Thailand's Free-falling Economy

[bingobongo]

reality is reality, nothing more, nothing less.......have fun reading....no lollipops and rainbows here

Thailand's free-falling economy

BANGKOK - Thailand's economy is fast decelerating, representing a volatile new complication to the country's already uncertain political situation and a significant risk to its overall global competitiveness.

http://www.atimes.com/atimes/Southeast_Asia/IF20Ae01.html

[Mid]

That pump-priming has so far failed to stimulate investment growth, as most of the disbursements went toward bureaucracy salaries and state-enterprise expenditures.

they just can't keep their sticky fingers out of the pie can they ?

[bingobongo]

That pump-priming has so far failed to stimulate investment growth, as most of the disbursements went toward bureaucracy salaries and state-enterprise expenditures.

they just can't keep their sticky fingers out of the pie can they ?

is that really a surprise? after all everybody loves a good "homemade pie"

[bkkandrew]

That pump-priming has so far failed to stimulate investment growth, as most of the disbursements went toward bureaucracy salaries and state-enterprise expenditures.

they just can't keep their sticky fingers out of the pie can they ?

But I thought that the reason for the Coup was to tackle corruption.

Great tackle - stop the flow to to the old lot, increase the flow, award it to yourself!

Edited June 19, 2007 by bkkandrew

[ThaiPauly]

A good article I reckon...hope somebody upstairs takes note of the contents.

[samran]

Frankly,

this article is another piece of turgid turd in the guise of economic analysis written by an incompetent, economically inarticulate, financially inept and numerically challenged moron with a computer who passes himself off as a ''freelance" journo. I mean, I've seen some bad attempts at economic analysis, but this bloke is simply worse than amateur in his analysis. And his article shows him up for the depths that this bloke has to sink when he wants to sell an article to a second rate newspaper.

Let’s get some facts on the table before we continue shall we? Yes, the Thai economy is not performing as well as it historically has. And, yes, Thailand is at a point where it needs to make some challenging economic and policy choices which - whoever is in government - will never go down well politically speaking.

To suggest that economy should continue gangbuster-ish growth is both irresponsible and ignores important factors such as inflation and wage and factor cost explosions.

But, let’s continue looking at this article shall we?

A series of policy missteps have badly undermined foreign-investor confidence in the military-appointed government's economic stewardship, including the imposition of capital controls on foreign currency, equity and bond transactions, proposed nationalistic amendments to the Foreign Business Act, and the nationalization of foreign-held media assets.

Yeah, give him that one in a broad sense, but it is old news and the market pretty much has reacted - and the recovered from this news. The SET has grown about 8% in the past 12 months and many good and well managed Thai companies on the index have done much, much better. It also ignores the recent court decisions banning TRT, and the calm aftermath. But hey, all these points are debatable, and I am a glass half full kinda man.

Private consumption fell to its lowest level since the second quarter of 1999, contracting for both durable goods and services, according to recent Phatra Securities research.

Well, sonny, this is what happens when a government stops the unaffordable practices of the former government pump priming parts of the economy via handouts and cheap loans which do nothing for establishing long term productivity for the economy (i.e. education and training) but do everything to please the rural north east to continue voting for you.

Rather than ramping up growth, the CNS declared its intention to put the economy on what it referred to as a more sustainable growth trajectory. Toward that end, the military-appointed government put on ice several of the US$43 billion worth of megaprojects Thaksin had designed to pump up the local economy in anticipation of slowing global demand for Thai exports and a cyclical downturn in the housing market.

yep, $43 billion of projects, a good 20% of which was set to go into his cronies pockets, and the remaining 80% having questionable long term strategic advantage for the economy. Fancy a slightly used, overpriced airport built on marshland anyone? The old one still works; it just needed a refit, and would have done the same job!

