Here’s Why Thailand’s Dire Economic Outlook Is the Worst in Asia

[Trillian]

39 minutes ago, ExpatOilWorker said:

The value of the tourist sector can be discussed indefinitely, but do you have a good "gestimate" of how much of imports can be directly linked to tourism?

When a tourist drink a bottle of Australian wine, have Frensh cheese for breakfast, use fuel, stay in a foreign owned hotel, etc, money is also flowing out of the country.

Surely it is less than 20%, but could it be 10%?

No I don't but I'll do some digging.

[Mr Meeseeks]

6 hours ago, Harry Fingerling said:

Perhaps building motorcycles that have lights and cars that have indicators might help. ????

Silly comment considering Thailand is a vehicle manufacturing hub for both cars and motorcycles.

[Trillian]

22 minutes ago, JonnyF said:

Saengd (sorry I mean Trillian) that is nonsense. Take the adult entertainment industry for example, which is huge. You think the sex workers are putting their money into the stock market, hotel rooms and real estate? A vast proportion of it goes to Issan to take are of their parents and kids and is spent in Issan at local markets, local stores or between individuals in the village environment. What doesn't get sent to Issan might get spent by the girl at night markets, clothes markets or maybe even on illegal drugs. I'd say a very small proportion of it goes into the white economy. Same goes for the van drivers, tuk tuk drivers, waitresses, maids, hotel staff, car/motorbike rental shops, tour guides etc. The list goes on and on. These people earn low wages and what they do earn may never turn up on any radar.

 

I think they have no idea of the true value of tourism and if they did they'd play it down anyway because they like to pretend they don't need foreigners and are 100% self sufficient.

 

There will be a lot of families in Issan who haven't received their 10,000 a month from their cashier daughter in Bangkok/Pattaya. A lot of these families are already in debt from last seasons disastrous crop due to the drought.

 

Not to mention decrease in demand for products exported to Europe and the US. Difficult to talk this one up.

 

Regardless of where it gets spent, by whom, it gets recorded as spend, the total of which comprise GDP. Read the following, slowly:

 

• GDP can be calculated by adding up all of the money spent by consumers, businesses, and government in a given period.
• It may also be calculated by adding up all of the money received by all the participants in the economy.

 

[Darkside Gray]

20 hours ago, Anton9 said:

Hey, at least there's no Covid.

Who cares about everything else?

Me!

[Lacessit]

1 minute ago, Mr Meeseeks said:

Silly comment considering Thailand is a vehicle manufacturing hub for both cars and motorcycles.

Not really, outside the cities you will see plenty of scooters that have had the rear mirrors removed. I assume it's based on the proposition if one can't see something coming, it does not exist.

[pineapple01]

16 minutes ago, Mr Meeseeks said:

The the Australian Defense Force Academy? Isn't that where they got caught abusing the cadets?

 

Like the Welsh with Sheep.

[Trillian]

56 minutes ago, ExpatOilWorker said:

The value of the tourist sector can be discussed indefinitely, but do you have a good "gestimate" of how much of imports can be directly linked to tourism?

When a tourist drink a bottle of Australian wine, have Frensh cheese for breakfast, use fuel, stay in a foreign owned hotel, etc, money is also flowing out of the country.

Surely it is less than 20%, but could it be 10%?

This might be a start, it's difficult to imagine that very much of that might be tourism linked:

 

The following product groups represent the highest dollar value in Thailand’s import purchases during 2019. Also shown is the percentage share each product category represents in terms of overall imports into Thailand.

1. Electrical machinery, equipment: US$43.4 billion (18.1% of total imports)
2. Mineral fuels including oil: $37.6 billion (15.7%)
3. Machinery including computers: $29.8 billion (12.4%)
4. Gems, precious metals: $12.3 billion (5.1%)
5. Iron, steel: $12 billion (5%)
6. Vehicles: $10.7 billion (4.5%)
7. Plastics, plastic articles: $9.2 billion (3.9%)
8. Articles of iron or steel: $6.9 billion (2.9%)
9. Optical, technical, medical apparatus: $6.4 billion (2.7%)
10. Organic chemicals: $4.3 billion (1.8%)

http://www.worldstopexports.com/thailands-top-10-imports/

[JonnyF]

4 minutes ago, Trillian said:

Regardless of where it gets spent, by whom, it gets recorded as spend, the total of which comprise GDP. Read the following, slowly:

 

• GDP can be calculated by adding up all of the money spent by consumers, businesses, and government in a given period.
• It may also be calculated by adding up all of the money received by all the participants in the economy.

