webfact Posted June 18, 2013 Share Posted June 18, 2013 IMF warns of rising risks to Thai economyBy English NewsBANGKOK, June 18 – The International Monetary Fund (IMF) warned Thailand to be prepared for inflation and vulnerability from capital flows which may add uncertainty to Thai economy outlook.An IMF delegation, led by Luis E. Breuer, met with executives of the Bank of Thailand (BoT) and senior Finance Ministry officials last week.Mr Breuer said the Thai economy has shown an impressive resilience to shocks, including the global financial crisis, supply-chain disruptions following the tsunami in Japan, and the devastating 2011 floods.Economic fundamentals are strong, including a track record of growth, stability and fiscal discipline, healthy balance sheets of commercial banks and corporations, high international reserves, and manageable public debt, he added.Despite Thailand’s economic slowdown in Q1, the IMF mission chief was optimistic that GDP will expand by 4.75 per cent this year, and further by 5.25 per cent next year – supported by strong private demand and an acceleration of public spending.“Against the backdrop of the global financial crisis and the devastating 2011 floods, the expansionary fiscal policy pursued in recent years was justified, aimed at supporting aggregate demand and reconstruction activities,” Mr Breuer said in a statement.“But now, the strength of the ongoing economic recovery provides an opportunity to gradually withdraw the fiscal stimulus, create fiscal space for priority infrastructure spending, and rebuild policy buffers to address future possible shocks.”He said the IMF mission welcomed the authorities’ commitment to fiscal discipline, including their objectives of keeping the public debt ratio under 50 per cent of GDP and balancing the central government budget by 2017.“The authorities are taking actions to improve tax compliance and expand the tax base, reduce tax incentives for consumption, and revamp excises, while confirming their strict control over current spending,” according to the statement.Mr Breuer said the IMF delegation discussed additional measures that would support the authorities’ goals of increasing public spending on infrastructure, while also preserving fiscal discipline.“The Bank of Thailand’s accommodative monetary stance is appropriately supporting the economy,” he said, however, calling on the central bank to continue to be vigilant to demand and wage pressures, and stand ready to normalise interest rates if overheating pressures emerge or inflation picks up.The mission chief continued, “In an era of volatile capital flows and rapid shifts in investors risk appetite, the inflation targeting regime and the credibility of the central bank have served Thailand well. The policy response to the recent episode of capital flows was appropriate, including exchange rate flexibility and the preparation of contingency measures.”Though the financial sector has benefited from the strong recovery, the IMF mission warned that vulnerabilities are rising, including from the expansion of specialised financial institutions (SFIs) and rising household debt.The IMF delegation said it supports the authorities’ intention to strengthen the operating environment of SFIs, including their management and mandates.“Building on Thailand’s remarkable record of economic development in recent decades, the mission supports the authorities’ intention to raise growth and to make growth more inclusive. The implementation of infrastructure projects, in particular in the transportation sector, is expected to raise economy-wide productivity,” the mission said. (MCOT online news)-- TNA 2013-06-18 Link to comment Share on other sites More sharing options...
Popular Post kotsak Posted June 18, 2013 Popular Post Share Posted June 18, 2013 IMF is not my father.. 5 Link to comment Share on other sites More sharing options...
clockman Posted June 18, 2013 Share Posted June 18, 2013 The day is coming!!!!!!!!!!!! 2 Link to comment Share on other sites More sharing options...
Popular Post pedro01 Posted June 18, 2013 Popular Post Share Posted June 18, 2013 "He said the IMF mission welcomed the authorities’ commitment to fiscal discipline, including their objectives of keeping the public debt ratio under 50 per cent of GDP and balancing the central government budget by 2017." Fiscal discipline???? 4 Link to comment Share on other sites More sharing options...
Mosha Posted June 18, 2013 Share Posted June 18, 2013 Two wheels on my wagon, And I’m still rolling along Them Cherokees are after me Flaming spears, burn my ears But I’m singing a happy song Link to comment Share on other sites More sharing options...
Popular Post Gsxrnz Posted June 18, 2013 Popular Post Share Posted June 18, 2013 "He said the IMF mission welcomed the authorities’ commitment to fiscal discipline, including their objectives of keeping the public debt ratio under 50 per cent of GDP and balancing the central government budget by 2017." Fiscal discipline???? Actually, Public Debt at 50% or less of GDP is fiscally very good. Compared to the US at circa 74% and Japan at circa 214%, and NZ at circa 45% (2010 figures). No matter how we may view Thai politics and economics, it is a strong emerging economy with fairly sound fundamental ratios. 3 Link to comment Share on other sites More sharing options...
