Thailand unexpectedly slips into mild recession in second quarter

[samran]

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.

I've come late to this debate.

Great link. Clearly, according to the governments own economic think tank and sometimes regulator "(GDP in) The Thai economy in the second quarter 2013 increased by 2.8%, compared to a rise of 5.4% in the previous quarter."

This is nowhere near a recession.

Reuters got it wrong. End of debate.

[samran]

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

When your car slows from 100km/h to 50km/h it has slowed down by 50% but you are still going forward.

When it goes from 50km/h to 40km/h, it has slowed down by another 20%, but you are still going forward.

If on the other hand you had gone into reverse for 2 quarters in a row, then perhaps you'd be in a recession. But this ain't a recession.

[RAZZELL]

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

When your car slows from 100km/h to 50km/h it has slowed down by 50% but you are still going forward.

When it goes from 50km/h to 40km/h, it has slowed down by another 20%, but you are still going forward.

If on the other hand you had gone into reverse for 2 quarters in a row, then perhaps you'd be in a recession. But this ain't a recession.

I agree with you.

BUT, not according to the USA body which defines recession - "two down consecutive quarters of GDP".

RAZZ

Edited August 20, 2013 by RAZZELL

[samran]

I'm an economist.

I wouldn't be using wikipedia or the Daily Mail for economic references.

The economy has to shrink consecutively for two sectors for it to be a recession (intellectual debates aside as to how many quarters of negative growth you have to have before you call it a 'recession').

All the Thai economy has done is grow slower than it has the previous quarter. It has done this for two quarters. The Thai economy at the end of June is bigger than it was at the start of January.

If we'd had 2 quarters of recession, the Thai economy would now be smaller than it was at the start of Jan.

Edited August 20, 2013 by samran

[wordchild]

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! alt=rolleyes.gif width=20 height=20>

RAZZ

When your car slows from 100km/h to 50km/h it has slowed down by 50% but you are still going forward.

When it goes from 50km/h to 40km/h, it has slowed down by another 20%, but you are still going forward.

If on the other hand you had gone into reverse for 2 quarters in a row, then perhaps you'd be in a recession. But this ain't a recession.

I agree with you.

BUT, not according to the USA body which defines recession - "two down consecutive quarters of GDP".

RAZZ

I think the confusion over this definition is it also needs to be clear whether you mean 2 quarters of quarter over quarter declines ie the rate of growth in the economy slowing down or 2 quarters of decline year over year ie the economy getting smaller . The classic definition of a recession would be the latter.

[aTomsLife]

I'm an economist.

I wouldn't be using wikipedia or the Daily Mail for economic references.

The economy has to shrink consecutively for two sectors for it to be a recession (intellectual debates aside as to how many quarters of negative growth you have to have before you call it a 'recession').

All the Thai economy has done is grow slower than it has the previous quarter. It has done this for two quarters. The Thai economy at the end of June is bigger than it was at the start of January.

If we'd had 2 quarters of recession, the Thai economy would now be smaller than it was at the start of Jan.

Thank you. Some of us have been making this point since yesterday. Nice to have an expert chime in.

[aTomsLife]

_{Samran, what odds do you give Thailand of actually entering a recession in the next year or so?}

Edited August 20, 2013 by aTomsLife

[bangkockney]

GDP usually is reported each quarter on a seasonally adjusted annualised basis.

Any trend makes little sense otherwise.

Therefore the Thai economy is in recession: -1.7 and -0.3 in Q1 and Q2 respectively.

[harryfrompattaya]

Unexpectedly? They could have asked me (or many other ThaiVisa posters). A population that believes what their government tells them even though there are blatant censorship rules in place. Somebody needs to tell the big people that it won't last.....these people are waking up.

I have been saying that George Soros is out to do it again

Edited August 20, 2013 by harryfrompattaya

[samran]

I'm an economist.

I wouldn't be using wikipedia or the Daily Mail for economic references.

The economy has to shrink consecutively for two sectors for it to be a recession (intellectual debates aside as to how many quarters of negative growth you have to have before you call it a 'recession').

All the Thai economy has done is grow slower than it has the previous quarter. It has done this for two quarters. The Thai economy at the end of June is bigger than it was at the start of January.

If we'd had 2 quarters of recession, the Thai economy would now be smaller than it was at the start of Jan.

Thank you. Some of us have been making this point since yesterday. Nice to have an expert chime in.

Actually, I may have to do a mea culpa here. Bangkokcockney might be right, and the economy has shrunk on a seasonally adjusted basis.

Computing...

Computing...

going back to read more.... apologies all.

[aTomsLife]

GDP usually is reported each quarter on a seasonally adjusted annualised basis.

Any trend makes little sense otherwise.

Therefore the Thai economy is in recession: -1.7 and -0.3 in Q1 and Q2 respectively.

Comparing 2013's first two quarters with the growth experienced this time last year is misleading. 2012 was an anomaly: the economy boomed as a result of rebuilding from the floods.

[samran]

okay, I'm an economist who sometimes gets it wrong..

Was looking at the downward trend thinking someone has misinterpreted slower growth for negative growth. Looking at the BOT chart, I see that seasonally adjusted, we are in are a technical recession.

Sorry about that folks.

http://www.bot.or.th/English/Statistics/Graph/Pages/Gross%20Domestic%20Product.aspx

Edited August 20, 2013 by samran

[aTomsLife]

okay, I'm an economist who sometimes gets it wrong..

Was looking at the downward trend thinking someone has misinterpreted slower growth for negative growth. Looking at the BOT chart, I see that seasonally adjusted, we are in are a technical recession.

