Thai economy: Officials downplay recession fears

[webfact]

ECONOMY
Officials downplay recession fears
Business Desk
The Nation

BANGKOK: -- Thailand's financial authorities yesterday sought to quash public fears over the economy entering recession, saying that prospects in the latter half of the year are positive and quarterly performance should be better than in the previous two periods.

The economy showed consecutive quarter-on-quarter contractions in the first half of the year, which is technically deemed to be a recession.

Weak economic data, aside from signs of political instability and fears over the pull-back of quantitative easing in the US, encouraged foreign investors to dump Thai shares yesterday.

The Stock Exchange of Thailand Index lost another 1.98 per cent to close at 1,370.86 points, after a 3.27-per-cent drop on Monday. Foreign net-sells yesterday were as high as Bt11.4 billion, taking the year-to-date amount to nearly Bt101 billion.

The baht also weakened sharply against the US dollar.

While Finance Minister Kittiratt Na-Ranong insisted that the economy had not yet entered recession, Bank of Thailand Governor Prasarn Trairatvorakul sought to soothe the markets, saying he expected gross domestic product to expand quarter on quarter in the July to September period.

Prasarn said he was also optimistic that the economy would expand in the second half, as a pick-up in the global economy should boost export demand, while the government's stimulus measures should boost domestic spending.

Ekniti Nitithanprapas, deputy director-general of the Fiscal Policy Office, said the 2.8-per-cent year-on-year growth rate in the second quarter should be the lowest quarterly figure for the economy this year.

He foresees an improvement in the latter half, pending recoveries in the US, China and Indochina. GDP unexpectedly shrank 0.3 per cent in the three months through June from the previous quarter, when it contracted by a revised 1.7 per cent.

Economic houses have revised down their economic-growth forecasts following the National Economic and Social Development Board's downward adjustment on Monday. Kittiratt told the Cabinet yesterday there was still time to boost the economy.

He will soon have a brainstorming session on government spending projects with the Comptroller General's Office and the Budget Bureau. Meanwhile, the 2014 budget bill should win parliamentary approval next week.

The baht opened weaker yesterday at 31.53 per US dollar, and fell further to 31.66 - the lowest level since June 20.


-- The Nation 2013-08-21

[Ricardo]

From steady growth two years ago, to a technical recession now, that's really quite some performance, when the rest of the world is stable or moving ahead slightly.

Yay for Thaksinomics & Red Economic-Management !

[Thai at Heart]

Well I wouldn't expect them to big it up.

[jaidam]

Thank God Kittirat has given his reassurances. Somebody we can all trust.

[MaxLee]

.... While Finance Minister Kittiratt Na-Ranong insisted that the economy had not yet entered recession, Bank of Thailand Governor Prasarn Trairatvorakul sought to soothe the markets, saying he expected gross domestic product to expand quarter on quarter in the July to September period.

Prasarn said he was also optimistic that the economy would expand in the second half, as a pick-up in the global economy should boost export demand, while the government's stimulus measures should boost domestic spending.

Ekniti Nitithanprapas, deputy director-general of the Fiscal Policy Office, said the 2.8-per-cent year-on-year growth rate in the second quarter should be the lowest quarterly figure for the economy this year.

He foresees an improvement in the latter half, pending recoveries in the US, China and Indochina. GDP unexpectedly shrank 0.3 per cent in the three months through June from the previous quarter, when it contracted by a revised 1.7 per cent. ....

Thailand's financial team, the trio of white liars are at it again "We see improvement from out of the blue, because we believe in Buddha, and Karma, andif anything goes wrong, blame the nasty nasty US and all other Falang nations

Edited August 21, 2013 by MaxLee

[Chittychangchang]

It's not long before the farang currency goes further and normal service is resumed.

Roll on the day's of the strong £/$/ euro and the weak baht.

It's been a long time coming.

CCC

[notmyself]

Took out every Baht I had in Thailand late June 2013. I'll be back soon and not bringing any back with me.

[LuckyLew]

You are going a great job Thaksin ... I mean Yingluck

You have all the best people in the right positions

What a champion for Thailand

[Ricardo]

Wonder what Moody's will make of this, and what they will then actually do, might that explain the sudden weakness of the Baht ?

