Thai Govt Can Handle Effects Of European Crisis

[webfact]

Govt can handle effects of European crisis

THE NATION

Kittiratt

BANGKOK: -- Senior officials yesterday expressed confidence in the government's ability to minimise the impact of the European debt crisis on the Thai economy, saying it is ready to spend more if necessary.

The central bank and the government are closely monitoring the situation and if necessary the government is ready to revise some projects to facilitate more spending, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said yesterday.

Economic ministers and Kittiratt met with Prime Minister Yingluck Shinawatra yesterday to discuss the deepening crisis in Europe, which some fear will have grave consequences for Thailand.

"We have gone through two major economic crises in 1997 and 2008. Many measures have been implemented; some worked very well, others didn't. There are other measures that have not yet been implemented, but we'll do so if there's serious trouble," Kittiratt said.

Textile exports have been hit due to declining purchasing power in Europe, but other export items have not been affected, he said. While the number of tourists from some troubled countries may drop, numbers from other countries have increased, the deputy prime minister said.

The Central Bank has also offered assurances that local banks are sound, as their exposure to the European financial system is limited. Thailand is not facing the liquidity crunch seen in other parts of the world, he said.

And while there have been some capital outflows, that money could easily flow back into the Kingdom if the country manages to create confidence, Kittiratt said.

He said he did not want to talk too much about the European crisis since he was afraid the public might worry about the contagion effect.

Meanwhile, Somchai Sujjapongse, director-general of the Fiscal Policy Office, said the government had run a fiscal deficit of Bt495.57 billion in the first eight months of the current fiscal year, from October to May. The government borrowed Bt189.54 billion to finance the deficit. At the end of May, the government had treasury reserves of Bt215.25 billion, he said.

Government revenue in May missed the target by Bt36.67 billion, due largely to the impact of the devastating floods last year. It was the first month of the current fiscal year in which government revenue missed the target, he said.

However, the government still collected more revenue than targeted in the first eight months, he said. Revenue from October to May was Bt1.29 trillion - 0.1-per-cent higher than targeted and up 1.5-per-cent year on year.

-- The Nation 2012-06-16

[webfact]

Bank of Thailand affirms readiness to cope with eurozone crisis impact

BANGKOK, June 16 - The Bank of Thailand (BoT) Governor Prasarn Trairatvorakul reaffirmed Friday that the bank has prepared monetary measures to effectively cope with the impact of the eurozone crisis, particularly on the country’s financial institutions and financial markets.

The impact of the eurozone crisis on Thailand's financial institutions has not been strong, according to the governor, who reported on the situation on Friday to Prime Minister Yingluck Shinawatra.

The Thai baht has weakened 2 per cent against the US dollar, but strengthened 7-8 per cent against the euro since Greece's May 6 general election. Mr Prasarn, however, brushed aside concerns over the baht depreciation provided that the country has strong international reserves and the baht's movement is flexible around Bt30-31/dollar. The baht is likely to weaken further against the greenback as investors turn to US dollar as their safe haven amid the eurozone's current debt crisis.

That the impact of the eurozone debt crisis has not been strong on Thailand's financial institutions is because Thailand has only a small percentage of trade credit volume with Europe.

Thailand's trade credit volume with the world is some US$30 billion, according to the BoT governor. Credits extended to financial institutions in Europe only stood at Bt470 billion.

However, the eurozone debt crisis has slowed the world economy and has affected Thailand's export growth, reducing it to around 8 per cent.

Mr Prasarn said if the eurozone debt crisis worsens and foreign funds start flowing out of forward markets in the continent, which has foreign investments of around US$7 billion, the Bank of Thailand is still certain it can handle the situation.

Meanwhile, BoT's Fund Management Department assistant director, Thong-urai Limpiti, said the bank has applied a stress test to all Thai commercial banks in order to test their abilities to cope with the eurozone debt crisis.

Thai commercial banks are still strong and have been only slightly impacted by the crisis, while banks with foreign shareholders have not withdrawn their shares in Thailand.

According to Ms Thong-urai, Thai banks have only 3.7 per cent (Bt56 billion) direct exposure to Europe or less than one per cent of their total assets. Thus, measures to cope with the eurozone debt crisis in Thailand have not been issued.

However, BoT warned Thai banks to closely monitor the situation and manage their risks in case European companies' credit ratings are downgraded, face downsizing, or close their businesses in Thailand, resulting in difficulties for Thai commercial banks.

