The Thai Economy Is In Crisis

[yoshiwara]

Economically, Thailand has not yet fully worked out how to position itself vis a vis China and even more importantly its near neighbour Vietnam.

Thaksin was showing himself up to be the grubbing copper he originally was who never knew when to stop and in the end was an overreaching thief on the make who was threatening to make the state his own as the placemen were gradually slotted in. His mistake was thinking that the electoral superiority of the agricultural workers was enough to keep his end up. The idea that one should defend Toxin as the democratic option is laughable. The truth is that the currency firmed on the abolition of TRT. Markets hate uncertainty and as long as Toxin's henchmen are prevented from pulling some stunt, things will return to normal, but gradually....it takes time to clean out the stables......

[mumbu]

Economically, Thailand has not yet fully worked out how to position itself vis a vis China and even more importantly its near neighbour Vietnam.

Thaksin was showing himself up to be the grubbing copper he originally was who never knew when to stop and in the end was an overreaching thief on the make who was threatening to make the state his own as the placemen were gradually slotted in. His mistake was thinking that the electoral superiority of the agricultural workers was enough to keep his end up. The idea that one should defend Toxin as the democratic option is laughable. The truth is that the currency firmed on the abolition of TRT. Markets hate uncertainty and as long as Toxin's henchmen are prevented from pulling some stunt, things will return to normal, but gradually....it takes time to clean out the stables......

Your post is full of venom and slander but contains no facts to substantiate anything you are saying. That is precisely the type of posts that should ignored.

Edited May 31, 2007 by mumbu

[TingOfTong]

When will Thais understand that they need to wake up if they want to do it without foreigners. I for myself am ready to leave, as that is what Thais want.

[Master of the court]

When will Thais understand that they need to wake up if they want to do it without foreigners. I for myself am ready to leave, as that is what Thais want.

Bye Bye, then.........

[wolfmanjack]

Reading Khun highdiver's post reminds me that this slowdown and sthrengthening Baht might actually be good for the Thai exporters in the long run in the way that they are now forced to be more productive and efficient in their operations (and logistics). They are now forced to add more values to their products as well. If the struggling companies survive this and succeed in revamping their businesses, Thailand will be better off I think.

It will be good for the thai exporters that survive. I agree. I can make my company more efficient by getting rid of my thai workers and bringing in people from Laos, vietnam, or thai yais. The most efficient model for my company would be to replace as many of my workers as possible by machines. The gov will benefit by receiving taxes for the extra product produced and the sale of machines. Is this good for the thai people though ?

[mumbu]

good post mumbu, you beat me to it.......

Bingobongo,

I am not expat but have important personal , noncommercial interests in Thailand. I would love to see Thailand stable and prosperous country no matter what political system it has (this is for Thais decide and farangs really should not interfere).

But I am also a scientist and absolutely hate to see when certain people try to distort the facts especially when they are so obvious as in the matter discussed in this thread. No student will ever have a chance to become a good scientist (or even good electrical engineer) without critical and flexible mind...

[Maxi101]

Unemploymentrate 1,5 % (Febuary)

source: The Economist 19th-25th May page 101, table

[calibanjr.]

Reading Khun highdiver's post reminds me that this slowdown and sthrengthening Baht might actually be good for the Thai exporters in the long run in the way that they are now forced to be more productive and efficient in their operations (and logistics). They are now forced to add more values to their products as well. If the struggling companies survive this and succeed in revamping their businesses, Thailand will be better off I think.

It will be good for the thai exporters that survive. I agree. I can make my company more efficient by getting rid of my thai workers and bringing in people from Laos, vietnam, or thai yais. The most efficient model for my company would be to replace as many of my workers as possible by machines. The gov will benefit by receiving taxes for the extra product produced and the sale of machines. Is this good for the thai people though ?

Yup Wolfman, reasonable adaptations to the Baht. When you factor in the changing export rules and arbitrary interpretation of the rules in place, one might go further and get out of dodge! I'm working on that now, Vietnam and/or Indo for our bronzes. Once that is wired, we'll move all of our other products there as well. I'm sure Thailand won't miss our SME. Love the place, got married here, can't do business here anymore.