Sorry about that folks.

http://www.bot.or.th/English/Statistics/Graph/Pages/Gross%20Domestic%20Product.aspx

Recession.png

I saw the seasonally adjusted figure yesterday, but dismissed it. I thought the adjustment was based off last year's growth numbers, which were generated from rebuilding after a near country-wide natural disaster. I figured there was no way Thailand could be expected keep up that rate of growth.

Are seasonal adjustments based on the previous year alone? Or are they made using figures from 5, 10 or 20 years?

[Totster]

Reuters should print a retraction.

Oops....

totster

[darrendsd]

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.

The same Farangs whose countries have been in recession for years you mean? What makes you think we are superior?

All countries will enter recession at some point, at the moment it seems it is Thailands turn

Why should we be consulted? Do you think the Thai government are suddenly going to ask Thai Visa members or any passing tourist for advice?

Edited August 20, 2013 by darrendsd

[aTomsLife]

Reuters should print a retraction.

Oops....

totster

Then instead of a retraction, it be nice if they clarified that it's a "technical recession". GDP still grew.

Run along now. Like I told you yesterday, the grownups are talking.

[Totster]

Their definition of recession is incorrect.

totster

[aTomsLife]

Their definition of recession is incorrect.

totster

You're a juvenile and I won't reply again to your pathetic attempts to provoke me. Their definition was incorrect, as a 'technical recession' isn't the same thing as a 'recession'.

Here, we just rely on the view that two consecutive quarters of negative growth constitutes a "technical" recession. There is actually nothing particularly "technical" about it at all. A better adjective would be "simplistic" because it only requires you to examine two quarters and only one piece of economic data.

The problem with regards to whether or not a state is in recession is that the ABS doesn't measure gross state production (the "GDP" of each state) quarterly; it only does it annually, and even then it doesn't account for seasonal variance.

http://www.abc.net.au/unleashed/4567244.html

[Totster]

Put me down in the confused camp.

Ok, no problem !

totster

[wordchild]

okay, I'm an economist who sometimes gets it wrong..

Was looking at the downward trend thinking someone has misinterpreted slower growth for negative growth. Looking at the BOT chart, I see that seasonally adjusted, we are in are a technical recession.

Sorry about that folks.

http://www.bot.or.th/English/Statistics/Graph/Pages/Gross%20Domestic%20Product.aspx

Recession.png

but the seasonally adjusted figure (according to their release) is on a quarter on quarter basis , ie 2nd on 1st quarter, that's how I read it anyway.

[RAZZELL]

I'm an economist.

I wouldn't be using wikipedia or the Daily Mail for economic references.

The economy has to shrink consecutively for two sectors for it to be a recession (intellectual debates aside as to how many quarters of negative growth you have to have before you call it a 'recession').

All the Thai economy has done is grow slower than it has the previous quarter. It has done this for two quarters. The Thai economy at the end of June is bigger than it was at the start of January.

If we'd had 2 quarters of recession, the Thai economy would now be smaller than it was at the start of Jan.

Studied Economics to undergraduate level.

Just saying there are different "interpretations". Bit like a US billion or Trillion and a UK one

Although I think they're maybe the same now

RAZZ

[RAZZELL]

okay, I'm an economist who sometimes gets it wrong..

Was looking at the downward trend thinking someone has misinterpreted slower growth for negative growth. Looking at the BOT chart, I see that seasonally adjusted, we are in are a technical recession.

Sorry about that folks.

http://www.bot.or.th/English/Statistics/Graph/Pages/Gross%20Domestic%20Product.aspx

Recession.png

Didn't I say that?

Anyway, the baht seems to be falling against the £ so praise be - as we maybe about to spend some hard earned!

RAZZ

Edited August 20, 2013 by RAZZELL

[cvs04]

It isn't a recession as stated; it's merely a slowing of growth. That said there is a definite credit bubble that will burst however unlike the Western countries the Thai Gov have made a bit of an attempt to tighten up lending standards a little bit which will certainly help to prolong the bubble somewhat I'm sure.

The other advantage is that there are talks of more industry coming to Thailand with the creation of 9 new industrial estates and rumours a large Japanese car manufacturer will relocate their steelworks to Thailand due to poor quality production in China. This would be nice to see and will no doubt help boost the economy.

[belg]

who would have tought that ?

300+ billion in rice berg scam

rotten chemical rice

exports doing down

but hey, as long as those dumb farangs are comming and spending money and building houses for bargirls, the economy is just A-OK

[francescoassisi]

Which is worse? To be an "economist" or claim to be one, a choice that thank the lord I'll never feel the compunction to make.

[francescoassisi]

who would have tought that ?

300+ billion in rice berg scam

rotten chemical rice

exports doing down

but hey, as long as those dumb farangs are comming and spending money and building houses for bargirls, the economy is just A-OK

This is what we want! A view of the Thai economy based on half understood media gossip and an expat's ego-centric overinflated assessment or rather perception of their own effect on the national finances. Edited August 23, 2013 by francescoassisi

[midas]

I have a hard tailed mountain bike that I use for exercise. Two days ago I had some minor repairs carried out and I casually asked the Thai owner of the shop where I take it how was business.

He said it was terrible. As an indicator he said he is used to selling about 20 new bicycles per month wheras over the last few months he has averaged 2 bicycles PER MONTH.

[samran]

Which is worse? To be an "economist" or claim to be one, a choice that thank the lord I'll never feel the compunction to make.

at least I'm not a lawyer...