Experts predict a weakening baht may boost exports and tourism

[webfact]

File photo. Minister of Finance, Arkhom Termpittayapaisith

 

by Michael Bridge

There have been many press campaigns and overseas promotions by the Tourism Authority of Thailand in a bid to fill the gaps left by the Chinese and Russian tourists.

However, with travel restrictions and a strong Thai Baht, many of their plans have not been very successful to date.

Meanwhile, a lower baht suggested by the Minister of Finance, Arkhom Termpittayapaisithm this week, will ease entry criteria to boost foreign tourism and also create export growth of between 5% and 6% in 2022.

Thailand’s economic experts in government are currently adopting a wait-and-see approach to the current crisis caused by the war between Russia and Ukraine.

The Minister of Finance, Arkhom Termpittayapaisith, suggested on Monday that economic growth should take precedence over curbing inflation, in a signal to the central bank. 

This would leave the way forward to a weakening baht, which may boost export competitiveness and tourism receipts in the short term, while the government estimates that the threat of inflation will recede over the course of the year particularly if the war in Ukraine is brought to a close.

 

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The current situation comes as the baht has lost 4.64% since the 17th of February last, one week before the Russian invasion of Ukraine when the dollar to Thai baht rate was at ฿31.12. 

There is now a strong body of opinion that suggests that this ultra-low rate may be maintained by the Bank of Thailand which could see the Thai baht set to weaken further as the year progresses.

Last week, the minister responded to fears that the kingdom may be suffering from a liquidity crisis after four Thai banks were downgraded.

Technically stagflation has returned to Thailand

Thanavath Phonvichai, the President of the University of the Thai Chamber of Commerce (UTCC), estimated that already Thailand has lost ฿244.7 billion because of the war, which has reduced the potential GDP gain for 2022 to between 2% and 3%.

‘The Thai economy is highly likely to grow at a rate of 2% to 3%, with inflation staying at 5% this year if the Russia-Ukraine conflict is prolonged throughout this year,’ Mr Thanavath said. ‘This scenario will lead Thailand to enter technical stagflation in 2022.’

So, the ailing hospitality industry can only wait and hope that the Baht weakens soon, which could encourage more tourists to choose to take a vacation in Thailand.

For expats, although we pay for our groceries in Baht, a weaker Baht would at least mean our pensions will rise.
 

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[Captain Monday]

Maybe exports but not tourism. Tourism is doomed until entry schemes are abolished and stop forced quarantine of otherwise healthy people at their own expense.

[Laughing Gravy]

1 hour ago, webfact said:

The Thai economy is highly likely to grow at a rate of 2% to 3%, with inflation staying at 5% this year if the Russia-Ukraine conflict is prolonged throughout this year,’ Mr Thanavath said. ‘This scenario will lead Thailand to enter technical stagflation in 2022.’

I see they have jumped on the bandwagon of using the war in Ukraine s a reason for the economy in the gutter. shameful. Try looking at home for the abysmal economic policies and handling of the pandemic first.

[smedly]

Experts predict a weakening baht may boost exports and tourism

 

 

 

no kidding 

 

but will make the hiso purchase abroad more expensive 

 

In a world were we are now seeing a tightening on officials/governments who steal and launder money and invest abroad - it is not just Russians - Thailand must be well up there, so you want to buy a property in Kensington - were did you get the money, they may as well all be drug dealers who cannot explain it either 

 

How many police/military in Thailand are billionaires - try explaing that one, oh it all came from my wifes noodle shop .............ahem

[jerrymahoney]

14 minutes ago, smedly said:

How many police/military in Thailand are billionaires - try explaing that one, oh it all came from my wifes noodle shop .............ahem

The government folks who list themselves as 'billionaires' or just plain wealthy seem more to get their largesse from being keyed in on pending real estate developments -- government or private -- and buy properties that they soon can flip rather than from the wife's noodle shop.

[ukrules]

I've read what appear to be many April Fools jokes already today.

 

With the Thai news it's hard to tell what's a complete joke on any normal day, I'm not even going to bother today.

[ikke1959]

Did they not say the were not manipulating the THB??? The Baht stays strong and how will it weaken with all the bad news of degrading the banking, less tourism, etc which have no influence on the exchange  rate

[leither69]

9 years here, still awaiting a prediction that comes too fruition. 

[Skeptic7]

1 hour ago, leither69 said:

9 years here, still awaiting a prediction that comes too fruition. 

27+ and still waiting. Breath holding not recommended. 

[Excel]

"Experts" with the mindset of children, as they could have told you that, well those that have had a decent education anyway.

