Thai Economy Shows Signs Of Recovery

[george]

Thai economy shows signs of recovery: BoT

BANGKOK: -- The Thai economy began signalling recovery in April despite political unrest and long public holidays, according to the Bank of Thailand (BoT).

BoT Local Economy Division senior director Amara Sripayak said Friday that economic data released in April was better than expected.

The industrial production index rose 7.6 per cent and private consumption index edged up 0.7 per cent from the previous month because there was an increase in purchase orders in the electronics and electrical appliance sectors.

However, private investment index shrank 16.4 per cent due to the economic slowdown as Thailand’s production capacity utilization stayed low at 59.7 per cent.

Additionally, the business confidence index edged down to 39.2 from 40 points in March because of concerns over the political and economic uncertainties.

She said the shrinkage in the country’s gross domestic product (GDP) of 7.1 per cent in the first quarter of this year announced by the National Economic and Social Development Board is a further contraction from the fourth quarter last year.

Still, economic indicators had picked up on a monthly basis. Even so, the central bank remained uncertain whether the economic recovery could gain momentum. It needed to monitor internal and external factors for a while.

April also saw private-sector loans increase by Bt29.4 billion after contracting for three consecutive months. Most are consumer loans and credit facilities extended by state-owned banks after the government had accelerated lending.

Exports totalled US$10.28 billion, down 25.2 per cent, while imports amounted to $9.66 billion, down 36.4 per cent, resulting in a trade surplus of $619 million.

Regarding a call by exporters for making the baht weaken further to help, Mrs. Amara said BoT had currently supervised the baht value to ensure it moves in line with the economic trend.

The general inflation rate in April edged down by 0.9 per cent while the core inflation stayed at 1 per cent.

She said the Bank of Thailand was unwooried about a surge in oil prices to $60 dollar per barrel because in July 2008 the oil prices skyrocketed to $140 per barrel.

-- TNA 2009-05-30

[jayboy]

"She said the Bank of Thailand was unwooried about a surge in oil prices to $60 dollar per barrel because in July 2008 the oil prices skyrocketed to $140 per barrel."

I bet she didn't say anything as stupid as this in Thai, much more likely something like the BOT has become accustomed to volatilty in the oil price and has adjusted its modelling accordingly.

Quite often poor English on the part of journalists gives a false impression of interviews with Thais.I happen to have met Khun Amara and she is impressively sharp and quick on the uptake.

[Lancelot]

Well, I hope that Thailand -and the rest of the world- recover soon. I'm not convinced that its anything other than a bear bounce type increase.

If the press was full of stories predicting "The End of Equities" or "Buy Gold and bury it in your back yard" then I'd be more inclined to believe that we had turned the corner.

Just my take on things

[johnsjourney]

Well, I hope that Thailand -and the rest of the world- recover soon. I'm not convinced that its anything other than a bear bounce type increase.

If the press was full of stories predicting "The End of Equities" or "Buy Gold and bury it in your back yard" then I'd be more inclined to believe that we had turned the corner.

Just my take on things

the only green shoot is money printing - watch out for inflation as the USA doubled the money supply already in the last year (see CRB commodity index looks like a major low has been passed to me and currently flying up)

agree the opposite of the press view is usually right - there is little talk of hyperinflation, therefore I expect that is exactly what we will get with all that printing, the baht stays close to the dollar...

...and then they'll call inflation 'growth'

Edited May 30, 2009 by johnsjourney

[teacup]

If the US, the biggest consumer market in the world, hasn't recover yet, I very much doubt that thailand will be in the up swing anytime soon.

I have heard when the US recovery does happen, the asian suppliers like China and thailand will be just about 6-12 mos lagging behind.

[givenall]

If the US, the biggest consumer market in the world, hasn't recover yet, I very much doubt that thailand will be in the up swing anytime soon.

I have heard when the US recovery does happen, the asian suppliers like China and thailand will be just about 6-12 mos lagging behind.

I have learned to ignore the official statements like these and see it with my own eyes. They always give rosier pictures than it is it must be part of losing face

[wasabi]

How can the recession be over when it never happened in the first place? The whole thing was a massive shell game.

