited June 3, 2020 by whiteman

[tribalfusion001]

Wow worse then expected, who would have thought that!

[Misterwhisper]

So if

53 minutes ago, webfact said:

the economy will contract more than initially estimated

and

53 minutes ago, webfact said:

the country’s current account had run into a US$700-million deficit in April

and

54 minutes ago, webfact said:

the rising price of oil and limits on the arrival of foreign tourists will continue reducing the current account surplus

and

54 minutes ago, webfact said:

he current account should be closer to the balance point at least until the tourism sector recovers

then why would there be

55 minutes ago, webfact said:

concerns that the baht will strengthen further

?

 

Under all these above conditions PLUS the fact that millions of workers have lost their jobs while inflation soars, shouldn't the THB tank at least a little bit instead of strengthening? I just don't understand what is keeping it so high. It cannot be due to (foreign) investors parking their funds in the THB as a "safe haven currency" alone, can it?

[AlfHuy]

16 minutes ago, Misterwhisper said:

So if

and

and

and

then why would there be

?

 

Under all these above conditions PLUS the fact that millions of workers have lost their jobs while inflation soars, shouldn't the THB tank at least a little bit instead of strengthening? I just don't understand what is keeping it so high. It cannot be due to (foreign) investors parking their funds in the THB as a "safe haven currency" alone, can it?

No.

Interest rate now at all time low at 0.5%

[Cake Monster]

14 minutes ago, Misterwhisper said:

So if

and

and

and

then why would there be

?

 

Under all these above conditions PLUS the fact that millions of workers have lost their jobs while inflation soars, shouldn't the THB tank at least a little bit instead of strengthening? I just don't understand what is keeping it so high. It cannot be due to (foreign) investors parking their funds in the THB as a "safe haven currency" alone, can it?

Maybe its because of the FDI coming into the Country from the Mother land to the North.

I think Thailand sees the start of a massive investment program into the Country from China, and want to a court that idea.

Any investment by Chinese Companies into Thailand in order to skirt  around Tariffs imposed by the US will soon be pinged, and a whole world of hurt will hit the Country

[Trillian]

22 minutes ago, Misterwhisper said:

So if

and

and

and

then why would there be

?

 

Under all these above conditions PLUS the fact that millions of workers have lost their jobs while inflation soars, shouldn't the THB tank at least a little bit instead of strengthening? I just don't understand what is keeping it so high. It cannot be due to (foreign) investors parking their funds in the THB as a "safe haven currency" alone, can it?

Inflation is falling, not soaring, it's a major issue for the bank, April CPI was -3%:

https://think.ing.com/articles/thailand-steepest-price-fall-since-financial-crisis-reflects-huge-demand-drop/

 

The ever weakening USD is a concern when it comes to Baht strength, people have been dumping the Dollar which is causing it to weaken. The main reasons for that fall are the riots, and the high level of borrowings, as a result THB looks like a very sound and stable currency since government debt is below 42% of GDP. 

 

 

[bert bloggs]

2 minutes ago, Trillian said:

Inflation is falling, not soaring, it's a major issue for the bank, April CPI was -3%:

https://think.ing.com/articles/thailand-steepest-price-fall-since-financial-crisis-reflects-huge-demand-drop/

 

The ever weakening USD is a concern when it comes to Baht strength, people have been dumping the Dollar which is causing it to weaken. The main reasons for that fall are the riots, and the high level of borrowings, as a result THB looks like a very sound and stable currency since government debt is below 42% of GDP. 

 

 

Dont know about inflation falling ,i notice that prices in the stores have been going up recently, rather than going down ,things like petrol have reduced ,but lets face it thats a short term thing ,soon it will be back where it was pre covid.

[CGW]

26 minutes ago, Misterwhisper said:

Under all these above conditions PLUS the fact that millions of workers have lost their jobs while inflation soars, shouldn't the THB tank at least a little bit instead of strengthening? I just don't understand what is keeping it so high. It cannot be due to (foreign) investors parking their funds in the THB as a "safe haven currency" alone, can it?

Which country, at this time has a stronger economy than Thailand? most other countries are in far worse shape and have pledged billions to keep their populations from starving, Thailand has set up a few food kitchens, paid out very little money and pledged very little to sustain the people - at this time! They still have plenty money in the bank, for how much longer who knows, but other nations are getting into far more debt than Thailand is? - as I see it................????

[Trillian]

10 minutes ago, bert bloggs said:

Dont know about inflation falling ,i notice that prices in the stores have been going up recently, rather than going down ,things like petrol have reduced ,but lets face it thats a short term thing ,soon it will be back where it was pre covid.

The CPI represents a basket of goods, oil, gasoline, food and fruit all fell, transport costs fell by almost -10%....inevitably, some things in the basket will have increased in value.

 

The important aspect here is that BOT targets inflation in a range of 1-3%, now that it's going negative they have to act, it's part of their core mandate.

[Airalee]

17 minutes ago, Trillian said:

people have been dumping the Dollar which is causing it to weaken.

Different screen name but still the same old misinformation.  Welcome back Saengd!

