Thailand's Real Economic Sector Begins To Feel Effects Of Us Crisis

[george]

Thailand's real economic sector begins to feel effects of US crisis

Unemployment likely to increase by one million

BANGKOK: -- Thailand's real economic sector has begun to experience tangible impacts from the financial crisis in the United States, as many entrepreneurs have closed their businesses due to reduced liquidity, according to a top economic forecaster.

Thanawat Palavichai, director of the University of the Thailand Chamber of Commerce (UTCC) Economic and Business Forecasting Center, said that its survey of the Thai economic situation in the fourth quarter of this year found that the US economic crisis had not adversely affected the Thai economy.

Despite that assessment, Dr. Thanawat went on to say that clear signs of business slowdown are seen because entrepreneurs are uncertain about the future economy, particularly that of next year.

Should the economy expand less than 3.5 per cent in the fourth quarter, overall Thai economic growth for this year is likely to be in a range of 3.5-4 per cent.

It bodes ill for economic conditions next year with the ranks of Thailand's unemployed very likely to increase by one million.

To prevent such an unfavourable situation, he said the government must attempt every possible concrete measure o drive the economy ahead in the remaining two months of this year.

Dr. Thanawat advised the Bank of Thailand to cut the policy interest rate by 0.5-1 per cent, keep the baht moving at 35-37 to the US dollar, and oversee diesel fuel prices to ensure it stays at 26 baht per litre.

In addition, it should more quickly distribute the budget, implement construction of long-planned mega-projects, and promote tourism.

Should these measures work, the gross domestic product (GDP) could grow at least 4.5-5 per cent this year and at the same rate next year.

-- TNA 2008-10-31

[george]

BoI applications drop on concerns over global economic woes

BANGKOK: -- The number of applications for Board of Investment (BoI) promotional privileges dropped by 20 per cent in the first nine months of 2008 due to mounting concerns over the global economic upheaval, according to BOI Secretary-General Atchaka Sibunruang Brimble.

She said the global financial crisis made entrepreneurs worry that Thailand's total exports would not meet the country's earlier export target and that financial institutions would reduce the number and value of loans extended. Under the circumstances, the liquidity of both Thai and international entrepreneurs will gradually vanish.

However, a survey conducted among entrepreneurs seeking BoI applications showed that most believed the US economic crisis would not affect the Thai economy so adversely that entrepreneurs would be forced to close their businesses or reduce the number of their staff.

Mrs. Atchaka disclosed that total purchase orders for this year had so far remained normal, but are likely to decrease next year.

She said the BoI had warned entrepreneurs to be careful of their spending and liquidity.

The number of applications for BoI investment promotions had declined by 20 per cent in the first nine months of this year due mainly to concerns over a spillover of the American crisis into other regions of the world.

In addition, not as many industries had sought investment promotions in the past year.

Mrs. Atchaka said BoI had decreased its estimate on the number of applications for investment promotions to Bt 450,000-500,000 for this year from the Bt650,000 targeted earlier.

She believed measures to offer incentives and privileges would help increase the number of applications slightly.

-- TNA 2008-10-31

[Martin]

".......the government must attempt every possible concrete measure to drive the economy ahead in the remaining two months of this year."

That could well make matters worse.

If I am driving in 2-wheel drive down a little 'fair-weather short cut' unpaved track ( such as we have around her), and the heavens open and it pisses down like a cow onto a flat rock (as happens round here) and then I see a puddly patch ahead, I do not drive ahead. I stop and engage 4-wheel drive and move into the puddly patch carefully. Then, if it starts getting worse, I back out and leave the short cut and take the long, tarmacced way round.

This is not going to be a temporary recession. America is not going to be back to importing things it doesn't need (like more Isuzu pickups, built in Thailand) in a couple of quarters. So it is no time to "attempt every possible concrete measure to drive the economy ahead..............."

This is a time when the Government should retrench. Cut back on public spending and stop any new costly developments.

Closed firms pay no profit taxes. Workers whose jobs have become redundant pay no income tax. The Government's income is on the way down.

What a government might do when going into a short recession of the variety that we have previously seen in our lifetimes would be the wrong response to what is coming now.

[ray23]

Well at least they are starting to recognize the problem publicly. The problm I see is there is to much political turmoil to addess this in the last quarter of this year.

[thaibkk]

isn't this too much of doomsday thinking ?

my main money is still in europe and there it is protected, not like many thai banks here

protected in the way if the bank goes bancrupt, the governement will pay back the saving deposit up to 100.000 euro per account

as us farangs ... we do not own houses or land because this LOL-evely (sarcasm on lovely) country does not allow us to do so ... so what do we care if economy drops or not ?

i don't, that is for sure ...

i am more concerned why my lovely euro is worth 6-8 baht less in conversion according to a few months ago !!!

