Thai Economic Crash

[mommysboy]

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!!!

YES. I don't think anyone in Thailand will have experienced anything like what is now beginning to happen, and given it's developing status there is likely to be real hardship.

As the first poster explained, Thailand is highly dependent on exports which have slumped, it was also experiencing a consumer spending boom somewhat linked to the rapidly deteriorating property market.

In truth I'm not sure things like this can be stopped, but earlier action on the bt may have mitigated effects.

As it is, fasten your safety belts.

since months, if not years, the apocalyptic riders are galloping in this forum painting horror pictures on the wall. slogans like "the pain, the suffering, hardship, beware, fasten seat belts" are used on a daily basis in connection with a (i admit highly likely) economic downturn in Thailand. i agree that might apply to expats who work or run a business here. it is also clear that the majority of expats who have forex income are suffering due to the strong Baht, but that is besides the point and has nothing to do with Thailands economy.

would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore? will less exports and less tourists affect the lifestyle of expat retirees? will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY? i have asked that question several times before but instead an answer i read the daily boring prophecies of future horror which are without being backed by conclusive reasons nothing but empty blah-blah.

Naam I generally agree with your postings but you've overstretched yourself here and deviated from the main point of the posting: is Thailand about to experience a major crash?

YES, it is.

[mommysboy]

the thais are better equipped to survive a recession than westerners pampered by benefit systems , an inflated sense of entitlement , wallowing in self pity and the negative habit of looking for someone else to blame rather than picking themselves up and trying to start again.

thais have the one thing that is missing in the west , support systems based on family.

thais are able to start up small business ventures (market stalls , food stalls , buying and selling etc. ) without the need for compliance with the onerous regulatory requirements and employment regulations that make any small business venture in the west such a headache. i remember after the thai crash in the late nineties , wealthy business people just started having garage sales , started market stalls and just carried on , albeit at a much lower level of affluence than before.

thais have a happy go lucky entrepreneurial spirit and the ability to face hardships with a smile.

the thais may be serial stumblers , but the never seem to fall.

sorry, you're a good poster, but on this one you are oblivious to the scale:

so I have to right 'RUBBISH'

[yabaaaa]

I do think right now is the quiet before the storm in 6 months the Great Depression will be here. Economic upheaval the likes of which Thailand has never seen. No jobs, no money coming in no savings overpriced Baht!

you forgot to mention that the sky will be falling

Oh bugger you mean there is a worldwide slump??? All my condos are full for 1 2 months Ill have to chuck a few folk out just to see how bad it is instead of turning people away like I am now.

[mommysboy]

the thais are better equipped to survive a recession than westerners pampered by benefit systems , an inflated sense of entitlement , wallowing in self pity and the negative habit of looking for someone else to blame rather than picking themselves up and trying to start again.

thais have the one thing that is missing in the west , support systems based on family.

thais are able to start up small business ventures (market stalls , food stalls , buying and selling etc. ) without the need for compliance with the onerous regulatory requirements and employment regulations that make any small business venture in the west such a headache. i remember after the thai crash in the late nineties , wealthy business people just started having garage sales , started market stalls and just carried on , albeit at a much lower level of affluence than before.

thais have a happy go lucky entrepreneurial spirit and the ability to face hardships with a smile.

the thais may be serial stumblers , but the never seem to fall.

sorry, you're a good poster, but on this one you are oblivious to the scale:

so I have to right 'RUBBISH'

yikes 'write'. Sorry 3 large beers but posting stands good

[Naam]

Naam I generally agree with your postings but you've overstretched yourself here and deviated from the main point of the posting: is Thailand about to experience a major crash?

YES, it is.

nobody reads my postings... sniff... weep... nobody answers my questions... sniff i never ruled out a slump/crash or whatever of the thai economy. my questions in this respect are clearly defined and yes they deviate slightly from the main topic but they are valid because they are directly connected and very important for most of us. i did not ask "will the headhunters in Papua New Guinea chop off and shrink less heads if Thailand's economy goes to the dogs?" i asked:

would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore? will less exports and less tourists affect the lifestyle of expat retirees? will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY?

but nobody cares a shÍt answering. instead the (for most of us) irrelevant bla-bla goes on. so i just say why and what the fàck do i waste my time asking relevant questions?

