The Thai Economy Is In Crisis

[chinthee]

JR, not sure if it changes your view, but I'm not Thai, but do live in Thailand.

[JR Texas]

I recall that a previous report from Jetro was highlighted for its positivity, just wonder if the same posters will use it as a reference again next week, or will it suddenly be insignificant.

Regards

Japanese more wary

INVESTMENT :Thailand's attractiveness as a foreign investment destination has declined among Japanese investors, according to the latest survey by the Japan External Trade Organisation (Jetro).

The survey, which will be released next week, cites Thailand's social and political instability, a growing shortage of skilled workers, weak management, the rising cost of raw materials and the strong baht as negative factors among Japanese investors.

Commerce Ministry spokesman Krisda Piampongsant said Jetro president Yoichi Kato met yesterday with Commerce Minister Krirk-krai Jirapaet to discuss the survey results and growing concerns among Japanese investors over the country's weakening competitiveness.

Mr Krisda quoted Mr Kato as saying that the negative factors could result in more funds increasingly going to other countries such as Vietnam.

Bangkok Post

/edit format//

Hence my view that the downturn will lead to continued low levels of GDP growth for some years to come. This is systemic, for all the reasons cited and more that I've detailed in prior posts, and won't be patched up by slapping a fresh coat of paint on this japlopy in the form of a new constitution and elections, no matter how much delayed or how democratic or not.

We can argue all day about short term blips, but it saddens me to think this country, my home, will continue to be ignored by the world financial community and be left to drift asea rudderless, as all speedboats lead to China, India and Vietnam. Mixed metaphors or not.

JR Texas: Agree with you Chintee.......it is sad, and thank you, a Thai, for acknowledge that something is seriously wrong. Thailand does know democracy......it has rejected free enterprise......it is, with its visa and business rules, sending xenophobic messages to a large segment of the farang community (basically, we do not want you here)......it is putting the brakes on small scale investment by foreign entrepreneurs........it is mired in a totally corrupt banking system.......its education institutions are corrupt to the core (I know, I am a professor in one of them)......it has turned away from freedom of speech and is taking action against freedom of assembly......it has done virtually nothing to address the economic needs of the vast majority that do not live in the narrow strip from Bangkok to Rayong. No election can save it as it will not be a genuine election.......and any such election will simply put the same corrupt members of the corporate-political-military triangle of power in office. I see hard times ahead........maybe a short recovery.......but the negative forces are simply too strong. It is reality check time.

JR Texas: Sorry.....meant to say "Thailand does not know democracy." I am having huge problems with the internet and TF's site.......which makes me add another item: It has no economic competition that would allow foreign companies to come here and fix what has to be one of world's worst phone/internet systems

[jomama]

In China and Hong Kong, they're still talking about the crisis of '97. They seem to have a wary eye on Thailand because that's where it originated last time and are concerned that it could happen again.

I'm not smart enough to know if other countries have been able insulate themselves from problems if Thailand crashes out again.

I know that there have been a series of moves by the Chinese government to cool the Shanghai and Shenzhen stock exchanges, including higher taxes on stock transactions, higher interest rates for deposits in an attempt to draw liquidity into consumer savings in banks and sanctions against banking officials who loaned large amounts that was illegally used for stock market speculation. There have been record numbers of new small players in the stock market. It has every sign of a bubble. If frightened, these unsophisticated stock players could sell in a panic.

[chinthee]

In China and Hong Kong, they're still talking about the crisis of '97. They seem to have a wary eye on Thailand because that's where it originated last time and are concerned that it could happen again.

I'm not smart enough to know if other countries have been able insulate themselves from problems if Thailand crashes out again.

I know that there have been a series of moves by the Chinese government to cool the Shanghai and Shenzhen stock exchanges, including higher taxes on stock transactions, higher interest rates for deposits in an attempt to draw liquidity into consumer savings in banks and sanctions against banking officials who loaned large amounts that was illegally used for stock market speculation. There have been record numbers of new small players in the stock market. It has every sign of a bubble. If frightened, these unsophisticated stock players could sell in a panic.

Not sure what would happen if Thailand crashed, but as far as China, it used to be said that "if China sneezes, Hong Kong catches a cold." I think today you could expand that significantly to include Thailand probably getting pneumonia.

[bingobongo]

and more ..............

July 1, 2007 : Last updated 12:52 pm

The Thai Chamber of Commerce asked the Monetary Policy Committee for cutting an interest rate for 75 basis points to 1 percentage points today in order to stimulating domestic slumping consumption and stem the baht's continued strength.

Chalida Ekvitthayavechnukul

The Nation

how is the swimming highdiver? tired yet

how are the noodles ThaiGoon? full yet

anyway, back to the "genius" idea of flooding the market with easy liquidity ala lowering rates......the following lesson is so apropo to LOS......enjoy.........this sounds like Thailand spot on....