Despite last year's 17% appreciation of the Thai currency, the baht, against the US dollar, Thai exports had performed strongly, expanding more than 17% year on year in 2006. That strong trend has continued into 2007, accounting for a $5.5 billion current-account surplus in the first quarter

Ya can't have it both ways, Eddie ole chap. The economy is either doing well or it is not. So do we have an export sector here doing well - in spite of a high baht - or don't we?

To date, those surpluses have provided Thailand's ruling generals with a financial cushion from souring foreign-investor sentiment. However, exports are expected to soften significantly in the coming months, witnessed in the meager $400 million current-account surplus recorded in April, meaning the economy must soon find growth from other sources to avoid a slide into recession. (Exports contribute more than 65% of Thailand's total gross domestic product.)

Slide into recession??

I mean, isn't a recession two successive quarters of negative growth?? And what have we got? 4.3% growth with upgraded forecasts in the high 4 percent range! I mean really!

And where did you get this 65% of exports from? You mean in between beer bars you did a Google search and came up with the first internet site with some official looking numbers? I wouldn't happen to be this one would it?? Asian Development Bank

I mean, you didn't even look at it hard enough did you? It is the Net Exports column you should be look at, which takes into account exports minus imports. In that case, net exports only account for 14.7% of GDP, not 65%. Meaning that 85% of the Thai economy has no reliance whatsoever on exports! I mean, there is even a big fugg-off equation at the top of the ADB web page telling you how to calculate GDP properly! But hey, don't let that get in the way of a good 'economic' argument shall we - especially when that beer is getting cold and there are bills to pay.

And so you go on, spouting 'world bank studies' to make you seem credible, and an opportune comment from the BOT governor to seemingly 'seal the deal' on your sieve of an argument.

But I'm sure you were paid handsomely for this inept piece of journalism, and punters will continue to swallow the tripe that you write.

[Mid]

well that's a hel_l of a hatchet job , samran ,

it's the message not the messenger .............

and some sort of direction / policy statement by the current incumbents would not go amiss ,

believe me , it's not pretty at the coal face.

[ThaiGoon]

to Khun Samran.

this article is another piece of turgid turd in the guise of economic analysis written by an incompetent, economically inarticulate, financially inept and numerically challenged moron with a computer who passes himself off as a ''freelance" journo. I mean, I've seen some bad attempts at economic analysis, but this bloke is simply worse than amateur in his analysis. And his article shows him up for the depths that this bloke has to sink when he wants to sell an article to a second rate newspaper.

[A_Traveller]

Also I recall many saying how export was the life blood of the Thai economy, but using the 2003 figures, at 1990 prices(?) the exports generate 14.7% of GDP.

One issue here is that figures are never available for analysis in a timely manner, so using this source we are all {including the 'journo'} looking through the wrong end of the telescope.

Ignoring these figures for a moment I know what I see, and what I'm told, and right now, the wheels are in danger of coming off, to borrow Mid's phrase, 'at the coal face'

Regards

/edit these //

Edited June 19, 2007 by A_Traveller

[bingobongo]

Frankly,

this article is another piece of turgid turd in the guise of economic analysis written by an incompetent, economically inarticulate, financially inept and numerically challenged moron with a computer who passes himself off as a ''freelance" journo. I mean, I've seen some bad attempts at economic analysis, but this bloke is simply worse than amateur in his analysis. And his article shows him up for the depths that this bloke has to sink when he wants to sell an article to a second rate newspaper.

Let's get some facts on the table before we continue shall we? Yes, the Thai economy is not performing as well as it historically has. And, yes, Thailand is at a point where it needs to make some challenging economic and policy choices which - whoever is in government - will never go down well politically speaking.

To suggest that economy should continue gangbuster-ish growth is both irresponsible and ignores important factors such as inflation and wage and factor cost explosions.

But, let's continue looking at this article shall we?

A series of policy missteps have badly undermined foreign-investor confidence in the military-appointed government's economic stewardship, including the imposition of capital controls on foreign currency, equity and bond transactions, proposed nationalistic amendments to the Foreign Business Act, and the nationalization of foreign-held media assets.