[Old Man River]

If the US, the biggest consumer market in the world, hasn't recover yet, I very much doubt that thailand will be in the up swing anytime soon.

I have heard when the US recovery does happen, the asian suppliers like China and thailand will be just about 6-12 mos lagging behind.

This is my view as well. The US economy contracted by 5.7% in the first quarter.

[Old Man River]

If the US, the biggest consumer market in the world, hasn't recover yet, I very much doubt that thailand will be in the up swing anytime soon.

I have heard when the US recovery does happen, the asian suppliers like China and thailand will be just about 6-12 mos lagging behind.

I have learned to ignore the official statements like these and see it with my own eyes. They always give rosier pictures than it is it must be part of losing face

It is not about losing face. With consumer spending having the biggest impact on an economy, it is all about trying to get consumers to begin spending.

[geriatrickid]

I have learned to ignore the official statements like these and see it with my own eyes. They always give rosier pictures than it is it must be part of losing face

Then every other bank governor and finance minister in the west must have face issues as well. As has been stated, it's part of the job description to try and be encouraging while giving dismal news. If there was a chorus of the sky is falling, the economy would tank even further.

I'd go with jayboy's explanation, since it's so obvious. Seen it before on other issues.

[Abrak]

Not that my crystal ball is any clearer than anyone elses but I am not an inherent believer in the idea of FIFO or that the USA will lead the world out of this recession. The US problems are deep and structural - an overblown consumer economy with no savings, a large structural fiscal deficit and a massive debt problem. Thailand's problems (if we perhaps paper over its structural political problem) are mostly cyclical and while linked to the US will only drag it down so much.

Ultimately the Thai economy may shrink a little more than the US this year (largely due to a failure to fully implement fiscal plans) but my guess is that there will be a modest turnaround next year due to increased production and exports as the inventory cycle turns (say 2-4% growth). I think there is little chance of that being achieved in the US.

[Lancelot]

Well, I hope that Thailand -and the rest of the world- recover soon. I'm not convinced that its anything other than a bear rally type increase.

If the press was full of stories predicting "The End of Equities" or "Buy Gold and bury it in your back yard" then I'd be more inclined to believe that we had turned the corner.

Just my take on things

Sorry about that, I tried to change bounce to rally and ended up with a new post?!?

Edited May 30, 2009 by Lancelot

[Thai at Heart]

If the US, the biggest consumer market in the world, hasn't recover yet, I very much doubt that thailand will be in the up swing anytime soon.

I have heard when the US recovery does happen, the asian suppliers like China and thailand will be just about 6-12 mos lagging behind.

I have learned to ignore the official statements like these and see it with my own eyes. They always give rosier pictures than it is it must be part of losing face

It is not about losing face. With consumer spending having the biggest impact on an economy, it is all about trying to get consumers to begin spending.

Who's consumers? The Thai consumer can readily reduce its spending and inevitably GDP will reduce within country. I am not sure of the exact numbers but for example probably 500k employees in Rayong right now who are producing or supplying the car industry alone are staring it right in the barrel.

The real worry will come when the GMs and Toyotas decide that they will move their export business from Thailand to China. The Japanese are more resilliant in their decision making right now than the Americans but if it happens, wait for them to turn the lights out in the Detroit of the East.

[midas]

" Regarding a call by exporters for making the baht weaken further to help, Mrs. Amara said BoT had currently supervised the baht value to ensure it moves in line with the economic trend."

If she thinks the economy is improving, does that mean a stronger baht ?

[cmsally]

Not that my crystal ball is any clearer than anyone elses but I am not an inherent believer in the idea of FIFO or that the USA will lead the world out of this recession. The US problems are deep and structural - an overblown consumer economy with no savings, a large structural fiscal deficit and a massive debt problem. Thailand's problems (if we perhaps paper over its structural political problem) are mostly cyclical and while linked to the US will only drag it down so much.