[ThaiGoon]

Reading Khun highdiver's post reminds me that this slowdown and sthrengthening Baht might actually be good for the Thai exporters in the long run in the way that they are now forced to be more productive and efficient in their operations (and logistics). They are now forced to add more values to their products as well. If the struggling companies survive this and succeed in revamping their businesses, Thailand will be better off I think.

It will be good for the thai exporters that survive. I agree. I can make my company more efficient by getting rid of my thai workers and bringing in people from Laos, vietnam, or thai yais. The most efficient model for my company would be to replace as many of my workers as possible by machines. The gov will benefit by receiving taxes for the extra product produced and the sale of machines. Is this good for the thai people though ?

Wolf I'm pretty sure that the Thai economy will still be quite all right when you decide to lay off all your three Thai workers.

And CalibanJr, good luck in Vietnam or Indo. I hope you will be able to hack it somewhere. There's still even Laos, Cambodia or Burma after that.

[Flysiam]

Reading Khun highdiver's post reminds me that this slowdown and sthrengthening Baht might actually be good for the Thai exporters in the long run in the way that they are now forced to be more productive and efficient in their operations (and logistics). They are now forced to add more values to their products as well. If the struggling companies survive this and succeed in revamping their businesses, Thailand will be better off I think.

It will be good for the thai exporters that survive. I agree. I can make my company more efficient by getting rid of my thai workers and bringing in people from Laos, vietnam, or thai yais. The most efficient model for my company would be to replace as many of my workers as possible by machines. The gov will benefit by receiving taxes for the extra product produced and the sale of machines. Is this good for the thai people though ?

Wolf I'm pretty sure that the Thai economy will still be quite all right when you decide to lay off all your three Thai workers.

And CalibanJr, good luck in Vietnam or Indo. I hope you will be able to hack it somewhere. There's still even Laos, Cambodia or Burma after that.

Sure wish someone could lay you off. Just love to perpetuate the petty bickering and pissing into the wind - don't you. Give it a rest. Please?

[Jai Dee]

Back on topic please folks.

[Steely Dan]

Unemploymentrate 1,5 % (Febuary)

source: The Economist 19th-25th May page 101, table

Of course it is, when was the last time someone washed your car window when you were filling up with fuel back west?

[calibanjr.]

Unemploymentrate 1,5 % (Febuary)

source: The Economist 19th-25th May page 101, table

Of course it is, when was the last time someone washed your car window when you were filling up with fuel back west?

In NYC there are places where your windshield's getting washed whether you want it or not!

Edited June 1, 2007 by calibanjr.

[Jai Dee]

Economy likely to improve upon Constitution Tribunal's ruling

Thailand's economy is expected to improve markedly following Wednesday's Constitutional Tribunal ruling on political party dissolution since political uncertainties have eased,

Finance Ministry Spokesman Somchai Sajjapong affirmed.

Although met with varying degrees of acceptance, Mr. Somchai said the tribunal's verdict is considered a fresh chapter of Thailand's political history.

Despite being unacceptable to some specific groups of people, he believed, it would not lead to any outbreak of violence.

The Finance Ministry spokesman said he understood the ruling as clearing out political uncertainties, which would benefit the economy in general.

It also increased the possibility that a general election will be held, which could help restore confidence among local and foreign investors.

At the same time, people would begin to have more willingness to spend money and with resumed consumer confidence, private companies would dare to expand their investments.

Mr. Somchai said the ministry and the Bank of Thailand had relaxed the monetary and fiscal policy by gradually reducing the short-term interest rate.

The central bank recently cut the one-day repurchase rate by half a percentage point and was likely to further reduce the rate in coming weeks.

Mr. Somchai said he believed commercial banks would follow suit by gradually cutting both lending and deposit rates.

Under the circumstances, he indicated, he viewed the interest rate would play an instrumental role in boosting public confidence in consumption and investment.

He said the Finance Ministry planned to revise its economic growth estimate for this year in August.