Yeah, give him that one in a broad sense, but it is old news and the market pretty much has reacted - and the recovered from this news. The SET has grown about 8% in the past 12 months and many good and well managed Thai companies on the index have done much, much better. It also ignores the recent court decisions banning TRT, and the calm aftermath. But hey, all these points are debatable, and I am a glass half full kinda man.

Private consumption fell to its lowest level since the second quarter of 1999, contracting for both durable goods and services, according to recent Phatra Securities research.

Well, sonny, this is what happens when a government stops the unaffordable practices of the former government pump priming parts of the economy via handouts and cheap loans which do nothing for establishing long term productivity for the economy (i.e. education and training) but do everything to please the rural north east to continue voting for you.

Rather than ramping up growth, the CNS declared its intention to put the economy on what it referred to as a more sustainable growth trajectory. Toward that end, the military-appointed government put on ice several of the US$43 billion worth of megaprojects Thaksin had designed to pump up the local economy in anticipation of slowing global demand for Thai exports and a cyclical downturn in the housing market.

yep, $43 billion of projects, a good 20% of which was set to go into his cronies pockets, and the remaining 80% having questionable long term strategic advantage for the economy. Fancy a slightly used, overpriced airport built on marshland anyone? The old one still works; it just needed a refit, and would have done the same job!

Despite last year's 17% appreciation of the Thai currency, the baht, against the US dollar, Thai exports had performed strongly, expanding more than 17% year on year in 2006. That strong trend has continued into 2007, accounting for a $5.5 billion current-account surplus in the first quarter

Ya can't have it both ways, Eddie ole chap. The economy is either doing well or it is not. So do we have an export sector here doing well - in spite of a high baht - or don't we?

To date, those surpluses have provided Thailand's ruling generals with a financial cushion from souring foreign-investor sentiment. However, exports are expected to soften significantly in the coming months, witnessed in the meager $400 million current-account surplus recorded in April, meaning the economy must soon find growth from other sources to avoid a slide into recession. (Exports contribute more than 65% of Thailand's total gross domestic product.)

Slide into recession??

I mean, isn't a recession two successive quarters of negative growth?? And what have we got? 4.3% growth with upgraded forecasts in the high 4 percent range! I mean really!

And where did you get this 65% of exports from? You mean in between beer bars you did a Google search and came up with the first internet site with some official looking numbers? I wouldn't happen to be this one would it?? Asian Development Bank

I mean, you didn't even look at it hard enough did you? It is the Net Exports column you should be look at, which takes into account exports minus imports. In that case, net exports only account for 14.7% of GDP, not 65%. Meaning that 85% of the Thai economy has no reliance whatsoever on exports! I mean, there is even a big fugg-off equation at the top of the ADB web page telling you how to calculate GDP properly! But hey, don't let that get in the way of a good 'economic' argument shall we - especially when that beer is getting cold and there are bills to pay.

And so you go on, spouting 'world bank studies' to make you seem credible, and an opportune comment from the BOT governor to seemingly 'seal the deal' on your sieve of an argument.

But I'm sure you were paid handsomely for this inept piece of journalism, and punters will continue to swallow the tripe that you write.

lets see, rhetoric from samran and thaigoon, now i am convivned that the two of you are either in very deep denial or work for the junta

the sooner you accept that thailand is no longer the utopian paradise you want it to be, the sooner you will be on the road to healing

Edited June 19, 2007 by bingobongo

[Maizefarmer]

I trade on-line just about every day (forex - not stocks/shares), and have watched the Baht maintain a level against not only the USD, but also regional currencies, that is simply to strong. It makes buying Thai made goods expensive - hence exports are hampered.

The strength of the Baht is "artificial", and has being for some considerable time - a deliberate Thai fiscal policy.

What r the chances of another devaluation looming on the horizon?