[RichardColeman]

4 hours ago, webfact said:

This would leave the way forward to a weakening baht,

Hope so, UK £ has dropped 2 baht per £ since January (3 baht in the last 8 months) - not exactly what you need after ridiculous entry restrictions. Get it back to 47-50 and Thailand may get some serious growth and tourists  in the figures they want.

 

They have lost 25% of their economy and STILL their currency strengthens. One can only assume there is something going on for that to happen - and as for those saying the other countries keep putting out bad economy data, why does Thailand take a 25% hit and nothing depreciate ? Least I can trust foreign economy figures. Other countries are not losing 25% and getting weaker , they are like losing say 5-10 %, makes no sense

[hotchilli]

5 hours ago, webfact said:

However, with travel restrictions and a strong Thai Baht, many of their plans have not been very successful to date.

Both totally controlled by the government.

[hotchilli]

4 hours ago, Laughing Gravy said:

I see they have jumped on the bandwagon of using the war in Ukraine s a reason for the economy in the gutter. shameful. Try looking at home for the abysmal economic policies and handling of the pandemic first.

Looking inwards is forbidden.

[Isaan sailor]

It’s not rocket science.  A weaker Baht will boost exports and help tourism.  If a foreigner wants to fly somewhere warm for a vacation—why fly to a more expensive country where your money doesn’t go as far?

[CartagenaWarlock]

When is dollar going to be 40 baht. Waiting to transfer 50K USD. 

[ehs818]

43 minutes ago, RichardColeman said:

Hope so, UK £ has dropped 2 baht per £ since January (3 baht in the last 8 months) - not exactly what you need after ridiculous entry restrictions. Get it back to 47-50 and Thailand may get some serious growth and tourists  in the figures they want.

 

They have lost 25% of their economy and STILL their currency strengthens. One can only assume there is something going on for that to happen - and as for those saying the other countries keep putting out bad economy data, why does Thailand take a 25% hit and nothing depreciate ? Least I can trust foreign economy figures. Other countries are not losing 25% and getting weaker , they are like losing say 5-10 %, makes no sense

Of course it makes no sense. TIT. (This Is Thailand).

[portlandtree]

1 hour ago, CartagenaWarlock said:

When is dollar going to be 40 baht. Waiting to transfer 50K USD. 

In our next life

 

[RafPinto]

5 hours ago, smedly said:

Experts predict a weakening baht may boost exports and tourism

 

 

 

no kidding 

 

but will make the hiso purchase abroad more expensive 

 

In a world were we are now seeing a tightening on officials/governments who steal and launder money and invest abroad - it is not just Russians - Thailand must be well up there, so you want to buy a property in Kensington - were did you get the money, they may as well all be drug dealers who cannot explain it either 

 

How many police/military in Thailand are billionaires - try explaing that one, oh it all came from my wifes noodle shop .............ahem

No, it came from my Noodle.

[RafPinto]

1 hour ago, CartagenaWarlock said:

When is dollar going to be 40 baht. Waiting to transfer 50K USD. 

Send them to my Thai account.
I give you a call, once we are at 40/1

[Guderian]

7 hours ago, webfact said:

This would leave the way forward to a weakening baht

The major events of the last 15 years haven't made even the slightest dent in the Baht, forgive me if I take this latest promise of a weaker Baht with a small sack of salt.

[Misterwhisper]

Luckily, you don't need to be an "expert" to predict that these "experts'" prediction will come to nothing. As usual.

 

There conceivably will be a certain increase in exports due to a declining baht, granted. But a tourism increase? Get real, you "experts" you! When will you fine "experts" finally acknowledge the truth that inbound tourism is NOT stifled because of a strong baht but because of a completely, completely, completely different reason?

[mikebell]

A strong baht is essential for the exporting of money that many police/military AKA politicians daren't put in a bank.

[Tony125]

What weakening baht? Last wek it was at 33.77 to a US dollar, today it's 33.36 to the dollar.

[puck2]

4 hours ago, CartagenaWarlock said:

When is dollar going to be 40 baht. Waiting to transfer 50K USD. 

Ask Prayut/Anutin  (hmmm)  or a soothsayer!.

[billy54]

Love it EXPERTS. 

People have been saying this for years 

ex=an unknown quantity 

Spurt =drop of fluid under pressure ????????

[vandeventer]

7 hours ago, ikke1959 said:

Did they not say the were not manipulating the THB??? The Baht stays strong and how will it weaken with all the bad news of degrading the banking, less tourism, etc which have no influence on the exchange  rate

I hope they put the baht where it should be, just float it with no help from the government or the banks.