Source: TNA - 01 June 2007

[ray23]

Tis Thailand pick the outlook you want

REACTION TO RULINGS

Businessmen cautiously optimistic

Clearer political picture seen, but worry that new battleground could hit charter, poll plans

The business sector is relieved that the Constitution Tribunal's verdicts on Wednesday have brought a clearer political picture and no immediate violence.

But it is closely monitoring the political situation in case the dissolution of the Thai Rak Thai Party unleashes another political fight, which could disrupt the charter-drafting process and general election.

Business people were pleased there was no outright violence after the rulings, believing it will increase confidence among consumers and investors.

Federation of Thai Industries chairman Santi Vilassakdanont was sympathetic towards Thai Rak Thai and urged the Democrat Party, which is considered to have an advantage in the upcoming election, to show what it has to offer the country.

He believes the Democrats' weak points are slow decision-making and having few prominent members, but he hopes a new generation of members can strengthen the party before its rivals regain strength.

He said the rulings had set a precedent in Thai politics and all parties needed to be careful not to break the law. While the main players were banned, there could be nominees and this would be clearer when the election draws near.

"Without protests, the economy can proceed as usual. Foreign investors are now more concerned with whether the constitution will be passed and if there will be an election," Santi said.

Board of Trade chairman Pramon Suthivong said the economy should pick up after the general election as people gain more confidence.

Thana Tienachariya, chief commercial officer of Total Access Communication, said the lack of post-verdict violence was better than anyone had expected.

"Lots of people had expected

there would be violence after the

ruling. But now they feel relieved.

It's good news for the economic situation in the short term," he said.

He added that the government should take this opportunity to announce positive news or policies to boost the confidence of investors.

But as Thai Rak Thai supporters yesterday attempted to stage a protest, Amata Group chief executive Vikrom Kromadit foresaw more political clashes.

"There could be more fighting, probably against the constitution. If the draft constitution is not accepted, there would be no election by the end of the year and our economy would return to chaos," he said.

All eyes were fixed on Thai Rak Thai supporters' movements yesterday.

Securities analysts closely monitored their movements, fearing that any action could lead to a fall in the Stock Exchange of Thailand index today. On Wednesday, the SET Index gained 1.32 per cent to pass the psychological 730-point level to end at 737.40, as foreign and local investors flocked to the market on expectations that no political party would be dissolved.

Marco Sucharitkul, president of JP Morgan Securities (Thailand), said the tribunal's verdict on Thai Rak Thai had been more severe than that expected by the market.

The market's response today will probably depend on how planned protests panned out, as diehard supporters were looking to protest a ruling which banned the party and barred 110 executives from politics for five years.

Marco feared the market could fall today. "I may need to advise clients to reduce their investment in the Thai market after advising them to increase investment two months ago. This verdict could lead to chronic political problems and the charter-drafting process could stumble," he said.

Chaiwat Sritajit of the Public Relations Society of Thailand said that though the picture was clearer to some extent, the public needed to be told that without the constitution there would be no election. Only after the election can the economy resume its normal growth.

Aat Pisanwanich, director of the Centre for International Trade Studies of the University of the Thai Chamber of Commerce, said political tension had relaxed after the ruling, which would prompt an improvement in the economic situation in the second half of the year.

But the key issue is whether the public will vote for the constitution draft and if there will be a general election, he added.

Suchart Chantaranakaracha, president of the National Thai Shippers Association, urged all disbanded parties to keep their promises not to protest against the ruling. He believed consumer and investor confidence could be restored by the rulings.

"What we want most now is an election and we are cautious about whether there will be one soon," said Poj Aramwattananont, president of the Thai Frozen Foods Association.

Teerachon Manomaiphibul, assistant managing director of Property Perfect, hoped that investment would return to Thailand in the second half if the election schedule was kept.

"Then the property market should recover next year after we know who will form the government and what are their economic policies," he said.

Srithai Superware president Sanan Angubolkul said that although the political situation was clearer, the economy would witness slower growth this year as investors are waiting to see who wins the election.

"Politics is more stable but we need to know the economic policies of the new government," he said.