"The current rise in stock prices does not indicate a healthy economy. It simply proves that the market is awash in cheap credit resulting from increases in the money supply. Consumer spending is a better indicator of the real state of the economy than stocks. When consumer spending drops off; it is a sign of overcapacity, which is deflationary. That means that growth will continue to shrivel because maxed-out workers can no longer purchase the things they are making.

The underlying problem is not simply the reckless increases to the money supply, but the growing "wealth gap" which is undermining solid economic growth. If wages don't keep pace with productivity; the middle class loses its ability to buy consumer items and the economy slows.

Low interest rates have created a culture of borrowing which has convinced many people that debt equals wealth.

MW - Weekend Edition

July 1, 2007

[ThaiGoon]

just poke this one a bit more to see if there's any life left in it will we .....................

State-related banker concerned at possible weak government

Sunday 1 July 2007 02:07:37 PM (GMT+7:00)

BANGKOK, July 1 (TNA) - A senior banker has expressed concern that the Thai economy may weaken if the new government formed after the coming general election is not strong and demonstrations continue unabated.

Krung Thai Bank President Apisak Tantivorawong said in a recent seminar the Thai economy should improve during the fourth quarter this year in part by anticipated heavy spending in the general election, due to be held late this year, investment by state-enterprises, government spending on its budget and a cut in local interest rates.

MCOT Public Company Limited

So you are ready to place the bet?

[ThaiGoon]

http://www.bangkokpost.com/Business/02Jul2007_biz39.php

TRADE

Pact could turn Thailand into hub for engineering

The Japan-Thailand free trade pact would create opportunities for local engineers and technicians as more production moves to Thailand, says the local Japanese Chamber of Commerce.

Mitsuhiro Sonoda, the chamber's president, said the agreement would bring business to both countries and that Thailand could serve as a producer of Japanese parts for re-export to third countries.

The chamber also expects research and development and engineering to be promoted in Thailand to increase capacity and competitiveness.

"After the JTEPA, we expect the next stage of localisation to move from production to engineering localisation. Manufacturers want more engineers who understand actual production and how to make the goods," he said, referring to the trade pact's formal name, the Japan Thailand Economic Partnership Agreement.

Anticipating more demand for engineers, the Technology Promotion Association (Thailand-Japan) has opened the Thai-Nichi Institute of Technology to supply industries with Japanese-speaking engineers.

The institute, which offers four-year university courses, started recruiting students for the first time this year, and expects the first graduates to be ready for the workforce in the next four years. These students would have the opportunity to practise their engineering skills at factory sites while studying.

"We want Thailand to be the engineering centre for Japanese companies," said Mr Sonoda.

Edited July 2, 2007 by ThaiGoon

[Mid]

Post #868

as for your childish fixation with a bet ThaiGoon ,

I personally have a lot more than your suggested wager already invested in the Thai economy and have no wish to increase my exposure , like many investors you may have noted .

in short thanxs but no thanxs .

[chinthee]

Post #868

as for your childish fixation with a bet ThaiGoon ,

I personally have a lot more than your suggested wager already invested in the Thai economy and have no wish to increase my exposure , like many investors you may have noted .

in short thanxs but no thanxs .

I think Thaigoon needs to stop hitting the books so hard and go get some recreation. He has his whole life to suffer through boom and bust cycles.

[ThaiGoon]

Post #868

as for your childish fixation with a bet ThaiGoon ,

I personally have a lot more than your suggested wager already invested in the Thai economy and have no wish to increase my exposure , like many investors you may have noted .

in short thanxs but no thanxs .

Why would you consider that bet as a risk at all, if you really believed in your predictions of the doom of Thai economy?

Oh I see, you don't.

Chicken (just like Chinthee and the rest).

Edited July 2, 2007 by ThaiGoon

[Master Chief]

In pre-talks to the crash in 97-, bank institute gurus and government pushers predicted a large upswing in the thai economy for years to come!!!

In pre-talks to the bird flu hits in Thailand, the thai government ensured that they are fully prepared to stop the sickness at its border. Content: they knew it was already in the Thailand!

In pre-talks to the junta take over 06-, the government and the army ensured that there will or would not be a new coup!!!

Now the junta government and the banking gurus say that inspite of all the negative signs, thai economics will stable and increase?

Last crises in 97-, 58 financial institutes crashed, the government crashed and it took over 6 years to get back. Now you gurus are predicting inspite of previous acts and knowledgement of what is going on right now, that the thai economy is doing fine!?

MC

[ThaiGoon]

In pre-talks to the crash in 97-, bank institute gurus and government pushers predicted a large upswing in the thai economy for years to come!!!

