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Thailand Risks First Double-Dip Recession Since 1998 Crisis


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A near-empty Patong Beach in Phuket, on July 19. Photographer: Andre Malerba/Bloomberg

 

Thailand will likely be the worst economic performer in Southeast Asia this year, with economists continuing to slash the country’s growth forecast amid surging Covid-19 infections, mounting political tensions and fading hopes for a tourism revival.

 

The Finance Ministry on Thursday cut its 2021 gross domestic product forecast to 1.3% growth, from the 2.3% it expected in April. With new Covid infections and deaths continually breaking records since the latest surge began in April, some economists are flagging the possibility of a technical recession in the second half of the year -- or even a second straight annual contraction, something the country hasn’t seen since the Asian Financial Crisis more than two decades ago.

 

Full Story: https://www.bloomberg.com/news/articles/2021-07-28/thailand-risks-first-double-dip-recession-since-1998-asia-crisis

 

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Why would anyone find satisfaction from the possible demise of the economic status of a country and the impact on the vast majority who are already mainly  far from comfortable wealth?

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C'mon! a double dip recession is for wimps!

Let's push the boat out, nothing less than a Triple Dip Depression, with a side of out of control disease! Yeah baby! Burn like you mean it!

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Mmmmm? Let me think. "What will be will be" and "Some risks must be taken". He's finished. What fool will take his place is the next thing. As I've said before Thailand is due for another coup d'etat. I used to think that Prayut would put his uniform back on but he won't have the backing. Military takes over. Wuhan style lockdown. Military guarantees democratic elections and yes folks it's Groundhog Day. I think this is a possiblity. When this may happen like the rest of my post is only conjecture but it has to be on the cards.

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Clearly The Finance Ministry did not consult TAT before coming up with their numbers.

 

Anyway, the dug the hole themselves. Only sad that this will not affect the Elite, but only make them richer.

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13 minutes ago, khunpa said:

Clearly The Finance Ministry did not consult TAT before coming up with their numbers.

 

Anyway, the dug the hole themselves. Only sad that this will not affect the Elite, but only make them richer.

At the end this will affect the elite, people got less cash now to spend in the elite owned seven-elevens, Big C's, Centrals etc.

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2 minutes ago, HiSoLowSoNoSo said:

At the end this will affect the elite, people got less cash now to spend in the elite owned seven-elevens, Big C's, Centrals etc.

Yes, and yet, no.

 

it’s true, less cash to spend will cause some of the rich to suffer reduced cash flow, as people have less cash to spend. King Power without tourists spending, Central as an up market shopping mall, are classic examples.

 

on the other hand, these people have deep pockets. As prices fall, they have the opportunity to acquire good assets cheaply. So in the long run, given reasonable business acumen, they will come out richer.

 

the people who will really suffer are those who are highly leveraged and suffer reduced cash flow. The banks will help them out as much as they can because they won’t want a bad debt on their hands, but some will go to the wall.

 

the little guy will suffer badly.

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8 minutes ago, chalawaan said:

How will a falling Baht hurt poor Thais?

It's a serious question.

A weak baht is the one solid thing that could encourage tourism back. And more generous spending in the grey economy. Only rich Thais who go abroad and do business overseas get hurt.

I think we would all like the Baht to drop a little chaiswaan--but what seems to hoped for by some of the posters is a 97 type crash, which was  disastrous for the country.

Imports (Oil etc) would rise of course and along with it anything manufactured for the home market, but what is not factored in is the price of the goods sold at home, they also rise.

 

Lets say we are in 97 with a 50% reduction of the baht--and you are a Rice buyer--the stable diet of Thai's, with the Baht crash the Rice you sold overseas at X-baht you can now get x+1 baht, (50% more) so you either sell all your rice overseas or put the home price up to X+1 baht.

 

Sure it would maybe attract more tourist--but that really isn't the runs the Thai economy.

 

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8 minutes ago, HiSoLowSoNoSo said:

At the end this will affect the elite, people got less cash now to spend in the elite owned seven-elevens, Big C's, Centrals etc.

To put it basically HiSoLowNoSo----- people can buy less to eat.......and thats a real good thing.....huh..? .......:coffee1:

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Will the nation become insolvent and have to use the USD cash reserves to buy back some baht to help keep the inflation at a dull roar. However if the cash reserves start to run low the central bank will be possibly forced to devalue its currency. Thus forward-looking investors should plan for that event today.

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4 minutes ago, ThailandRyan said:

Will the nation become insolvent and have to use the USD cash reserves to buy back some baht to help keep the inflation at a dull roar. However if the cash reserves start to run low the central bank will be possibly forced to devalue its currency. Thus forward-looking investors should plan for that event today.

 

Forward looking investors were planning for that event months ago.

 

 

Some of the smarter ones since 2008.

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27 minutes ago, sanuk711 said:

I think we would all like the Baht to drop a little chaiswaan--but what seems to hoped for by some of the posters is a 97 type crash, which was  disastrous for the country.

Imports (Oil etc) would rise of course and along with it anything manufactured for the home market, but what is not factored in is the price of the goods sold at home, they also rise.

 

Lets say we are in 97 with a 50% reduction of the baht--and you are a Rice buyer--the stable diet of Thai's, with the Baht crash the Rice you sold overseas at X-baht you can now get x+1 baht, (50% more) so you either sell all your rice overseas or put the home price up to X+1 baht.

 

Sure it would maybe attract more tourist--but that really isn't the runs the Thai economy.

