Finance Minister: GDP may fall to -3% this year

Finance Minister Korn Chatikavanij admits that the country's gross domestic product (GDP) growth could shrink to -3 per cent this year while encouraging cooperation from the private sector in reviving the economy.

The minister said the Fiscal Policy Office has lowered its GDP growth projection for 2009 from -2 percent to -3 percent following the close monitoring of the global economic situation during the last 2-3 months. The minister said other countries have also cut their GDP growth prediction.

Mr Korn emphasized that it is necessary for the government to inform the public and entrepreneurs the real economic figures in a straightforward manner, adding that the government needs cooperation between the public and private sectors in order to tackle the economic crisis.

The minister stated that the government is preparing the 2010 fiscal budget and will continue the deficit budget policy next year.

Source: National News Bureau of Thailand - 23 March 2009

Looks like Abhisit is going to have to give out some more cash to stay in office or just forego elections until the economy improves!

GDP may contract 3% in 2009

Thailand's gross domestic product (GDP) could contract 3 per cent this year, from the earlier forecast of flat growth or minus 2 per cent contraction, due to deterioration in the global economy, said Finance Minister Korn Chatikavanij.

He said on Monday that without any stimulus measures, the GDP could contract 8-9 per cent, which could push the unemployed to 2 million persons.

"A plunge in exports alone could lead to minus 5 per cent contraction in GDP. The government's mission is to alleviate the situation and explain this fact to the public. And to solve the problems, we need cooperation from the private sector and the general public," he said.

He said the government will be more thorough in completing the 2010 budget. While 80 per cent of the budget is for fixed expenses, the government must be thorough in allocating the remaining budget. He insisted that it is necessary to borrow to stimulate the economy, but the fiscal disciplines will be honoured.

Source: The Nation - 23 March 2009

Thai Finance Minister sees economy sinking lower

As the global economy continues to contract, Thailand’s Ministry of Finance has further revised its national economic projections even lower, to shrink three per cent this year, lowered again from its earlier projection of a zero to two per cent contraction, Finance Minister Korn Chatikavanij said on Monday.

Mr. Korn told the House of Representatives earlier that the world economy is in bad shape now and if the government just sits idle, the country’s gross domestic product (GDP) could contract as much as 8-9 per cent and the number of unemployed could soar to two million later this year.

The government is working hard to hold up GDP, he said, but it could still contract as much as a further 5 per cent if exports fall sharply.

Mr. Korn said the main task for the government is to tighten its budget spending, as 80 per cent of total spending is fixed, such as civil servant salaries.

The government must prepare a deficit budget to have enough cash to stimulate the economy, he said. It must borrow from multiple sources on the condition that borrowing must take place within financial discipline.

Source: TNA - 23 March 2009

a week ago the PM said unemployement will reach 1mln, now it's going to be 2 mln - at that rate unemployement in thailand might be many times that

I attended a lunch today where Korn addressed this very subject. He stressed that the anticipated 8% decline in GDP are the numbers that could happen if no action is taken by the government, so for example it does not take into account the effect that the 2000 Baht handout for folks with salaries below 15,000 per month might have.

He was not trying to paint a rosy picture, in fact came across as very pragmatic, interestingly he was more concerned about the decline in demand for Thai products from China than he was from the USA.

Edit so in effect the 2 million figure would only happen if the GDP did decline by 3% meaning that the stimulus measures would have no effect.

Corn for lunch; should help the agricultural sector!