Thai economic woes grow with a 10-year high trade deficit as January exports slumped by 4.5%

[nigelforbes]

6 minutes ago, ThailandRyan said:

If and when are synonymous. The correction is coming.

Post of the week that one Ryan, I'm going to frame it, it's one of your better faux pas.

[nigelforbes]

11 minutes ago, ThailandRyan said:

If and when are synonymous. The correction is coming.

I understand what a correction is on the stock market but not in the economy. Why not set out for us all what that correction looks like, what will happen and how?

[nigelforbes]

2 hours ago, ThailandRyan said:

Especially when things get hidden from view and the truth of the issues never arise, not talking conspiracy here, just the real world of Thailand. Yet Reuters has a report which says what we are seeing as well.

 

https://www.reuters.com/markets/asia/thai-economy-seen-growing-3-4-this-year-inflation-fall-cbank-2023-02-28/

 

"Southeast Asia's second-largest economy grew 2.6% in 2022, less than expected but is now gathering steam as tourism rebounds, helped by the return of Chinese visitors. The BOT expects 25.5 million foreign arrivals this year, compared with nearly 40 million in pre-pandemic 2019.

 

Exports, another key driver of growth, however, were seen rising just 1% this year, with a possible contraction ahead, the BOT said, blaming the global economic slowdown.

In January, the economy improved from December, helped by improved service sector activities and government stimulus measures, the BOT said in a separate statement.

 

But exports fell 3.4% in January from a year earlier and could see another year-on-year drop in February, Assistant Governor Chayawadee Chai-Anant told a news conference on Tuesday."

 

Look at the highlighted and underlined section above. If tourism stagnates then all bets are off and it appears stagnation is in the cards looking at increasing prices for air fares etc....

Also, you do understand the term, year on year!

[Scott]

Inflammatory post reported and removed.  

 

[ThailandRyan]

17 hours ago, nigelforbes said:

I understand what a correction is on the stock market but not in the economy. Why not set out for us all what that correction looks like, what will happen and how?

 A correction in the economy is a recession......

 

What Is a Correction?

A “Correction” describes when an asset or industry loses a significant amount of value.

 

Tourism industry GDP etc.....slowing down will cause more contractions.....recession....then if bad enough a depression..

 

https://smartasset.com/financial-advisor/recession-vs-depression

Edited March 4, 2023 by ThailandRyan

[nigelforbes]

22 minutes ago, ThailandRyan said:

 A correction in the economy is a recession......

 

What Is a Correction?

A “Correction” describes when an asset or industry loses a significant amount of value.

 

Tourism industry GDP etc.....slowing down will cause more contractions.....recession....then if bad enough a depression..

 

https://smartasset.com/financial-advisor/recession-vs-depression

The quote describes a markets correction, that's equities markets such as the Dow or the S&P. You said a correction is coming, in reference to the Thai economy which is very different and why I asked. People do not normally refer to economic downturns as corrections, more often they are described as recessionary or similar. Regardless, please describe for us the events that will take place, why and how.

 

 

 

[nigelforbes]

On 3/3/2023 at 1:44 PM, ThailandRyan said:

Especially when things get hidden from view and the truth of the issues never arise, not talking conspiracy here, just the real world of Thailand. Yet Reuters has a report which says what we are seeing as well.

 

https://www.reuters.com/markets/asia/thai-economy-seen-growing-3-4-this-year-inflation-fall-cbank-2023-02-28/

 

"Southeast Asia's second-largest economy grew 2.6% in 2022, less than expected but is now gathering steam as tourism rebounds, helped by the return of Chinese visitors. The BOT expects 25.5 million foreign arrivals this year, compared with nearly 40 million in pre-pandemic 2019.

 

Exports, another key driver of growth, however, were seen rising just 1% this year, with a possible contraction ahead, the BOT said, blaming the global economic slowdown.

In January, the economy improved from December, helped by improved service sector activities and government stimulus measures, the BOT said in a separate statement.

 

But exports fell 3.4% in January from a year earlier and could see another year-on-year drop in February, Assistant Governor Chayawadee Chai-Anant told a news conference on Tuesday."

 

Look at the highlighted and underlined section above. If tourism stagnates then all bets are off and it appears stagnation is in the cards looking at increasing prices for air fares etc....

