Thailand’s Economy Remains Healthy with No Sign of Recession

[Lite Beer]

Thailand’s Economy Remains Healthy with No Sign of Recession

BANGKOK: -- Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said that the Thai economy remains healthy and that there is no sign of a recession.

In the weekly program “Yingluck Government Meets the People” on 24 August 2013, Mr. Kittiratt said that although economic growth in the second quarter of 2013 was lower than in the first quarter, Thailand still has a good chance of better economic performance in the remaining quarters of the year.

Referring to a BBC report that Thailand had fallen into recession, he explained that the report might compare economic growth figures between the first and second quarters of 2013, or between the last quarter of 2012 and the first quarter of 2013. In his view, economic figures this year in comparison with the same period of the previous year were more significant.

Mr. Kittiratt said that lower growth in the second quarter resulted from the disruption of the natural gas supply from Myanmar for more than one week in April, when manufacturers in Thailand had to slow down their production in order to save energy.

nother reason was that Thailand faced rapid appreciation of the baht during the period when exports were hurt. In April, the average exchange rate was 28 baht per US dollar. He said that the baht has now weakened to 31-32 per dollar, which is an appropriate level for exporters.

He said that the Thai economy is stable, with strong fundamentals, and that the unemployment rate is quite low. Thailand’s international reserves now stand at more than 170 billion dollars, which is considered high. The country’s Oil Fund is now in plus figures, at almost 10 billion baht, while public debt is at a low level.

Mr. Kittiratt pointed out that what Thailand needs now is investment in infrastructure mega-projects, which will help sustain economic growth. They will create a favorable investment atmosphere and encourage investors to expand production and build more factories. He believed that both Thai and foreign investors were confident in the Thai economy.

Meanwhile, the Secretary-General of the Office of the National Economic and Social Development Board, Mr. Arkhom Termpittayapaisith, said that, in the second quarter of 2013, tourism and increased agricultural prices contributed significantly to the Thai economy.

He said that the domestic economy is playing a more important role, when compared with exports. He believed that Thailand would depend more on the domestic economy and that investment would become a major growth driver in the third and fourth quarters of 2013.

Mr. Arkhom stated that investment in infrastructure development, especially the transport system, would help increase Thailand’s production capacity and reduce production costs for the private sector. This will also lead to more investment in the future.

Foreign Office, The Government Public Relations Department, Office of the Prime Minister

[RickeyParkany]

Huh?

Didn't I read just last week that Thailand's Economy slipped into *Recession Territory* this past quarter? is this not a *SIGN of a Recession*, being the first of the requisite 3 months running to be *Officially* in Recession? ;-} rap.

[RickeyParkany]

Wait a minutre!!! Giving a reason for a Recession is not the same as determining that Recession levels of data had not been encountered... ;-} rap.

**Mr. Kittiratt said that lower growth in the second quarter resulted from the disruption of the natural gas supply from Myanmar for more than one week in April, when manufacturers in Thailand had to slow down their production in order to save energy.**

Whaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaat?

[theblether]

Economists can't agree a definition. Some say that a slow down in growth is a recession, others particularly in the UK say a contraction of the economy in negative growth area is a recession.

The BBC should stick to the accepted British definition. A slow down in growth is exactly that, not recession. I think the Thai government would be right to request an apology from the BBC, they have a case to answer.

False assessments like this hit confidence, and confidence is the quiet killer of economies. There's still plenty of personal wealth in the UK but people are reading the newspapers and holding on to what they've got. That jokes economic activity through the chain and makes recessions worse.

It becomes a self fulfilling prophesy.

[keith101]

why would the PM be spending so much time overseas seeking investment if there was no problem at home . maybe she should go to Aus to see ford and ask them to make their falcons here and save their tax dollars .

Edited August 25, 2013 by keith101

[RickeyParkany]

Economists can't agree a definition. Some say that a slow down in growth is a recession, others particularly in the UK say a contraction of the economy in negative growth area is a recession.

No Sign of Recession

The BBC should stick to the accepted British definition. A slow down in growth is exactly that, not recession. I think the Thai government would be right to request an apology from the BBC, they have a case to answer.

**Mr. Kittiratt said that lower growth in the second quarter resulted from the disruption of the natural gas supply from Myanmar for more than one week in April, when manufacturers in Thailand had to slow down their production in order to save energy.**

...Fair enough points, theblether...but, nevertheless: a SIGN is a SIGN, no? and giving a reason for a fact does not make the fact go away, either, does it? ;-} rap.

Edited August 25, 2013 by RickeyParkany

[wordchild]

it wasn't just the BBC, it started with a Reuters news report on the 2nd quarter figures which (inaccurately) used the term recession, this was then picked up by a number of news organizations incl the BBC, Financial Times and Bloomberg. As has been discussed on another thread there are differing definitions of what constitutes a recession but , as he points out, it is the year on year figures that count. Thailand has experienced a sharp slowdown in growth which may, in the end, lead to recession, but it is not (by the the traditional definition) in one right now.

[theblether]

Economists can't agree a definition. Some say that a slow down in growth is a recession, others particularly in the UK say a contraction of the economy in negative growth area is a recession.

No Sign of Recession

The BBC should stick to the accepted British definition. A slow down in growth is exactly that, not recession. I think the Thai government would be right to request an apology from the BBC, they have a case to answer.

...Fair enough points, theblether...but, nevertheless: a SIGN is a SIGN, no? and giving a reason for a fact does not make the fact go away, either, does it?

**Mr. Kittiratt said that lower growth in the second quarter resulted from the disruption of the natural gas supply from Myanmar for more than one week in April, when manufacturers in Thailand had to slow down their production in order to save energy.**

4xForeheadPalmSlapCropped.jpg

I specifically pointed out that under British terminology the so called recession in Thailand would be considered a slow down in growth based upon the criteria settled and agreed by the UK Treasury.