In pre-talks to the bird flu hits in Thailand, the thai government ensured that they are fully prepared to stop the sickness at its border. Content: they knew it was already in the Thailand!

In pre-talks to the junta take over 06-, the government and the army ensured that there will or would not be a new coup!!!

Now the junta government and the banking gurus say that inspite of all the negative signs, thai economics will stable and increase?

Last crises in 97-, 58 financial institutes crashed, the government crashed and it took over 6 years to get back. Now you gurus are predicting inspite of previous acts and knowledgement of what is going on right now, that the thai economy is doing fine!?

MC

Could you elaborate on "the negative signs" besides the lower consumer and private investor confidences that are the results of the political instability?

Sky high inflation rates (like in pre 97)? Unmanageable NPLs (like in pre 97)? High public debt to GDP ratio(like in pre 97)? High unemployment? Low savings(like in pre 97)? Dangerously low federal reserve(like in pre 97)? Decreasing FDI's? Foreign investors are leaving the country in mass? Tourism is going down the tube? Low prices of agricultural products? Exports are going down the tube?

What are the negative signs besides the low Thai consumer confidence?

I'm looking forward to reading your insight. Please elaborate. Pleaseeeee.

[ThaiGoon]

Master Chief, you still here? ;-))))))

[chinthee]

Ain't nobody here but us chickens, sonny.

[ThaiGoon]

Ain't nobody here but us chickens, sonny.

Oh I see. I just thought Master Chief was an economic expert, and he saw the signs.... So I just wanted to know what signs he was seeing. ...

[chinthee]

I agree with you, the signs are different, and do not indicate a crash as I've stated before. But, enough warning signs ARE there to indicate a lower level GDP for the next few years.

[ThaiGoon]

I agree with you, the signs are different, and do not indicate a crash as I've stated before. But, enough warning signs ARE there to indicate a lower level GDP for the next few years.

Is 5+% growth considered low to you? Cause that's the estimated growth for Thailand next year. And it's about the same growth that's expected of Singapore and Malaysia this year.

Oh wait, so you mean Singapore and Malaysia are in crisis as well???!!!!

[chinthee]

I agree with you, the signs are different, and do not indicate a crash as I've stated before. But, enough warning signs ARE there to indicate a lower level GDP for the next few years.

Is 5+% growth considered low to you? Cause that's the estimated growth for Thailand next year. And it's about the same growth that's expected of Singapore and Malaysia this year.

Oh wait, so you mean Singapore and Malaysia are in crisis as well???!!!!

I guess your numbers are different from mine, cause I see low 4's for Thailand. However, you also can't compare GDP in first world economies like Singapore with Thailand. That's like comparing Japan or US with Thailand. Malaysia is incrementally better than Thailand. As I also stated, Thailand has the lowest GDP of any other country in Asia in my prior post. And, for a country the size of Thailand, with a good industrial base, it is very poor performance. period.

[artao]

I agree with you, the signs are different, and do not indicate a crash as I've stated before. But, enough warning signs ARE there to indicate a lower level GDP for the next few years.

Is 5+% growth considered low to you? Cause that's the estimated growth for Thailand next year. And it's about the same growth that's expected of Singapore and Malaysia this year.

Oh wait, so you mean Singapore and Malaysia are in crisis as well???!!!!

How about vietnam?

When will Vietname GDP overtake Thailand? I think 10 years at most!

[ThaiGoon]

I guess your numbers are different from mine, cause I see low 4's for Thailand.

I was talking about next year's number. I thought someone said this: "enough warning signs ARE there to indicate a lower level GDP for the next few years." I must have misunderstood it then.

[ThaiGoon]

How about vietnam?

When will Vietname GDP overtake Thailand? I think 10 years at most!

This year's Thai GDP is expected to be around $235 billion (per BoT), while Vietnam's is about $75 billion or so I think. (Not sure about Vietnam's, that's my ballpark number.) So you do the math. (4+% of $235 billion is about $9.6 billion or so, while 10% of $75 billion is $7.5 billion.)

And by the way, the topic of this thread is "The Thai Economy Is In Crisis", not "Thailand's growing at a slower rate than Vietnam"....I think.

Edited July 2, 2007 by ThaiGoon

[chinthee]

For clarity, I'm speaking about lower levels of GDP GROWTH for the next few years. I don't believe 5% next year. Vietnam will enjoy very high GDP growth for the next years because of its favorable policies, etc.. It will take some time for Vietnam to exceed Thailand in terms of the size of its economy - GDP.

[ThaiGoon]

I don't believe 5% next year.

We will see. By the way, BoT is set to revise their Thailand's GDP prediction for this year pretty soon...I think. ;-))

[rainman]

If the economy is really in crisis, I'd like to start seeing a little weaker Thai Baht.

