Central bank governor says Thai economy does not need bailout from IMF

 

 

The Thai economy is strong enough and the country does not need to seek a financial bailout from the International Monetary Fund (IMF), although its GDP this year may be the lowest in the region, Bank of Thailand Governor Veerathai Santipraphob said at a seminar on Monday.

 

In his address on the “Post-COVID Economic Direction”, the head of the Central Bank said that, although Thailand has managed to control the spread of COVID-19, its growth rate for the whole year may be the lowest in Southeast Asia, because its economic structure is dependent on exports and tourism, which have been hard hit by the pandemic.

 

He claimed, however, that the Thai economy had bottomed out in the second quarter, after which it will make a gradual “V” shaped recovery, back to pre-COVID-19 levels, at the end of next year.

 

Full story: https://www.thaipbsworld.com/central-bank-governor-says-thai-economy-does-not-need-bailout-from-imf/

 

-- © Copyright Thai PBS 2020-07-21

 

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3 hours ago, webfact said:

Central bank governor says Thai economy does not need bailout from IMF

He can't be the real governor surely? He didn't mention once he was 'worried about the strength of the Baht'.

I thought that was a prerequisite?

Of course they don't need any stinking Loans.  This is Thailand and they still have billions left over. In fact they are buying the top army generals a new Billion baht+ aircraft so they can fly in luxury while the peons, oops I meant citizen's can live on the table scraps they throw there dogs. Such a familiar sight the world over.....rich tramping down on the poor. One day Thailands people may be fed up enough to do something. 

Thailand is doing great considering the loss of the tourism sector. I am sure Thailand will own the IMF in the future. 

 

And the virus is under control. I have traveled to Rayong and the hotel check in procedure is very strict. 

Recovering Thailand doesn't need IMF bailout: Veerathai

By The Nation

 

Bank of Thailand governor Veerathai Santiprabhob delivers his speech at the central bank’s July 20 symposium on how local businesses can survive in post-Covid-19.

 

Thailand has no need to ask for help from the International Monetary Fund despite Covid-19 causing a sharp economic contraction, capital outflows and deterioration in the labour market, says the central bank’s chief.

 

Bank of Thailand governor Veerathai Santiprabhob acknowledged on Monday (July 20) it would take time for the economy to recover to pre-pandemic levels. But he vowed to extend this year’s Bt500-billion soft loans package into next year to fuel the recovery.

 

Veerathai was speaking at the central bank’s symposium on how local businesses can survive in the post-Covid-19 era.

 

The pandemic has hit economies around the world hard, prompting over 100 countries to ask for IMF rescue packages. But Thailand would not be one of them, said the BOT chief.

 

“For people raising concerns over whether we will have to ask for IMF help, the answer is that we do not need it, despite 102 members already requesting IMF aid,” said Veerathai.

 

The Thai economy is expected to fall further than many in the region this year, with worse to come in the second quarter before it gradually recovers, he said, forecasting the economy could return to pre-Covid-19 levels by the end of next year.

 

He said that no single policy could handle the current crisis effectively, and the government needs to coordinate many policies and measures.

 

For its monetary policy, the central bank has this year cut its key policy rate three times to a historic low of 0.5 per cent.

 

Capital has flowed out of the country but not at an alarming rate, given that Thailand is still running a small current account surplus. So the country could maintain a low interest rate, he said. However, local financial markets are also flooded with liquidity, which together with excess liquidity in the global market could cause the baht exchange rate to fluctuate greatly, he cautioned.

 

“The central bank’s biggest concern is employment, because the Covid-19 pandemic has adversely affected the labour market in both the services and manufacturing sectors, where large numbers of workers were laid off,” he said. Even if the pandemic situation improves, many workers may not be able return to work, he warned.

 

He pointed out that current overcapacity and many factories had also installed robots to replace workers.

 

As a result, new graduates will find it more difficult to get jobs over the next two years.

 

“The challenge during this two-year period of how to ensure new graduates aren't scarred is a cause for concern,” he warned.

 

He was optimistic, however, that bad debt in the banking system will not lead to a repeat of the 1997 Asian financial crisis.

 

“The impact of Covid-19 will definitely see non-performing loans [NPLs] rise, but as we have implemented preemptive measures, NPLs will not spike,” he said.

 

Debt restructuring  will allow everyone to survive and avoid the prospect of a 1997 financial crisis scenario, he said.

 

Regarding its soft loan package, the central bank will extend the deadline for applications from the end of this year to the end of 2021, he said.

 

Moreover, the central bank is in talks with the Thai Credit Guarantee Corp(TCG) over credit insurance after the two-year soft loan package ends, Veerathai added.

 

The central bank predicts the Thai economy will contract 8.1 per cent this year as exports and tourism are hard hit by the virus crisis. It forecasts the economy will now gradually start to recover as lockdown restrictions have been eased.

 

Meanwhile, Somkiat Tangkitvanich, president of the Thailand Development Research Institute, predicted a rise in the number of poor along with a deterioration of the government’s fiscal position in the next five or six years.

 

The virus impact will see more people working from home. For businesses to survive, they have to cut costs, diversify risk and connect with networks. Holding cash will be the best option, he suggested.

 

Strong businesses may have an opportunity to acquire small regional businesses at cheaper prices. New businesses may emerge, as did e-commerce giant Alibaba when SARS hit China last decade, he added.