[auserb]

well my dear friend, i can not understand that Australia is efected by mealting and Thailand as developing country is not

and yes I do care if my AU dolar is worth only 24BHT instead of 30BHT

[khaowong1]

You must be a lovely human being, thaibkk, not to give a rats for anyone else but yourself.

[Seneque]

isn't this too much of doomsday thinking ?

my main money is still in europe and there it is protected, not like many thai banks here

protected in the way if the bank goes bancrupt, the governement will pay back the saving deposit up to 100.000 euro per account

as us farangs ... we do not own houses or land because this LOL-evely (sarcasm on lovely) country does not allow us to do so ... so what do we care if economy drops or not ?

i don't, that is for sure ...

i am more concerned why my lovely euro is worth 6-8 baht less in conversion according to a few months ago !!!

There is blanket guarantee for all banks deposits in Thailand, valid 3 years (and not for only! 100000 EUR)

But you don't care .. so why bother ?

[DegenFarang]

as us farangs ... we do not own houses or land because this LOL-evely (sarcasm on lovely) country does not allow us to do so ... so what do we care if economy drops or not ?

this is not true, based on their rules about how i can engage in business, banking and real estate in this country, i absolutely care about how the thai economy performs. as a consumer, i want the economy to tank! the baht will crash and my money will be in much higher demand by businesses.

[thailandpeter2]

isn't this too much of doomsday thinking ?

my main money is still in europe and there it is protected, not like many thai banks here

protected in the way if the bank goes bancrupt, the governement will pay back the saving deposit up to 100.000 euro per account

as us farangs ... we do not own houses or land because this LOL-evely (sarcasm on lovely) country does not allow us to do so ... so what do we care if economy drops or not ?

i don't, that is for sure ...

i am more concerned why my lovely euro is worth 6-8 baht less in conversion according to a few months ago !!!

well, i do not know, what you are doing in thailand, but i guess there will be a lot of farangs affected from any economy downturn here - the ones, who (like me) who own companies here in thailand or work here...

also, this could also have an effect on work permits - if, due by a bad economy, a company with a farang in it would generate a loss for one or several years, this could make problems for the work permit holders in this company (the thai authorities like to see rising profits/turnover for companies with work permit holders)

... besides, i could also possibly imagine that in a really bad economy the thai government would maybe get the idea to protect thai employees, rather than farangs - maybe making it more difficult for us to obtain/renew work permits and trying to replace farang employees by thais?

as for the guarantee for bank accounts, according to the government here there is a blanket guarantee for savings accounts here too, at least until 2011 - so it's the same as in europe. but as to the question, what any government guarantee for savings would be worth in case it gets REALLY bad - i am rather sceptical there, be it in europe or here in thailand...

so, i don't think it's not too much doomsday scenario. fact is, this time we don't really know how bad things can get - maybe all is over in 1-2 years, maybe we are in for a longer 'ride'...

also, in times of bad economic conditions political radicalism and divisions have been growing in affected countries - and currently political rifts already worse in thailand as it ever has been in most of the 16 years i have been living here...

Edited October 31, 2008 by thailandpeter2

[Maverell]

Wow, Thai officialdom actually admitting that Thailand ( along with the rest of the world ) has a problem !! I am not sure if the Government cares too hoots.

[mrjohn]

I am no expert but it seems to me that the UK and European economies rapidly caught the cold from the US because their financial and lending institutions were interdependent and overstretched.

If Thailand, as we are so often told, is an export driven economy it stands to reason that the effects of what looks like being a deeper than average recession will only start to bite when the markets for those exports dry up. This will inevitably take a little longer to filter through. In this context the statement:

“in the fourth quarter of this year found that the US economic crisis had not adversely affected the Thai economy.”

is utterly ridiculous

To lamely chase the US dollar and thus make exports uncompetitive seems fairly typical of the “stick our heads in the sand” mentality of many members of the Thai establishment.

Quite simply Thai products including tourism will be too expensive to customers in the outside world whose spending power is threatened by unemployment and falling property prices.

Something has got to change here.

[wrecker]

Looking at the main export products of Thailand, they would have been quite immune to the downturn. Thailand exports mostly food and food related products. However due to the Protestors Against Democracy, a significant number of tourist will stay away on top of the people who would like to come but who are bitten by the crisis. Foreign Companies have scaled down, will withdraw or will amend plans to invest in Thailand. They would have done so anyhow because of the credit crisis but because of the erratic behavior of Bangkok's finest protestors and their backers they probably go for the neighboring countries. Add the boys and girls from the rural parts who were kept in school by the ten thousand baht a year program from Thaksin ( Chamlong claims that using lottery proceedings for education are immoral but has no problem with the fact that the stand-up backers in brown take care of the lottery money nowadays) and you need to find new jobs already for close to 300,000 more people. THAT is what really hurts.

