Weakening baht boosts Thailand’s exports and tourism

[webfact]

 

Thailand’s prime minister, Srettha Thavisin, pointed out yesterday that the weakening baht, despite its potential negative impact on energy import costs, is actually proving to be a boon for the country’s exports and tourism. The baht had earlier plummeted to an 11-month low against the US dollar, trading at 37.095.

 

According to Srettha, who also holds the finance minister portfolio, this depreciation isn’t entirely detrimental. It has a favourable effect on the country’s exports and tourism sectors – key contributors to Thailand’s gross domestic product (GDP). Typically, exports account for 50% while tourism makes up 20% of the GDP.

 

Despite the fluctuating value of the baht, Srettha assured that the government has no immediate plans to intervene. Instead, the Bank of Thailand is vigilantly observing and managing the situation.

 

by Mitch Connor

Photo: thestar.com.my

 

Full story: The Thaiger 2023-10-04

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

 

Get our Daily Newsletter - Click HERE to subscribe

[hotchilli]

3 hours ago, webfact said:

Thailand’s prime minister, Srettha Thavisin, pointed out yesterday that the weakening baht, despite its potential negative impact on energy import costs, is actually proving to be a boon for the country’s exports and tourism.

Something Prayut could never understand.

[TheAppletons]

16 hours ago, webfact said:

 

Thailand’s prime minister, Srettha Thavisin, pointed out yesterday that the weakening baht, despite its potential negative impact on energy import costs, is actually proving to be a boon for the country’s exports and tourism.

"The tourism confidence index in Thailand has taken a hit, with figures sliding from 91 in the same period of 2019 to 69 in the third quarter of this year, according to the Tourism Council of Thailand (TCT)."

 

[spidermike007]

Make up your minds! I thought they were worried about tourism numbers. There is a different story every day. One would think the weakening of the baht, which was way over valued, should help some. But, there are alot of other issues. About 2 dozen of them.

[BusyB]

1 hour ago, spidermike007 said:

Make up your minds! I thought they were worried about tourism numbers. There is a different story every day. One would think the weakening of the baht, which was way over valued, should help some. But, there are alot of other issues. About 2 dozen of them.

I'm surprised anyone even reads the rubbish. A TAT pronouncement is one I never click on.

 

As for the faltering baht: it takes months for that to feed through the 'system' and have any effect. But it immediately makes imports, which are required to produce the exports, more expensive. When that accumulates with high oil prices a weaker currency becomes a liability because it also makes exports more expensive.

 

A tourist doesn't care about a couple of baht more or less exchange rates  when a holiday is planned well in advance. They're more concerned about the currently ridiculous airfares and hyper inflationary hotel prices in LOS nowadays. So it only really affects expats.

 

(Obviously I'm ignoring the effects of long term contracts and hedging, and using general principles. But they also mitigate - as is their purpose - any fluctuations. So like I said, it takes a while to filter through, and baht weakness is still a relatively new development - only 8 months ago it stood  at 32.65 after tumbling briefly about a year ago. I know that because a year ago I was getting generally abysmal rates. I remember those dreamy days 20 years ago when I got over 50 to the euro. Nowadays I dream of 45 and pray for 40. Sadly 39 seems to be resistance level ???? ... but I keep coming back, ... see?)

 

 

Edited October 4, 2023 by BusyB

[digger70]

Weakening  Baht,  what are they talking about?  just a couple Satang  not worth talking about.

[Eric Loh]

4 minutes ago, digger70 said:

Weakening  Baht,  what are they talking about?  just a couple Satang  not worth talking about.

Have some sympathies for importers who have bills in the tens of thousands USD and have to take up the 5-6% of the cost of goods due to the baht depreciation. Crunch time when profitability is razor thin in a highly competitive market. Personal experience. 

[RanongCat]

13 minutes ago, digger70 said:

Weakening  Baht,  what are they talking about?  just a couple Satang  not worth talking about.

On trade volumes significant enough . On paltry  pension volumes not so much.

[John Drake]

Great! Weaken it some more!

[RanongCat]

3 minutes ago, Eric Loh said:

Have some sympathies for importers who have bills in the tens of thousands USD and have to take up the 5-6% of the cost of goods due to the baht depreciation. Crunch time when profitability is razor thin in a highly competitive market. Personal experience. 

The average  expat here will only object when the cost of the imported items  they "can't live without" rise disproportionately as importers and retailers alike take further advantage of that  niche Vegemite/Marmite like market.

People rarely comprehend the fact that as commodities rise in cost the  local 7% VAT take also increases but Govt. budgets  are fixed. Bigger pot to dip in ! Cheers !

[digger70]

6 minutes ago, Eric Loh said:

Have some sympathies for importers who have bills in the tens of thousands USD and have to take up the 5-6% of the cost of goods due to the baht depreciation. Crunch time when profitability is razor thin in a highly competitive market. Personal experience. 

Get Real will ya, No one cares about us , We already lost over 25% of our money coming from abroad.

Why should I worry about them  losing 5 or 6%

[digger70]

13 minutes ago, RanongCat said:

On trade volumes significant enough . On paltry  pension volumes not so much.