[Naam]

Nam

would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore? will less exports and less tourists affect the lifestyle of expat retirees? will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY? i have asked that question several times before but instead an answer i read the daily boring prophecies of future horror which are without being backed by conclusive reasons nothing but empty blah-blah.

But if the retiree/expat is living off or suplementing his pension with income from interest or stock market funds I guess they may be feeling the pinch.. I'm still working and my industry hasn't shown any signs of a downturn.. However my stirling based saving are now worth 30% less against the Baht and whereas previously I was earning 7% on my savings I'm now getting 1.8% .. No real affect on my standard of living cos I'm still at work.. But had I been already retired it would have been a big blow to my income.

that's not an answer to the question i asked! please read again. is my wife perhaps right when she claims my english is poor?

I read it again.. Your wife is correct Sir.... Income generated offshore = Pensions, Savings,stocks, bonds etc... Said income would be in a foreign currency and therefore subject to exchange rate fluctuations and interest rate cuts and the movement of the global markets... The people who I would suspect would be least affected by global economic crisis would be expats who have and income source in Thai Baht ie. a rental property or small business..

i might have problems with english but you definitely need not only reading glasses but have to admit your statements are wrong.

reason: pensions, savings, stocks, bonds and offshore income of any kind are not affected by an economic slump of Thailand. offshore interest cuts are not caused or in any way connected to Thailand's economy. exchange rate fluctuations always existed and it's either bad luck or lack of planning if one is invested in a shitty currency only and not connected to a potential slump of Thailand's economy. my questions did not include "effects of the global crisis" but pointed specifically to Thailand and its economy. the movement of global markets might affect the thai economy but my claim is the thai economy crashing (as forecasted) will benefit the retired expat although the various gloom and doom postings seem to indicate the contrary.

please sit down. topic missed. test failed! repeat lesson. next please...

[eggomaniac]

As it is, fasten your safety belts.

would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore? will less exports and less tourists affect the lifestyle of expat retirees? will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY? i have asked that question several times before but instead an answer i read the daily boring prophecies of future horror which are without being backed by conclusive reasons nothing but empty blah-blah.

Protectionism will build, in other countries too. Visa restrictions will continue to get tighter. If your 'offshore income' is high enough, still no 'effects'; but many are reporting in here, vociferously, they are losing their 'visa' status; they are 'affected'.

But do you want to be a 'well off' foreigner in a country where the nationals are going broker and hungrier? Does getting burglarised count in your definition of being 'affected'?

My own 'opinion' is that violence and robbery 'seems to be' up lately. I have no facts or statistics, [bus loads being drugged out and robbed, burglaries, the advertiser at the top of this page states 'notebook thefts are UP, buy our insurance']. Seems to be 'more' stories in the news lately that the 'don't touch tourists' mandate is slipping?

Truth is, in relative terms, the economic collapse will be a shorter drop for most Thais than for most Euro-Americans. America has $53,000,000,000 debt, no way out!.

watch the film I O U S A

economic doom is not coming, it is here!

[wait until fuel prices go up again, the last few months have been 'lucky']

[Naam]

Protectionism will build, in other countries too. Visa restrictions will continue to get tighter. If your 'offshore income' is high enough, still no 'effects'; but many are reporting in here, vociferously, they are losing their 'visa' status; they are 'affected'.

But do you want to be a 'well off' foreigner in a country where the nationals are going broker and hungrier? Does getting burglarised count in your definition of being 'affected'?

finally reasonable comments to my questions although i differ from some of the opinions.

that visa restrictions get tighter for those who continously bring money into country, inject it into the economy and provide employment is high unlikely.

it is however reasonable to assume that more restrictions will crop up and those targeted which (looking at the bottom line) are no real benefit to the country and perhaps take jobs away from locals.

i have been a well off foreigner in poorer countries and had no problems, but i admit that burglary or other crimes might affect me in a worst case scenario.