Unfortunately it is a taboo to talk about PAD here....

[likewise]

You must be a lovely human being, thaibkk, not to give a rats for anyone else but yourself.

Why should we care? It's not like the Thais care about us now do they?

[ray23]

Amazing how quickly things change not that long ago if you were earning baht great times. Now it may turn into complete liablity.

I think the answer is in the end we all pay maybe at different times but we none the less we pay. Today I get a little more for my dollar, no where near where I was six years ago, but better then it was two years ago. So maybe I have already paid time will tell. Three baht difference reduces my house payment by 1,000 baht per month or increases it.

I do feel for all that are going through this I know what it feels like to see a 30% loss income. Not fun being carewful with money becomes very important. Good luck to you all.

[thailandpeter2]

You must be a lovely human being, thaibkk, not to give a rats for anyone else but yourself.

Why should we care? It's not like the Thais care about us now do they?

if you are in Thailand, you WILL care, believe me.... but of course you are free to choose another country for staying and seeing whether things will be better there...

any crisis here, will effect ALL people living in Thailand - regardless of their nationality...

[flyfrog]

isn't this too much of doomsday thinking ?

my main money is still in europe and there it is protected, not like many thai banks here

protected in the way if the bank goes bancrupt, the governement will pay back the saving deposit up to 100.000 euro per account

as us farangs ... we do not own houses or land because this LOL-evely (sarcasm on lovely) country does not allow us to do so ... so what do we care if economy drops or not ?

i don't, that is for sure ...

i am more concerned why my lovely euro is worth 6-8 baht less in conversion according to a few months ago !!!

I agree with that! Why should we care who lives here, only the rich guys have lost money, middclass people like me cannot buy shares, haha

[scratt]

While this is bad news for Thailand it is also bad news for expats, because we all know where the extra money that is required is going to start coming from.. Anyone want to guess the minimum taxation levels for next year?

What also is quite ironic and frankly amusing is that wasn't it last week that the (places tongue in cheek) most excellent and skillful Thai Banking sector was boasting that Thailand would 'not feel the effects of the global economic slowdown', because of their 'extensive experience in this field' based on the last 15 years or so and the Asian crisis of the 90's....

Which is yet another reason why I don't trust, or use Thai banks for anything other than getting money in and out of the country. Idiots!

[Mitker]

as us farangs ... we do not own houses or land because this LOL-evely (sarcasm on lovely) country does not allow us to do so ... so what do we care if economy drops or not ?

i don't, that is for sure ...

Please do not include me in your definition of "farangs".

I do live here and I care about what might happen to Thai people as well as farangs. Otherwise what would I be doing here?

I also run a business so it might affect me professionally too.

A blind "mega-projects (automatically torpedoed by corrupt interests) - big infrastructure expenses" programm reflects the usual politically motivated move we witness here but doesn't make sense when drop in fiscal revenues is expected.

[likewise]

You must be a lovely human being, thaibkk, not to give a rats for anyone else but yourself.

Why should we care? It's not like the Thais care about us now do they?

if you are in Thailand, you WILL care, believe me.... but of course you are free to choose another country for staying and seeing whether things will be better there...

any crisis here, will effect ALL people living in Thailand - regardless of their nationality...

Exactly after 13 years here I am seriously considering of finding greener pastures.

[Mitker]

i am more concerned why my lovely euro is worth 6-8 baht less in conversion according to a few months ago !!!

There is blanket guarantee for all banks deposits in Thailand, valid 3 years (and not for only! 100000 EUR)

But you don't care .. so why bother ?

Thai politics abound in opportunistic decision reversals. Should the politicians need some extra money for more profitable use (for them) I wouldn't be surprised to learn about an on-the-spot decree that might annihilate any benefit of this "unlimited guarantee" on bank deposits.

Trust come (and go) by experience.

[dessy]

isn't this too much of doomsday thinking ?

my main money is still in europe and there it is protected, not like many thai banks here

protected in the way if the bank goes bancrupt, the governement will pay back the saving deposit up to 100.000 euro per account

as us farangs ... we do not own houses or land because this LOL-evely (sarcasm on lovely) country does not allow us to do so ... so what do we care if economy drops or not ?

i don't, that is for sure ...

i am more concerned why my lovely euro is worth 6-8 baht less in conversion according to a few months ago !!!

Perhaps as a foreign person taking advantage of the lovely Thai people you should go back to where your money is safe and put up with the conditions made you leave and take advantage of another country, you belly and what hangs below it,

[thailandpeter2]

i am more concerned why my lovely euro is worth 6-8 baht less in conversion according to a few months ago !!!

There is blanket guarantee for all banks deposits in Thailand, valid 3 years (and not for only! 100000 EUR)

But you don't care .. so why bother ?