Yawn. Well, here is how I think things might play out. 

 

I have no doubt that international tourism, that's the services export sector, will perform strongly over the course of the year. Whether it turns out to be 20, 25 or more million, nobody knows but the number is more likely to be higher than lower, 25 mill + seems doable. The value of the Baht will depend on usd strength but is extremely unlikely to affect tourism because Thailand remains a comparatively inexpensive holiday destination to most countries in the region, especially to China. Malaysia and further afield, Russia. 

 

Customs exports of goods remains less certain because much depends on the strength of the economies in the export countries. Given that Thailand relies on regional trade for 75% of its exports, the chances that exports will surprise to the upside, throughout the course of the year, remains strong. Thailand has been historically strong at opening up new markets for tourism and for goods, last week or so they signed a new export contract with a Chinese province and i would expect to see more of similar. I do not expect Baht strength or weakness to influence Thai exports levels to any economy that doesn't use usd or a usd linked currency. If however the Baht does weaken, I expect inbound FDI to take advantage, especially from Japan. 

 

Again, historically, Thai export levels have frequently been volatile, month on month, often going from deep deficit to surplus in adjacent months.

 

Lastly, service sector imports may easily be the factor that produces a trade deficit, visa applications for outbound travel are up substantially. 

 

I think I'd perhaps want to look again and maybe reforecast, after the 1Q23 numbers are published in total. 

 

 

 

 

 

 

[ThailandRyan]

On 3/4/2023 at 3:07 PM, nigelforbes said:

Yawn. Well, here is how I think things might play out. 

 

I have no doubt that international tourism, that's the services export sector, will perform strongly over the course of the year. Whether it turns out to be 20, 25 or more million, nobody knows but the number is more likely to be higher than lower, 25 mill + seems doable. The value of the Baht will depend on usd strength but is extremely unlikely to affect tourism because Thailand remains a comparatively inexpensive holiday destination to most countries in the region, especially to China. Malaysia and further afield, Russia. 

 

Customs exports of goods remains less certain because much depends on the strength of the economies in the export countries. Given that Thailand relies on regional trade for 75% of its exports, the chances that exports will surprise to the upside, throughout the course of the year, remains strong. Thailand has been historically strong at opening up new markets for tourism and for goods, last week or so they signed a new export contract with a Chinese province and i would expect to see more of similar. I do not expect Baht strength or weakness to influence Thai exports levels to any economy that doesn't use usd or a usd linked currency. If however the Baht does weaken, I expect inbound FDI to take advantage, especially from Japan. 

 

Again, historically, Thai export levels have frequently been volatile, month on month, often going from deep deficit to surplus in adjacent months.

 

Lastly, service sector imports may easily be the factor that produces a trade deficit, visa applications for outbound travel are up substantially. 

 

I think I'd perhaps want to look again and maybe reforecast, after the 1Q23 numbers are published in total. 

 

 

 

 

 

 

Best look at the 87% household debt per GDP issue that is increasing over what anyone expected.

[nigelforbes]

30 minutes ago, ThailandRyan said:

Best look at the 87% household debt per GDP issue that is increasing over what anyone expected.

Household or Consumer Debt has nothing to do with the construct or measurement of GDP!

 

Household or Consumer Debt is a number that is calculated and expressed as a percentage of GDP but it has nothing to do with the construct or composition of GDP. If GDP increases and the debt level remains the same, the percentage of debt to GDP will fall. If GDP falls, which it has, and consumer debt levels remain the same, the percentage will increase. This is why I said earlier that Consumer Debt is a mathematical formula.

 

What ever happens to Consumer debt will have no bearing on the level, measurement or reporting of GDP in Thailand. Consumer debt is neither a Product or Goods, Service, nor a factor in net exports, nor an Investment. Consumer Debt is compared to GDP and expressed as a percentage, solely for the purpose of international comparison, just in the same way that Defense Spending is expressed as a percentage of GDP. 

 

Those things said, it is feasible that extreme levels of Consumer Debt could negatively impact Consumer Expenditure, which IS a component of GDP. Historically however this has not been the case. The troughs in the graph below result from business closure during covid, the 10 year graph shows a consistent upwards trend, despite dent levels still being high.

