Forecast trimmed after sluggish Q3

NESDB revises down projection to 4.5%

CHATRUDEE THEPARAT

The National Economic and Social Development Board (NESDB) has revised down its forecast for economic growth in 2008 to 4.5% from an earlier range of of 5.2% to 5.7%, following confirmation of lower-than expected expansion of 4% year-on-year in the third quarter.

The agency forecast gross domestic product (GDP) expansion of 3-4% next year, down from 4-5% projected earlier, due to the impact from both domestic and global economic conditions. The projection based on the Dubai oil price averaging US$55-65 per barrel and world economic growth of 2%.

The state planning agency said third-quarter growth was driven by domestic demand, especially the agriculture sector, which grew by 9.9%, up from 8.6% in the second quarter.

The non-agricultural sector grew by 3.5% in the third quarter, down from 5% in the second quarter. Meanwhile, government consumption growth decreased to 2.9% and total investment grew by only 0.6%.

The poor third-quarter performance - lower than 6% and 5.3% growth in the first and second quarters respectively - also reflected a sharper slowdown in the tourism industry than previously forecast.

Hotels and restaurants in the third quarter showed 0.2% growth, down from 5.9% and 9.2% in the second and first quarters. In September, foreign tourist arrivals were down 16.5% while the average occupancy rate of hotels nationwide dropped to 45% from 60% in the same period last year.

The tourism slowdown reflected the high cost of travel as fuel prices were near record highs at the time, but also unease about the protracted political tensions in Thailand.

Thailand has performed poorly the last few years as political troubles hold the country back. But whilst the rest of the world falls into recession according to these figures Thailand can still expect growth of over 3%.

The drop in tourism arrivals is worrying tho and will lead to job losses. I'm also worried that manufacturing will take a big hit.

How reliable are these figures?

Thailand should escape a recession because of it higher growth and state of domestic economy. It will have a down turn in many sectors especially tourism, but I dont see the domestic economy being hit too hard like other places. But no one seems to know what is next on the horizon so people will be a lot more cautious with their spending.

If it's not a recession then what is it. Ask all those people who are losing jobs like Nikon camera employees and sub contractors. I guess it's only a recession when your out of work not when others are out of work.

no it's a recession when you have three months of negative growth. Some define it as two consecutive quarters of negative GDP. Depends on who you are, but it's basically a contraction of gdp.

There are going to be a lot of lay-offs and job losses soon. GM in Rayong has stopped production already. A lot of the Oil & Gas and downstream process plant here is shut down here too right now.

Recession or not, large-scale unemployment will make big social problems here, especially without any comprehensive unemployment benefits, and lots of people up to their neck in credit debt.

Thailand should escape a recession because of it higher growth and state of domestic economy. It will have a down turn in many sectors especially tourism, but I dont see the domestic economy being hit too hard like other places. But no one seems to know what is next on the horizon so people will be a lot more cautious with their spending.

I guess if it is a recession or a temporay downturn....well that depends on how you define terminology.

But if you mean Thailnad won't suffer from the economic problems worldwide, then you are deluding yorself. In the last week I have seen articles which which specifiaclly menationed international companies that were planning layoffs in Thailand due to lowered demand for their peoducts in the west. Toyota is one, they plan to layoff about 1500 Thai workers in assembly plants in Thailand.

The Thai economy is export based, it is foolish to think that exports won't drop with dereased demand in the western markets.

Exactly how much....well we will see.

In the last 2 weeks even China has been laying off workers, and cutting back on factory hours. If it is happening in China, it will happen in Thailand. Exports of certain items from China, like toys for the western market, are way down. Some toy factories are closed "temporariliy" until the export orders are up.

As China is going, so willl Thailand go.