EvilDrSomkid Posted June 18, 2013 Share Posted June 18, 2013 The IMF has a bit of a bad image in Thailand. It's a good thing they are mild in their 'advice'. Link to comment Share on other sites More sharing options...
waza Posted June 18, 2013 Share Posted June 18, 2013 Beware of inflation, capital flows, SFIs and rising household debt, but all in all its says noything 2 Link to comment Share on other sites More sharing options...
iancnx Posted June 18, 2013 Share Posted June 18, 2013 Beware of inflation, capital flows, SFIs and rising household debt, but all in all its says noything Agreed, a lot of complex chat, but nothing of substance. A copy of the executive summary of the report would have been more coherent and of more use. Link to comment Share on other sites More sharing options...
Popular Post rubl Posted June 18, 2013 Popular Post Share Posted June 18, 2013 "In an era of volatile capital flows and rapid shifts in investors risk appetite, the inflation targeting regime and the credibility of the central bank have served Thailand well."Well, the BoT governor will be glad to have this on record for next time MoF Kittirat starts nagging :-)BTW "preserving fiscal discipline" ? Like moving things out of sight, out of the National Budget? Special decree for 350 billion, borrowed 700 billion from BAAC, 2.2 trillion to come, 1.14 trillion under the BoT carpet, etc., etc. 5 Link to comment Share on other sites More sharing options...
Jasun Posted June 18, 2013 Share Posted June 18, 2013 What do they mean by their suggestion to 'normalise interest rates'? Put them up? Won't that create some of the highest interest rates in the region, and potentially an even stronger baht? 1 Link to comment Share on other sites More sharing options...
iancnx Posted June 18, 2013 Share Posted June 18, 2013 Here is his actual statement..... A little more comprehensive http://www.imf.org/external/np/sec/pr/2013/pr13212.htm Link to comment Share on other sites More sharing options...
rubl Posted June 18, 2013 Share Posted June 18, 2013 Does the positive tone of the IMF Press Release signify that the IMF has actually got some data & information which made sense and could be believed, or is it just the usual diplomatic phrasing? 1 Link to comment Share on other sites More sharing options...
winstonc Posted June 18, 2013 Share Posted June 18, 2013 he couldnt have been talking about thailand could he,,,,??? 1 Link to comment Share on other sites More sharing options...
bobl Posted June 18, 2013 Share Posted June 18, 2013 And Thailand should say "Thanks for the advice, and don't let the door hit you on the ass on the way out". The IMF have a great track record in helping destroy economies... 2 Link to comment Share on other sites More sharing options...
winstonc Posted June 18, 2013 Share Posted June 18, 2013 so moodys will listen to the imf ,,??,,im so confused,help me guys please,,, Link to comment Share on other sites More sharing options...
iancnx Posted June 18, 2013 Share Posted June 18, 2013 (edited) so moodys will listen to the imf ,,??,,im so confused,help me guys please,,,Seems to me this statement has been made based on financial data to date, or some of it. Historic at any rate. The 2.2 trillion, the water mega projects and the rice mis-management not in the reckoning it seemsIn all fairness they cannot report on what has not yet happened (the truth of the rice still not ascertained at time of statement). Moody's might be a little more robust! Edited June 18, 2013 by iancnx Link to comment Share on other sites More sharing options...
geriatrickid Posted June 18, 2013 Share Posted June 18, 2013 Does the positive tone of the IMF Press Release signify that the IMF has actually got some data & information which made sense and could be believed, or is it just the usual diplomatic phrasing? Yes, the IMF made its statement based upon reliable data & information. Considering that Thailand's debt situation and GDP growth is better than some western countries, the IMF comments should be taken in that context. The comments did include some tough advice too. A forceful nudge on some issues if you will. 1 Link to comment Share on other sites More sharing options...
Popular Post geriatrickid Posted June 18, 2013 Popular Post Share Posted June 18, 2013 Just look at Greece and see for your self what the IMF is doing,,,,,,,,,,,,, Greece has no one to blame for its financial condition but itself. If a country wants a bail out because of its own greed, corruption and sloppy fiscal policy then it must accept that the entities providing the bail out will impose some conditions. 7 Link to comment Share on other sites More sharing options...