[NongKhaiKid]

All the indices and market indicators show the country has a problem, local institutions such as the BoT and Chamber of Commerce have issued warnings BUT they are all wrong according to Kittiratt and he is the only one who really knows what's happening and THERE IS NO PROBLEM, that's official

[Neilly]

He will soon have a brainstorming session on government spending projects with the Comptroller General's Office and the Budget Bureau.

We all know where that will lead

[Pimay1]

This bunch of weasels is sure intertaining if nothing else. They can only vow, deny or downplay.

[slapout]

This government seems to have taken a position of downplaying what has transpired, but then they vow that the future will be brighter, with virtually no plan to bring about that happening..

There have been 5 cabinet resuffles in less than 2 years, with the Finance Minister, Foreign Minister and the PM being seemly bullet proof. Yet these are the ones, along with a few other favorites, who are doing the micro mangament for the man in Dubia.

To combat a plague you have to isolate the source (that is apparent), and destroy/neutralize same, thus saving the general population from its deadly effects.

[mayday49]

I am just plain Mystified ......

[Baerboxer]

All the indices and market indicators show the country has a problem, local institutions such as the BoT and Chamber of Commerce have issued warnings BUT they are all wrong according to Kittiratt and he is the only one who really knows what's happening and THERE IS NO PROBLEM, that's official

Obviously the FM has his own definition of what technically constitutes a recession. His may be different to the generally accepted definition used by almost all other governments, economic and financial institutions but that's his Thainess showing through.

He's not adverse to the odd white lie, as long as its in the public interest of course. And, he has demonstrated his grip and solid understanding of financial management and controls by his accurate and timely detailed information on the rice pledging fiasco.

Clearly, the right FM for PTP.

[dcutman]

Over the last five or six years Thailands and most of Asia's economies have been built on "Hot Money". I seems Thailands financial wizards think they in in their own little world, totally immune from the global market swings. Indonesia and Malaysia are shittin their pants right now, as they should be.

[khunken]

The hot money that was invested in Thai bonds & stocks is now being withdrawn as the Fed is about to reduce it's money printing. Not just a Thai problem but a regional one as well.

Now the real Thai economic performance is revealed & it's not very good. Spending vast sums of money on c8% of the economy is not good fiscal discipline. But that is what happens when one knowall determines every little bit of government policy.

[mrfill]

All the indices and market indicators show the country has a problem, local institutions such as the BoT and Chamber of Commerce have issued warnings BUT they are all wrong according to Kittiratt and he is the only one who really knows what's happening and THERE IS NO PROBLEM, that's official

Obviously the FM has his own definition of what technically constitutes a recession. His may be different to the generally accepted definition used by almost all other governments, economic and financial institutions but that's his Thainess showing through.

He's not adverse to the odd white lie, as long as its in the public interest of course. And, he has demonstrated his grip and solid understanding of financial management and controls by his accurate and timely detailed information on the rice pledging fiasco.

Clearly, the right FM for PTP.

The clue is here .. "the 2.8-per-cent year-on-year growth rate in the second quarter should be the lowest quarterly figure for the economy this year."

Because the growth rate has declined in the last 2 quarters, the 'experts' are saying it is a recession.

However, the 'generally accepted definition used by almost all other governments, economic and financial institutions' is for a contraction in the GDP over 2 quarters, not a reduction in growth rate.

It may seem odd, but the FM is actually correct and agrees with the economists.

The US, UK and Europe would dearly love a 'recession' that meant only 2.8% growth in a quarter.

[khunken]

All the indices and market indicators show the country has a problem, local institutions such as the BoT and Chamber of Commerce have issued warnings BUT they are all wrong according to Kittiratt and he is the only one who really knows what's happening and THERE IS NO PROBLEM, that's official

Obviously the FM has his own definition of what technically constitutes a recession. His may be different to the generally accepted definition used by almost all other governments, economic and financial institutions but that's his Thainess showing through.

He's not adverse to the odd white lie, as long as its in the public interest of course. And, he has demonstrated his grip and solid understanding of financial management and controls by his accurate and timely detailed information on the rice pledging fiasco.

Clearly, the right FM for PTP.

The clue is here .. "the 2.8-per-cent year-on-year growth rate in the second quarter should be the lowest quarterly figure for the economy this year."

Because the growth rate has declined in the last 2 quarters, the 'experts' are saying it is a recession.

However, the 'generally accepted definition used by almost all other governments, economic and financial institutions' is for a contraction in the GDP over 2 quarters, not a reduction in growth rate.