[Heng]

thanks for the clarification , your undoubted concern for the cruel suffering of all us nail biting expats as our currencies tumble out of control is a great comfort to us.

and a happy and prosperous chinese new year to you and everyone else out there.

p.s. please send your red envelopes to

taxexile , c/o the workhouse , st. tropez , france.

Looks like I'm going to have to fire my blogger. "Concern?" Hahahaha.

Happy New Year, Tax.

[Riley'sLife]

Seems the main way Naam would be affected by a slump in the Thai economy is when posters on this forum -on a thread with the topic “THAI economic crash”- give answers to Naam that refer to WESTERN economies!!!!! (Notwithstanding that the said posts are articulate, accurate and comprehensive.)

Perhaps?

Had Naam’s post been phrased as follows

would anybody therefore explain why a THAI economic slump would affect expats

or had posters read the thread title before posting, the posters getting flack from Naam wouldn’t have been affected too!!

Either way, there’s little that we can do about all these problems now. It’s all way too late. I can’t think of a better place in the world to be than Thailand while the self serving Bankers and Politicians (Obama included) reshape our world to their …oops I mean “our” benefit!

A Thai economic slump would be to the benefit of expats living in Thailand, but I still hope Thailand remains less affected than the "West"

Edited January 24, 2009 by Riley'sLife

[MeetJohnDoe]

the thais are better equipped to survive a recession than westerners...thais have the one thing that is missing in the west , support systems based on family.

I agree. Another key factor is lessoning the impact of the recession for most Thais is that Thailand is still primarily an agricultural society...something like 70-80% of the population are still farmers. Therefore, just about all Thais have immediate family that have or work on farms and they can always go there and at least have access to food and shelter if they loose their city or factory jobs. This is not the case in the Western world...if you loose your job and have no cash income its the food bank or charity kitchen for most.

As the Thais say..."There's always fish in the rivers and rice in the fields."

[Owain]

the thais are better equipped to survive a recession than westerners...thais have the one thing that is missing in the west , support systems based on family.

I agree. Another key factor is lessoning the impact of the recession for most Thais is that Thailand is still primarily an agricultural society...something like 70-80% of the population are still farmers. Therefore, just about all Thais have immediate family that have or work on farms and they can always go there and at least have access to food and shelter if they loose their city or factory jobs. This is not the case in the Western world...if you loose your job and have no cash income its the food bank or charity kitchen for most.

As the Thais say..."There's always fish in the rivers and rice in the fields."

more like 50%

[JR Texas]

the thais are better equipped to survive a recession than westerners...thais have the one thing that is missing in the west , support systems based on family.

I agree. Another key factor is lessoning the impact of the recession for most Thais is that Thailand is still primarily an agricultural society...something like 70-80% of the population are still farmers. Therefore, just about all Thais have immediate family that have or work on farms and they can always go there and at least have access to food and shelter if they loose their city or factory jobs. This is not the case in the Western world...if you loose your job and have no cash income its the food bank or charity kitchen for most.

As the Thais say..."There's always fish in the rivers and rice in the fields."

more like 50%

Just a brief comment on the original post. Where I live the government is paying all electric/water bills for the citizens. I don't think they are doing that because things are great. I am assuming the govt. is doing this in small towns all over Thailand.

[Naam]

A Thai economic slump would be to the benefit of expats living in Thailand, but I still hope Thailand remains less affected than the "West"

does that mean you don't believe that soon a hungry mob will slit our throats to get to the food stuff in our fridges and larders?

[Naam]

Just a brief comment on the original post. Where I live the government is paying all electric/water bills for the citizens. I don't think they are doing that because things are great. I am assuming the govt. is doing this in small towns all over Thailand.

that information is not quite correct as only small bills (up to a few hundred Baht per month) are paid for.

