The Thai Economy Is In Crisis

[highdiver]

Half-point interest rate cut expected

Target at end of year projected at 3%

The financial market anticipates the Bank of Thailand will cut its benchmark interest rate by a half percent to 3.5% instead of only a quarter point on Wednesday due to worse-than-expected economic conditions.

http://www.bangkokpost.com/Business/21May2007_biz31.php

It's rather funny to see that the debate over interest rates was before aimed at curbing the THB increase...

As you can see, the "tone" has changed... From a currency problem... we jump directly to the "worse-than-expected economic conditions".

So much for the followers of Lehman Brothers.

But they will probably tell us that "now" with low interest rates the machine is going to run at full speed.

Unfortunatly, the road ahead is still very bumpy.

if you read the article again.

''The market has enjoyed a positive environment from the lower interest-rate trend since the beginning of the year. It has not factored in political risks just yet.''

The baht is expected to weaken because of wider interest-rate differentials and a thinner trade surplus in the remainder of the year.

it is definatly about controlling the THB.

it is about making Thailand less attractive to short time speculators and mor attractive to medium long term investors.

[bingobongo]

nothing to see here....move along......

well hello, "defenders of the realm" and rainbows and lollipos brigade. nice to see Thailand lumped in with Laos, Cambodia, Vietnam, and Myanmar

do i really wnat to invest in a junta? i think not

http://www.economist.com/daily/chartgaller...tory_id=9196395

Edited May 21, 2007 by bingobongo

[Maestro]

Edonista and palm, may I suggest that you suspend your exchange of personal messages on the public forum for a moment and consider whether you may perhaps be talking at cross purpose?

(Highlighting is mine)

Palm wrote:

Yet, from investing in Thailand, global businesses can still manufacture at low costs here and sell in the West for substantial mark-ups.

...

For every good employee we can find here, we can make a monthly profit of around 300% of their salary.

Edonista wrote:

Please enlighten us about what goods allow you to gain 300% (while keeping you out of monkey house, of course)

Palm wrote:

Garments.

Manufacture for 300 baht, sell for 1000+.

Manufacture for 2000 baht, sell for 7000+.

Edonista wrote:

So when you say you have a mark up of 300% you say a lie, because most of that added value is created in USA and Europe by your distribution chain, not in Thailand by your manufacturing activities.

Palm mentioned his company’s profit to indicate that it is possible to operate at a profit in Thailand despite news reports of the Thai economy being in crisis. There are many ways to quote a company’s profit and palm gives it a s a percentage of salary expenses, ie 300%

Edonista takes this number of 300% as a mark-up, ie the difference between a product’s retail selling price and its cost. Obviously, Edonista and palm are talking about two different things and if Edonista can accept that there is a misunderstanding there should be no further need for an exchange of private messages between them in this public forum. If they want to continue their private conversation, I suggest they do so by means of PMs (personal messages) or email.

--------------

Maestro

[Edonista]

nothing to see here....move along......

well hello, "defenders of the realm" and rainbows and lollipos brigade. nice to see Thailand lumped in with Laos, Cambodia, Vietnam, and Myanmar

do i really want to invest in a junta? i think not

http://www.economist.com/daily/chartgaller...tory_id=9196395

BingoBongo, I agree with most of your posts about current economic situation in Thailand, but may I remind you that Chinese regime is 1,000 times worse then this junta , yet everyone rushes to invest in China ?

It is not a matter of free elections, it is a matter of competitive advantage....with their low salaries and higher work ethic China and Vietnam have a big advantage versus Thailand, whose elite is so shortsighted to choose protectionism as solution.

Btw I also find quite curious that Singapore is "partially free" while Indonesia is the only "free" rated country....I did not get this impression when I visited both Singapore and Batam past year

[bingobongo]

nothing to see here....move along......

well hello, "defenders of the realm" and rainbows and lollipos brigade. nice to see Thailand lumped in with Laos, Cambodia, Vietnam, and Myanmar

do i really want to invest in a junta? i think not

http://www.economist.com/daily/chartgaller...tory_id=9196395

BingoBongo, I agree with most of your posts about current economic situation in Thailand, but may I remind you that Chinese regime is 1,000 times worse then this junta , yet everyone rushes to invest in China ?

It is not a matter of free elections, it is a matter of competitive advantage....with their low salaries and higher work ethic China and Vietnam have a big advantage versus Thailand, whose elite is so shortsighted to choose protectionism as solution.