MF

[solo siam]

I trade on-line just about every day (forex - not stocks/shares), and have watched the Baht maintain a level against not only the USD, but also regional currencies, that is simply to strong. It makes buying Thai made goods expensive - hence exports are hampered.

The strength of the Baht is "artificial", and has being for some considerable time - a deliberate Thai fiscal policy.

What r the chances of another devaluation looming on the horizon?

MF

eh?!

The baht's worth what people will pay for it.

I understand the difference between on-shore and off-shore rates, but if what you say is true then simple supply and demand would soon put it back in its place. Why are Thai exports still doing well (as you are suggesting that exports are way overpriced), also why aren't people selling baht like crazy? Unless it's only yourself that can spot this artificial, too strong price, Even the very best money guys in the world often get it wrong, and it's INCREDIBLY hard for a country to prop or strengthen its currency in such an artificial manner (ask the UK).

Regardless, I'm not sure of your point - after all if exports are able to maintain (and even grow) at the current much higher price - then are you suggesting that a devaluation would make the economy rush into an incredibly strong period? as Thai goods prices fall (comparatively) and consumers rush out to buy them.

[samran]

well that's a hel_l of a hatchet job , samran ,

it's the message not the messenger .............

and some sort of direction / policy statement by the current incumbents would not go amiss ,

believe me , it's not pretty at the coal face.

well when the messenger doesn't understand how to calculate GDP, doesn't know what a recession is, uses sloppy research and generally doesn't get their economics right, then yeah, I'm going to blast them. Analysis like this does no one any good.

As for the 'real' message, well, it ain't all beer and skittles, I'd be the first to admit that. But I'll tell you one thing, the 'downturn' we are seeing now is the result of 5+ years of substandard economic management in combination of Thailand reaching a point where it is going to have to make some really hard economic decisions which will take it to the next level of economic development. But journos are conveinently forgetting the former, and don't have the brains to explain the latter. Denial has nothing to do with it for me. I'm calling a spade a spade, and am trying to look beyone the doomsday hype to what the core issues - and problems - are.

As for putting me and Thai goon in the same sentance bingoboingo, with the greatest respect, please don't do that again. I can argue my own way, and you can be guaranteed, it won't be based on emotion.

[ThaiGoon]

http://www.boi.go.th/english/download/stat.../96/FINV075.pdf

BOI's numbers (FDI from major countries):

Net Applications: Jan-May07= 122,930 million Baht ; Jan-May06= 90,741 million Baht

Applications Approved: Jan-May07= 161,056 million Baht ; Jan-May06= 125,605 million Baht

Promotion Certificate Issues: Jan-May07= 167,837 million Baht ; Jan-May06= 128,586 million Baht

this article is another piece of turgid turd in the guise of economic analysis written by an incompetent, economically inarticulate, financially inept and numerically challenged moron with a computer who passes himself off as a ''freelance" journo. I mean, I've seen some bad attempts at economic analysis, but this bloke is simply worse than amateur in his analysis. And his article shows him up for the depths that this bloke has to sink when he wants to sell an article to a second rate newspaper.

[samran]

I trade on-line just about every day (forex - not stocks/shares), and have watched the Baht maintain a level against not only the USD, but also regional currencies, that is simply to strong. It makes buying Thai made goods expensive - hence exports are hampered.

The strength of the Baht is "artificial", and has being for some considerable time - a deliberate Thai fiscal policy.

What r the chances of another devaluation looming on the horizon?

MF

maybe the market is trying to tell us something here maize....

high baht means cheap imports. Cheap capital imports properly invested would do wonders for the Thai economy.

[ThaiGoon]

As for putting me and Thai goon in the same sentance bingoboingo, with the greatest respect, please don't do that again. I can argue my own way, and you can be guaranteed, it won't be based on emotion.

And please don't put me and bingobongo in the same sentence as well.

[Mid]

I'm calling a spade a spade, and am trying to look beyone the doomsday hype to what the core issues - and problems - are.