Meanwhile, Prime Minister Yingluck Shinawatra on Friday chaired a meeting of economic team to assess the impact of eurozone's debt crisis.

Representatives of all economic-concerned agencies including the Finance Ministry, the Office of the National Economic and Social Development Board (NESDB), and the BoT, attended the meeting.

Deputy Prime Minister/Finance Minister Kittiratt Na Ranong said that the government is closely monitoring the situation in Europe to minimise its impact on the Thai economy.

The central bank on Thursday kept its policy interest rate unchanged at three per cent to ensure sufficient liquidity in the system, he said.

Mr Kittiratt is also scheduled to chair an additional meeting with his economic team to map long-term measures to mitigate impacts on Thai exports. (MCOT online news)

-- TNA 2012-06-16

[ramrod711]

This government couldn't organize a train wreck, unless, of course they could intimidate someone else to do it

[Ricardo]

saying it is ready to spend more if necessary.

I think we have already seen examples, of the government spending money it didn't have, on things which don't help the country long-term, but wouldn't it be better to see a few infrastructure-projects happening too, things which actually improve economic-efficiency rather than just blowing the cash ?

Say the new rail-system or hydro-electric dams or getting the remote schools a power-supply ?

[Unkomoncents]

There has been a lot of stimulus spending though. ChannelNewsAsia's correspondent in Singapore recently confirmed that the Thai economy is roaring back, thanks to generous government packages. The Nation and Thai media, in general, have been terrible about reporting these things in a believable manner. The real problem for Thailand is the political crisis that is seemingly intractable and number of looming "changes" to the political/social landscape.

[geriatrickid]

I'm glad someone is prepared for the crisis in the EU, as the UK finance team just about crapped its collective pants over at 11 Downing. (And before anyone says, oooh didn't you mean 10 Downing, no, they work out of 11 Downing, the rowhouse with the bad plumbing and inadequate HVAC.)

[belg]

in time of crisis : let's spend it all... what the heck could be the worst outcome ? come the GREECE of asian ?

[theblether]

What do you expect them to say? No we can't handle it and we're gonna have a repeat of '97?

Nobody knows what's going to happen, everybody is crapping it.

[webfact]

Thai PM calls for close watch on impact of Eurozone crisis

BANGKOK, 16 June 2012 (NNT) – The Prime Minister has urged all related agencies to keep a close eye on the economic crisis in Europe as its impact can be drastic for Thailand.

Prime Minister Yingluck Shinawatra, on Friday, chaired a meeting with the National Economic and Social Development Board (NESDB) and related agencies, in which the discussion focused on the fallout from the ongoing economic crisis in Europe.

Participating officials updated the PM about how the situation in Europe has been affecting Thailand, while the Premier instructed all agencies to come up with the most effective fiscal policy tools to safeguard the country.

PM Yingluck, however, noted that Thailand has been preparing itself to cope with the crisis fallout for some time, by putting more emphasis on domestic spending and consumption, to help protect Thai SMEs and export sectors from any severe impact.

However, she conceded that the European crisis remains an issue that must be closely monitored, while adding that more measures may be introduced once related figures from the Ministry of Finance, the NESDB and the Bank of Thailand are available.

-- NNT 2012-06-16

[Ricardo]

I'm glad someone is prepared for the crisis in the EU, as the UK finance team just about crapped its collective pants over at 11 Downing. (And before anyone says, oooh didn't you mean 10 Downing, no, they work out of 11 Downing, the rowhouse with the bad plumbing and inadequate HVAC.)

This could be an opportunity for a bulk-order (government discount applies), of underwear/textiles, for the Thai garment-industry ?

Wonder what the UK could offer in-barter, a few more jumbo-jet-loads of fine British retirees (clapped-out, caveat emptor), or a time-share on one of those houses built on top of Old-London-Bridge ?

[Anon999]

I'm glad someone is prepared for the crisis in the EU, as the UK finance team just about crapped its collective pants over at 11 Downing. (And before anyone says, oooh didn't you mean 10 Downing, no, they work out of 11 Downing, the rowhouse with the bad plumbing and inadequate HVAC.)

Seems that what you know about the subject could be written on the back of a postage stamp. If you believe what you read in the tabloid press or hear on the main news then coming up with an ill conceived comment is what should be expected.