Btw I also find quite curious that Singapore is "partially free" while Indonesia is the only "free" rated country....I did not get this impression when I visited both Singapore and Batam past year

good point, but the difference is China is growing exponentially and Thailand is not

[ThaiGoon]

http://www.nationmultimedia.com/2007/05/22...ss_30034788.php

Exports record 18.5% growth

In spite of the strengthening baht, exports rose 18.5 per cent to US$10.87 billion (Bt376 billion) last month, bringing the export growth rate for the first four months to 18.3 per cent, the Commerce Ministry announced yesterday.

In April, exports of agro-industrial products grew 28.8 per cent, agricultural goods rose 13.2 per cent and industrial goods increased 30.7 per cent. Exports of most industrial goods increased more than 15 per cent, including electronic appliances, automobiles, construction materials and medical products.

Garment exports, which had fallen in March, increased by 7.6 per cent, thanks to the recently signed Japan-Thailand Economic Partnership Agreement.

However, gems and jewellery exports continued to drop, due mainly to the rise in gold prices. They slumped 32.3 per cent compared with the same period last year.

Imports rose in all sectors. Capital goods rose 4.9 per cent, raw materials and semi-raw materials increased 21.9 per cent and consumer goods jumped 23.8 per cent.

Despite rising global oil prices, fuel imports decreased 15.6 per cent, thanks to the strengthening baht.

...............................

http://www.nationmultimedia.com/2007/05/22...ss_30034799.php

S Korea's latest hit here is investment

Investment by Korean firms in Thailand has shot up 124 per cent so far this year over the same period last year, with Samsung - which manufactures television sets here - leading the way, according to the Board of Investment (BoI)

So far this year, the BoI has received applications for investment privileges for 33 projects with South Korean investment.

Their total investment amounts to Bt5.23 billion, up 124 per cent over the same period last year. Investment for one Thai Samsung project accounts for more than Bt1.5 billion, with the remainder going into electronics and machine manufacturing.

.............................

Oh No! The sky is falling. And no way am I gonna invest in this country because it's in a crisis and under a junta blah blah blah. (not because I'm practically bitterly and miserably broke and actually living here paycheck to paycheck and can't even afford to live comfortably in my home country, let a lone making an investment in another.)

Edited May 21, 2007 by ThaiGoon

[Robski]

275 posts, no conclusion and for the last week only petty name calling in a pissing contest,

why don't you give it a rest and agree to disagree,

you know like the intellligent adults you are all trying so hard to be.

Most of us only want to know if the Baht will depreciate anytime soon, but your all just getting boring now.

Edited May 21, 2007 by Robski

[bingobongo]

well, it is now time for the updated list, of what has transpired since the glorious coup

all items mentioned below have been listed in this thread so refer back for specific articles. now i am sure the "defenders of the realm" (lollipops and rainbow brigade) can refute/counter 25% even 50% of the items listed, but alas, it is obvious the economy is taking it on the chin in all areas......point is negatives are outweighing the positives (there are some positives, but not many)......so flame away

i will expand the list as needed.......

so to summarize the NEGATIVEs over the past 18 pages......

Stronger baht - check

Declining oil imports (as of Q1, 2007) - check

Work halted on numerous property developments - check

Declining property sales - check

Banks offering no interest/no closing cost loans for 3 months (Via teaser rates) - check

Auto sales down (again) - check

Housewares sales down (again) - check

BOT cutting rates to stimulate economy - check

Advertising spending declining - check

Increase in short term speculative inflows - check

Thailand trailing all other economies in region - check

Economy slows on weaker domestic demand - check

Consumer confidence lowest in 5 years - check

Sony, Toshiba, Pioneer (electronics) report lower YOY demand - check

Thai Airways profits slump 31% - check

Thai Gross Domestic Happiness falling - check

Pawn Shop loans increasing – check

Brokerage houses take big hit on lower trade volume – check

Declining motorcycle sales (higher repossessions) – check

AOT profit down 90% - check

BOT chief fired and run by junta – check

Credit card use down – check

IMF voices capital influx concern – check

Listed firms post big Q1fall in earnings – check

Credit bubble deflating – check

Capital controls to remain in place – check

ABAC poll indicates increasing pessimism - check

Edited May 21, 2007 by bingobongo

[ThaiGoon]

From BoI's website:

http://www.boi.go.th/english/download/stat...t/86/INV073.pdf

Foreign investment from major countries during Jan-March of this year has increased in all three categories (Net Applications, Applications approved and Promotion Certificates issued) compared to last year's.