It may seem odd, but the FM is actually correct and agrees with the economists.

The US, UK and Europe would dearly love a 'recession' that meant only 2.8% growth in a quarter.

Well done. You have copied Kittirat in twisting the figures to make them look good.

The usual definition of (a technical) recession is 2 quarters of declining growth. Nothing to do with the Y-on-Y figures. The decline (or increase) is measured against the previous quarter. The second quarter had a -0.7% 'growth'. Not a huge recession but one nevertheless.

[Noistar]

The game to be in, for people on the ground, is selling Buddhist offerings.

The downturn is causing local shopkeepers to visit the temple to try to turn their fortunes around.

Saying that, I doubt anybody links their problems with any actions/inactions of the government. KT, the milky bar kid, seems to retain his shine whatever.

[siampolee]

He will soon have a brainstorming session on government spending projects with the Comptroller General's Office and the Budget Bureau. Meanwhile, the 2014 budget bill should win parliamentary approval next week.

Does this signal that the puppet master is going to have his pocket money cut by any chance?

[mrfill]

All the indices and market indicators show the country has a problem, local institutions such as the BoT and Chamber of Commerce have issued warnings BUT they are all wrong according to Kittiratt and he is the only one who really knows what's happening and THERE IS NO PROBLEM, that's official

Obviously the FM has his own definition of what technically constitutes a recession. His may be different to the generally accepted definition used by almost all other governments, economic and financial institutions but that's his Thainess showing through.

He's not adverse to the odd white lie, as long as its in the public interest of course. And, he has demonstrated his grip and solid understanding of financial management and controls by his accurate and timely detailed information on the rice pledging fiasco.

Clearly, the right FM for PTP.

The clue is here .. "the 2.8-per-cent year-on-year growth rate in the second quarter should be the lowest quarterly figure for the economy this year."

Because the growth rate has declined in the last 2 quarters, the 'experts' are saying it is a recession.

However, the 'generally accepted definition used by almost all other governments, economic and financial institutions' is for a contraction in the GDP over 2 quarters, not a reduction in growth rate.

It may seem odd, but the FM is actually correct and agrees with the economists.

The US, UK and Europe would dearly love a 'recession' that meant only 2.8% growth in a quarter.

Well done. You have copied Kittirat in twisting the figures to make them look good.

The usual definition of (a technical) recession is 2 quarters of declining growth. Nothing to do with the Y-on-Y figures. The decline (or increase) is measured against the previous quarter. The second quarter had a -0.7% 'growth'. Not a huge recession but one nevertheless.

Well done, you have fallen into the trap of not understanding the proper definition of a recession.

Investopedia puts it nicely..

Definition of 'Recession'

A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP); although the National Bureau of Economic Research (NBER) does not necessarily need to see this occur to call a recession.

So just because the NBER or anyone else calls a recession, it is not because it actually is a recession but because they want to.

This reduction in the growth rate is not a recession proper and would not be called a recession by reputable economists. Only by those wishing to make a great drama out of a bit of an economic slow-down.

[rubl]

6%, 5.5%, 4.5-5.5%, more than 4.5%, to now possible 3.8 - 4.2% GDP growth over 2013 ? And four more months to go.

Surely those dasterdly farang again who through forcing their economies into recession cause problems to a fair country like Thailand.

BTW cheap rice anyone?

[ozyjon]

Took out every Baht I had in Thailand late June 2013. I'll be back soon and not bringing any back with me.

It's an interesting statement,, could you elaborate as i have a lot of money in my Thai account and i will just use that money to live when i get there,, if i take the money out the exchange will be less and i will loose money so i think i will just leave it there, what do you think.

[Baerboxer]

Well done, you have fallen into the trap of not understanding the proper definition of a recession.

Investopedia puts it nicely..

Definition of 'Recession'

A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP); although the National Bureau of Economic Research (NBER) does not necessarily need to see this occur to call a recession.

So just because the NBER or anyone else calls a recession, it is not because it actually is a recession but because they want to.

This reduction in the growth rate is not a recession proper and would not be called a recession by reputable economists. Only by those wishing to make a great drama out of a bit of an economic slow-down.

"GDP unexpectedly shrank 0.3 per cent in the three months through June from the previous quarter, when it contracted by a revised 1.7 per cent."

Another clue for you. Let's see 2 consecutive quarters of negative economic growth ................ etc as you typed in bold.

