Thailand unexpectedly slips into mild recession in second quarter

[aTomsLife]

A poster just linked to this article in the General Forum: http://www.bbc.co.uk/news/business-23751846

BBC is reporting a recession, too. Only they've clearly written there was a contraction in GDP: "The 0.3% contraction in gross domestic product between April and June followed a previous fall of 1.7% during the first quarter of 2013."

Edit: Put me down in the confused camp. While I stand by my definition of a recession, I am unsure the state of Thailand's economy with regard to it. Anyone have a reliable source for the actual numbers?

Edited August 19, 2013 by aTomsLife

[wordchild]

A poster just linked to this article in the General Forum: http://www.bbc.co.uk/news/business-23751846

BBC is reporting a recession, too. Only they've clearly written there was a contraction in GDP: "The 0.3% contraction in gross domestic product between April and June followed a previous fall of 1.7% during the first quarter of 2013."

lazy journalism, they are just taking the line from Reuters. The paper we cannot quote from has a more accurate and less misleading piece on the figures.

[aTomsLife]

A poster just linked to this article in the General Forum: http://www.bbc.co.uk/news/business-23751846

BBC is reporting a recession, too. Only they've clearly written there was a contraction in GDP: "The 0.3% contraction in gross domestic product between April and June followed a previous fall of 1.7% during the first quarter of 2013."

lazy journalism, they are just taking the line from Reuters. The paper we cannot quote from has a more accurate and less misleading piece on the figures.

Thanks, the second article got me wondering. BBC even went so far as to call it "A Tailspin Recession", as opposed to Reuters less sensational use of the phrase "Mild Recession".

Edited August 19, 2013 by aTomsLife

[brommers]

Ha ha ha. Whether it is a recession or not it shows that the country is experiencing a deterioration in economic performance. And yet I have just watched a television commercial on Bloomberg promoting " Thailand. Rising ". Perhaps the government is a tad confused. Or am I being cynical?

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

[homeownership]

The BBC says Thailand is in recession. The then you can believe they are recession, they would not put this on their website without checking their facts and sources, they have been slapped on the wrist far too much for this lately.

My thinking it his, the Thai Government has been subsiding the economy and now they have withdrawn that support, the "real" figures are showing through. I suspect the Thai economy has been in trouble for at least a year, but this has been masked by government stimulus.

The currencies markets have shown the baht slip to over 48.00 baht to the £

[wordchild]

Ha ha ha. Whether it is a recession or not it shows that the country is experiencing a deterioration in economic performance. And yet I have just watched a television commercial on Bloomberg promoting " Thailand. Rising ". Perhaps the government is a tad confused. Or am I being cynical?

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

my comments above were really aimed at the reuters piece and the journalists misuse (IMO) of the rather emotive term "recession". I would however agree that it is right to be cautious . The current quarter (3d) and also the 4th quarter will be important as , in theory, there should be a decent bounce back in exports as the worst of the strong baht effect has now washed through. if we don't see that, there would be real cause for concern and then a recession could be on the cards.

Edited August 19, 2013 by wordchild

[aTomsLife]

Ha ha ha. Whether it is a recession or not it shows that the country is experiencing a deterioration in economic performance. And yet I have just watched a television commercial on Bloomberg promoting " Thailand. Rising ". Perhaps the government is a tad confused. Or am I being cynical?

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

Not cynical at all.

My sense of justice and accountability leaves me, if not feeling happy, at least feeling vindicated.

Between the credit/housing/car bubble, free money giveaway schemes, and generally taking for granted the golden goose that is tourism (as well as long term expats), Thailand deserves a recession. I wish I could say it would cure them of their hubris, but it won't...

[dcutman]

Ooooooh poop.

That is not good

I was thinking the same thing about the growth forecasts. This is the third downgrade this year.

[gopis108]

Little wonder--I have never seen such an more inefficient workforce in all of my world travels, which have been considerable-and that includes Africa.They take nothing seriously-every thing has to plug along at a liesurely pace and they cannot be hurried.It appears that all Thais are above criticism as well and farangs are always wrong and only here to be exploited,never consulted..The Thai Govt. could do much better to allow the Farangs to be free to demonstrate actually how to do business and get an economy moving at a much faster pace without all of the "envelopes"and other silly controls that seriously stall developement,the silly practices that were part of the some distant culture and are now completely incompatible with modern developement.

[puukao]

This is great, since I am in the middle of a bidding war for a studio apartment in soi 17 for 40 million baht. the bidding started at 800k baht, but this place seems to be on fire. oh, wait, phone call......price down to 39.50 million. cancel!!! this recession is scary!!!

[dcutman]

A poster just linked to this article in the General Forum: http://www.bbc.co.uk/news/business-23751846

BBC is reporting a recession, too. Only they've clearly written there was a contraction in GDP: "The 0.3% contraction in gross domestic product between April and June followed a previous fall of 1.7% during the first quarter of 2013."

