Bot Signals Policy Interest Rate Cut, Economy Likely To Grow Less Than 3% In 2009

[george]

BoT signals policy interest rate cut

BANGKOK: -- Bank of Thailand (BoT) Deputy Governor Bandid Nijathaworn on Tuesday said that the Monetary Policy Committee MPS), apparently responding to pressure from different quarters, will take economic growth risk into account for its decision on the policy interest rate at the next meeting on December 3.

Given the easing of inflationary pressure now, he said, the MPC must process and assess the latest economic data, particularly regarding the country's economic slowdown in the third quarter.

In the next meeting of the MPC, he said, the central bank is under more pressure to use the policy interest rate to oversee the economy than it was in its previous meeting in October because the inflation rate had begun to decline and the economy had experienced a slowdown.

He said the BoT viewed that Thailand had not been directly affected by the global economic crisis, making it unnecessary to cut the policy interest rate immediately.

However, Mr. Bandid said the current policy interest rate, which remains at 3.75 per cent, is considered low when compared with the inflation rate.

Such a level of interest neither obstructed nor limited business expansion inf the private sector, as could be witnessed by the 10.8 per cent growth of loans dispersed in September.

He affirmed that the BoT had attempted to oversee the liquidity in the financial system to the utmost of its ability to prevent a possible shortage.

Lliquidity in Thailand currently remains normal, he said, adding, that it might become somewhat tighter in the short run because deposits had grown at a slower rate than loans.

Next year, he said, the Thai people must take greater care of themselves since the economy is likely to slow down.

Thai economy likely to grow less than 3% next year

BANGKOK: -- Thailand's economy is projected grow less than 3 per cent next year because the country's exports are likely to expand at a slower pace, according to a top securities executive.

Asia Plus Securities executive chairman Kongkiati Opaswongkarn said the Thai economy next year would slow down along with the global economy, which is expected to grow only 2.2 per cent.

Economies of the world's developed countries will all be sluggish with the US economy projected to experience 'negative growth' of 0.3 per cent and the Chinese economy to grow 8.5 per cent.

Mr. Kongkiati said he believed the Chinese economy in the fourth quarter would expand only 5.8 per cent, its lowest in 14 years.

Should China be able to stimulate its economy efficiently, it would emerge as the world's economic leader and the Eastern countries would play a more active role than the Western countries, Mr. Kongkiati said.

Amid the economic slowdown, he said, small- and medium-size enterprises (SMEs) will experience greater difficulties in beiung granted loans from commercial banks because the banks will focus on lending to major institutions.

So, he sees the Bank of Thailand needing to reduce the policy interest rate to help reduce costs of doing business for entrepreneurs because the inflation rate had dropped significantly.

In addition, the government should accelerate restoring private-sector confidence and stimulate the economy by speeding up its budget spending.

SET chief concerned Thai bourse may 'miss the boat' for rebound

BANGKOK: -- The Thai stock market may not catch up with the stock markets of its neighbouring countries to rebound on the easing of the global economic crisis should the country's domestic political conflicts continue unabated, according to Stock Exchange of Thailand (SET) president Pattareeya Benjapolchai.

She predicted that stock markets worldwide will rally if the global financial crisis eases, but as political woes and divisiveness among the public continue in Thailand, the stock market might "miss the boat" when other stock markets in the neighbouring countries turn to rebound.

What SET wants now is to see the Thai stock market rally in the same direction with those of its neighbours.

Mrs. Pattareeya said the latest overseas road show indicated that foreign investors remained optimistic about investment in Thailand.

-- TNA 2008-11-12

[Martin]

"Economies of the world's developed countries will all be sluggish with the US economy projected to experience 'negative growth' of 0.3 per cent and the Chinese economy to grow 8.5 per cent."

Yes. The 'West' has had the leadership for about 200 years (after the UK had its Agricultural Revolution, and found easily-worked deposits of coal and ores which enabled it to put to manufacturing, and colonizing, those 78% of its population that weren't needed to grow food).

But now, depletion of energy is starting the East back into its former ascendancy.

On fertile land in the sub-tropics, with no need for winter heating or summer cooling, is the place to be, chaps. Lucky, aren't we!

[Bengt]

¨Just wonder the amount of dollar that Thailand have intervene in their economy and to subsidize the fuel whith 4.7 THB since several months now.

Saw several big building projects under construction in Bangkok recently that been stopped....it just looked like a big public holiday.

It use to be a lot of tourist everywhere but it was like "where have all the flowers gone"

I am worried and many other expats have the same opinion and it seems that many just waiting for the economy of Thailand to totally collapse again as 1997.

I still believe that there is a solution and I still have hope that Thailand will be a great country for us expats to retiree in.

Regards

[OlRedEyes]

"Economies of the world's developed countries will all be sluggish with the US economy projected to experience 'negative growth' of 0.3 per cent and the Chinese economy to grow 8.5 per cent."

Yes. The 'West' has had the leadership for about 200 years (after the UK had its Agricultural Revolution, and found easily-worked deposits of coal and ores which enabled it to put to manufacturing, and colonizing, those 78% of its population that weren't needed to grow food).

But now, depletion of energy is starting the East back into its former ascendancy.

On fertile land in the sub-tropics, with no need for winter heating or summer cooling, is the place to be, chaps. Lucky, aren't we!

Now all we need is more tinfoil hats.....

[Seneque]

He said the BoT viewed that Thailand had not been directly affected by the global economic crisis

Is that so ? ... just ask people in the street, they might have a different opinion ...

and then :

Next year, he said, the Thai people must take greater care of themselves since the economy is likely to slow down

So : affected or not affected ?

Help yourself, if you can ... the government will not !

[Martin]

"Now all we need is more tinfoil hats..... "

Sorry to be slow to come back to this thread, 'OlRedEyes', but my e-mail alert facility seems to have packed in.

It is (as my signature says) much a matter of personal inclination as to how we see this enormous change in our ways of life.

I understand that some see it as something nasty coming from 'outer space' and that we should guard against it (or try to deflect it) with a tinfoil hat.

My own view is that it was inevitable, and the sooner we get on with accepting that life is going to be different (frugal and thrifty, rather than frenetically consumerist), and welcome the good aspects of that, the better.

Being very old, it comes easily for me to say that, since I can remember my greatgrandparents and grandparents being happy people, although they had very liitle (apart from a good stash of savings against 'rainy days') because they thought it was unwise to buy things that they didn't really need.

I think the children of today (my greatgrandchildren's generation) will adopt thrift, frugality, and living-within-their means, as virtue that they can be proud of, and be happy with their lot.

It is going to be a big challenge to their parents' and grandparents' generations to make such a chage in their outlooks, and lifestyles, though. However, humans in the past have shown themselves as very adaptable (towards good as well as towards evil) so maybe they'll manage better than I expect.

As to the topic of the thread, anybody buying shares in the Stock Market at present should be braced to see their re-sale value fall a long way yet. And the only ones that will recover will be those where the firm starts to make good earnings in the future. (On the range from hopeful to unlikely, I would put oil and gas exploration contractors, like Shlumberger at the 'hopeful' end and all airlines at the 'unlikely' end.)