 

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3086782/rush-us-dollars-hong-kong-forces-money-changers

 

https://www.reuters.com/article/us-argentina-currency/argentine-peso-risk-rises-as-crises-spark-black-market-rush-for-dollars-idUSKBN22K1PT

 

https://www.bloomberg.com/news/articles/2020-05-20/lira-averse-banks-fuel-turkish-fears-of-another-dollar-rush
 

https://news.cgtn.com/news/2020-05-16/Will-the-pandemic-reaffirm-the-dollar-s-reserve-currency-dominance--QxlaRWr8oE/index.html
 

https://www.nasdaq.com/articles/yuan-snaps-4-day-winning-streak-as-corporate-dollar-demand-kicks-in-2020-06-03

 

[Trillian]

30 minutes ago, Airalee said:

Different screen name but still the same old misinformation.  Welcome back Saengd!

 

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3086782/rush-us-dollars-hong-kong-forces-money-changers

 

https://www.reuters.com/article/us-argentina-currency/argentine-peso-risk-rises-as-crises-spark-black-market-rush-for-dollars-idUSKBN22K1PT

 

https://www.bloomberg.com/news/articles/2020-05-20/lira-averse-banks-fuel-turkish-fears-of-another-dollar-rush
 

https://news.cgtn.com/news/2020-05-16/Will-the-pandemic-reaffirm-the-dollar-s-reserve-currency-dominance--QxlaRWr8oE/index.html
 

https://www.nasdaq.com/articles/yuan-snaps-4-day-winning-streak-as-corporate-dollar-demand-kicks-in-2020-06-03

 

I don't understand the first line of your post but it doesn't seem to be relevant to the subject, I'm sure if it is you will elaborate.

 

The US dollar Index has fallen from over 100 to 97.3 in under two weeks, the value of USD is decreasing as a result. One of the reasons for that is investors are buying into gold as a safe haven, it's up substantially on the year:

 

https://www.marketwatch.com/investing/index/dxy

 

https://markets.businessinsider.com/commodities/news/gold-prices-may-sell-off-after-exuberance-wanes-analysts-warn-2020-5-1029183763

 

EDIT TO ADD:

 

"US Dollar Tumble Matches Worst Since 2007, Aussie and Yen Crosses Accelerate"

 

https://www.dailyfx.com/forex/video/daily_news_report/2020/06/03/US-Dollar-Tumble-Matches-Worst-Since-2007-Aussie-and-Yen-Crosses-Accelerate.html

Edited June 3, 2020 by Trillian
To add additional link/quote

[Brunolem]

31 minutes ago, CGW said:

Which country, at this time has a stronger economy than Thailand? most other countries are in far worse shape and have pledged billions to keep their populations from starving, Thailand has set up a few food kitchens, paid out very little money and pledged very little to sustain the people - at this time! They still have plenty money in the bank, for how much longer who knows, but other nations are getting into far more debt than Thailand is? - as I see it................????

It will take some time for the countries to get a clear idea of their economic situation.

 

Right now, they are like in the cloud of dust after a massive explosion, or rather implosion in this case.

 

When the dust settles, maybe around September, reality will reveal itself in all its ugliness...

[metisdead]

Some off topic posts have been removed.  

[steven100]

4 hours ago, webfact said:

He added that the economy will contract more than initially estimated

well i'll be a donkeys a_ss  .....  of course it's worse than you expected because you are not out in the real world where everyday folks are broke .... pennyless 

[Trillian]

Since the strength of USD plays a key role in the Thai economy and there seems to be some disagreement as to whether it is strong or weak and is being bought or sold presently:

 

"with interest rates at zero, the federal deficit soaring and U.S. bond yields barely above the rest of the developed world, there’s not much incentive for investors to be parked in dollars. Washington’s dispute with Beijing won’t be helping, and neither will the civil unrest of recent days and the prospect of mass unemployment".

 

The effect of that is:

 

"The dollar’s weakness also reflects the relative strength of other currencies. Neither China nor Japan have conducted stimulus on anything like the same scale. A weaker dollar might be just what the global economy needs to sustain a proper recovery, as it prevents a skew of capital flooding into just one liquid currency".

 

https://www.bloomberg.com/opinion/articles/2020-06-03/the-mighty-u-s-dollar-is-having-a-wobble

 

The US Dollar Index (the value of USD) is at its lowest point since March and Thai gold has risen 22% in the past 6 months, it's impossible to make the case that even though it's a safe haven currency that people are buying USD in anything like a meaningful way globally, they're not, they're selling USD and have been buying gold.

 

https://goldprice.org/gold-price-thailand.html

https://www.marketwatch.com/investing/index/dxy

 

BOT's concern must be that USD weakness will make THB even stronger, those are the financial markets and exchange rate developments they are concerned about. And of course the stronger the Baht, the greater the threat to exports, tourism and FDI, potentially, all of which undermine BOT's efforts to weaken the Baht.

