Thai Economic Crash

[12DrinkMore]

PTT shocks market with q4 loss of Bt22 billion

By The Nation

Published on February 21, 2009

PTT Plc, Thailand's largest company in terms of market value, shocked the market with a higher-than-expected quarterly loss last year, due mainly to inventory losses at its refining and petrochemical subsidiaries.

http://www.nationmultimedia.com/2009/02/21...ss_30096239.php

Yeah, but still did OK with a net profit of 51,700,000,000 Baht.

The quarterly loss plunged the company's annualised consolidated net profit by 47 per cent from Bt97.8 billion last year to Bt51.7 billion

And this was due entirely to the rapid fall in the price of crude oil.

So we are not talking about massive annualised losses and job layoffs.

[sleepyjohn]

I noticed in a two second peek at the BKK Post whilst walking through a hotel lobby recently that the government on approaching the BOT about trying to get the baht down were told the BOT had done a study which said this was not worthwhile. I remember it saying that each 1% devaluation would only help exports 0.2% but not much more. I tried searching 0.2% but no luck

Among other things I would be fascinated to know what advantages to Thailand they think balances the cost of a holiday for a Brit rising about 33%.

Could anyone better than me at searching post or link to that article please?

thanx v much

Edited February 21, 2009 by sleepyjohn

[sleepyjohn]

While we're at it it seems that at some time coming after a dead period high inflation may be possible.

Last period of high inflation was the Carter episode.

Could anyone sager or less idle than me tell us what did perform well in that period?

cheers John

ps: I presume if it's deflation coming those holding cash will do well?

Edited February 21, 2009 by sleepyjohn

[midas]

One would think with these kinds of statements............the Thai Baht has further room to fall now

Thailand to suffer most from crisis

By: BangkokPost.com

Published: 24/02/2009 at 12:21 PM

Thailand will likely suffer the most from the global economic crisis in Asia, according to forecast of Moody's Analytics.

The forecast was made after the National Economic and Social Development Board (NESDB) revealed that the country's gross domestic product (GDP) in the fourth quarter of last year fell 4.3 per cent while the industrial output shrank 22.3 per cent when compared to the same period of 2007.

Moreover, the demands for electronics, electrical appliances, automobiles and other industrial products went down, and the plummeting agricultural product prices severely affected the export sector.

The tourism industry lost a significant amount of revenue after the People's Alliance for Democracy (PAD) blockaded Suvarnabhumi and Don Mueang airports last year. Public spending also declined while foreign investors became more hesitant to do businesses in the country due to continuing political uncertainties.

http://www.bangkokpost.com/breakingnews/13...ost-from-crisis

[AlexLah]

Scheiße!

Solution, buy more Gold?

[jumnien]

Aren't Thai exports up a bit the last two years? Things were not that bad two years ago and the exports are up a total of over 3% the last two years combined? The next two years may be a bit off, but mai pen rai.

[ray23]

Watching the Thai news tonight a BOT meeting tomorrow and they are expecting .75% reduction in interest rates. We will know tomorrow.

As to the Moody report the PM is sailing down the river of denial and doesn't believe it.

Thai TV so nothing to qoute

[bonzor]

The Economist still has Thai unemployment rate at 1.1%. Couriously, the article does not tell any figures.

The Economist may be using "local standards" when defining unemployment, at least they have some idea. That Thai official has no clue at all.

the economists of "The Economist" forecasted ten years ago an oil price of $2.-/barrel by 2001, latest 2002 that's when (after 20 years of reading) i stopped reading "The Economist"

You might be remembering this article

there was another article a few months later with references to an interview with former (at that time long disgraced) saudi oil minister Ahmed Zaki al-Yamani that lowered the forecast to 2.00-2.50

Presumably you read that copy in the pyschiatrists waiting room.

[mommysboy]

Aren't Thai exports up a bit the last two years? Things were not that bad two years ago and the exports are up a total of over 3% the last two years combined? The next two years may be a bit off, but mai pen rai.