 

https://tradingeconomics.com/thailand/consumer-spending

 

 

Edited March 6, 2023 by nigelforbes

[ThailandRyan]

2 hours ago, nigelforbes said:

Household or Consumer Debt has nothing to do with the construct or measurement of GDP!

 

Household or Consumer Debt is a number that is calculated and expressed as a percentage of GDP but it has nothing to do with the construct or composition of GDP. If GDP increases and the debt level remains the same, the percentage of debt to GDP will fall. If GDP falls, which it has, and consumer debt levels remain the same, the percentage will increase. This is why I said earlier that Consumer Debt is a mathematical formula.

 

What ever happens to Consumer debt will have no bearing on the level, measurement or reporting of GDP in Thailand. Consumer debt is neither a Product or Goods, Service, nor a factor in net exports, nor an Investment. Consumer Debt is compared to GDP and expressed as a percentage, solely for the purpose of international comparison, just in the same way that Defense Spending is expressed as a percentage of GDP. 

 

Those things said, it is feasible that extreme levels of Consumer Debt could negatively impact Consumer Expenditure, which IS a component of GDP. Historically however this has not been the case. The troughs in the graph below result from business closure during covid, the 10 year graph shows a consistent upwards trend, despite dent levels still being high.

 

https://tradingeconomics.com/thailand/consumer-spending

 

 

Better take a look elsewhere.

 

Household debt has become an alarming issue for the country, and as Thailand heads towards a general election this year, it’s a ticking bomb that needs the urgent attention of political parties making policy pledges to voters. 

 

Sharp increase. Thailand’s household debt has seen a sharp increase over the past 10 years from 59.3 percent of GDP in 2010 to 86.9 percent in the third quarter of last year

    

https://aseannow.com/topic/1288318-political-parties-can-no-longer-evade-household-debt-crisis-facing-thailand/?do=findComment&comment=17936597

 

Household debt had risen to 14.9 trillion baht in the third quarter of last year, equivalent to 87 percent of gross domestic product (GDP). “As an international benchmark, the Bank for International Settlements (BIS) warns a household debt-to-GDP ratio at 80 percent is a cause for alarm,” said Suwannee Jatsadasak, assistant governor of the Bank of Thailand (BOT).

Edited March 6, 2023 by ThailandRyan

[nigelforbes]

2 minutes ago, ThailandRyan said:

Better take a look elsewhere.

 

Household debt has become an alarming issue for the country, and as Thailand heads towards a general election this year, it’s a ticking bomb that needs the urgent attention of political parties making policy pledges to voters. 
 

     
 

    Household debt had risen to 14.9 trillion baht in the third quarter of last year, equivalent to 87 percent of gross domestic product (GDP). “As an international benchmark, the Bank for International Settlements (BIS) warns a household debt-to-GDP ratio at 80 percent is a cause for alarm,” said Suwannee Jatsadasak, assistant governor of the Bank of Thailand (BOT).
 

     
 

    Sharp increase
 

     
 

    Thailand’s household debt has seen a sharp increase over the past 10 years from 59.3 percent of GDP in 2010 to 86.9 percent in the third quarter of last year.
 

     
 

    Full story: https://www.thaipbsworld.com/political-parties-can-no-longer-evade-household-debt-crisis-facing-thailand/
 

     
 

    
 

    -- © Copyright Thai PBS 2023-03-06

     

    
        
            
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https://aseannow.com/topic/1288318-political-parties-can-no-longer-evade-household-debt-crisis-facing-thailand/?do=findComment&comment=17936597

 

Household debt had risen to 14.9 trillion baht in the third quarter of last year, equivalent to 87 percent of gross domestic product (GDP). “As an international benchmark, the Bank for International Settlements (BIS) warns a household debt-to-GDP ratio at 80 percent is a cause for alarm,” said Suwannee Jatsadasak, assistant governor of the Bank of Thailand (BOT).

You almost certainly know lots of really useful things about lots of seriously interesting subjects but you just don't have a good grounding in economics. I'm sorry but you just don't understand much of this at all and it's becoming pointless to try and help you with try and understand it because you will neither read nor listen. You keep posting things that either aren't relevant or not connected to the issue. Your quotes above say nothing apart from consumer debt is too high and is a concern, so? We all know that but it has nothing to do with GDP growth and exports. Sure there's been a sharp increase, I posted the 10 year graph above so you could see that!!!

