Thai Top Bankers See Stronger Economy In 2008

[george]

Top bankers see stronger economy in 2008

BANGKOK: -- Thailand's economy next year is expected to outgrow that of this year, boosted by the upcoming general election and the forming of the new government in the post-election period, according to top bankers.

Kasikornbank president Bantoon Lamsum said the Thai economy is sluggish this year, but is likely to pick up when the general election is held and the new government is formed.

Mr. Bantoon said the local investment and consumption should improve in the post-election period.

The KBANK chief believed the Bank of Thailand's Monetary Policy Committee would take into account the latest economic figures and surrounding factors at its next meeting October 10.

However, it remains uncertain whether the MPC willl decide to reduce the policy interest rate in tandem with the United States Federal Reserve's interest rate cut, or not.

He said he believed financial institutions would not experience an easy path for their business performance next year since they must compete more fiercely, particularly for deposit funds following the introduction of the Deposit Insurance Institute procedures.

Mr. Bantoon said that as the deposit insurance is unprecedented in the country, depositor reaction is unpredictable.

Since the institute will not insure a full amount of customer deposits, he said, each financial institution must try to build up its creditability to compete for deposits.

Kannikar Chalit-arporn, president of Siam Commercial Bank, projected the economy next year would improve since there would be the general election and the new government.

The mega-projects would have a clearer picture for their implementation plan, she said, adding that lending by commercial banks would increase from that of this year.

She said it is difficult to guess whether MPC would reduce the policy interest rate on parallel with the Fed's rate cut move because it had already cut the interest rate to a certain extent.

--TNA 2007-09-24

[lazeeboy]

lets hope these guys know what there talking about ,we do get a new government ,and things improve on this year

[Gravelrash]

Sometimes I think many of us who have been here a while, tend to shrug off the occasional coup and its associated setbacks. But many first timers view tanks and soldiers on the television and assume that Thailand has become Burma No. 2. Aside from some restrictions nothing could of course could be further from the truth. I personally believe and through talking with other foreigners that an election will see people starting to flow in again. As such the bankers prediction isn't from the local sooth-sayer but common sense, how fast we will need to wait and see.

Essentially Thailand has been put on hold for 1 year. This election is vitally important for the economy, as is soldiers seen to disappear from the political scene. We all know they won't really be gone, but it is about external perception.

[Old Man River]

Its funny in a way. This year we will have a 4% growth rate (GDP) and there are many countries that would kill for this growth rate. Still, none of us are happy. It could have been so much better. I guess it is all relative.

[Martin]

This announcement is nonsense. They are just articulating wishful thinking, and 'whistling to keep their spirits up'.

But that is not a criticism, as it is their job to do just that---keep folk hoping for the best, whilst (behind the scenes) they prepare their contingency plans to cope with the worst.

The announcement would make sense if all was going to be as it was last year in the USA and Europe, but since those economies have hefty recessions on the way, Thailand's manufacturing-for-export is going to see big reductions in the flow of orders.

It is more likely that Thailand will experience negative growth than 4% positive.

I am going to earmark this thread for review in a year's time. We will see who was right then.

[Mid]

darn ,

thought I was negative ..................

Edited September 24, 2007 by Mid

[quiksilva]

We don't see things as they are. We see things as we are.

[HunkeyDorey]

"just articulating wishful thinking".

I like your calm and objective observation Martin. I, like you, will be watching this forum in the future. I believe that the Banking System is contrived, ambivalent, not transparent, and not accountable as long as we have banks like The Siam Commercial Bank and the Thai Military Bank who have obvious connections to those who job is supposed to be ruling the country.

Hunkey Dorey

[Thaising]

Foreign direct investment in the first half of the year fell by 32%, or 81 billion baht from the same period last year, said the Bank of Thailand.

Foreign investment, in the form of equity investment and joint ventures with Thai companies in the manufacturing sector, totalled 170 billion baht in the first six months of the year, or 32% below the same period in 2006.

The central bank said the lower investment figures reflected shaky investor confidence and policy uncertainties under the military-appointed government.

Investment in the second half of the year is expected to remain weak, but investment should pick up in 2008 following general elections at the end of the year.

Japan remained the largest foreign investor in the first half, with inflows of 54.78 billion baht, or 33% of total foreign inflows. Ranked second was Singapore, at 25.16 billion baht worth of investment in the first half of the year, or 15% of the total, followed by the United States at 21.6 billion, or 13% of total investment.

Investments from 15 countries in Europe in the first half totalled 14.3 billion baht, or 9% of total foreign investment in the period. The central bank said 49% of total investment in the first half was in the industrial sector, followed by the property sector at 14%.

Foreign investment, both in terms of direct investment and lending, has risen sharply for the property sector in recent years. In 2001, foreign investment in property totalled just 1% of total investment.

The retail sector attracted 11% of total investment flows in the first half, followed by portfolio stock investments and investments in other sectors.

Bangkok Post

Who am I suppose to listens. Bank of Thailand or Kasikornbank ?

[matter]

This announcement is nonsense. They are just articulating wishful thinking, and 'whistling to keep their spirits up'.

But that is not a criticism, as it is their job to do just that---keep folk hoping for the best, whilst (behind the scenes) they prepare their contingency plans to cope with the worst.

The announcement would make sense if all was going to be as it was last year in the USA and Europe, but since those economies have hefty recessions on the way, Thailand's manufacturing-for-export is going to see big reductions in the flow of orders.

It is more likely that Thailand will experience negative growth than 4% positive.

I am going to earmark this thread for review in a year's time. We will see who was right then.

Whole heartedly agree with this assesment. We cannot ignore the potential impact that recession in Europe and the USA will have here.

[samran]

This announcement is nonsense. They are just articulating wishful thinking, and 'whistling to keep their spirits up'.

But that is not a criticism, as it is their job to do just that---keep folk hoping for the best, whilst (behind the scenes) they prepare their contingency plans to cope with the worst.

The announcement would make sense if all was going to be as it was last year in the USA and Europe, but since those economies have hefty recessions on the way, Thailand's manufacturing-for-export is going to see big reductions in the flow of orders.

It is more likely that Thailand will experience negative growth than 4% positive.

I am going to earmark this thread for review in a year's time. We will see who was right then.

Indeed, that is a big call a 4% drop. One, which I say is wrong, and I'll be happy to taken to task on my call in a year as well.

As a ref point during the 1998 crisis the economy shrunk 10% and in 1999 it grew at 4.2 and has done so consistently after that. It has survived the tech bubble bursting in the US and sluggish growth in its main trading partners in the EU, Japan and the US. And yet it still grew.

Thailand doesn't suffer excess capacity like it did then, not is it suffering from excessive debt ratios like it did back then (which were unhedged in foreign currency).

Au contraire, I think we are looking at 5% growth next year as a minimum, as people start seeing the emergence of fitter Thai enterprises who are making the adjustment to living in a strong baht world.

If we see world downturn, then there could be an effect on lowering GDP growth, but not into the negative. I'd guess the baht would be realtively stronger, allowing for increased imports to retool the Thai economy, if that sitiation was to occur.

But, hey, I'm a lilly livered member of the Thai aplogist brigade, so what would I know, really?