[slapout]

You look at the way the present govenment of Thailand has been spending money, moving same areound within different departments, and then borrowing and reclassifing old debts so they can add more debt to the country, they need to look at the internal, upcoming crises first Let the farang system handle their own problems, stick to what you already are having problems with, which are recent and self inflicted.

[Skywalker69]

Finance Minister Kittiratt Na-Ranong should ask Chalerm for some of his ear-medicine.

[w11guy]

The West could learn a lot from Thailand. It has much lower debt levels than almost all Western countries. Many Western countries appear prosperous because they've spend the last few decades living on debt. Now it's payback time and it's not going to be pretty. Living standards have fallen and will continue to do so. And what do the politician do? Nothing.

It's all very well most of you slagging off the Thai government, but your own governments aren't exactly doing a good job are they? And you keep voting for more of the same.

Edited June 16, 2012 by w11guy

[Lite Beer]

PM orders agencies concerned to closely follow up economic situation in Europe

BANGKOK, June 16 - Prime Minister Yingluck Shinawatra on Saturday expressed concern over economic woes in Europe will affect Thai exports, order concerned agencies to closely follow up the economic situation in European countries.

PM said during “Yingluck Government Meets the People” program broadcast via Radio Thailand and National Broadcasting Services of Thailand (Channel 11) that the government has instructed relevant agencies including the National Economic and Social Development Board (NESDB), Finance Ministry, and Bank of Thailand to working together to monitor the situation and analyse the potential impact to Thailand's economy, both directly and indirectly.

These agencies are tasked with understanding impacts correctly and work together to build Thailand's economic strength, she said, adding that this approach would help Thailand to prepare for and proactively prevent problems at the same time.

Ms Yingluck said that Commerce Ministry has discussed with exporters who may be affected by the crisis in Europe and the government has prepared to extend assistance while advising the private sector to be prepared to respond to the situation.

As for the tourism industry, she said, new markets of tourists would be sought out.

Meanwhile, Deputy Prime Minister/Finance Minister Kittiratt Na-Ranong who also joined the TV programme, said that the international community was confident that the European countries would be able to handle this economic crisis.

He was also confident that Thailand could handle the situation and measures have been prepared to respond to the crisis.

Mr Kittiratt also added that Thailand's public debt would not become non-performing loan as in several countries of the European Union (EU), while expecting the eurozone crisis will not heavily affect the world economy like the 2008 Hamburger crisis.

He said Thailand's export goal remains the same, to expand by 15 percent, thanks to negotiations to enter more markets.

The country's gross domestic product (GDP) is expected to grow at least at 5.5 percent due to government investment in infrastructure for flood prevention, the minimum wage raise, corporate tax reduction from 30 percent to 20 percent, low interest rates, weaker energy prices, and weaker foreign exchange rate of the baht currency.

He noted that the Thai economy depends on exports, domestic investment, and the service sector (tourism). While admitting the EU's debt crisis would affect the Thai economy, he was confident the government would mitigate the impact.

The premier has assigned all parties to reduce such impact, he said. The Export-Import Bank of Thailand (EXIM), and other banks were called upon to prepare assistance to the private sector. (MCOT online news)

-- TNA 2012-06-16

[MEL1]

If Thailand can more than cope then why the need to draw deep into its wallet and spend more?

That seems completely paradoxical to me. ?

-mel.

[JohnAllan]

Govt can handle effects of European crisis

If the crisis further escalates, I seriously doubt that this government has either the skillset or the wherewithal to handle the effects of any fallout that threatens to impact the Thai economy.

[JohnAllan]

The West could learn a lot from Thailand. It has much lower debt levels than almost all Western countries. Many Western countries appear prosperous because they've spend the last few decades living on debt. Now it's payback time and it's not going to be pretty. Living standards have fallen and will continue to do so. And what do the politician do? Nothing.

It's all very well most of you slagging off the Thai government, but your own governments aren't exactly doing a good job are they? And you keep voting for more of the same.

As do the Thais . . . And are you referring to absolute debt levels, or relative to GDP?

Edited June 16, 2012 by JohnAllan

[JohnAllan]

Govt can handle effects of European crisis

If the crisis further escalates, I seriously doubt that this government has either the skillset or the wherewithal to handle the effects of any fallout that threatens to impact the Thai economy.

[Skywalker69]

If Thailand can more than cope then why the need to draw deep into its wallet and spend more?

That seems completely paradoxical to me. ?

-mel.