 

So how do they calculate the following example?

 

A sex worker gets 2000 Baht from a customer and sends 1500 of it to her parents in Issan. Her parents spend it at the local market on locally grown fish and rice, a bottle of Lao Khao and some goat poo to fertilize their land. The people who sold them the food and Lao Khao (and goat poo) spend it on grass cuttings from their neighbour to feed their cows. They also hire a local worker for 2 days to cut some bamboo on their land and use it to fix a fence. They also buy some locally produced food at the market that they cannot produce themselves.

 

How is that 2000 Baht recorded? And what happens if it never lands in Issan in the first place? We have a hobby farm in a village in Korat which I visit a couple of times a month and this is how it works. People buy stuff (locally produced produce, labour etc.) from each other all the time, they never declare it. None of them pay tax. They very rarely visit Tesco or 711. This story is repeated all over the North East.

[Trillian]

10 minutes ago, JonnyF said:

So how do they calculate the following example?

 

A sex worker gets 2000 Baht from a customer and sends 1500 of it to her parents in Issan. Her parents spend it at the local market on locally grown fish and rice, a bottle of Lao Khao and some goat poo to fertilize their land. The people who sold them the food and Lao Khao (and goat poo) spend it on grass cuttings from their neighbour to feed their cows. They also hire a local worker for 2 days to cut some bamboo on their land and use it to fix a fence. They also buy some locally produced food at the market that they cannot produce themselves.

 

How is that 2000 Baht recorded? And what happens if it never lands in Issan in the first place? We have a hobby farm in a village in Korat which I visit a couple of times a month and this is how it works. People buy stuff (locally produced produce, labour etc.) from each other all the time, they never declare it. None of them pay tax. They very rarely visit Tesco or 711. This story is repeated all over the North East.

At the macro level they don't and they don't care, calculating GDP is not about your 2k Baht story and how it's broken down. The Central Bank will have a mechanism to calculate this at a much higher level, one that involves total retail receipts, total services acquired, actual and modelled spending by tourists (I imagine your 2k is under ancillary cash expense by tourist), the difference in average consumer account balances since the last calculation and so on. If the GDP calculation is off by 5% or more that would not surprise, the key is that the same calculation is made the same way every time. You think your 2k example that is repeated all over the NE is a huge amount, it's not, not in the context of USD 520 billion of GDP.

 

 

 

[Mikeasq60]

15 hours ago, drbeach said:

She sounds very paranoid. Talking about it over the phone should be zero issue.

Paranoid, why you say that its Thailand. Are you Thai or just one of the busy body losers that just wants to make a comment on these sites, any comment. Honestly I shake my head at the comments posted yours one of them.

[transam]

1 minute ago, Mikeasq60 said:

Paranoid, why you say that its Thailand. Are you Thai or just one of the busy body losers that just wants to make a comment on these sites, any comment. Honestly I shake my head at the comments posted yours one of them.

What about yours....?    ????

[elgenon]

Just bring the girls back. The only thing that counts. : )

[rosst]

23 hours ago, Justgrazing said:

I've seen a lot more than 15% exposed in Soi/6 .. 100% in fact .. but won't all the High Quality Tourists they are confident will be banging on the door ( metaphorically ) readjust the balance back to happy , amazing and wonderful again .. 

 

Personally it will be the insurance issue for me, I am 74 and the cost is punitive 

[rott]

On 7/7/2020 at 12:39 PM, Jim1000 said:

I smell a tumbril ( hope I did spell   that correctly ! )

Yes but you should have said spelt instead of did spell. 

 

Just trying to help. ????