We already lost just over 25% since 2012 what more will they take Let the Baht Really plummet then we may gain a bit back from what we've lost over the years.

[RanongCat]

5 minutes ago, digger70 said:

We already lost just over 25% since 2012 what more will they take Let the Baht Really plummet then we may gain a bit back from what we've lost over the years.

If you had just stayed  home ( wherever that was) you would have not lost  anything !

Go stay in another country where you are subject to things you have no control over such as  exchange rates.......?

Joking !  Inflation in place of origin would have had  just as much impact unless pensions there are genuinely adjusted for inflation ( yeah  right ! )

Do tell why  you  are  living in Thailand ?

Edited October 4, 2023 by RanongCat

[digger70]

1 minute ago, RanongCat said:

If you had just stayed  home ( wherever that was) you would have not lost  anything !

Go stay in another country where you are subject to things you have no control over such as  exchange rates.......?

 

Thank you for that just what I would expect from you. 

[digger70]

7 minutes ago, RanongCat said:

If you had just stayed  home ( wherever that was) you would have not lost  anything !

Go stay in another country where you are subject to things you have no control over such as  exchange rates.......?

Joking !  Inflation in place of origin would have had  just as much impact unless pensions there are genuinely adjusted for inflation ( yeah  right ! )

Do tell why  you  are  living in Thailand ?

Pensions have been adjusted  a Little but not to the extent tat it makes up for  the Strong Baht

[bamnutsak]

9 hours ago, webfact said:

According to Srettha, who also holds the finance minister portfolio, this depreciation isn’t entirely detrimental. It has a favourable effect on the country’s exports and tourism sectors

I'm sorry but this man seems to be seriously mentally deficient.

 

It's like tens of thousands of tourists saw the recent weakness in the baht, yesterday, booked a trip to Thailand, have arrived and have already spent a ton of money. 

 

People have already planned their vacations through high season. Very few people travel on a whim, after noticing the relative strength of their home currency.

 

What a maroon. He just lacks even a modicum of common sense. Probably used to having his way with no push-back or criticism. 

 

What silly thing will he say next? Stay tuned.

 

 

 

 

Edited October 4, 2023 by bamnutsak

[RanongCat]

20 minutes ago, digger70 said:

Thank you for that just what I would expect from you. 

Nice that on this occasion there was no surprise.

[Mavideol]

5 hours ago, hotchilli said:

Something Prayut could never understand.

u are speaking about a "no brain" military guy, economics/finances are not on their curriculum, guns, submarines, fighter jets are 555

[RanongCat]

16 minutes ago, digger70 said:

Pensions have been adjusted  a Little but not to the extent tat it makes up for  the Strong Baht

As I suspected would be the case. But be  honest. Has such adjustments been adequate to  compensate in home country ? I would doubt it and although you may resent me making a likely valid point of it the fact remains that regardless of where disposable incomes  are derived from they are rapidly reducing the historical quality of life across the spectrum regardless of employment or designated "retirement". In lowest extremes now presented in mass poverty.

Disproportionate "incomes" are the current standard of the elitism that is driving economies into disaster.

CEO's  bragging $100,000  per day ? Ludicrous distortion.

 

[Mavideol]

will it reach 40 bath to the USD by end of the month..... will settle for 38 to USD ... 555

[bamnutsak]

The number one expense for tourists is airfare.

 

Tourists pay for airfare in their home currency (where their ticket was issued), so the exchange rate is immaterial.

 

Hotels, local ground/air transport, food/bev, ent? Sure they can buy an extra beer today.

[digger70]

16 hours ago, RanongCat said:

As I suspected would be the case. But be  honest. Has such adjustments been adequate to  compensate in home country ? I would doubt it and although you may resent me making a likely valid point of it the fact remains that regardless of where disposable incomes  are derived from they are rapidly reducing the historical quality of life across the spectrum regardless of employment or designated "retirement". In lowest extremes now presented in mass poverty.

Disproportionate "incomes" are the current standard of the elitism that is driving economies into disaster.

CEO's  bragging $100,000  per day ? Ludicrous distortion.

 

No, the adjustment isn't enough in the home country according to a friend who went back Home 3 yrs ago after being in Thailand for 12 yrs.

He said that pensioners are very bad off now and getting worse. even the low earners.

[thailand49]

Why would he intervene?  Let it crash which should have been the case long ago. 

Whenever they start talking about the baht weakness no matter what as target claim intervention is coming????

[Eric Loh]

55 minutes ago, digger70 said:

No, the adjustment isn't enough in the home country according to a friend who went back Home 3 yrs ago after being in Thailand for 12 yrs.

He said that pensioners are very bad off now and getting worse. even the low earners.

Adjustment of pension in every home country will never catch up with the value of money eroded by inflation, interest rates etc. Take for instance, the average inflation rate of about 2.5% per year in US last 20 odd years which will mean a cumulative price increase of almost 78% today. In short, a dollar today only buys 56% of what it could buy back then. Exchange rate is only one of the factors causing your money to lost its value.