I think that might prove to be a tad understated Suggest poster sneaks a quick look at the latest dire forecast.

http://www.bangkokpost.com/business/econom...ecession-likely

Full text reads:

NESDB: Thai recession likely

January saw deepest export fall in 18 years

By: CHATRUDEE THEPARAT Published: 24/02/2009 at 12:00 AMNewspaper section: Business The country's economy shrank more than expected in the fourth quarter last year, as exports and tourism slumped, with growth this year forecast between -1% and 0% due to the lingering global recession.

The National Economic and Social Development Board revealed yesterday Thailand's economy in the last three months of 2008 contracted by 4.3%.

It is the first contraction in 10 years since the aftershocks of the 1997 crisis.

The Thai economy grew 2.6% in 2008, a substantial drop from 4.9% in 2007.

The agency said the economy may contract as much as 1% in 2009 due to sharp drops in exports and tourism falloff with global recession. It previously forecast growth of as much as 4%.

"The global economy is moving into a recession and Thailand, like other countries, has been hard hit and the situation is worse than expected," the board's secretary-general Ampon Kittiampon said yesterday.

The decline was due to declines in exports, tourism and production.

"The Thai economy is likely to slip further in the first quarter of this year. We may see the worst figure in the second quarter before it climbs in the second half," Mr Ampon said.

The final quarter of 2009 would be a "turning point" for the Thai economy, as the government's 117-billion-baht supplementary budget for fiscal 2009 starts taking effect, he said.

"The budget injection in May should boost the Thai economy slightly at the end of the second quarter or early in the third quarter," he said. "The economy needs to grow by 4-5% in the final quarter if we want to see zero growth in GDP in 2009."

Dr Ampon said despite sluggish export and tourism sectors, the agency still projects greater domestic consumption will help the Thai economy.

Overall consumption was projected to grow 3.1%, with private consumption up 2% and government consumption increasing 8.3%.

According to the government's planning agency, Thai exports were likely to contract by 13.1% this year, with imports dipping by 14%.

NESDB projected the trade balance was estimated at US$1.8 billion with inflation projected at 0.5% to minus 0.5%, down from 2.5-3.5% in the previous projection.

The unemployment rate was projected at 2.5-3.5% of the total workforce, or 950,000-1.3 million, an increase from 1.5-2.5% in an earlier projection.

Sompob Manarungsan, an economist at Chulalongkorn University, said the Thai economy this year is likely to contract by more than the NESDB projection because of export slowdown and a reduction in asset values.

He said the government's plans to stimulate domestic consumption and government spending would deliver only a slight impact to the Thai economy, as government expenditure accounts for just 20% of the economy.

Note the bit I put in red: where the heck did that prediction come from? Must share poster's preference for rose tinted specs.

[jumnien]

The Thai economy grew 2.6% in 2008, a substantial drop from 4.9% in 2007. And the worst estimates will not wipe out these gains. Things were ok here in 2006 even before these gains; they will be fine after.

[midas]

But in reality how much reliance can we place on these forecasts anyway with so much uncertainty still

overhanging the USA economy? Japan is sinking like a stone and China has labour problems which seem to be

deteriorating week by week. Today it was announced the German economy will have a worse recession

than originally thought -so which economies exactly will be contributing to any improvement here?

[AlexLah]

As long as you export more then you import you should be relatively OK.

[mommysboy]

The Thai economy grew 2.6% in 2008, a substantial drop from 4.9% in 2007. And the worst estimates will not wipe out these gains. Things were ok here in 2006 even before these gains; they will be fine after.

It doesn't work like that, it's a very naive statement.

What is different is asset values have dropped but debts haven't. What happens is that in order to grow businesses borrow large sums of money relative to their worth. It only takes minor disruptions to produce big problems, business scales back, firms default, and then go bankrupt. Every 3 ex workers produce another, and so the effect goes on.

You need to work in inflation to, at one point it hit a whopping 9%, yet the economy grew just 2.6%. so9 in real terms this is negative growth.