Edit: Put me down in the confused camp. While I stand by my definition of a recession, I am unsure the state of Thailand's economy with regard to it. Anyone have a reliable source for the actual numbers?

The numbers are reported from the Thai government, National Economic and Social Development Board (NESDB) and or the BOT to be exact. The news reports that you are reading are based on these numbers. Its is the only numbers you will find.

[Totster]

Wait for it..... Someone will say that article is wrong in some way....

totster

You'd have to be a complete moron to not question and take every article for 100% truth.

Indeed, you are absolutely right. You would also have to be a complete moron to argue about the finer points of the wording all afternoon.

totster

[metisdead]

A post containing a derogatory slur toward Thais has been removed, review the following before posting:

7) Not to post slurs or degrading comments directed towards any group on the basis of race, nationality, religion, gender or sexual orientation.

8) Not to post extremely negative views of Thailand or derogatory comments directed towards all Thais.

[mommysboy]

It is not my understanding of what recession means and would have said growth slowed. Depends how you look at it I suppose but the definition here is a bit misleading imho.

[aTomsLife]

Wait for it..... Someone will say that article is wrong in some way....

totster

You'd have to be a complete moron to not question and take every article for 100% truth.

Indeed, you are absolutely right. You would also have to be a complete moron to argue about the finer points of the wording all afternoon.

totster

Two posts, two fails, totster.

No one argued the finer points. There was a general misunderstanding about the meaning of the word 'recession'. Kind of an important point in a topic concerning whether or not Thailand has entered -- drum roll, please -- a recession.

But then, some take issue to facts getting in the way of their baseless insults and rants.

[metisdead]

Off topic posts have been removed, this is about a recession in Thailand, not the USA.

[jamhar]

The revised numbers are the important ones.

this first look is for the planners.

On the plus side,

this recession could push the Baht in the right direction for the members of TV

[wordchild]

this is the press release from the NESDB (which Reuters was reporting on) http://eng.nesdb.go.th/Portals/0/eco_datas/account/qgdp/data2_13/BookQGDP2-2013.pdf Aside from the headline data there is some interesting stuff in here for those with the time or inclination to wade through the whole document.

Edited August 19, 2013 by wordchild

[NeverSure]

I can't get a handle on Thailand. First, the numbers are from the government. What about the rice scheme? Farming is 8% of GDP and as far as I can tell, there have been no rice sales. Additionally, Thailand carries the mountains of rice on the books at what it paid for the rice, not what it's really worth.

Then what about the nearly 1 trillion baht borrowed from the government owned Ag Bank to pay for that rice, at inflated prices? The government and the bank are showing all of the purchased rice at the value they paid for it, not what it's really worth.

What happens to that 8% of GDP if you do your books correctly? What does Thailand do with that debt?

Next, is there a housing/condo bubble? I say there is but others may disagree. What if construction slows down, further affecting GDP? If there is a condo bubble, Thai banks are up to their eyeballs in loans for a lot of those. Could values begin to drop?

What happens when the new car scheme stops and slows production of new vehicles? How long can the government afford those "rebates?"

What about the increasing deficits and borrowing by the government, much of which appears to disappear into thin air? What happened to the flood control money?

So what are the real numbers? Where can I look at some real books?

Edited August 19, 2013 by NeverSure

[francescoassisi]

Looks to me as if Thailand is paying the price for it's nation-centric approach to government, the unrelenting and ubiquitous corruption and nepotism, and the resulting all round lack of creativity both in government and business.

The growth rate has always been lower than it should be due to these factors, and now the "dark side" of Thailand's management is getting the upper hand.

http://m.bbc.co.uk/news/business-23751846

Maybe "unexpected" now, but in the long term without an attitude sea-change, inevitable

[Thait Spot]

wordchild is correct. The (Thai) authors of the article have defined slower growth as a recession. Their definition of recession is incorrect.

Reuters said "Thailand's economy shrank"

"The 0.3 percent contraction in Southeast Asia's second-largest economy"

Is this not clear enough?

except that the economy did not shrink it just grew less!

All the press this morning seems to support the Reuters statements

[Thait Spot]

wordchild is correct. The (Thai) authors of the article have defined slower growth as a recession. Their definition of recession is incorrect.

Reuters said "Thailand's economy shrank"

"The 0.3 percent contraction in Southeast Asia's second-largest economy"

Is this not clear enough?

Per investopedia: "The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP)" http://www.investopedia.com/terms/r/recession.asp

Thailand still experienced growth, just not as much as forecast. Is that clear enough for you?

The Thai economy CONTRACTED 0.3% - that's clear enough for me.

[stoli]

wordchild is correct. The (Thai) authors of the article have defined slower growth as a recession. Their definition of recession is incorrect.