[Trillian]

3 hours ago, Trillian said:

This might be a start, it's difficult to imagine that very much of that might be tourism linked:

 

The following product groups represent the highest dollar value in Thailand’s import purchases during 2019. Also shown is the percentage share each product category represents in terms of overall imports into Thailand.

1. Electrical machinery, equipment: US$43.4 billion (18.1% of total imports)
2. Mineral fuels including oil: $37.6 billion (15.7%)
3. Machinery including computers: $29.8 billion (12.4%)
4. Gems, precious metals: $12.3 billion (5.1%)
5. Iron, steel: $12 billion (5%)
6. Vehicles: $10.7 billion (4.5%)
7. Plastics, plastic articles: $9.2 billion (3.9%)
8. Articles of iron or steel: $6.9 billion (2.9%)
9. Optical, technical, medical apparatus: $6.4 billion (2.7%)
10. Organic chemicals: $4.3 billion (1.8%)

http://www.worldstopexports.com/thailands-top-10-imports/

The question was asked, "do you have a good "gestimate" of how much of imports can be directly linked to tourism?"

 

Imports appear to have averaged about USD 20 bill per month during 2019, that's USD 240 bill for the year.

 

Tourism (domestic and international) during 2019 represented USD 17.5% of GDP, GDP = USD 520 bill. so Tourism was worth USD 91 bill.

 

The tenth biggest import above is organic chemicals at USD 4.3 bill. which is 1.8% of all imports, as a percentage of Tourism it represents 4.75%. 

 

So if any import is directly linked to Tourism it probably has a value of less than 5%, my best gestimate is that the true value of imports linked to Tourism is probably less than 2%. I imagine the question was asked to see what the impact might be on the trade surplus resulting from having zero tourists, my answer/guess is very very little.

 

 

[kingofthemountain]

1 hour ago, elgenon said:

Just bring the girls back. The only thing that counts. : )

The girls are here

it's the foreigners customers who are lacking at the moment

[rott]

3 hours ago, JonnyF said:

So how do they calculate the following example?

 

A sex worker gets 2000 Baht from a customer and sends 1500 of it to her parents in Issan. Her parents spend it at the local market on locally grown fish and rice, a bottle of Lao Khao and some goat poo to fertilize their land. The people who sold them the food and Lao Khao (and goat poo) spend it on grass cuttings from their neighbour to feed their cows. They also hire a local worker for 2 days to cut some bamboo on their land and use it to fix a fence. They also buy some locally produced food at the market that they cannot produce themselves.

 

How is that 2000 Baht recorded? And what happens if it never lands in Issan in the first place? We have a hobby farm in a village in Korat which I visit a couple of times a month and this is how it works. People buy stuff (locally produced produce, labour etc.) from each other all the time, they never declare it. None of them pay tax. They very rarely visit Tesco or 711. This story is repeated all over the North East.

All the prostitutes I know are regularly in 7eleven.

[kingofthemountain]

10 hours ago, Harry Fingerling said:

Perhaps building motorcycles that have lights and cars that have indicators might help. ????

Motorcycles and cars in Thailand are build with the same safety standarts as in the rest of the world

so they come new with lights and indicators.

The problem is the maintenance (Or the lack of) by the owners

from a Thai point of view, a light out of service doesn't prevent the vehicle from rolling

and it's cost money to fix it, plus the famous ''mai pen rai'' attitude and you have your answer

[kingofthemountain]

7 minutes ago, rott said:

All the prostitutes I know are regularly in 7eleven.

In the country side most of the small villages don't have a 7\11

i think it was about these places he was talking about

[ExpatOilWorker]

23 minutes ago, Trillian said:

The question was asked, "do you have a good "gestimate" of how much of imports can be directly linked to tourism?"

 

Imports appear to have averaged about USD 20 bill per month during 2019, that's USD 240 bill for the year.

 

Tourism (domestic and international) during 2019 represented USD 17.5% of GDP, GDP = USD 520 bill. so Tourism was worth USD 91 bill.

 

The tenth biggest import above is organic chemicals at USD 4.3 bill. which is 1.8% of all imports, as a percentage of Tourism it represents 4.75%. 