Net Applications: Jan-March 2007=74,107 million Baht, Jan-March 2006=59,492 million Baht

Applications approved: Jan-March 2007=124,506 million Baht, Jan-March 2006=80,251 million Baht

Promotion Certificates issued: Jan-March 2007=113,788 million Baht, Jan-March 2006=84,736 million Baht

Oh No! The sky is falling!! I'm so happy the Thai economy is collapsing and everyone in Thailand will finally be living paycheck to paycheck and be as miserable, sad and bitter as me! (If that is not really the reality, then I'll just keep banging on it in an internet forum so that at least I can feel a bit better about my sad and pathetic life.) :D

Edited May 21, 2007 by ThaiGoon

[cclub75]

275 posts, no conclusion and for the last week only petty name calling in a pissing contest,

why don't you give it a rest and agree to disagree,

I beg to disagree. The title of this thread is "crisis".

It allows the people who care a bit about the future of Thailand to follow the news. The bad news that is to say.

There is no "pissing contest".

And because, we have such success, I suggest to our dear Lehman Brothers followers to open their own thread, for instance "Lucy In the Sky with thai Diamonds" or "Thai economy : mai mi pen ah" or whatever.

Edited May 21, 2007 by cclub75

[bkkandrew]

well, it is now time for the updated list, of what has transpired since the glorious coup

all items mentioned below have been listed in this thread so refer back for specific articles. now i am sure the "defenders of the realm" (lollipops and rainbow brigade) can refute/counter 25% even 50% of the items listed, but alas, it is obvious the economy is taking it on the chin in all areas......point is negatives are outweighing the positives (there are some positives, but not many)......so flame away

i will expand the list as needed.......

so to summarize the NEGATIVEs over the past 18 pages......

Stronger baht - check

Declining oil imports (as of Q1, 2007) - check

Work halted on numerous property developments - check

Declining property sales - check

Banks offering no interest/no closing cost loans for 3 months (Via teaser rates) - check

Auto sales down (again) - check

Housewares sales down (again) - check

BOT cutting rates to stimulate economy - check

Advertising spending declining - check

Increase in short term speculative inflows - check

Thailand trailing all other economies in region - check

Economy slows on weaker domestic demand - check

Consumer confidence lowest in 5 years - check

Sony, Toshiba, Pioneer (electronics) report lower YOY demand - check

Thai Airways profits slump 31% - check

Thai Gross Domestic Happiness falling - check

Pawn Shop loans increasing – check

Brokerage houses take big hit on lower trade volume – check

Declining motorcycle sales (higher repossessions) – check

AOT profit down 90% - check

BOT chief fired and run by junta – check

Credit card use down – check

IMF voices capital influx concern – check

Listed firms post big Q1fall in earnings – check

Credit bubble deflating – check

Capital controls to remain in place – check

ABAC poll indicates increasing pessimism - check

Quite so, keep the FACTS rolling, so that we don't get obscured by the ramblings of the Expat Thai Goon, pontificating from afar, luxuriating in the knowledge that he is insulated from events here...

BOI numbers are largely the result of multi-year planning by companies. I know I prepared one about 6-years ago. Numbers now reflect sentiment some time ago. But there again, I guess you haven't submitted a BOI app. yourself have you Mr Goon?

Edited May 21, 2007 by bkkandrew

[cclub75]

Ah, we forgot this one in our daily harvest....

Gold sales drop by 30% in Q1

Weak consumer confidence and belt-tightening habits have caused gold sales to plummet in the first quarter this year, according to Jitti Tangsithpakdi, president of the Gold Traders Association.

''Parents have avoided buying such luxurious items and save money for school,'' he said.

In addition, retail gold sales have dropped more than 30% compared with the same period the year before. The sales figure was not available.

http://www.bangkokpost.com/Business/21May2007_biz34.php

Too bad. BOI has record applications. But the common thai can not afford anymore a gold necklace and the school fees.

We know the importance of gold in thai psyche. This a good proof of the real crisis, the one that is hitting the common people in their life.

Inflation of gold, inflation of gasoline and other goods. Are the wages following ?

[ThaiGoon]

Man, I care so much about the future of this country that I need to come to an internet board everyday to tell everyone that Thai economy is in crisis, even when the reality says otherwise. (It's an economic downturn because of the polictical uncertainty, not a crisis.) And I'm not gonna tell anyone that the reason I'm doing this is actually because my life in Thailand has been a completely sad and pathetic failure. So I need somewhere on the internet to help make me feel a bit better about my sad pathetic self, even if that's based on delusions. )

PS. Bkkandrew, you prepared one application for BOI 6 years ago?? (That's one of the funniest claims I've ever read on this forum. )

Edited May 21, 2007 by ThaiGoon

[Robski]

Ok I get the point, but... any predictions for the Baht depreciating? When and how fast?