[chinthee]

If the economy is really in crisis, I'd like to start seeing a little weaker Thai Baht.

A-f'ing men.

[artao]

And by the way, the topic of this thread is "The Thai Economy Is In Crisis", not "Thailand's growing at a slower rate than Vietnam"....I think.

sorry, but someone has mentioned about Singapore and Malaysia before, so....

I mean vietnam total GDP will overtake Thailand in 10 years, because Veitnam has less preblems in politics. Maybe communist goverment is good at developing economy!

[highdiver]

How about vietnam?

When will Vietname GDP overtake Thailand? I think 10 years at most!

This year's Thai GDP is expected to be around $235 billion (per BoT), while Vietnam's is about $75 billion or so I think. (Not sure about Vietnam's, that's my ballpark number.) So you do the math.

And by the way, the topic of this thread is "The Thai Economy Is In Crisis", not "Thailand's growing at a slower rate than Vietnam"....I think.

thai goon .

you are so right. this whole topic is going on now for over 3 months. it started as a thai bashing anti juntas by many memebers who are doing all they can to present thailand as a crashing economy and in Crisis. here on this forum we lovingly call them the dooms day brigade..

from day one we have been warned by dooms day brigade that thailand is loosing investors. but the facts are they are pouring in.

We have been warned that the exports will go down but they went up

we have been warned that gdp wil go down but that to is stable and going up.

we have been warned that the stock market will crash and its still going up.

there is no crisis in thailand. there is a crisis with those who did some bad finanacial moves and are now blaming thailand for it.

I totlay agree that thailand is affected by global economy and that the slow down in US and in Europe has effected thailand but the dooms day prediction that the Thai BOT or the goverment is a pack of worthless amatures, and that thailnd is crashing into a crisis has flown out the window.

when you offer a bet those... gloomy dooms day brigade will not put money where thiere mouth is.. just shows you how serious these people are.

moving on....

when are you coming back home?? school is nearly over.. it will be great to see you in the land of smiles.

[ThaiGoon]

And by the way, the topic of this thread is "The Thai Economy Is In Crisis", not "Thailand's growing at a slower rate than Vietnam"....I think.

sorry, but someone has mentioned about Singapore and Malaysia before, so....

I mean vietnam total GDP will overtake Thailand in 10 years, because Veitnam has less preblems in politics. Maybe communist goverment is good at developing economy!

That someone who mentioned Singapore and Malaysia did so to point out that the Thai economy is not in crisis as the OP suggested (i.e. that someone was discussing what's supposed to be discuessed in this thread...unlike another person who came out of the blue to ask when Vietnam's GDP will overtake Thailand's.) See the difference?

And please do tell how Vietname's GDP will overtake Thailand's in 10 years? Just give us some ballpark numbers like what kind of GDP growths Vietnam and Thailand would have to sustain for the next 10 years in order for that to happen. (Keep in mind that Thailand's current economy is about three times as big as Vietnam's.)

Also if communist gov'ts are so great (according to you), what are you doing in Thailand? (Granted that we had the coup..., the current Thai gov't is in no way communists!)

Edited July 2, 2007 by ThaiGoon

[A_Traveller]

It might be worth recalling the words in the title come from TNA based on an interview with Supavut Saichua, president of Phatra Securities Plc on 27th April 2007.

This is a [reset] button post.

Regards

[ThaiGoon]

thai goon .

you are so right. this whole topic is going on now for over 3 months. it started as a thai bashing anti juntas by many memebers who are doing all they can to present thailand as a crashing economy and in Crisis. here on this forum we lovingly call them the dooms day brigade..

from day one we have been warned by dooms day brigade that thailand is loosing investors. but the facts are they are pouring in.

We have been warned that the exports will go down but they went up

we have been warned that gdp wil go down but that to is stable and going up.

we have been warned that the stock market will crash and its still going up.

there is no crisis in thailand. there is a crisis with those who did some bad finanacial moves and are now blaming thailand for it.

I totlay agree that thailand is affected by global economy and that the slow down in US and in Europe has effected thailand but the dooms day prediction that the Thai BOT or the goverment is a pack of worthless amatures, and that thailnd is crashing into a crisis has flown out the window.

when you offer a bet those... gloomy dooms day brigade will not put money where thiere mouth is.. just shows you how serious these people are.

moving on....

when are you coming back home?? school is nearly over.. it will be great to see you in the land of smiles.

Cheers again krab khun Highdiver. I think the term "crisis" is definitely of the views of those people who have been gravely affected by apprecitaing Baht. They must be mistaking their own crises as that of the whole country.

PS. I'll be going home soon krab, but might have to stay over here for the whole summer to finish some work.