Thai politics abound in opportunistic decision reversals. Should the politicians need some extra money for more profitable use (for them) I wouldn't be surprised to learn about an on-the-spot decree that might annihilate any benefit of this "unlimited guarantee" on bank deposits.

Trust come (and go) by experience.

of course, they don't even have to reverse it - just for example saying that the savings are still guaranteed but you can't withdraw them for a certain period....or limit withdrawals...or whatever.

but then again, i don't think that governments in europe would be above being opportunistic either...

[misterme]

I'm not buying it. A tax rich country doing relatively little for its people. And doing it's best to discourage foreign investors and immigrants.

This press release is the one immediately before the one begging for international loans...

IMHO, they think thast since the world economy is tanking, they may as well try to get some sympathy funding to pad up the grift.

[dessy]

You must be a lovely human being, thaibkk, not to give a rats for anyone else but yourself.

Why should we care? It's not like the Thais care about us now do they?

if you are in Thailand, you WILL care, believe me.... but of course you are free to choose another country for staying and seeing whether things will be better there...

any crisis here, will effect ALL people living in Thailand - regardless of their nationality...

Exactly after 13 years here I am seriously considering of finding greener pastures.

I agree so many Farangs need to return to their own country and put up with what they left for. Too much greed and satisfactionb of their bellies and what hangs below it.

[likewise]

i am more concerned why my lovely euro is worth 6-8 baht less in conversion according to a few months ago !!!

There is blanket guarantee for all banks deposits in Thailand, valid 3 years (and not for only! 100000 EUR)

But you don't care .. so why bother ?

Thai politics abound in opportunistic decision reversals. Should the politicians need some extra money for more profitable use (for them) I wouldn't be surprised to learn about an on-the-spot decree that might annihilate any benefit of this "unlimited guarantee" on bank deposits.

Trust come (and go) by experience.

Right, corruption is rooted deep into their society and eventually it will destroy their society.

Let them sort out their own problems, since they are all so "keng", they don't except any criticism even contructive nor will they take advice from foreigners, yet when problems emerge they are the first to run to the IMF or worldbank.

[John1012]

Perhaps now the Thai ' authorities ' will finally realise that to have a really vibrant economy they have to attract foreign investment that can control the companies that it buys/invests in. Not just 49% of them. Perhaps they will allow foriegn purchase of land by foreigners for foreigners, that could be controlled by leglislation as to one plot per farang of only to 2 rai, anything more would have to be controlled by a company. Lets us invest in the country we want to live in, Thai's can do it in Europe, why can't we do it here.

[likewise]

You must be a lovely human being, thaibkk, not to give a rats for anyone else but yourself.

Why should we care? It's not like the Thais care about us now do they?

if you are in Thailand, you WILL care, believe me.... but of course you are free to choose another country for staying and seeing whether things will be better there...

any crisis here, will effect ALL people living in Thailand - regardless of their nationality...

Exactly after 13 years here I am seriously considering of finding greener pastures.

I agree so many Farangs need to return to their own country and put up with what they left for. Too much greed and satisfactionb of their bellies and what hangs below it.

Euh, first of all no belly here, and second of all greener pastures does not particularly mean my own country.

Suffering a bit of monovision there are we ?

[dessy]

i am more concerned why my lovely euro is worth 6-8 baht less in conversion according to a few months ago !!!

There is blanket guarantee for all banks deposits in Thailand, valid 3 years (and not for only! 100000 EUR)

But you don't care .. so why bother ?

Thai politics abound in opportunistic decision reversals. Should the politicians need some extra money for more profitable use (for them) I wouldn't be surprised to learn about an on-the-spot decree that might annihilate any benefit of this "unlimited guarantee" on bank deposits.

Trust come (and go) by experience.

If you love your lovely Euro, why the hel_l don't you go back and put up with the conditions there, don't critisise Thailand and exploit it/

[thailandpeter2]

While this is bad news for Thailand it is also bad news for expats, because we all know where the extra money that is required is going to start coming from.. Anyone want to guess the minimum taxation levels for next year?

What also is quite ironic and frankly amusing is that wasn't it last week that the (places tongue in cheek) most excellent and skillful Thai Banking sector was boasting that Thailand would 'not feel the effects of the global economic slowdown', because of their 'extensive experience in this field' based on the last 15 years or so and the Asian crisis of the 90's....

Which is yet another reason why I don't trust, or use Thai banks for anything other than getting money in and out of the country. Idiots!

1.) i don't trust banks in any country more than i have to do...

2.) i am from austria (living here in bangkok since 1992), and i can remember, that, not a long time ago, also the austrians (government and banks), as well as of course the germans have claimed to be only affected marginally of the (then still mostly us-based) crisis...

seems that the europeans were not really better controlled i their business transactions or better than their american counterparts, expecially the banks - and i wonder, what in this respect will come from the asian financial sector in the next weeks and months...

it's gonna be fun! or maybe not..