Reuters said "Thailand's economy shrank"

"The 0.3 percent contraction in Southeast Asia's second-largest economy"

Is this not clear enough?

Per investopedia: "The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP)" http://www.investopedia.com/terms/r/recession.asp

Thailand still experienced growth, just not as much as forecast. Is that clear enough for you?

The article is confusing. It says the following; in the first and second quarters Thai GDP was less than GDP in the quarters before. So Thai GDP is shrinking. However, one shouldn't compare quarterly results against previous quarter, as some economies (certainly Thai one) generally fluctuate during the year. So one should compare quarter GDP with the same quarter a year earlier.

Europe's general accepted definition of recession is; "Two consecutive quarters of negative GDP growth compared with SAME quarter previous year". Considering this Thailand is not in a recession, as quarterly results are higher than same quarters last year.

If you want to compare each quarter with the same quarter as last year, it would make it very difficult and misleading to come up with 2 consecutive quarters.

[aTomsLife]

All the press this morning seems to support the Reuters statements

Right, because the press never reports on anything without first getting all the facts.

The Thai economy CONTRACTED 0.3% - that's clear enough for me.

http://eng.nesdb.go.th/Portals/0/eco_datas/account/qgdp/data2_13/BookQGDP2-2013.pdf

Above is the actual report. GDP grew by 2.8%.

[aTomsLife]

I think we can all agree that Thailand is trending toward recession. Beyond the technicals, economies are largely influenced by emotion. And consumer sentiment is decreasing, and that will likely continue as more and more people default on their loans and have their cars and homes repossessed.

Way too much free money has been given out, the bubbles are apparent -- at least to me -- and Thailand may experience a recession similar in scale to what occurred in the west.

[i claudius]

The problem here is the same we had in the west ,living on credit ,20 years ago when you walked down the stree here in Pattaya people sat on the pavement watching tv in shop windows ,those same people and their kids now have tv in their homes ,cars outside and their kids have the latest i phone ,yet they still earn very little ,it cannot go on .

[SantiSuk]

Reuters published an article with the words:

"A recession is typically defined as two consecutive quarters of contraction in gross domestic product (GDP)".

Just goes to show that if you publish shortcut unqualified information on an authoritative website then idiot reporters at a local level around the world are going to come up with stupid extrapolations.

[54321]

as have the BBC

http://www.bbc.co.uk/news/business-23751846

wordchild is correct. The (Thai) authors of the article have defined slower growth as a recession. Their definition of recession is incorrect.

[Thait Spot]

All the press this morning seems to support the Reuters statements

Right, because the press never reports on anything without first getting all the facts.

The Thai economy CONTRACTED 0.3% - that's clear enough for me.

http://eng.nesdb.go.th/Portals/0/eco_datas/account/qgdp/data2_13/BookQGDP2-2013.pdf

Above is the actual report. GDP grew by 2.8%.

I believe Reuters and the BBC

This is from Bloomberg "Thailand’s SET Index (SET) retreated 2.8 percent, heading for its lowest close since December. India’s S&P BSE Sensex lost 0.3 percent, extending a drop from its July 23 high to 10 percent. Indonesia’s record current-account deficit and Thailand’s recession spurred concern that capital outflows from emerging markets will accelerate."

The markets clearly believe it too

[RAZZELL]

All the press this morning seems to support the Reuters statements

Right, because the press never reports on anything without first getting all the facts.

The Thai economy CONTRACTED 0.3% - that's clear enough for me.

http://eng.nesdb.go.th/Portals/0/eco_datas/account/qgdp/data2_13/BookQGDP2-2013.pdf

Above is the actual report. GDP grew by 2.8%.

The article is not very clear.

If you use the "two negative quarters" definition Thailand would not "appear" to be in recession.

In the UK the Office for National Statistics defines it as:

"The standard definition of a recession is two consecutive quarters of negative GDP growth"

Eg: for the uk here: http://www.dailymail.co.uk/news/article-2349469/The-double-dip-recession-happened-Revised-figures-economy-performed-better-thought.html

If you use the "American" definition listed here:

http://en.wikipedia.org/wiki/Recession

"In a 1975 New York Times article, economic statistician Julius Shiskin suggested several rules of thumb for defining a recession, one of which was "two down consecutive quarters of GDP".^[3] In time, the other rules of thumb were forgotten. Some economists prefer a definition of a 1.5% rise in unemployment within 12 months."

The American National Bureau of Economic Research (NBER) also defines "recession" this way as "falling" GDP.

It "seems" there was growth but was not as big forecast. However, looking at the graph in the article below:

http://eng.nesdb.go.th/Portals/0/eco_datas/account/qgdp/data2_13/BookQGDP2-2013.pdf

It seems there were two quarters with "less than zero GDP growth".

So - everything is not as it seems! I'm none the wiser!

RAZZ