Business Desk

The Nation

[Mid]

. Foreign investors are now more concerned with whether the constitution will be passed and if there will be an election," Santi said.

smart man .

[ThaiGoon]

http://www.nationmultimedia.com/2007/06/02...es_30035813.php

MARKET REBOUND

SET gets a boost on court verdict

Brokers caution prudence ahead of constitution referendum, reforms

Stock investors yesterday hailed the Constitution Tribunal ruling dissolving the Thai Rak Thai Party and banning 111 of its executives from politics, driving the main market up 2.24 per cent to a one-year high.

Foreign investors bought Bt8.14 billion in local shares. Overall turnover was Bt40.38 billion, the heaviest level since December 20.

As a result, market capitalisation was increased to Bt5.7 trillion from Bt5.5 trillion on Wednesday.

Siam Commercial Bank executive vice president Veerathai Santipraphob said existing parties should suggest an economic road map to build confidence.

Investors hope a new government will bring economic improvements. Meanwhile, the clearer political picture will restore investor confidence.

"The next government should pay attention to an economic agenda as its first priority, in order to build confidence. A general election will be a key factor in improving people's confidence," he said.

However, he believes economic fundamentals remain strong, particularly exports. Raw-material imports show good growth, reflecting a positive sign for exports and manufacturing in the coming three to six months, he added.

Kasikorn Research Centre said in a note that the court ruling would boost private-sector confidence and spending would increase.

Improved confidence, lower interest rates and government spending will boost growth to 4-5 per cent in the second half of the year from 3-3.5 per cent in the first, it said.

[Dakhar]

Really?

My crystal ball does says the opposite.... I best check the batteries.

[stumonster]

http://www.un.org/News/briefings/docs//200..._Ocampo.doc.htm

[bingobongo]

enjoy the calm as it is temporary, sort of like sitting in the eye of a hurricane, you go thru one side of the storm to get to the center, but you have to go thru the otherside of the storm to get out of it...........

Thai verdicts have realigned the political landscape: analyst

"So they like it at the outset but I'm afraid that this crisis is not over and that there will be turbulence down the road and more risks down the road. So the business community will have a reprieve. This is a short period that things would have settled a little bit. But it's only a phase. We'll have a new phase and I think that the new phase will be much more volatile. So they better brace themselves".

http://www.channelnewsasia.com/stories/ana.../279960/1/.html

Edited June 3, 2007 by bingobongo

[LaoPo]

Thai verdicts have realigned the political landscape: analyst

http://www.channelnewsasia.com/stories/ana.../279960/1/.html

Thank you for posting this link bingobongo !

Your comment however doesn't pay justice to this extremely interesting interview with Dr Thitinan Pongsudhirak of Bangkok's Chulalongkorn University.

It gives a rare inside view into the present and past in Thai politics, military and establishment.

I strongly suggest to everybody to read this interview (it will take some time though...) although I think you (bingobongo) should post a new topic with this interview in general topics as the present topic is not completely suitable since not all readers of TV are interested in 'Thailand in Crisis'; just my opinion.

http://www.channelnewsasia.com/stories/ana.../279960/1/.html

LaoPo

[wolfmanjack]

Reading Khun highdiver's post reminds me that this slowdown and sthrengthening Baht might actually be good for the Thai exporters in the long run in the way that they are now forced to be more productive and efficient in their operations (and logistics). They are now forced to add more values to their products as well. If the struggling companies survive this and succeed in revamping their businesses, Thailand will be better off I think.

It will be good for the thai exporters that survive. I agree. I can make my company more efficient by getting rid of my thai workers and bringing in people from Laos, vietnam, or thai yais. The most efficient model for my company would be to replace as many of my workers as possible by machines. The gov will benefit by receiving taxes for the extra product produced and the sale of machines. Is this good for the thai people though ?

Wolf I'm pretty sure that the Thai economy will still be quite all right when you decide to lay off all your three Thai workers.

And CalibanJr, good luck in Vietnam or Indo. I hope you will be able to hack it somewhere. There's still even Laos, Cambodia or Burma after that.