Thailand has had an increasing population and in order to provide adequate food and health care an emerging economy needs rapid growth, bad enough that the rate slows as in China, but to actually go in to negative territory points to a grave problem. You expect negative growth in mature economies from time to time, but an emerging economy!!

What we're experiencing is a time lag of about a year, so it all looks like doom merchants, but it's not like that really, it's just something that is going to happen and it's not exaggerated IMHO.

[mommysboy]

As long as you export more then you import you should be relatively OK.

Again, I'm not sure this is true. I mean of course it's important to balance books, but you really need money and large amounts of it sloshing around so that people are earning and spending. Remember the economy has a big fixed cost,ie, the upkeep of it's citizens.

[Merangue]

If anything i think these latest projections are still rather optimistic.

Thailand is in for a rough ride and i expect a lot more political turmoil to happen yet.

Any more problems of a violent nature and Thailand will start to make Japan look like a healthy and happy economy.

[alfbondi]

Lower the Baht

[ray23]

This brings up an interesting question how are the figuring the jobless rate sending back to the farm they are no longer jobless?

What do they do on the fram to earn money?

Most workers send money to the family to meet ends fom their work in Bangkok, so where it the advantage that they are speaking of?

"1,307 companies go bankrupt in Jan

By: BangkokPost.com

Published: 24/02/2009 at 04:00 PM

The Department of Business Development said 1,307 companies went out of business in January, 53.7 per cent higher than the same period of 2008.

Many were construction, real estate and service-related companies, and 459 of them were in Bangkok while the other 848 were in other provinces.

The rising number of insolvent companies showed that the global economic crisis had already hit different businesses in the country.

The department, however, said the country had the advantage of relocating workers from the commercial sector to the agricultural sector.

The Fiscal Police Office also expected that about 1.2 million workers, or about 4.2 per cent of the total work force, would be unemployed this year, while the government's economic stimulus measures may only provide 180,000 new jobs."

[Jumber]

Anyone else think that the Thai economy is about to crash and burn? No exports, hardly any tourists, an over-valued currency!!! Everything that has made Thailand what it is today has come from foreign money, take that away and what are you left with!!!

Do you have fixed exchange rate in Thailand?

[Naam]

Anyone else think that the Thai economy is about to crash and burn? No exports, hardly any tourists, an over-valued currency!!! Everything that has made Thailand what it is today has come from foreign money, take that away and what are you left with!!!

Do you have fixed exchange rate in Thailand?

no.

[AlexLah]

So exactly how is the Thai gov tracking unemployment numbers?

I mean does a Thai that lost it's job have to register itself and in return recieves unemployment benefits?

Edited February 25, 2009 by AlexLah

[colibra]

To say that Thai's spending is going to keep things a float is wishful thinking. Many are saying the same thing of china. I'm not buying. With mass lay offs, declining exports, and tourist numbers down, its going to be a ruff year for Thailand I fear. I know of a few college grads that have lost their jobs in bangkok and are bauking at the thought of going back to the village to talk care of the pigs, chickens and cows. They have become to good for that work and want no part of it. I hope they like crow.

latest out of China is there stimuless package is not working and fears are that the economy is going the way of Japan. Oh those wise Chinese, as one poster was saying, plan for the future so their should be no problems. lol. Oh well have fun. aloha

[Naam]

To say that Thai's spending is going to keep things a float is wishful thinking. Many are saying the same thing of china. I'm not buying. With mass lay offs, declining exports, and tourist numbers down, its going to be a ruff year for Thailand I fear. I know of a few college grads that have lost their jobs in bangkok and are bauking at the thought of going back to the village to talk care of the pigs, chickens and cows. They have become to good for that work and want no part of it. I hope they like crow.

latest out of China is there stimuless package is not working and fears are that the economy is going the way of Japan. Oh those wise Chinese, as one poster was saying, plan for the future so their should be no problems. lol. Oh well have fun. aloha

that's what i heard too. today the Beijing Morning Post describes in an editorial the failure of the stimuless package. politicians and economists are working now at a stimumore package which should be rather successful.