I hear you ,

my view is you don't gotta look far before corruption raises it's ugly head . Until the general populous is educated to a level that allows logical thought , this will be the status quo.

unfortunately there are some high level entities with a vested interest against that happening .

[ThaiGoon]

I'm calling a spade a spade, and am trying to look beyone the doomsday hype to what the core issues - and problems - are.

I hear you ,

my view is you don't gotta look far before corruption raises it's ugly head . Until the general populous is educated to a level that allows logical thought , this will be the status quo.

unfortunately there are some high level entities with a vested interest against that happening .

Mid talking about education and logical thought....

[Mid]

Mid talking about education and logical thought

thanxs for demonstrating yours .................

[ThaiGoon]

Mid talking about education and logical thought

thanxs for demonstrating yours .................

Sure. I also see how far your education and logical thought has got you in Thailand.... Same thing with bingobongo, cclub7 and the like. You guys are really role models of high education and logical thought that we, Thais, have to look up to (if we all dream of owning a bar with three stools somewhere in Cambodia while holding our breath to get by day to day on a shoestring budget that is.)

[Mid]

my view is you don't gotta look far before corruption raises it's ugly head . Until the general populous is educated to a level that allows logical thought , this will be the status quo.

and your solution for the above is ??

[endure]

The VERY NEXT personal insult gets the poster a 10 day holiday.

[ThaiGoon]

According to the latest survey by JETRO, Thailand is the top destination for Japanese investors to relocate their business to.

Look at Page 6:

http://www.jetro.go.jp/en/news/releases/20...facturers_1.pdf

"Genernal machinery and chemical firms in Singapore are eyeing Thailand."

Thailand is also ranked second (behind China, tied with India) as a country that Japanese firms plan to target in the next 5-10 years.

Page 5:

http://www.jetro.go.jp/en/news/releases/20...facturers_2.pdf

"China ranked higest (337), followed by India (281), Thailand (281) and Vietnam (229)."

Edited June 19, 2007 by ThaiGoon

[Robski]

Oh no!!! They've escaped from the news clippings forum... aaaaaaaaaaaaaaaaaaargh!

Send them back, send them back!!

[endure]

Oh no!!! They've escaped from the news clippings forum... aaaaaaaaaaaaaaaaaaargh!

Send them back, send them back!!

[ThaiGoon]

[Mid]

According to the latest survey by JETRO, Thailand is the top destination for Japanese investors to relocate their business to.

a samran could be done on those articles and your post , not by me though ,

I'm more interested in the answer to my ? in post #21 ?

edit for continunity , thanxs to the peanut gallery

Edited June 19, 2007 by Mid

[Ijustwannateach]

Good one, Robski- funniest post I've read this week...

[Mid]

yep , stopped the thread dead .

[ThaiGoon]

a samran could be done on those articles and your post , not by me though ,

I'm more interested in the answer to my ? in post #21 ?

You are talking to me? Of course, the education system in Thailand needs to be improved and more money and efforts are needed in R&D for Thailand to sustain the growth and our competitiveness in the long term. Recently there has been a serious discussion about revamping the college education in Thailand. (The discussion was recently on the Nation tv for about an hour and half. The participants were highly educated Thai professors. )

There's also already a plan from the gov't to gradually increase the budget for R&D so that it will be comparable to Singapore's in a few years. Not to mention other efforts by organizations like NECTEC to promote R&D in Thailand and match their work with needs of Thai companies. SCG (Poon Cement Thai) also wants to be able to build their own machines in the near future (hence reducing their dependecy on imported machinery). They recently have stepped up their efforts in recruiting and investing in a lot of moeny in Thai PhD's to realize their goals.

There's still a lot to be done in terms of education and R&D in Thailand but these are a few examples that we know the problems and are trying to fix them. Of course, some ignorant fools living in Thailand are oblivious to all these and it's easier and more fun for them to just ridicule and insult Thailand and act as if they know it all on an internet forum.