 

Source: https://www.nationthailand.com/business/30391640

 

-- © Copyright The Nation Thailand 2020-07-21

 

- Whatever you're going through, the Samaritans are here for you

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2 hours ago, NCC1701A said:

Thailand is doing great considering the loss of the tourism sector. I am sure Thailand will own the IMF in the future. 

 

And the virus is under control. I have traveled to Rayong and the hotel check in procedure is very strict. 

Pharaoh-nuff.

I hope the hotel you're in doesn't use the same laundry to wash the sheets as the hotel the Egyptians stayed in.

Or if so, does the laundry have a 'boil wash' option?

10 minutes ago, webfact said:

Recovering Thailand doesn't need IMF bailout: Veerathai

Perhaps not, but maybe the Generals would like a piece? Or is there too much oversight attached?

Must be that Thai face concept.  Economy based on exports and tourism—heading to Hell in a hand basket.  But they’ll refuse a bailout.

25 minutes ago, webfact said:

Recovering Thailand doesn't need IMF bailout: Veerathai

Brilliant. Surely now we can look forward to the usual U-turn in the near future.

The pandamic is a very interesting time for Thai rich people. Imagine all the investments going on now. 

 

Ofcource the ordinary people are the victim in all of this.

 

Thailand doesn't want a loan, but it's also is leaving people hanging who have lost their jobs. The best they could do was 15k over 3 months. Now <deleted> is really hitting the fan...

 

Ofcource not for the rich, who are pulling the strings.

When someone negates the need for something, it makes me worried... Does that really mean that Thailand might need IMF bailout and this is just a way to prepare people for the bad news?

4 hours ago, NCC1701A said:

Thailand is doing great considering the loss of the tourism sector. I am sure Thailand will own the IMF in the future.

They may not actually own it,but according to the illustrious PM, the official IMF language may be Thai one day

1 minute ago, RichardColeman said:

4 hours ago, NCC1701A said:

Thailand is doing great considering the loss of the tourism sector. I am sure Thailand will own the IMF in the future.

They may not actually own it,but according to the illustrious PM, the official IMF language may be Thai one day

That's so when they re-write the rules - same as they do annually with the constitution - no one will understand until it's too late.

The phrase is 'method in their madness'.

No loan required we have spent nearly 5 quid on bailing out the country already and our people will be quite happy to be thinner in the future we in the party are in good shape????

22 hours ago, webfact said:

The Thai economy is strong enough and the country does not need to seek a financial bailout from the International Monetary Fund

 

True. The country is being sold to the Chines in the form of bonds , hence one of the reasons the Thai baht stays strong. Influx of hot money.

 

No more need for TEFlers soon.   The demand will be TCFlers

4 hours ago, NCC1701A said:

Thailand is doing great considering the loss of the tourism sector. I am sure Thailand will own the IMF in the future. 

 

And the virus is under control. I have traveled to Rayong and the hotel check in procedure is very strict. 

Taking advantage of the special discounts on offer? ????

4 hours ago, NCC1701A said:

Thailand is doing great considering the loss of the tourism sector. I am sure Thailand will own the IMF in the future. 

 

And the virus is under control. I have traveled to Rayong and the hotel check in procedure is very strict. 

Taking advantage of the special discounts on offer? ????

 

He claimed, however, that the Thai economy had bottomed out in the second quarter, after which it will make a gradual “V” shaped recovery, back to pre-COVID-19 levels, at the end of next year.

 

That will be the same V Shaped recovery as the rest of the world yes?

The Thai economy is expected to fall further than many in the region this year, with worse to come in the second quarter before it gradually recovers, he said, forecasting the economy could return to pre-Covid-19 levels by the end of next year.

 

??? Really. "Ground control to Major Tom"

will make a gradual “V” shaped recovery

 

They can be happy if it will be a U shaped recovery.

I'm guessing this means they as negotiating an IMF bailout as we speak. I base this belief on regular Orwell-speak from out leaders.

6 hours ago, webfact said:

Bank of Thailand governor Veerathai Santiprabhob acknowledged on Monday (July 20) it would take time for the economy to recover to pre-pandemic levels.

Pre-pandemic levels weren't looking to good !

20 hours ago, bluesofa said:

Pharaoh-nuff.

I hope the hotel you're in doesn't use the same laundry to wash the sheets as the hotel the Egyptians stayed in.

Or if so, does the laundry have a 'boil wash' optio

I will ask. Thanks.

I am burning through a lot of Listerine on this trip. 

Edited July 21, 20205 yr by NCC1701A

18 hours ago, trucking said:

 

True. The country is being sold to the Chines in the form of bonds , hence one of the reasons the Thai baht stays strong. Influx of hot money.

 

No more need for TEFlers soon.   The demand will be TCFlers

Guess you haven't noticed the baht heading south.

Those of us that were here remember the previous IMF loan in '97 after Thailand caused the Worldwide economic crash. 

 

We can also remember the almost daily updates in the papers about IMF loan repayments, as a matter of national security, and how PM Thaksin was lauded for finally paying them all off. 

 

They'd rather see the country burn than lose face by taking foreign (not Chinese) money again. 

Of course they don't if they can buy a new private personal over the top expensive jet for the military fatheads.