Goon,

This post makes it seem like you do not care about the common thai worker. Every job is important to the thai worker that has that job and the thai family that depends on that income. I guess this is another example of a HiSo person that wants to keep all lower class thais uneducated and in the feilds. By the way how did you know I have 3 office staff ? And no they won't be the ones laid off if i ever automate. I will still need them even with the new machines.It will be the 50 hands on workers that will become redundant. These 50 and CalibanJr's workers may not be important to you HiSo types but their jobs are important to their families and the village we live in. Nice to know you care so much about your fellow thais.

Anyway I can see that the point I was making escapes you. One of the reasons many businesses start up in thailand is the cheap labor force. Now that the labor force is not so cheap any more the exporters that survive will be stronger because they streamline their business through automation and/or getting rid of the extra workers they have. This is being advocated by the powers that be. This is detrimental to the unskilled uneducated work force in thailand. The sad part about this is the gov is not educating the people so they can have a job in a non labor intensive work enviroment.

CalibanJr,

I agree that goon and thailand as a whole will not miss our SME's. I was considering moving my factory the same as you. However I have a family here that is not too keen on moving to another country. My wife wants me to sell and move to the mountains. That would put me in the group of under 50 year olds with enough money to live comfortably in thailand but with no visa options except for paying taxes on a fictitious job. Currently I am gradually updating my machinery to increase my production without adding any more workers. Hopefully i will continue to add new customers faster than the old customers jump to surrounding countries.

[nick2k]

Thai verdicts have realigned the political landscape: analyst

http://www.channelnewsasia.com/stories/ana.../279960/1/.html

Thank you for posting this link bingobongo !

Your comment however doesn't pay justice to this extremely interesting interview with Dr Thitinan Pongsudhirak of Bangkok's Chulalongkorn University.

It gives a rare inside view into the present and past in Thai politics, military and establishment.

I strongly suggest to everybody to read this interview (it will take some time though...) although I think you (bingobongo) should post a new topic with this interview in general topics as the present topic is not completely suitable since not all readers of TV are interested in 'Thailand in Crisis'; just my opinion.

http://www.channelnewsasia.com/stories/ana.../279960/1/.html

LaoPo

I read the whole thing. and agree with the analysis.

thaksin addressed the needs of the poor. and he got canned for it.

granted, thaksin wasn't a saint. but he addressed the needs of the poor.

the old elite don't give a sh#t.

my guess is - TRT will rise again. because the democrats who represent the old elite will STILL not give a sh#t about the poor.

the old elite want the pleasants to kowtow to them. to beg them for handouts. they don't want this to change. they like the poor people to bow down to them whenever they walk by. anyone with half a brain can figure this out.

the old elite are even willing to suppress the poor to the point where the country will suffer so that they will be treated like royalty.

already, look at what has happened. neighboring countries like small singapore, malaysia, and even vietnam are now progressing pass thailand. why? because the old elite don't want to educate the masses. that way, no one will have the brains to oppose them.

TRT will rise again on the platform of the poor. and next time, my guess is - they will be prepared for a coup by the old elite.

as long as the poor are the majority, this will occur. just a matter of time.

I wish the poor in thailand the best. but my priorities are usa first, then, thailand. as an american, I hope you can understand that.

[wolfmanjack]

I wish the poor in thailand the best. but my priorities are usa first, then, thailand. as an american, I hope you can understand that.

Not sure what you mean by this ?? I am American also and I do not see how helping the poor in thailand become educated and more wealthy is going to hurt the USA. To tell you the truth I can not think of anything that can happen in thailand would hurt the USA. Please enlighten me.

[Dupont]

Reading Khun highdiver's post reminds me that this slowdown and sthrengthening Baht might actually be good for the Thai exporters in the long run in the way that they are now forced to be more productive and efficient in their operations (and logistics). They are now forced to add more values to their products as well. If the struggling companies survive this and succeed in revamping their businesses, Thailand will be better off I think.

It will be good for the thai exporters that survive. I agree. I can make my company more efficient by getting rid of my thai workers and bringing in people from Laos, vietnam, or thai yais. The most efficient model for my company would be to replace as many of my workers as possible by machines. The gov will benefit by receiving taxes for the extra product produced and the sale of machines. Is this good for the thai people though ?