I think there is more problems in the horizon and it spells ASEAN.

[animatic]

I remember how well the Samak and Somchai governments ham-handled the last international financial crisis.

They didn't until Kuhn Korn started making the moves. Even former TRT finance guy Devakula was excoriating them in the press in the several months prior to PPP's collapse.

And remember how Chavalit with assistant Thaksin handled '97 so smoothly.

So are they running on their record? God helps us if that's so!

When they go out of their way to advertise who well they do it,

it sure feels like wool descending over eyes; full frontal/

Edited June 16, 2012 by animatic

[kimamey]

The West could learn a lot from Thailand. It has much lower debt levels than almost all Western countries. Many Western countries appear prosperous because they've spend the last few decades living on debt. Now it's payback time and it's not going to be pretty. Living standards have fallen and will continue to do so. And what do the politician do? Nothing.

It's all very well most of you slagging off the Thai government, but your own governments aren't exactly doing a good job are they? And you keep voting for more of the same.

I'm not sure you've got this quite right. In the UK at least borrowing and debt wasn't that high before the financial crisis and the then government had strict rules about only borrowing for investment. It was the collapse of the housing market in the USA that brought about the financial crisis. A lot of the debt was down the need to support the banking industry and continue a level of public spending to try to prevent recession becoming depression as it in the Great Depression of the 1930s. In most western countries the argument has been not about reducing debt but how quickly to do it. Again in the UK the previous government tried to reduce it slowly and managed to avoid recession and had very modest growth. The current coalition have tried to move faster and has had to deal with low growth and going in and out of recession. Of course they haven't been helped by the crisis in the eurozone as although the UK isn't a member it conducts a lot of trade within the zone.

The causes of the problems within the various countries in the eurozone are varied. Greece should probably never have gone into it as it used very dubious figures to support its entry and subsequently broken the rules on the level of debt although Germany was the first to do that. Spain's government didn't overspend and ran a balanced budget. Its problem was again a housing one. Many people borrowed money from Spanish banks to buy property and the Spanish banks borrowed to facilitate this, quite often from German banks. The financial crisis meant many people couldn't pay the debts and the Spanish government has had to help the banks and deal with massive unemployment.

All this causes problems for places like China which despite it's recent growth now finds it's customers in the west not spending as much and so they need to promote domestic spending growth. A similar problem affects other countries, amongst them Thailand. I don't know if Thailand has got it right. The tax refund on first cars would seem a good idea but I have no idea if it's having the desired effect. The increase in minimum wage might encourage people to spend but my feeling is its been done too fast and only for Thais which may mean non Thais doing the jobs instead and may increase unemployment which would do away with the initial advantage. I wouldn't be surprised also if some countries start to get annoyed with Thailand's import taxes.

[geriatrickid]

I'm glad someone is prepared for the crisis in the EU, as the UK finance team just about crapped its collective pants over at 11 Downing. (And before anyone says, oooh didn't you mean 10 Downing, no, they work out of 11 Downing, the rowhouse with the bad plumbing and inadequate HVAC.)

Seems that what you know about the subject could be written on the back of a postage stamp. If you believe what you read in the tabloid press or hear on the main news then coming up with an ill conceived comment is what should be expected.

Oh my. Actually, I listened to what Mr. Osborne had to say when he announced the £100bn support programme for the British economy. I also paid close attention to the statements of BoE Governor King. They are taking some heavy duty actions. On Friday, when the BoE announced its emergency scheme that offers six-month liquidity to banks in tranches of no less than £5 billion a month, that tells me that the finance folks are very concerned. This differs from the Thai response in that the Chancellor of the Exchequer and the Governor of the Bank of England have an organized plan and are ready to act. They have provided information to the public to help manage the situationand there is a strong element of transparency. However, in listening to the two gentleman, the angst and trepidation was palpable.

In Thailand, there is no dissemination of a what the plan is or how concerns will be managed. It doesn't matter who is sitting in the Thai minister's seat, this has been the M.O. for decades. Maybe it's because they don't think there is a need to explain or they believe that tmi would overwhelm the public, I don't know.

[geriatrickid]

I remember how well the Samak and Somchai governments ham-handled the last international financial crisis.

They didn't until Kuhn Korn started making the moves. Even former TRT finance guy Devakula was excoriating them in the press in the several months prior to PPP's collapse.

And remember how Chavalit with assistant Thaksin handled '97 so smoothly.