[Riley'sLife]

I live in a Thai village in the deep south and there is an abundance of food! However, I am surprised I haven't had my throat cut by the locals for marrying the most stunning girl in the Province.

[Owain]

However, I am surprised I haven't had my throat cut by the locals for marrying the most stunning girl in the Province.

Give them time.

[thaimate]

Just a brief comment on the original post. Where I live the government is paying all electric/water bills for the citizens. I don't think they are doing that because things are great. I am assuming the govt. is doing this in small towns all over Thailand.

that information is not quite correct as only small bills (up to a few hundred Baht per month) are paid for.

actually up to 500 baht ,my bills have been free 6 out of the last 7 months.

[ray23]

Just a question are you concerned about Thailand or the effects to you living in Thailand.

I will say this I can do something about the effects on me but I can do nothing about the economy of Thailand one way or another.

Will some foriegners have to leave because they can't meet the financial requiremnts, yes. Unless the immigration standards are lowered to what they once were. Will that happen I don't know but I would not want to try to live here on 20K month as they once were, not that long ago. ( married visa 200K or 20 K month)

40 K a month in mind can be done if you are very careful.

So what is the real subject of the thread?

If it is will Thailand feel the effects as the rest world has, the answer is yes.

[Naam]

Just a question are you concerned about Thailand or the effects to you living in Thailand. I will say this I can do something about the effects on me but I can do nothing about the economy of Thailand one way or another. Will some foriegners have to leave because they can't meet the financial requiremnts, yes. Unless the immigration standards are lowered to what they once were. Will that happen I don't know but I would not want to try to live here on 20K month as they once were, not that long ago. ( married visa 200K or 20 K month)

40 K a month in mind can be done if you are very careful.

So what is the real subject of the thread?

If it is will Thailand feel the effects as the rest world has, the answer is yes.

i tried to find out but nobody seems to know. perhaps the purpose (not subject) was boredom and the usual bickering and picking on Thailand based on personal frustration?

addendum: to all who read and contribute. please don't hold back. remember that i try hard to be the most hated contributor on Thaivisa.

Edited January 24, 2009 by Naam

[Scott]

Which state am I in: HYSTERIA!

[Scott]

Naam: Your posts are sometimes a little...well...abrupt and to the point. You are, however, knowledgeable, informed and, for lack of a better word, wise. If you think this thread (and others) seem to go nowhere and be about nothing, they would be even more so without your welcomed input.

Thanks

[Naam]

Naam: Your posts are sometimes a little...well...abrupt and to the point. You are, however, knowledgeable, informed and, for lack of a better word, wise. If you think this thread (and others) seem to go nowhere and be about nothing, they would be even more so without your welcomed input.

you are trying to undermine my bad reputation Scott and... i don't like that!

[geriatrickid]

Humour me here, but I think that Thailand is well positioned to escape the most brutal aspects of the worldwide adjustments. Here's why;

- The high cost of peroleum was making it hard to cover the costs of transporting the agricultural products. Now that fuel costs have fallen and costs for fertilizer (potash prices have fallen significantly) these savings can partially offset the loss of markets due to FX issues. People still have to eat.

- For sure the manufacturing sector is hit hard by the loss of consumption demand in foreign markets, but again, the reduction in the cost of transporting the finished goods and in the costs of the raw materials themselves helps offset some of these losses.

Sure, the 6% GDP contributor is going to take a hit and maybe that's where we will see the problems. The tourism sector was a great sponge to have. It soaked up alot of the uneducated and unskilled labour, but as we all know, Thailand has been experiencing a labour shortage and was projected to have one in the future before the market crunch arrived. As such, I think that while there will be displacements, the country will be able to absorb the impact of a drop in tourists.

I do not think we will see the rapid deflation now being reported in the west.