Wolf I'm pretty sure that the Thai economy will still be quite all right when you decide to lay off all your three Thai workers.

And CalibanJr, good luck in Vietnam or Indo. I hope you will be able to hack it somewhere. There's still even Laos, Cambodia or Burma after that.

Goon,

This post makes it seem like you do not care about the common thai worker. Every job is important to the thai worker that has that job and the thai family that depends on that income. I guess this is another example of a HiSo person that wants to keep all lower class thais uneducated and in the feilds. By the way how did you know I have 3 office staff ? And no they won't be the ones laid off if i ever automate. I will still need them even with the new machines.It will be the 50 hands on workers that will become redundant. These 50 and CalibanJr's workers may not be important to you HiSo types but their jobs are important to their families and the village we live in. Nice to know you care so much about your fellow thais.

Anyway I can see that the point I was making escapes you. One of the reasons many businesses start up in thailand is the cheap labor force. Now that the labor force is not so cheap any more the exporters that survive will be stronger because they streamline their business through automation and/or getting rid of the extra workers they have. This is being advocated by the powers that be. This is detrimental to the unskilled uneducated work force in thailand. The sad part about this is the gov is not educating the people so they can have a job in a non labor intensive work enviroment.

CalibanJr,

I agree that goon and thailand as a whole will not miss our SME's. I was considering moving my factory the same as you. However I have a family here that is not too keen on moving to another country. My wife wants me to sell and move to the mountains. That would put me in the group of under 50 year olds with enough money to live comfortably in thailand but with no visa options except for paying taxes on a fictitious job. Currently I am gradually updating my machinery to increase my production without adding any more workers. Hopefully i will continue to add new customers faster than the old customers jump to surrounding countries.

<snip>

Some people just don't get it that 3+3 carried out one thousand times equates to 3 thousand jobs. And yes, it is further necessary to point out to goon and his ilk that 3+3 one million times is three million. Even after this, they would not expect 3+3 two million times to make 6 million jobs

They even then still don't understand that a million baht can be two lots of 500,000 baht or 500,000 lots of 2 baht.

Look after the pennies and the pounds will look after themselves is as true and wise a saying today as it always was. <snip>

Edited June 4, 2007 by Jai Dee
Flame comments deleted

[Jai Dee]

Ministry of Industry to boost regional industrial capacity

The Ministry of Industry is seeking to increase the efficiency of the Thai economy.

The Deputy Permanent Secretary for Industry, Mr.Issara Chotiburakarn (อิสสระ โชติบุรการ) revealed that the industry ministry will organize a signatory ceremony of and agreement under the “Regional Industry Efficiency Development Project” as the ministry's implementation plan for 1 Province 1 Agro-Industrial Product.

The pilot project is initiated for SME entrepreneurs in the southernmost provinces to promote agriculture- processing industry, and community-based products for increased competitiveness and sustainable growth development. The industry and entrepreneurs will be encouraged to apply information technology know-how as well as local intelligence in the business.

The ceremony is scheduled on Thursday June 7th, 2007 at 09:00AM Morakot Room, Diamond Plaza Hotel, Surat Thani Province.

Source: Thai National News Bureau Public Relations Department - 04 June 2007

[quiksilva]

Uncertainty still a drag on economy

Political uncertainty remains despite the Thai Rak Thai Party's dissolution by the Constitution Tribunal. And because this puts pressure on the economy, an expansionary fiscal policy and loosened monetary policy are still required, analysts said late last week.

The economy remains in the doldrums so long as Thailand continues to stray off the democratic path. Consumers are waiting for security in their lives before making big purchases or engaging in indulgent spending, while investors wait for more certain policies from an elected government.

Exports are not an engine to drive the economy amid the uncertainty created by a global economic slowdown, the analysts said.

Usara Wilaipich, senior economist at Standard & Chartered Bank (Thai), forecast that the central bank would cut its one-day repurchase rate by 25 basis points in each of the next two meetings - July 18 and August 29 - to boost sluggish domestic demand, as a slowdown in exports has become a major concern.

