Bot Urged To Cut Policy Interest Rate

[george]

BoT urged to cut policy interest rate to help homebuyers

BANGKOK: -- The Bank of Thailand (BoT) should reduce the policy interest rate by at least 0.50 per cent to be on par with the US Federal Reserve's latest interest cut, within this year, to help reduce the burdens of homebuyers amid the country's economic slowdown, according to a top Bangkok property-sector executive.

Thai Condominiums Association president Athip Peechanont said that consumer incomes had dropped as a

result of the current economic sluggishness. Should the short-term repurchase rate drop by 1 per cent, consumer burdens on making installment payments for homes would be reduced by around 8 per cent.

Mr. Athip conceded he remains concerned that the Thai economy next year will expand more slowly, which could negatively affect consumer purchasing power.

Should the country's export and tourism sectors grow slowly, it will fuel unemployment. Although the interest rate would then tend to decline, consumer purchasing power would not increase.

Because of this, he advised the government to have a clear policy to manage unemployment and stimulate

private-sector spending by offering tax incentives for business expansion, and to promote freelance careers and self-employment.

He said the government must quickly implement the measures before the US economic downturn affects the Thai economy.

However, Mr. Arthip said he is confident that property companies will not go out of business as in 1997 when the country experienced the last major economic crisis, because commercial banks have been strict in lending to the property development sector.

In addition, the government should act to ease criteria for lending to the property sector since some 20 per cent

of all homebuyers currently failed to receive bank approval for their loan applications.

The property sector executive also wanted the government to extend tax incentive measures, including reduction

of loan mortgage and ownership transfer fees for another one year to stimulate the property business growth.

-- TNA 2008-11-01

[Martin]

Well, Thai Condominiums Association president Athip Peechanont, would, wouldn't he?

That's what his Association's members elect him to do.

But since the whole problem has arisen from getting people to take on more debt than they were wise to, it is very difficult to see how doing even more of it is the solution!!!

[thailand_tom]

Should the country's export and tourism sectors grow slowly ? usa have lost 750,000 jobs already, 1 million by jan 1st, 6.1% unemployment here, now, and i just heard on msnbc could go as high as 9% before we finally start turning around, just contracted this quarter, signal of reccession, expected to last here 2009-2011, europe in the tank, china will have no one to export too and tourists will come from where, still not getting statements from government officials saying thailand will not be affected. China Manufacturing Contracts as Crisis Trims Exports (Update1)

By Li Yanping and Wang Ying

Nov. 1 (Bloomberg) -- China's manufacturing contracted as the worst financial crisis since the Great Depression eroded export demand.

The Purchasing Managers' Index fell to a seasonally adjusted 44.6 last month from 51.2 in September, the China Federation of Logistics and Purchasing said today in an e-mailed statement. That was the lowest since the gauge was launched in July 2005. A reading below 50 reflects a contraction, above 50 an expansion.

China's cabinet has pledged extra infrastructure spending to stimulate the world's fourth-biggest economy amid the global slowdown. The government has already lowered rates three times in the past two months, increased export rebates and cut property transaction taxes.

``The government needs effective stimulus measures to spur growth,'' said Wang Qian, a Hong Kong-based economist at JPMorgan Chase & Co. ``The external economic outlook is worsening rapidly.''

Manufacturing contracted in July for the first time since the survey began in 2005. It also shrank in August. The October index was a record low.

China's economy grew at the slowest pace in five years in the three months through September as export orders shrank and industrial production waned. The expansion cooled for a fifth straight quarter, to a 9 percent gain from a year earlier.

Global Slowdown

Chinalco Luoyang Copper Co., a Chinese processor of the metal, said orders fell 20 percent in the third quarter as domestic and international demand weakened.

The global slowdown is curbing demand for the nation's goods. The International Monetary Fund estimates that advanced economies will expand 0.5 percent next year, the slowest pace since 1982.

Falling property sales and prices in major cities are another drag on China's growth.

The index is based on a survey of more than 700 companies in 20 industries, including energy, metallurgy, textile, automobiles and electronics.

The output index fell to 44.3 in October from 54.6 in September, while the index of new orders dropped to 41.7 percent from 51.3. The index of export orders declined to 41.4 percent from 48.8, the statement said.

The inventory index climbed to 51.4 from 50.5, it said.

To contact the reporters on this story: Li Yanping in Beijing at [email protected]; Wang Ying in Beijing at [email protected]

Last Updated: November 1, 2008 02:18 EDT

[Bengt]

There is a lot of new housing projects and millions of houses and condos for sale even if many havent been started to build yet but a lot are already finnish and waiting for customers to buy....in Chonburi there is a very nice condominium compound that have been ready for customers to move in but they havnt sold so many condos there yet...and its a lot more for sale just here in chonburi and take a closer look at Pattaya and Jomtien....whos gonna buy all this homes for sale?

The prices is high and it seems that Thai people is not so interestin to buy now as some few years back.

What really will happend to the economy in Thailand is to early to speculate in but something must happend because BOT cannot following Uncle Sam as a brother so much longer and I think Thailand spend a lot of US dollar for several months now and they still subsidize the fuel whit nearly 5 bath per litre.

It will be very exiting to see what really will happend whit the Thai economy in the nearest coming months.