[bkkandrew]

Man, I care so much about the future of this country that I need to come to an internet board everyday to tell everyone that Thai economy is in crisis, even when the reality says otherwise. (It's an economic downturn because of the polictical uncertainty, not a crisis.) And I'm not gonna tell anyone that the reason I'm doing this is actually because my life in Thailand has been a completely sad and pathetic failure. So I need somewhere on the internet to help make me feel a bit better about my sad pathetic self, even if that's based on delusions. )

PS. Bkkandrew, you prepared one application for BOI 6 years ago?? (One of the funniest claims I've ever read on this forum. )

PPS - yes. spent two years working on setting up production in Bangkok for the corporate I used to work for - first (I.E. NOT LAST!!!) meeting at BOI September 03, thus proving my point that BOI projects from corporates take time from initial planning to formal meetings to applications etc. etc....

PPPS - Go back and study more rather than hurl insults about matters you know little of.

PPPPS - what is so funny about the BOI? Is it that you cannot stand the thought of us white-faced types there? I believe you had a choice word for our "types" in previous posts, but I won't repeat it as it is racist and got you suspended last time...

Edited May 21, 2007 by bkkandrew

[ThaiGoon]

Ok I get the point, but... any predictions for the Baht depreciating? When and how fast?

I don't know. But from what I've read, some Thai bank (not sure if it's BoT) is expecting it to be about 34 Baht/US dollar by year's end because of the relaxed regulations on Yuan.

[Robski]

That's pretty vague, anymore of you 'experts' care to hazard a guess?

[ThaiGoon]

Here's the news:

http://etna.mcot.net/query.php?nid=29449

BoI-promoted firms reiterate stand to maintain investment in Thailand

BANGKOK, May 18 (TNA) – Local and foreign companies receiving the Board of Investment’s investment promotions for projects worth 130 billion baht have reiterated its stand to maintain investment in Thailand, according to Deputy Prime Minister and Industry Minister Kosit Panpiemras.

Speaking after chairing a meeting held by BoI to discuss ways to accelerate investment, he said top executives of 37 leading local and foreign firms granted the BoI’s privileges, who attended the meeting, gave an assurance that they would not change any investment in Thailand.

Some companies even stated they prepared to seek additional investment promotions if some obstacles to investment were eliminated.

Oh No! The Sky is falling!

[bingobongo]

PPS - yes. spent two years working on setting up production in Bangkok for the corporate I used to work for. 1st (I.E. NOT LAST!!!) meeting September 03, thus proving my point that BOI projects from corporates take time...

Did your Thai girlfriend help you prepare the application?

By the way, we all know that it's all multi-year planning, but the companies don't need to stick with it if they see a crisis. The fact that 37 companies have just comfirmed thair plans to continure investing about 130 billion Baht in Thailand this year (read news a couple of days ago) does go to show that the future of Thailand in the short and medium terms is still quite all right. It's not all doom and gloom like those (including you) who "care for the future of Thailand" want others to believe.

ThaiGoon, sorry you are back, but welcome

[endure]

Stop the insults now.

[endure]

The next insult that appears in this thread will earn its poster a 10 day suspension. Understand?

[jumnien]

I was at Paragon yesterday to see the beautiful orchid show along with hordes of other shoppers. Thailand seems to be doing just fine, but this thread seems to be in crisis! I think Sonthi and Thaksin would have kinder words for each other than the regular posters on this deal. Can't we all get along?

[Flysiam]

I was at Paragon yesterday to see the beautiful orchid show along with hordes of other shoppers. Thailand seems to be doing just fine, but this thread seems to be in crisis! I think Sonthi and Thaksin would have kinder words for each other than the regular posters on this deal. Can't we all get along?

I have to agree....the only thing that seems to be in crisis is this thread and the constant slinging of buffalo feces back and forth. Posting news and information to educate readers is one thing but the constant badgering and insults is childish and boring.

[Naam]

Ok I get the point, but... any predictions for the Baht depreciating? When and how fast?

the "depreciating Baht" is presently nothing but wishful thinking (in which i join as my major expenses are in Thailand) but not based on any tangible facts. even if the BOT cuts interest rates tomorrow another ½ point (as the gurus expect) we might see a tiny move and onshore and offshore rate might converge more, strenghtening the trend of the last few weeks.