As usual, a myriad of different figures. You can believe the FM if you chose. Or indeed put your own interpretation of what you deem a recession. But, do try to pay attention to the detail before attempting to lecture others who are equally if not more capable than you on understanding economics and judging whose figures to believe.

[Noistar]

Isn't it usual for 1st world leaders to express an opinion on such matters in their countries?

It seems like the government is so dis-jointed when individual ministers/officials make statements, with no apparent government cohesiveness.

Mind you, the PM can just say she left people with the power to run their own ministries.

"Nothing to do with me" smile, smile.

[webfact]

Thailand Economy Turns Sour
Written by Our Correspondent

GDP contracts, stock and currency markets tumble

BANGKOK: -- Thailand this week delivered truly shocking GDP and current account numbers for its second quarter. Stock and currency markets tumbled as the economy contracted 0.3 percent in the second quarter over the first which also saw a contraction - though GDP is still 2 percent above the level a year ago. Worse was a current account deficit of US$5.1 billion, a dramatic turnaround for a nation which has enjoyed surpluses every year since the Asian crisis of 1998-1999.

Were these numbers just statistical freaks, so that the second half of the year will see Thailand back in the black, ending 2013 with GDP growth at 4 percent - the Asian Development Bank's lowered forecast - and the current account in balance? Or has a corner really been turned in Thai fortunes which will put growth, the current account and the government's budget under pressure for a sustained period?

Recent falls in global emerging market stocks and currencies have been largely attributed to fears of tighter money as US "quantitative easing" is "tapered". But data from Thailand (and Indonesia and India) suggest that there are deeper problems than simply the end of easy money. A more fundamental problem is declining current account balances at a time when debt costs are rising.

The answer to whether Thailand has just suffered a temporary blip will not be known for several months at least which is bad news for Prime Minister Yingluck Shinawatra. Her government faces declining popularity but wants to push through an amnesty for political activists of all colors but which is widely seen as a wedge to enable the return of her brother, Thaksin. The decline in Yingluck's fortunes is more closely linked to economic and other issues rather than the amnesty bill. So poor economic numbers make it all the more difficult to push ahead with programs intended to bolster the government's popularity.

Full story: http://www.asiasentinel.com/index.php?option=com_content&task=view&id=5653&Itemid=437

-- ASia Sentinel 2013-08-22

[Mosha]

Look on the bright side. A falling baht makes the rotten rice cheaper to export.

[TheGhostWithin]

The article above uses poorly written English (e.g. "a dramatic turnaround for a nation", which should actually read "a dramatic u-turn for a nation", in combination with inaccurate factual elements e.g. ("wants to push through an amnesty for political activists of all colors") to paint a rosy picture on a terrible situation not matched by any nation in Asia at this point on time. No other Asian country as I am aware of has experienced a deficit this quarter.

This will be compounded as SE Asia experiences on-flows of the slow down seen in China - Malaysia yesterday announced an unexpected reduction in GDP expectations for the 3rd quarter which has some now wondering if the slowdown will spread to other mid-market countries such as Thailand and the Philippines.

You can call it what you want, but Thailand is not a developing nation - just a nation with huge disparities between the richest and the poorest.. some of the richest are richer than anyone in my country, New Zealand. Unless you consider the definition of "developing nation" as this idea of allowing the minority to control the majority through unimaginable wealth and corruption..

Edited August 21, 2013 by TheGhostWithin

[Noistar]

The article above uses poorly written English (e.g. "a dramatic turnaround for a nation", which should actually read "a dramatic u-turn for a nation", in combination with inaccurate factual elements e.g. ("wants to push through an amnesty for political activists of all colors") to paint a rosy picture on a terrible situation not matched by any nation in Asia at this point on time. No other Asian country as I am aware of has experienced a deficit this quarter.

This will be compounded as SE Asia experiences on-flows of the slow down seen in China - Malaysia yesterday announced an unexpected reduction in GDP expectations for the 3rd quarter which has some now wondering if the slowdown will spread to other mid-market countries such as Thailand and the Philippines.

You can call it what you want, but Thailand is not a developing nation - just a nation with huge disparities between the richest and the poorest.. some of the richest are richer than anyone in my country, New Zealand. Unless you consider the definition of "developing nation" as this idea of allowing the minority to control the majority through unimaginable wealth and corruption..

And the chief culprit isn't even in the country