 

So if any import is directly linked to Tourism it probably has a value of less than 5%, my best gestimate is that the true value of imports linked to Tourism is probably less than 2%. I imagine the question was asked to see what the impact might be on the trade surplus resulting from having zero tourists, my answer/guess is very very little.

 

 

2% (of imports) sound like a reasonable number, but if international tourism represent 20% of exports and just 2% of imports, shouldn't a full year of zero international tourism result in a big (18%??) deficit on the currency balance?

[Trillian]

7 minutes ago, ExpatOilWorker said:

2% (of imports) sound like a reasonable number, but if international tourism represent 20% of exports and just 2% of imports, shouldn't a full year of zero international tourism result in a big (18%??) deficit on the currency balance?

Only if you carry today's scenario through to the end of the year and each month is the same, in that case yes. We've already had three months of fairly decent numbers at the start of the year and the projection for the last few months of the year are not zero.

 

But do you think that's likely or probable? (presume you intended to write current account balance/trade surplus/deficit)

[JonnyF]

3 hours ago, Trillian said:

At the macro level they don't and they don't care, calculating GDP is not about your 2k Baht story and how it's broken down. The Central Bank will have a mechanism to calculate this at a much higher level, one that involves total retail receipts, total services acquired, actual and modelled spending by tourists (I imagine your 2k is under ancillary cash expense by tourist), the difference in average consumer account balances since the last calculation and so on. If the GDP calculation is off by 5% or more that would not surprise, the key is that the same calculation is made the same way every time. You think your 2k example that is repeated all over the NE is a huge amount, it's not, not in the context of USD 520 billion of GDP.

 

 

 

The 2k example was just that, a simple example of a single transaction to point out to you that a lot of this money is off the radar. I thought you understood that (in fact, I'm sure you do understand that but your job/agenda on the forum firstly as Saengd and now as Trillion obviously prevents you from acknowledging it).

 

You are talking like losing 10% of GDP is no big deal for Thailand. The problem isn't so much that GDP will drop by 10 (or more likely 15%). It's that the 10% or 15% will have huge social impacts on the poorest people in the country. Mai Pen Rai doesn't work when you and your family haven't eaten for 2 days. I'm sure you aware of Lenin's quote that every society is 3 meals from chaos. This could have serious ramifications. 

[peter48]

Until the Baht drops tourists particularly from western nations will not flood back- so many other nations like Vietnam are cheaper or even now southern Europe like Greece or Spain or Portugal etc. It seems incredible that the Baht holds up so much especially against sterling when you think that Thailand is so dependent upon exports like incoming tourists spending their foreign money here and foreign companies buying Thai manufacturing or commodities. Its just baffling. Who wins from a continuous high Baht? 

[Trillian]

2 minutes ago, JonnyF said:

The 2k example was just that, a simple example of a single transaction to point out to you that a lot of this money is off the radar. I thought you understood that (in fact, I'm sure you do understand that but your job/agenda on the forum firstly as Saengd and now as Trillion obviously prevents you from acknowledging it).

 

You are talking like losing 10% of GDP is no big deal for Thailand. The problem isn't so much that GDP will drop by 10 (or more likely 15%). It's that the 10% or 15% will have huge social impacts on the poorest people in the country. Mai Pen Rai doesn't work when you and your family haven't eaten for 2 days. I'm sure you aware of Lenin's quote that every society is 3 meals from chaos. This could have serious ramifications. 

Much of your first paragraph makes no sense to me whatsoever, I suggest you restrict yourself to the topic at hand rather than any conspiracy theory you have in mind!  That said, I never said that all money in an economy is accounted for, I merely pointed out that much of it is.

 

Second, you seem to have missed the point that if a GDP calculation is performed the same way every time it's the relative number(s) that become important rather than the actual ones since they denote change. I didn't say that losing 10% of GDP is no big deal for Thailand, neither did I imply it was. I'm not sure what your agenda is here but I'm not keen to get into discussions about Lenin or starving families, this topic isn't about those things.