 

Sure, Household debt is too high, sure, there's lots of negative social impact and sure, using GDP as a gauge to measure consumer debt is accepted practice. So what! Household debt doesn't impact the future GDP growth scenario I painted earlier, the one I asked you to describe but you either couldn't/wouldn't. And household debt doesn't impact exports, international tourism, services, investment or FDI.....those are the things that impact GDP growth. If Thailand was a consumer led economy I might have a different view, it doesn't, Thailand's economy is 70% exports and consumer debt isn't part of that picture or any other part of the GDP picture.

 

I'm sorry Ryan but I can't keep responding to these posts because you clearly don't understand the subject matter, you might be getting something out of this but for me it's become painful and a waste of time. I'm not going to respond further to your posts, it would be helpful; if you stopped following me around and do the same. Thanks.

[ThailandRyan]

Onto ignore you go as you don't see it...TTFN...

 

How does debt affect GDP?

 

 

In particular, CBO explains that "higher debt crowds out investment in capital goods and thereby reduces output relative to what would otherwise occur." In other words, high debt harms economic growth.

https://www.crfb.org › blogs › high...

High Debt Drags Down The Economy

Edited March 6, 2023 by ThailandRyan

[nigelforbes]

5 minutes ago, ThailandRyan said:

Onto ignore you go as you don't see it...TTFN...

 

How does debt affect GDP?

 

 

In particular, CBO explains that "higher debt crowds out investment in capital goods and thereby reduces output relative to what would otherwise occur." In other words, high debt harms economic growth.

https://www.crfb.org › blogs › high...

High

7 minutes ago, ThailandRyan said:

Onto ignore you go as you don't see it...TTFN...

 

How does debt affect GDP?

 

 

In particular, CBO explains that "higher debt crowds out investment in capital goods and thereby reduces output relative to what would otherwise occur." In other words, high debt harms economic growth.

https://www.crfb.org › blogs › high...

High Debt Drags Down The Economy

Debt Drags Down The Economy

Stop it Ryan, you're coming across as very silly by quoting things you don't understand, just to try and appear that you do. 

 

I'll leave you to it.

[nigelforbes]

For anyone else that's interested, here's what the 10 year consumer debt chart looks like, below. What you can see is that pre-covid, the debt ratio was sub 70% of GDP. As covid took hold and GDP shrank, the ratio increased, since 2021 and GDP has started to increase, it's on a downward trend (not fast enough, I know).

https://tradingeconomics.com/thailand/households-debt-to-gdp

 

 

[ThailandRyan]

13 minutes ago, nigelforbes said:

Stop it Ryan, you're coming across as very silly by quoting things you don't understand, just to try and appear that you do. 

 

I'll leave you to it.

So wait, the article is wrong? High debt has nothing to do with harming the economy. Now you have me in stitches. Instead of humouring you any more I will ignore you because you can not seem to see when your wrong. So let's agree to disagree and head off into the sunset. Please don't respond as I wont see it.

[nigelforbes]

Here also is the IMF's 2017 report on Consumer Debt (Chapter 2) where it states that there is a short term gain to economic improvement as a result of higher than normal consumer debt. (don't worry, nothing has changed on this score since 2017). The trade off is in the medium term when the risks to economic growth and financial stability enter the picture, potentially.

 

https://www.imf.org/en/Publications/GFSR/Issues/2017/09/27/global-financial-stability-report-october-2017

[3NUMBAS]

wonder how foreign reserves are these days ,,less euros and pounds $ ,,more ru bles and renmimby

[nigelforbes]

43 minutes ago, 3NUMBAS said:

wonder how foreign reserves are these days ,,less euros and pounds $ ,,more ru bles and renmimby

There is unlikely to be any rubles since most trade export bills are concluded in USD. In the case of China, a currency swap is in place which negates the need for any direct payment. 

 

https://tradingeconomics.com/thailand/foreign-exchange-reserves

 

[Gknrd]

Posh, that 300 baht/person and the staggering tourist stats will more than offset this.