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GDP Growth Forecast To Fall Further: Thailand Flood


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Posted

ECONOMY

GDP growth forecast to fall further

The Nation

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The Bank of Thailand will drop its growth forecast even lower for gross domestic product this year as the massive flood works its way through Bangkok and into Samut Sakhon.

"How much [the Monetary Policy Committee] will decide to revise downwards the GDP figure on November 30 will depend on the latest estimated loss figures. The situation has not yet stabilised," Deputy BOT Governor Suchada Kirakul said yesterday.

The flood situation is still evolving. Flood waters are spreading into downtown Bangkok and some areas of the neighbouring provinces, she said.

On October 28, the central bank slashed its growth forecast to 2.6 per cent from 4.1 per cent after floods swamped almost 10,000 factories and threatened to seep into the capital.

The tourism industry is expected to see a decline of about 700,000-800,000 arrivals this quarter, resulting in the no-show of about Bt20 billion in income. These effects were not taken into consideration at the previous MPC meeting, she said.

The latest estimated damage to manufacturing is a minimum of Bt150 billion, up from the previous estimate of Bt110 billion. The estimate will be updated before the MPC meeting.

The MPC, which paused its policy-rate hikes at its October 19 meeting because of the floods, will likely assess the severity of the flood's impact before deciding on the rate's direction.

If the economy worsens, policy-makers could shift towards a more accommodative stance, Suchada said.

"At the last meeting, the MPC acknowledged how bad the floods were. A decision was made then to leave the rate unchanged," she said. "The rate's next direction may be to be held as is or lowered. The market knows this signal. And this is help the central bank can provide directly, a monetary policy that supports economic recovery."

On October 19, the MPC decided to keep the policy rate on hold at 3.5 per cent, citing the nation's severe floods and weakening global economy.

Tisco Wealth expects the Thai economy to expand only 2 per cent this year, if the government fails to fix flood problems within a few months and areas of inner Bangkok are seriously affected. In the worst-case scenario, the fourth-quarter economy will contract.

Tisco Wealth will re-evaluate the 2012 situation. It noted that manufacturing should recover quickly if the machinery in inundated industrial zones is not significantly damaged.

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-- The Nation 2011-11-09

Posted

Just another example of politically motivated numbers. Let's do the math. We are coming into peak tourist season. The AOT claims about 15 million tourists per year. That assumes as least 4,000,000 in the last quarter, with the peak season. The problems did not start until later in October. So, perhaps the average of 1,250,000 monthly arrivals, was reduced by half of that, due to the flooding. That is 625,000 right there. What about November. I arrived on Nov. 1st, and Suvarnabhumi was a ghost town. So was Bangkok. The flooding is expected to last for some time. Travel agents say their cancellation over the next 60 days are up to 90%. So, how do the authorities come up with a number like 600,000 to 700,000 less tourists in the last 3 months of the year? Are they just pulling that figure out of a hat? Are they using defective calculators? What gives here?

Posted

Let's hope the next rate move is down and that the bank starts spending its foreign exchange reserves on repairing flood damage, which would in turn weaken the Baht and make Thailand attractive to tourists again -

and give those already here more spending money.

Posted

"Tisco Wealth will re-evaluate the 2012 situation. It noted that manufacturing should recover quickly if the machinery in inundated industrial zones is not significantly damaged."

Shows how much they know about computerised machinery - or is it just investment BS? A lot of these machines will never be got running again.

Posted

The ministry of disinformation is definitely in full swing here - how is it possible that the baht has not moved significantly in either direction?

Catastrophic natural disaster leading to destruction of industry and widespread chaos, but the THB is steady as you like. :huh:

Switzerland can offer lessons to Thailand about trying to protect a currency; only after squandering 20 Billion Euros did the Swiss finally give in and let the market decide the value.

Pompous, arrogant and uber foolish to use your foreign reserves to this end - the only people fooled are those that think it actually works.

Posted
If the economy worsens, policy-makers could shift towards a more accommodative stance, Suchada said.

Does this actually translate to a tea-money rate-cut? :rolleyes:

Posted

PM Eyes 5.5% Growth in 2012

During the House session to discuss the 2012 fiscal year budget, the prime minister stated that flood reconstruction will drive economic growth in 2012 to between 4.5 and 5.5 percent.

At the House session to vet the 2012 fiscal year budget today, Prime Minister Yingluck Shinawatra announced to lawmakers that the government has adjusted the national budget proposal so that it reflects the current situation, in which the projected gross domestic growth for the year has been slashed to 3.5 to 4 percent due to the global economic crisis and flood situation.

The prime minister claimed that the government will initiate the flood reconstruction once the water has receded and this will drive economic growth for 2012 to between 4.5 and 5.5 percent while the inflation rate will be between 3 and 4 percent.

Both the government and the Opposition will be given 13 hours each to present their cases during the budget session.

The entire duration of the session will be nationally televised via NBT station.

Meanwhile, in order to prepare for possible flooding, sandbag barriers have been put up around the Parliament building and the koi fish have been removed from the pond.

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-- Tan Network 2011-11-09

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Posted

At the House session to vet the 2012 fiscal year budget today, Prime Minister Yingluck Shinawatra announced to lawmakers that the government has adjusted the national budget proposal so that it reflects the current situation, in which the projected gross domestic growth for the year has been slashed to 3.5 to 4 percent due to the global economic crisis and flood situation.

On October 28, the central bank slashed its growth forecast to 2.6 per cent from 4.1 per cent after floods swamped almost 10,000 factories and threatened to seep into the capital.

It seems Yingluck hasn't been talking to the economists at the central bank.

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