 

 

 

Edited June 3, 2020 by Trillian

[Trillian]

As if by coincidence, a further article in the Thai press this morning but the link can't be posted. It reads to the effect of, FDI inflows to THB were seen last month as people shun USD, currency traders are invited to meet with BOT to disucss related Baht strength issues. So the path was, USD to THB to Gold.

[Destiny1990]

No worries TAT will Stimulating local tourism to get back the momentum !

[kingdong]

12 hours ago, Brunolem said:

It will take some time for the countries to get a clear idea of their economic situation.

 

Right now, they are like in the cloud of dust after a massive explosion, or rather implosion in this case.

 

When the dust settles, maybe around September, reality will reveal itself in all its ugliness...

And it's going to get very ugly,there is a naff off depression in the post,and Thailand with its high baht,Reliance on touriam and exports is going to be badly hit,throw in the global civil unrest and you,'ve got the recipe for the perfect storm.

[kingdong]

14 hours ago, Misterwhisper said:

So if

and

and

and

then why would there be

?

 

Under all these above conditions PLUS the fact that millions of workers have lost their jobs while inflation soars, shouldn't the THB tank at least a little bit instead of strengthening? I just don't understand what is keeping it so high. It cannot be due to (foreign) investors parking their funds in the THB as a "safe haven currency" alone, can it?

Kept artificially high by farang "sponsors" of their Thai " girlfriends" all joking aside don,t know the amount of for ex flooding it on a weekly basis but it must be considerable.

[ricardofel]

You think it's bad now???? Just wait when NO tourists arrive....then it will get worse! Thank god I left 7 years ago. 

[crazykopite]

Will that mean the cancellation of 2nd hand Chinese submarines and 2nd hand armoured tanks from the Ukraine.

[cheapcanuck]

15 hours ago, Misterwhisper said:

So if

and

and

and

then why would there be

?

 

Under all these above conditions PLUS the fact that millions of workers have lost their jobs while inflation soars, shouldn't the THB tank at least a little bit instead of strengthening? I just don't understand what is keeping it so high. It cannot be due to (foreign) investors parking their funds in the THB as a "safe haven currency" alone, can it?

You forget that all other economies have tanked also. So no gains no lose. Add to that Thailand had far fewer infections and deaths from Covid19 compared to other countries. 

[Brunolem]

1 hour ago, kingdong said:

And it's going to get very ugly,there is a naff off depression in the post,and Thailand with its high baht,Reliance on touriam and exports is going to be badly hit,throw in the global civil unrest and you,'ve got the recipe for the perfect storm.

Let's try and keep the civil unrest in the West if you don't mind...

 

I am not convinced it is going to be that bad.

 

The numbers will be very bad, like almost everywhere else, but the population is a different story.

 

People here are not addicted to all kinds of social benefits provided by a nanny state, like in the West...they are used to hardship.

 

I live in a village populated with poor families, in a rather poor Isaan province.

 

Many among the young have lost their jobs and come back home to join their families, but there is no resentment and no complaining.

 

When I go to the city, it is life as usual, save for the face masks...people are shopping at the market ou the supermarket...you wouldn't know that we are in the middle of an economic crisis.

 

The cow market is actually booming, and prices are at their highest in a long time, with people ready to fork out 40,000 baht for a cow.

 

There will be problems but, as usual, they will be concentrated in the cities, where people who have lost their jobs, and have no family upcountry, find themselves in a terrible situation, hence the lines seen in Pattaya and some other places to get some food.

 

I have no idea of the size of this specific part of the population, and of its state of mind.

 

Generally speaking, I think it will depend on how long the slump will last.

 

If there is a "second wave" of the virus, worldwide, this will be disastrous, but if things starts to go back to normal in the fourth quarter, Thailand should be able to muddle through, as economists say.

[alation]

I dont know really, but I reckon the the rellows from the north will have a bit to do with it as far a providing money for info structure (fast train) you know things like that BELT AND ROAD that's what I'm thinking additional points to all bad news with that scenario. 

[Caspersfriend]

Maybe simply buy their calculators from somewhere other than PRC

[bander]

This bad news will have a huge impact on the Thai stock market!

Let's watch the SET index when it opens today, after this news I would guess a 5 to 10% fall if not more.

 

[Jimbo2014]

This same headline gets reproduced each year from this point to end.  Covid has just made it worse than the usual worse.  I feel for the Thai people.  No free election or recourse out of the bad decisions a military government will be prone to make.

[bander]

42 minutes ago, crazykopite said:

Will that mean the cancellation of 2nd hand Chinese submarines and 2nd hand armoured tanks from the Ukraine.

No cancellation, Thailand is surrounded by enemies, they are ready to attack if Prayut Chan-o-cha cancel submarines and tanks orders.

And more importantly for Thais "to loose face".

The new thai slogan: "We are the most powerful country in SEA"

[Trillian]

20 minutes ago, bander said:

This bad news will have a huge impact on the Thai stock market!

Let's watch the SET index when it opens today, after this news I would guess a 5 to 10% fall if not more.

 

Why would it, that inbound FDI is going into gold, bonds and the SET, the SET has benefited in recent days.