And now for the bad news. If there is no deflation in Thailand as we are seeing in the west and expat incomes are getting slashed, it's going to be rough for foreigners that were living close to the edge. If people were relying on those pensions and investment funds to make ends meet, I don't know how they will do it for the next year or two. I've seen my western ROI drop from 4.5% to 2% in the past year.

[Naam]

Naam: Your posts are sometimes a little...well...abrupt and to the point. You are, however, knowledgeable, informed and, for lack of a better word, wise. If you think this thread (and others) seem to go nowhere and be about nothing, they would be even more so without your welcomed input.

you are trying to undermine my bad reputation Scott and... i don't like that!

joke aside! this forum is meant to render advice and assist those who seek advice and assistance. reading Thaivisa since 2½ years i learned a lot and gathered a wealth of information which i wouldn't know otherwise even if i had lived here for a decade or two. for that i am extremely grateful and i am trying my best to share my knowledge and experience when and if applicable. when it concerns a subject of which i have no idea (there are many of them) i might read with interest but keep my mouth shut and refrain from posting.

therefore all of us should -besides rendering advice to the best of our knowledge- try hard to point out respectively try to rectify incorrect information (quite often assumptions from thin air or even pure rubbish) which might confuse or lead an advice seeking reader on a wrong path which might have serious negative consequences

[Scott]

You are right, Naam. I seldom post anything her except an occasion joke and a fair amount of questions because I am not very well informed about economics. I can make observations based on what I see in my neighborhood, but that's about it. There are people, as you point out, who post rubbish--as fact--and it is misleading. You and a few others refute this and it's helpful to us who need the straight information.

I am quite well aware that we are often talking about the future and no one has a crystal ball, but some folks can make educated guess based on facts rather than supposition.

Sorry to ruin your reputation on TV, but regretfully, I can't retract it! Sorry, but you are helpful.

[BEENTHEREDONETHAT]

You are right, Naam. I seldom post anything her except an occasion joke and a fair amount of questions because I am not very well informed about economics. I can make observations based on what I see in my neighborhood, but that's about it. There are people, as you point out, who post rubbish--as fact--and it is misleading. You and a few others refute this and it's helpful to us who need the straight information.

I am quite well aware that we are often talking about the future and no one has a crystal ball, but some folks can make educated guess based on facts rather than supposition.

Sorry to ruin your reputation on TV, but regretfully, I can't retract it! Sorry, but you are helpful.

It seems to me that things really started to go to hel_l right after Naam's dog buried Naam's crystal ball. Not sure what this means but it is possible his dam_n dog is responsible for a lot of it.

[12DrinkMore]

Humour me here, but I think that Thailand is well positioned to escape the most brutal aspects of the worldwide adjustments. Here's why;

- The high cost of peroleum was making it hard to cover the costs of transporting the agricultural products. Now that fuel costs have fallen and costs for fertilizer (potash prices have fallen significantly) these savings can partially offset the loss of markets due to FX issues. People still have to eat.

- For sure the manufacturing sector is hit hard by the loss of consumption demand in foreign markets, but again, the reduction in the cost of transporting the finished goods and in the costs of the raw materials themselves helps offset some of these losses.

I agree that here in Asia we are in much better shape to avoid the calamity about to strike the UK. I doubt whether the oil price will stay this low for more than six months or so. But who knows? The speculators pushed it up to 150 USD / barrel and now we're down to 40 USD. Wonder why the price at the pumps only came down to 22 Baht or so. Prices are always very slippery going up but quite sticky on the way down.

I do not think we will see the rapid deflation now being reported in the west.

You have to be specific about what is being deflated. In Farangland the major deflation is in the house prices, and overstocks in TVs, white goods, cars are not selling so there will be reductions in prices here. BUT food, services and essential goods are not dropping. CPI inflation in the UK was 3.1% that is certainly not deflation. RPI which includes the cost of housing came down more, but is still not negative.

In Thailand the house prices have not risen to ridiculous levels except in places like Phuket, Pattaya, Hua Hin where a degree of speculation has pushed up the prices. So I cannot see any substantial drop in prices generally over Thailand except in those areas, where there will doubtless be a few either desperate to sell.