[Trillian]

I borrowed this from another thread because I think it's relevant and useful to anyone interested in this subject, I would urge those people to read the most recent MPC minutes:

 

https://www.bot.or.th/English/MonetaryPolicy/MonetPolicyComittee/ReportMPC/Minutes/MPC_Minutes_42020_6abht7w8.pdf

[Jimbo2014]

On 7/7/2020 at 3:20 PM, khunpa said:

What do you suggest they do? Do like the Americans with now 50.000 cases per day and rising?

 

Keeping Thailand free of Covid might end up as the biggest benefit for them in the long run.

Its true its taking a toll globally and in America in-particular.  Im not saying dont be cautious.  It makes sense to socially distance to some extent and to wear masks.  However unless there is a treatment or vaccine then we need to learn to live with it.  Its not the black death.  About 70 people die each day on the roads in thailand and countless more from the impact of poor air and water.  By comparison Covid has killed 58 people to date, a portion of which likely had serious underlying health issues.  America presents the other extreme where precautions have not been taken.   To date 133K deaths for 325M population.  Scaling that to Thailand you would get 27000 deaths.  Thats one years road toll in this country.  People learn to live with one risk but not the other.   Perhaps somewhere in the middle lies the future sans a cure, treatment, vaccine.

[Phulublub]

2 hours ago, peter48 said:

It seems incredible that the Baht holds up so much especially against sterling when you think that Thailand is so dependent upon exports like incoming tourists spending their foreign money here and foreign companies buying Thai manufacturing or commodities. Its just baffling. Who wins from a continuous high Baht? 

Not incredible at all when you factor in the colossal amounts of inward investment -mostly from China - building infrastructure - not just the EEC, but heading north and north east from Bangkok too.

 

PH

[JonnyF]

2 hours ago, Trillian said:

Much of your first paragraph makes no sense to me whatsoever, I suggest you restrict yourself to the topic at hand rather than any conspiracy theory you have in mind!  That said, I never said that all money in an economy is accounted for, I merely pointed out that much of it is.

 

Second, you seem to have missed the point that if a GDP calculation is performed the same way every time it's the relative number(s) that become important rather than the actual ones since they denote change. I didn't say that losing 10% of GDP is no big deal for Thailand, neither did I imply it was. I'm not sure what your agenda is here but I'm not keen to get into discussions about Lenin or starving families, this topic isn't about those things.

It's no conspiracy theory. You were on ThaiVisa before as user Saengd talking up the Thai economy with every single post, got banned and returned as Trillian to do the same. You're totally transparent. 

 

The Thai economy is in freefall. The 15% that it will likely shrink by in 2020 will affect mainly the poorest members of society. You think it's no big deal, I think it's a huge deal.

[Phulublub]

3 minutes ago, JonnyF said:

The Thai economy is in freefall. The 15% that it will likely shrink by in 2020 will affect mainly the poorest members of society. You think it's no big deal, I think it's a huge deal.

Many Countries are going to suffer hugely through Covid, Thailand amongst them.

 

I do wonder, though, just how many - outside the major conurbations - are actually pretty much subsistence farmers who will continue to grow rice and chickens, and catch fish, frogs field rats, ant eggs etc just as they always have done and that the economic effect on them may be less than we realise.  Just a thought, not a conclusion.

 

PH

[Trillian]

1 hour ago, JonnyF said:

It's no conspiracy theory. You were on ThaiVisa before as user Saengd talking up the Thai economy with every single post, got banned and returned as Trillian to do the same. You're totally transparent. 

 

The Thai economy is in freefall. The 15% that it will likely shrink by in 2020 will affect mainly the poorest members of society. You think it's no big deal, I think it's a huge deal.

You are deluded in your conspiracy theory, nobody is talking up anything but a few of us are presenting facts, I'm sorry you can't handle them!

 

You are entitled to your views on the economy but don't make assumptions about what you think I think, I have said what I think. It's shame you were not able to join the discussion on a more constructive level and have had to resort to fantasy tales to hide that fact.

 

And I think you and I are done on this and any other point of discussion.

Edited July 8, 2020 by Trillian