Pattaya sees rise in independent Chinese tourists amid decline in group tours

[Ned]

Amazing how many farang I meet keep telling me how well the Thai economy is going nowadays.....when I myself have felt that things have been going steeply downhill for months. And now this headline in the International Herald Tribune on Tuesday, page 20: "Thailand Economy Enters Recession." ....following two consecutive quarters of contraction.

[gotlost]

This broke last week. With the strength of the baht to other currencies it is no surprise.

[wordchild]

i have not seen the article but, as quoted, it is nonsense. The latest gdp figs were strong (+6.7% for 3d quarter).though this was a little less than the forecast of +7.5%. Most economists expect the RATE OF GROWTH to slow through next year because of the baht and its effect on exports, but that is slow from the current very strong levels to more like +5%.

I would not be surprised if farang oriented business is a bit slow right now, but ,as has often been mentioned before on this site, farang spending (from tourists and expats) is not as significant a part of the Thai economy as many seem to think. FWIW I have an involvement with a large Thai domestically focused retailer and ,for them, business is very very strong right now.

Edited November 25, 2010 by wordchild

[nong38]

I thought the GDP figures were good but slowing, so you could still produce a very acceptable GDP figure which was slowing for 2 quarters and claim a recession, depens which headlines you want. The slowing forecast has been told for a good few months,so technically a recession but nothing to worry about yet I think.

[wordchild]

I thought the GDP figures were good but slowing, so you could still produce a very acceptable GDP figure which was slowing for 2 quarters and claim a recession, depens which headlines you want. The slowing forecast has been told for a good few months,so technically a recession but nothing to worry about yet I think.

not the case; the technical definition of a recession is two consecutive quarters of NEGATIVE (not slowing) GDP; by this measure Thailand is nowhere close to one. Where GDP slows sharply but remains positive and unemployment rises ,this is sometimes referred to as a "growth recession" and you could argue that Thailand could face that next year.

FWIW my feeling (based on what i see happening in some Thai companies that i know) is that the Thai economy is pretty robust and will actualy continue to grow strongly next year. However with the proviso that the baht strengthens at a modest pace rather than shoots away which would be quite harmful.

Edited November 25, 2010 by wordchild

[Time Traveller]

It is possible we are in recession, but that article is completely incorrect. Unlike journalists, economists and statisticians know that you don't measure GDP changes by comparing one quarter against the previous quarter (e.g. Q3 v Q2). You measure GDP by comparing one quarter against the same quarter from the previous YEAR (e.g. Q3 2010 v Q3 2009). The reason is because seasonal factors will create false signals. In Thailand, agricultural production, construction activity and tourism receipts are lower in the rainy season, so Q3 GDP growth (or lack of it) is very often weaker than it is in Q1 and Q2. The fact that some hack writer for the IHT picked up on a one week old story explains why no one is bothering buying newspapers anymore. Good riddance!