Although the political

situation became clearer for some after the Constitution Tribunal's landmark ruling, it remains the main factor putting pressure on the economy. "Consumers and investors continue to wait for the political uncertainty to settle completely after a successful referendum on the draft constitution and a general election," she said.

"We have to stay in uncertain times for about six months before the political situation is put in order and confidence is back on track. An election is the last important step to guarantee that we will have an acceptable elected government," said Usara.

Low headline inflation at 1.9 per cent and core inflation at 0.7 per cent in May leave room for the BOT to slash its key rate further.

According to the Commerce Ministry, headline inflation and core inflation over the past five months were 2.2 per cent and 1.3 per cent respectively, which were in the mid-range of the BOT's forecast of 1.5-2.5 and 1-2 per cent.

"Inflation has been low and the economy has slowed. The BOT therefore has no reason to halt the cutting of rates," said Usara.

Sukit Udomsirikul, Siam City Securities' head of research, was optimistic that the landmark ruling would help boost consumer confidence, leading to a slight increase in consumption. He believed that investment would rebound after an election and a gradual economic recovery would be seen.

He also projected that the key rate would be lower by 0.5 percentage point by the end of the year. Commercial banks were unlikely to aggressively cut deposit rates in order to keep real deposit interest rates in positive territory.

"From now on, the economy will pick up gradually and will recover completely after an election and political stability. The election is the important factor for confidence. If consumers and investors are confident that an election will occur, consumption and investment will increase," he said.

The central bank has tried to halt such expectations by sending a message that it would halt the interest cuts in a bid to lift domestic demand - allowing transmission mechanisms in "expectation channels" to work. It has realised that "exchange-rate channels" and "interest-rate channels" could not function effectively.

The BOT concedes that the transmission mechanism from the key rate to market rates works rapidly during a downward trend of interest rates but the mechanism from the market rates to the real sector functions slowly compared to normal times.

The banks have made heavy cuts to deposit rates but light cuts to lending rates. They want to hold their interest-rate income and do not want to lend to the real sector due to concerns about non-performing loans. As a result, excess liquidity remains in the banks' vaults instead of in the real sector.

Market expectations of a further rate decline are actually not good for policy makers, because consumers and investors continue to postpone their spending and investment, resulting in a seemingly endless murky economic situation.

Anoma Srisukkasem

The Nation Mon, June 4, 2007 : Last updated 10:25 am (Thai local time)

[Jai Dee]

Kasikorn Research Center believes court decision will pave way for economic growth

The Kasikorn Research Center believes that Thailand's economy in the second half of the year will experience growth stemming from the Constitutional Court's verdict on political party dissolutions.

The Kasikorn Research Center reports that, following the Constitutional Court's decision to dissolve the Thai Rak Thai Party on May 30th, Thailand's political future has become clearer, despite remaining requirements for a constitutional public referendumm and general elections. The KRC believes that the court's decision will become a positive factor resulting in increased investor's confidence and growth for the Thai economy.

Kasikorn analysts predict that Thailand's economy in the second half of 2007 will receive a boost from renewed investor confidence, resulting in a 3.5-4.5 percent growth rate.

Source: Thai National News Bureau Public Relations Department - 04 June 2007

[rken]

I have enjoyed all of the posts on this thread. very entertaining.

I don't however see how anyone living in Thailand can say that the enconomy is not in the dumps. Every buisness owner I talk to (off season taken into account) says buisness is bad, the worst in years. When I ask what they attribute it to, most say the 1. new visa rules 2. the coup 3. bombing in the south. Visa rules being number one.

Most are losing money but trying to hang on till next high season before perhaps throwing in the towel.

So you guys can throw around stats all day and both sides can probable prove there points but in the end its he guy on the street that you need to talk to and he is hurting. Aloha rken

[Mid]

Kasikorn analysts predict that Thailand's economy in the second half of 2007 will receive a boost from renewed investor confidence, resulting in a 3.5-4.5 percent growth rate.

6 mths in and with all the data they have , they still want 100 base points spread .........................

I'll go on record for 3% max .