So are they running on their record? God helps us if that's so!

When they go out of their way to advertise who well they do it,

it sure feels like wool descending over eyes; full frontal/

I know you love the former finance minister, but the reality is that he is criticized for saddling the Thai government for billions of baht in spending obligations without appropriate oversight mechanisms in place. The reality is that he approached the problem in a manner really no different than previous finance ministers or the current finance minister.

The one exception was the man most qualified and suited to be finance minister, Thirchai Phuvanatnaranubala. He was honest and competent and his policies put him at direct odds the with the Democrat and PTP views of let's throw money at the problem and cut taxes . The biggest mistake of the Yingluck governemnt was to force this man into retirement. TP's experience as a deputy Bank of Thailand Governor, at the SEC and as a compliance & regulatory affairs expert made him the ideal person to be in charge during a time when the international financial systems were in crisis. Korn was cut from the same cloth as the Wall Street cowboys and TP was from the old school of restraint and responsible spending. If ever there was a time for Khun Thirchai, it is now.

[Pseudolus]

By "handle" I guess they mean they will just sit on all their property over there as opposed to sell it at a lower price?

[ttelise]

Uh, really. Why would their be a liquidity crunch for the baht when potential defaults on Euro backed bonds and concerns over hyper inflation in two relatively small monetary markets. Sounds like they don't have a clue or they are just making those without a clue believe they are doing something.

Greece will leave the Euro. Too much debt and too many entitlement programs. You cannot loan someone making 50k a year a $ 5,000,000.00 home loan and expect them to repay it just because you give them a favorable interest rate. Greece's departure from Euro no where close to the severity of the 2008-2009 global revision. May have a minor impact exports, imports and throughportfolio foreign investment. The pull back, if any, will primarily effect Japan and China. Glad to see they are least thinking about something other than Lady GaGa's stage props though.

[Skywalker69]

Yea, they could handle last years flooding as well.

[rubl]

2012-05-25

Commerce Ministry: Jan-Apr export posted -3.86% growth, import grew 9.79%, trade deficit at $8 bn

[lounger]

Another idiotic platitude aimed at calming the uninformed and ignorant. We hear similar so often that its not worth commenting on the detail. Please insert as necessary:

the Government can cope with the...

The ..... will not happen again

Government giving handouts ( really?) to the people as a result of the .............

Trust us in the matter of........

The art of government: Take from the poor and give to the rich, but tell the poor its going to change for the better..........

[animatic]

I remember how well the Samak and Somchai governments ham-handled the last international financial crisis.

They didn't until Kuhn Korn started making the moves. Even former TRT finance guy Devakula was excoriating them in the press in the several months prior to PPP's collapse.

And remember how Chavalit with assistant Thaksin handled '97 so smoothly.

So are they running on their record? God helps us if that's so!

When they go out of their way to advertise who well they do it,

it sure feels like wool descending over eyes; full frontal/

I know you love the former finance minister, but the reality is that he is criticized for saddling the Thai government for billions of baht in spending obligations without appropriate oversight mechanisms in place. The reality is that he approached the problem in a manner really no different than previous finance ministers or the current finance minister.

The one exception was the man most qualified and suited to be finance minister, Thirchai Phuvanatnaranubala. He was honest and competent and his policies put him at direct odds the with the Democrat and PTP views of let's throw money at the problem and cut taxes . The biggest mistake of the Yingluck governemnt was to force this man into retirement. TP's experience as a deputy Bank of Thailand Governor, at the SEC and as a compliance & regulatory affairs expert made him the ideal person to be in charge during a time when the international financial systems were in crisis. Korn was cut from the same cloth as the Wall Street cowboys and TP was from the old school of restraint and responsible spending. If ever there was a time for Khun Thirchai, it is now.

Partly right, depending on how you interpret the word 'appropriate'.

But at least he APPROACHED THE MATTER AT ALL!

And he had little choice about taking on debt to keep the country afloat,

because the mess he was left was 6 months or more behind the curve needed to control it.

And the PTP has outstripped his debt levels by far and jiggered the books to do it.

"...the man most qualified and suited to be finance minister, Thirchai Phuvanatnaranubala. He was honest and competent and his policies put him at direct odds the with the Democrat and PTP views of let's throw money at the problem and cut taxes . The biggest mistake of the Yingluck governemnt was to force this man into retirement... "

At least we can agree on this.

Edited June 17, 2012 by animatic