 

Ok, some fair points there, but hard as it is to contemplate, nothing changes without pain, and blood, and death. It's the human condition.

We ordinary people, expats, could fall foul of extreme dysfunction in Thai society.

 

My enduring fear is that if the wheels come off, poor Thais will lump us in with their Thai oppressors, sure, we're "wealthy" but not even close to the Salim, and most of us I hope, have learned, as part of our own democracies, that absolute power for one group leads to great turmoil and human suffering for everyone else, eg: pre-revolutionary France.

 

However, we usually emerge better people, with better societies, when these extreme imbalances are ironed out.

 

And in these epic struggles, people die in sometimes vast numbers, when these imbalances are challenged. Velvet revolutions are a rare beast indeed.

 

I think everyone seriously underestimates how much tourism impacts Thailand, particularly at a grassroots level. Every worker we meet as tourists, is a person who relies almost solely on the industry, and tips etc. to live a dignified life. I recall a conservative estimate of tourism income is 25% of the economy With Thailand, we will likely never know, but as a foreigner here, I use services that would likely not even exist if we all disappeared overnight. Don't forget the ripple effect of all; thus, a tuk tuk driver going bust could well eventually impact the BoT bottom line, just because what he can't afford, ripples out and out to an eventual significant amount of cash.

 

I think globally, it's never been about what "trickles down", but what gets pushed "up" the food chain. that drives wealth.

 

I do not wish suffering on ordinary Thais, but I do pragmatically wish they hurt enough to turn on these salim scumbags who have preyed on them throughout their history.

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15 minutes ago, chalawaan said:

I think everyone seriously underestimates how much tourism impacts Thailand, particularly at a grassroots level. Every worker we meet as tourists, is a person who relies almost solely on the industry, and tips etc. to live a dignified life. I recall a conservative estimate of tourism income is 25% of the economy.

So true, I'm actually blown away at how minimal the domestic tourism sector managed to support the industry.  It is clear that international tourism was the lifeblood of more 'unofficial' jobs that weren't in the official recognized tally.  Street food vendors, night life workers, guest house owners, and everyone in between - none of those people are accounted for in officially registered figures.  Thailand needs tourism, it has relied on it for far too long with a relatively uneducated mass of people that used it to support themselves and their families lifestyles.

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I often got questioned about why I put my 800,000 baht equivalent (for Non-O renewal) in a dollar denominated account and not in a baht account. Actually at the time I did it because I thought that roughly dollar/30 was not a very good deal. When the pandemic started I said that if the baht got a notch above dollar/32.5 (it did briefly in 2020 but I missed that) I would convert my dollars. But now: 1)the baht may fall much further, and 2) I may well not want to use Thailand as my base for the next few years, or ever again.

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12 hours ago, Nojohndoe said:

Why would anyone find satisfaction from the possible demise of the economic status of a country and the impact on the vast majority who are already mainly  far from comfortable wealth?

Maybe some people think it's highly reserved.By the way I thought Thailand has an enormous foreign reserve,maybe time to touch that unless the generals pocketed it already

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8 minutes ago, mrmicbkktxl said:

Maybe some people think it's highly reserved.By the way I thought Thailand has an enormous foreign reserve,maybe time to touch that unless the generals pocketed it already

Little of whatever any Thai Government Holds or claims to hold  is unlikely to be utilized for anything other than the protection of the extremely wealthy. The majority must sink or swim even in the best of times which now a fading dream. The internal economy is being credit squeezed mercilessly which eventually could lead to the rich elite reducing the "peasants" to  slave status given the bizzare disparity in wealth.

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1 hour ago, mrmicbkktxl said:

Maybe some people think it's highly reserved.By the way I thought Thailand has an enormous foreign reserve,maybe time to touch that unless the generals pocketed it already

because this will motivate them to get off their backsides and take action.  it's the only thing that Thai people care about.  money.

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11 hours ago, chalawaan said:

Ok, some fair points there, but hard as it is to contemplate, nothing changes without pain, and blood, and death. It's the human condition.

We ordinary people, expats, could fall foul of extreme dysfunction in Thai society.

 

My enduring fear is that if the wheels come off, poor Thais will lump us in with their Thai oppressors, sure, we're "wealthy" but not even close to the Salim, and most of us I hope, have learned, as part of our own democracies, that absolute power for one group leads to great turmoil and human suffering for everyone else, eg: pre-revolutionary France.

 

However, we usually emerge better people, with better societies, when these extreme imbalances are ironed out.

 

And in these epic struggles, people die in sometimes vast numbers, when these imbalances are challenged. Velvet revolutions are a rare beast indeed.

 

I think everyone seriously underestimates how much tourism impacts Thailand, particularly at a grassroots level. Every worker we meet as tourists, is a person who relies almost solely on the industry, and tips etc. to live a dignified life. I recall a conservative estimate of tourism income is 25% of the economy With Thailand, we will likely never know, but as a foreigner here, I use services that would likely not even exist if we all disappeared overnight. Don't forget the ripple effect of all; thus, a tuk tuk driver going bust could well eventually impact the BoT bottom line, just because what he can't afford, ripples out and out to an eventual significant amount of cash.

 

I think globally, it's never been about what "trickles down", but what gets pushed "up" the food chain. that drives wealth.

 

I do not wish suffering on ordinary Thais, but I do pragmatically wish they hurt enough to turn on these salim scumbags who have preyed on them throughout their history.

no pain, no gain

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