[wolfmanjack]

I was at Paragon yesterday to see the beautiful orchid show along with hordes of other shoppers. Thailand seems to be doing just fine, but this thread seems to be in crisis! I think Sonthi and Thaksin would have kinder words for each other than the regular posters on this deal. Can't we all get along?

I am not sure how hoards of shoppers going to look at orchids means the economy is fine.

From what i understand jatuchak is still full of people on the weekends but rents are going down because few are buying.

That is also my experience when i go to bkk to sell. Three years ago i would do over 100k in a weekend. Last month when I went i only did 20,000. Every retailer i have spoken with say that sales are down by 50%. Many lookers but not many buyers.

[ray23]

The investments pointed out are the type of investments not planned in months but years. my guess it has really very little to do with he currnet situation but a part of a very long term plan.

The green light I see is they have not been stopped yet.

Doesn't the current financial situation really have a lot to do with the current budget surplus?

If you look at that closely yes some things were done to the positive, but were those actions recent actions, or something that was already in the pipeline.? Could a contributor to that be that the Government halted projeects and stopped spending money?

It appears that in the near future the money will be spent again as before. How will that effect Budget surplus?

What will be the overall effect to the business climate on a international basis?

Sorry guys I'm not a sharp a the rest of you so I only have questions, not answers.

Interestingly enough for the first time in my life I really have enouhg money that I could invest, but I certainly don't have money to throw away. Thailand has been very good to me but not one baht of the money I have, was earned in Thailand.

[Mid]

to see the beautiful orchid show

That is also my experience when i go to bkk to sell. Three years ago i would do over 100k in a weekend. Last month when I went i only did 20,000. Every retailer i have spoken with say that sales are down by 50%. Many lookers but not many buyers.

wolfman , if some of these guys told you the sun was shining , I'd suggest you go outside and check ...............

[wolfmanjack]

to see the beautiful orchid show

That is also my experience when i go to bkk to sell. Three years ago i would do over 100k in a weekend. Last month when I went i only did 20,000. Every retailer i have spoken with say that sales are down by 50%. Many lookers but not many buyers.

wolfman , if some of these guys told you the sun was shining , I'd suggest you go outside and check ...............

My retail sales were down by more than 50% even though the number of shoppers was about the same as every year therefore I can assume that they are telling the truth.

I also know that the price for shop rent in jatuchak is a lot less than it was a year ago when i checked. I can only imagine that they lowered the shop rent because shop owners were going out of business. If business was the same there would be no reason to lower the rent if it was booming rents would be going up. Simple logic.

[Prakanong]

to see the beautiful orchid show

That is also my experience when i go to bkk to sell. Three years ago i would do over 100k in a weekend. Last month when I went i only did 20,000. Every retailer i have spoken with say that sales are down by 50%. Many lookers but not many buyers.

wolfman , if some of these guys told you the sun was shining , I'd suggest you go outside and check ...............

Well if a Thai told me economy was doing great and all was hunky dory I would count my fingers

[ThaiGoon]

The investments pointed out are the type of investments not planned in months but years. my guess it has really very little to do with he currnet situation but a part of a very long term plan.

The green light I see is they have not been stopped yet.

Doesn't the current financial situation really have a lot to do with the current budget surplus?

If you look at that closely yes some things were done to the positive, but were those actions recent actions, or something that was already in the pipeline.? Could a contributor to that be that the Government halted projeects and stopped spending money?

It appears that in the near future the money will be spent again as before. How will that effect Budget surplus?

What will be the overall effect to the business climate on a international basis?

Sorry guys I'm not a sharp a the rest of you so I only have questions, not answers.

Interestingly enough for the first time in my life I really have enouhg money that I could invest, but I certainly don't have money to throw away. Thailand has been very good to me but not one baht of the money I have, was earned in Thailand.

Budget surplus? What are you on about? The current gov't has approved the annual budget that would run in deficit since last year. And it's the right policy for the economy that's slowing down. It's a basic macro-economy principle (I only needed to take one macro econ class to know this.) In fact the gov't has been trying to expedite the spending for quite a while now. (The budget spending was a bit sluggish earlier this year because the annual budget was passed later than schduled, due to the coup. FYI, gov't budget calendar runs from one year's September to the next.) The spending's needed to boost the economy. And I have to say again that it's a very very basic macro economy principle. Perhaps you were talking about the trade surplus? That's another matter entirely. (Budget surplus, what? )

Edited May 22, 2007 by ThaiGoon