[lannarebirth]

To say that Thai's spending is going to keep things a float is wishful thinking. Many are saying the same thing of china. I'm not buying. With mass lay offs, declining exports, and tourist numbers down, its going to be a ruff year for Thailand I fear. I know of a few college grads that have lost their jobs in bangkok and are bauking at the thought of going back to the village to talk care of the pigs, chickens and cows. They have become to good for that work and want no part of it. I hope they like crow.

latest out of China is there stimuless package is not working and fears are that the economy is going the way of Japan. Oh those wise Chinese, as one poster was saying, plan for the future so their should be no problems. lol. Oh well have fun. aloha

that's what i heard too. today the Beijing Morning Post describes in an editorial the failure of the stimuless package. politicians and economists are working now at a stimumore package which should be rather successful.

Lets hope they don't fashion it after Americas stimuloss package.

[thaihome]

So exactly how is the Thai gov tracking unemployment numbers?

I mean does a Thai that lost it's job have to register itself and in return recieves unemployment benefits?

There are no unemployment benefits. Workers receive severance pay based on length of employment, basically one month for each year.

The company must notify the labor dept they are terminating the workers. Of course, many small unregistered companies that do not pay the provident fund and other benefits do not do this, so there is some built in inaccuracy of the numbers, but on the whole, they probably are indicative of what is going on.

In the construction industry there is very little impact at this time, and workers, especially semi and skilled workers continue to be in high demand. No doubt this is going to slow down through the year, especially in the commercial and residential areas. The industrial sector may make it through ok as there are still a number of large projects that are going ahead.

TH

[ray23]

What does the Social Security System actually do here?

By the way Bloomberg is showing the baht at 35.99 to the dollar and the dollar seems to be down against the European countries so it mihgt be a good day for everyone on that side of life today. But's it's really early in the day.

[mommysboy]

What does the Social Security System actually do here?

By the way Bloomberg is showing the baht at 35.99 to the dollar and the dollar seems to be down against the European countries so it mihgt be a good day for everyone on that side of life today. But's it's really early in the day.

Well it hasn't fed through to the pound which is actually dropping again.

But it's good for the dollar and my bank balance, so long may it continue .

But going back to the thread title, ie, 'on the edge'- judging by recent newspaper reports I think we can conclude that the economy has not only gone over the edge, but is hurtling downhill at an alarming speed.

I think I take agreement as read, but anyone care to counter?

[Naam]

But going back to the thread title, ie, 'on the edge'- judging by recent newspaper reports I think we can conclude that the economy has not only gone over the edge, but is hurtling downhill at an alarming speed.

I think I take agreement as read, but anyone care to counter?

i don't want to counter but ask a simple question "which economy is not going downhill?"

[thaihome]

... judging by recent newspaper reports ...

That is one of the problems with this thread...

TH

[mommysboy]

... judging by recent newspaper reports ...

That is one of the problems with this thread...

TH

So, the reports are untrue and the figures inaccurate, and the factory closures aren't happening then ?. Utter denial of reality.

That is one of the problems with this thread...

[mommysboy]

But going back to the thread title, ie, 'on the edge'- judging by recent newspaper reports I think we can conclude that the economy has not only gone over the edge, but is hurtling downhill at an alarming speed.

I think I take agreement as read, but anyone care to counter?

i don't want to counter but ask a simple question "which economy is not going downhill?"

None of course, but that seeks to detract from confirming that the Thai economy is entering a recession ! As of a month ago a significant minority on TV argued that Thailand would not be effected. Naam, are you saying it isn't either in recession/depression?

I wanted to clarify that we are no longer on the edge, and that there was surely no one left that thought otherwise but a subsequent poster obviously believes not. I don't think the newspaper reports are inaccurate, but I wish they would not endlessly make matters worse, but the 2 matters are not the same, and I think TB's argument against seeks to deflect the main thrust.