Ultimately the Thai economy may shrink a little more than the US this year (largely due to a failure to fully implement fiscal plans) but my guess is that there will be a modest turnaround next year due to increased production and exports as the inventory cycle turns (say 2-4% growth). I think there is little chance of that being achieved in the US.

To increase production and exports, somewhere will need to see an increase in consumption. If the US is not consuming where will the demand come from, I can't see it being Europe.

[tigerbalm]

Does any body know what Thailand Exports to the west Europe and the USA?

What are, say the Top 10 Exported products.

[Seneque]

Exports totalled US$10.28 billion, down 25.2 per cent, while imports amounted to $9.66 billion, down 36.4 per cent, resulting in a trade surplus of $619 million.

I would tend to believe that most (i do not know the %) thai exports have some import content ... Imports being down 36.4% does not sound that good for exports (less imported energy, less raw materials, less machinery, less investments, etc...).

isn't it valid to say that the Baht as always been moving in the same fashion as the USdollar ... (of course discount the baht devaluation of 10 yrs ago). Considering where the US$ is going, will the Baht follow that course?

[hansnl]

Thai economy shows signs of recovery: BoT

BANGKOK: -- The Thai economy began signalling recovery in April despite political unrest and long public holidays, according to the Bank of Thailand (BoT).

BoT Local Economy Division senior director Amara Sripayak said Friday that economic data released in April was better than expected.

The industrial production index rose 7.6 per cent and private consumption index edged up 0.7 per cent from the previous month because there was an increase in purchase orders in the electronics and electrical appliance sectors.

However, private investment index shrank 16.4 per cent due to the economic slowdown as Thailand’s production capacity utilization stayed low at 59.7 per cent.

Additionally, the business confidence index edged down to 39.2 from 40 points in March because of concerns over the political and economic uncertainties.

She said the shrinkage in the country’s gross domestic product (GDP) of 7.1 per cent in the first quarter of this year announced by the National Economic and Social Development Board is a further contraction from the fourth quarter last year.

Still, economic indicators had picked up on a monthly basis. Even so, the central bank remained uncertain whether the economic recovery could gain momentum. It needed to monitor internal and external factors for a while.

April also saw private-sector loans increase by Bt29.4 billion after contracting for three consecutive months. Most are consumer loans and credit facilities extended by state-owned banks after the government had accelerated lending.

Exports totalled US$10.28 billion, down 25.2 per cent, while imports amounted to $9.66 billion, down 36.4 per cent, resulting in a trade surplus of $619 million.

Regarding a call by exporters for making the baht weaken further to help, Mrs. Amara said BoT had currently supervised the baht value to ensure it moves in line with the economic trend.

The general inflation rate in April edged down by 0.9 per cent while the core inflation stayed at 1 per cent.

She said the Bank of Thailand was unwooried about a surge in oil prices to $60 dollar per barrel because in July 2008 the oil prices skyrocketed to $140 per barrel.

-- TNA 2009-05-30

WHERE????????

[jackdanielsesq]

Three days ago the Thai GDP fell right off the cliff!! By a massive 6.8%!! Give me a break!!

BR>Jack

[Old Man River]

If the US, the biggest consumer market in the world, hasn't recover yet, I very much doubt that thailand will be in the up swing anytime soon.

I have heard when the US recovery does happen, the asian suppliers like China and thailand will be just about 6-12 mos lagging behind.

I have learned to ignore the official statements like these and see it with my own eyes. They always give rosier pictures than it is it must be part of losing face

It is not about losing face. With consumer spending having the biggest impact on an economy, it is all about trying to get consumers to begin spending.

Who's consumers?

From reading the rest of your message, I think you are asking whose consumers not who is consumers, and of course I am talking about the Thai consumers as it relates to Thailand. Still, other country's consumers are equally important since Thailand relies heavily on exports.

I highly doubt we will see the auto companies closing up Thailand and moving their operations to China. They normally prefer not to put their eggs in one basket and are already in China (and the Philippines and many other countries in the Asia). While Thailand doesn't carry the onerous union problems some other countries have, it is still too costly to close up operations without buyers available and really there isn't anyone to sell to at the moment. It is much easier to downsize until things turns around, whenever that is.