Deflation in TVs has certainly occurred, I saw a 42 inch LCD going for under 20,000 Baht yesterday, motorcycles have remained more or less the same price for years. Bought my first Honda Dream 10 years ago for about 43,000 Baht and exactly the same model is for sale for about 46,000 Baht in the shops now. Can't see any room for these prices to come down anyway. But, as in Farangland, there has been a substantial inflation in food and essential goods for several years, I would estimate between 6 to 10%, which is around the same in Farangland for the same sort of goods. Don't forget that people don't buy TV every day, but they are still in the index, next to bread, milk eggs etc., just to hold down the CPI.

I am convinced that there will NOT be any deflation in the stuff we buy every day to live. Neither here nor in the UK, nor in the States, or indeed anywhere. Only things that people do not need to buy will come down in price temporarily. On the contrary especially in the UK with the GBP falling faster than knickers in Pattaya there will be a surge in prices once the imports come to the supermarkets.

And now for the bad news. If there is no deflation in Thailand as we are seeing in the west and expat incomes are getting slashed, it's going to be rough for foreigners that were living close to the edge. If people were relying on those pensions and investment funds to make ends meet, I don't know how they will do it for the next year or two. I've seen my western ROI drop from 4.5% to 2% in the past year.

It is going to EXCEEDINGLY tough for anybody relying on the income from pensions and deposits. I doubt whether the pensions can continue to pay indefinitely. Where on earth are THEY going to get the income? Previously this was most government bonds and the stock market. The stock market is well down and government bonds are not returning a sufficient income. All pension schemes are now massively underfunded in respect of their future commitments and I will not be surprised to see a few go under.

I would guess that quite a few will carry on running down capital as the income won't be enough until the capital is at a critical level and then what?

Things are looking very bleak for a lot of people.

[gregb]

Regarding the visa issue, one thing that has always worked in Thailand is bribes. Even today, you have to meet the letter of the law, but as long as you do that, small tributes work wonders to make sure you don't experience further pain.

Example, the law isn't clear on exactly how long you must have money in your account to meet the qualifications for a visa. Policeis have been made mostly by the local offices, and each one seems to be slightly different, although they do receive guidance from Bangkok. Still, they seem to have large discretion on how to interpret this issue.

A friend recently found that a small gift was necessary for the officer to look the other way that the 400k in his account had been transferred in only 6 weeks prior to his application for extension. In the end, everyone went away happy for the price of only a few thousand baht. These situations have always existed and are likely to continue. The resolutions are likely to be the same also.

Now, expats who are worried about the coming economic issues may wish to consider that tangible gifts are historically well received by those in the government. A company which I am acquainted with (I won't say who to protect the names of the innocent) likes to provide small baht gold chains to all the auditors in the local tax office every year. It's less incriminating that direct cash transfers and buys lots of good will.

Independent of what happens to the economy, Thais will most likely always find this an acceptable product of endearment. Good alcohol is another such traditional gift that seems to be appreciated. There are expats who paid 1.5 million baht for a Thai Elite Card, and are now face the prospect of grief from their visa applications. That would have bought approximately 100 gold chains, which could have been used to win friends at immigration probably for the rest of their days. Friends like these are generally willing to help you work through problems as long as it isn't grossly illegal. As things get rough, people generally fall back on what has worked in the past, and I expect to see a resurgence of corruption in this respect.

So I might offer, that if you are truly worried about your future visa status, you consider how many friends you would like to have in the future, and how many years you expect to live, and purchase some appropriate presents now. You at least will know you have this avenue covered. I personally would go the gold route, as I would have a hard time not consuming the alcohol. The peace of mind this will bring you may well be worth its weight in...well Johnny Walker Black Label anyway.

[Naam]

It seems to me that things really started to go to hel_l right after Naam's dog buried Naam's crystal ball. Not sure what this means but it is possible his dam_n dog is responsible for a lot of it.

:D