Thai at Heart Posted June 18, 2013 Share Posted June 18, 2013 The sky isn't falling. I think Moody's and the IMF are doing them a big favour by going public about the need to be prudent. Is anyone listening? 2 Link to comment Share on other sites More sharing options...
rubl Posted June 18, 2013 Share Posted June 18, 2013 Does the positive tone of the IMF Press Release signify that the IMF has actually got some data & information which made sense and could be believed, or is it just the usual diplomatic phrasing? Yes, the IMF made its statement based upon reliable data & information. Considering that Thailand's debt situation and GDP growth is better than some western countries, the IMF comments should be taken in that context. The comments did include some tough advice too. A forceful nudge on some issues if you will. I like your sense of humour and definition of 'tough' and 'forceful' Link to comment Share on other sites More sharing options...
bander Posted June 18, 2013 Share Posted June 18, 2013 Anybody know what time IMF released this news? I noticed that SET index fell from 1490 to 1427 (63 points) this afternoon just after 3 o'clock. Link to comment Share on other sites More sharing options...
EvilDrSomkid Posted June 18, 2013 Share Posted June 18, 2013 (edited) Just look at Greece and see for your self what the IMF is doing,,,,,,,,,,,,, You should know what mayhem they caused in this country. I'm reading Chris Baker and Pasuk's 'Thailand's Crisis'. Very educational. The IMF completely misread the situation in 97 and pushed the wrong policies down the Dems' throats. That took about a year. After that, the Dems resisted the IMF. Then, the IMF had the nerve to declare the crisis over in 99 and state it was thanks to them. Au contraire, Mr. Camdessus. Edited June 18, 2013 by EvilDrSomkid 1 Link to comment Share on other sites More sharing options...
iancnx Posted June 18, 2013 Share Posted June 18, 2013 Anybody know what time IMF released this news? I noticed that SET index fell from 1490 to 1427 (63 points) this afternoon just after 3 o'clock. IMF website published on 17th. IMF Concludes 2013 Article IV Mission to Thailand Press Release No. 13/212 June 17, 2013 http://www.imf.org/external/np/sec/pr/2013/pr13212.htm 1 Link to comment Share on other sites More sharing options...
wolf5370 Posted June 18, 2013 Share Posted June 18, 2013 (edited) "He said the IMF mission welcomed the authorities’ commitment to fiscal discipline, including their objectives of keeping the public debt ratio under 50 per cent of GDP and balancing the central government budget by 2017." Fiscal discipline???? Actually, Public Debt at 50% or less of GDP is fiscally very good. Compared to the US at circa 74% and Japan at circa 214%, and NZ at circa 45% (2010 figures). No matter how we may view Thai politics and economics, it is a strong emerging economy with fairly sound fundamental ratios. 2012 estimates (from IMF and CIA): http://en.wikipedia.org/wiki/List_of_countries_by_public_debt PD = % Public Debt against GDP GD=% Government Debt against GDP UK: PD 88.7 GD 82.785 USA: PD 73.6 GD 107.859 Jpn: PD 214.3 GD 134.325 Ger: PD 81.7 GD 57.224 Aus: PD 26.9 GD 11.641 Chi: PD 31.7 GD 21.301 Tha: PD 43.3 GD 45.868 Edited June 18, 2013 by wolf5370 1 Link to comment Share on other sites More sharing options...
kevinsan Posted June 18, 2013 Share Posted June 18, 2013 The IMF must have access to the real numbers. Wherever they may reside. Link to comment Share on other sites More sharing options...
givenall Posted June 18, 2013 Share Posted June 18, 2013 IMF is not my father.. As the government says no worries, everything is fine. let the good time roll Link to comment Share on other sites More sharing options...
Thai at Heart Posted June 18, 2013 Share Posted June 18, 2013 Anybody know what time IMF released this news? I noticed that SET index fell from 1490 to 1427 (63 points) this afternoon just after 3 o'clock. When the genuine farang newbies piss of and the set is 1200 that is the the time to buy 1 Link to comment Share on other sites More sharing options...
bigbamboo Posted June 18, 2013 Share Posted June 18, 2013 Let's cut to the chase. Would the IMF lend Thailand that 2.2 trillion baht it wants or not? 1 Link to comment Share on other sites More sharing options...
davejones Posted June 18, 2013 Share Posted June 18, 2013 The article says the exact opposite of the headline. IMF seems very pleased with Thai economy. Link to comment Share on other sites More sharing options...
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