Our state broadcaster should be consistent in it's application of terminology. It's giving a false impression of a recession. If they ran this article in the UK applied to our economy in the same circumstances they would be crucified.

The UK would love to have the growth rate of Thailand. In fact there would be street parties and fireworks.

A slow down in growth is an indicator of a reduction in activity. Short term problems can cause short term reductions. That Myanmar gas situation was well trailed here on Thaivisa, when the government advised factories of the implications. Even booming economies like the BRIC countries will have lower quarters due to short term problems such as spikes in oil price, political turmoil, whatever.

You're little face palm episode there is making one of us look stupid, and it's not me. Try to understand what is written before answering.

[clockman]

As there is no transparency in Thailand how does anybody know the true state of the economy!

[RickeyParkany]

I specifically pointed out that under British terminology the so called recession in Thailand would be considered a slow down in growth based upon the criteria settled and agreed by the UK Treasury.

...

You're little face palm episode there is making one of us look stupid, and it's not me. Try to understand what is written before answering.

...we all often scan instead of reading well, the bletherly one...though not blathering, you certainly scanned past the Headline and details to which I was attending--having given you fair credit for points well made--but a fact remains a fact, despite emoticons on BOTH sides, that the latest ecconomic data /DOES/ contain SIGNS OF A RECESSION...no? ;-} rap.

Edited August 25, 2013 by RickeyParkany

[NeverSure]

How about the total loss of rice sales which is off the books? What about the nearly 1 trillion baht in debt it has generated which is also off the books?

Let's get some real auditors in here.

[sadhukar]

How about the total loss of rice sales which is off the books? What about the nearly 1 trillion baht in debt it has generated which is also off the books?

Let's get some real auditors in here.

I've always wondered, is it actual public news somewhere that the rice buying scheme done by the government incurred a huge loss as you say and that no one wants to buy it? Or is it just hearsay from TV? I'm genuinely curious and if someone could provide a source it would be much appreciated.

[bangkockney]

Not this again. Yes, Thailand is in a recession.

When anyone talks of GDP, they refer to seasonally adjusted GDP. That is the result of a transform on raw GDP, to remove seasonal factors (e.g weather, holidays, etc) and allow better comparison between countries. And it provides a more meaningful number for the underlying health of the economy. People trying to draw trends from raw GDP will arrive at ambiguous conclusions.

Quarter-on-quarter seasonaly adjusted GDP has been negative for two consecutive quarters in Thailand.

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

[NeverSure]

How about the total loss of rice sales which is off the books? What about the nearly 1 trillion baht in debt it has generated which is also off the books?

Let's get some real auditors in here.

I've always wondered, is it actual public news somewhere that the rice buying scheme done by the government incurred a huge loss as you say and that no one wants to buy it? Or is it just hearsay from TV? I'm genuinely curious and if someone could provide a source it would be much appreciated.

We have had numerous threads with news articles and they are additive. First there was the statement that the government had borrowed 500 billion baht from the government owned Agricultural bank. It is called a revolving fund which means it was intended to be borrowed, paid back, borrowed again and finally paid back.

Next we had a news article that the fund was maxed out and they had to borrow another 200 billion baht to cover rice purchases.

Next we had an article that the government had taken 1/2 of the Agricultural Bank's capital which was 1/2 of 200 billion baht. Add it all up and we're at 800 billion baht.

Then we had another article saying that the latest crop that's about to be harvested would cost around 200+ billion baht. That's a trillion baht borrowed.

We have had article after article where attempts at selling any significant amount of rice have failed.

So the bottom line is that the government has mountains of unsold rice that it paid about 15,000 baht per ton for, but it's worth maybe 9,000 per ton if it's still in good condition. Then we've had a lot of articles saying it isn't in good condition. There's also a lack of accounting for it and there's no way for the public to know if it's even all still there.

Then we had articles exposing the scam of people buying rice cheap in Cambodia and selling it to the Thai government as Thai rice for the inflated price of 15,000 baht.

All the while the government has been paying this 15k price and stockpiling the rice while the world is awash in surplus rice and the price is probably more like 9k per ton for good fresh rice. So even if they sold it, and if it has stayed in good condition, they would lose at least 1/3 of what they paid. If they could find buyers.

Last week they tried to have a big auction and sell a lot of the rice but the bids were so low none of it sold. That further raises suspicions about it's condition. Some say it is being sprayed with nasty chemicals to keep insects and mice out of it and other chemicals to keep it from rotting.

There is a story that an African country bought a bunch of it and 20% of it had to be thrown away due to spoilage. This was also in the news.

Now I'm just recapping stories that have been in the news and giving a summary of it. All of that news has been posted in the news section here on this forum.

If the rice could be sold for even 500 billion baht there would be a loss of 500 billion baht. But as long as they don't sell it for less than they paid for it, they don't have to mark the loss. If they did and there was a loss of 500 billion baht, the Agricultural Bank which now has only 100 billion baht in capital would be instantly bankrupt. A bank has to pay for its losses out of its own capital.

This is not my imagination. This is a recap of real news stories and repeated ones.

[Thai at Heart]

Economists can't agree a definition. Some say that a slow down in growth is a recession, others particularly in the UK say a contraction of the economy in negative growth area is a recession.

The BBC should stick to the accepted British definition. A slow down in growth is exactly that, not recession. I think the Thai government would be right to request an apology from the BBC, they have a case to answer.

False assessments like this hit confidence, and confidence is the quiet killer of economies. There's still plenty of personal wealth in the UK but people are reading the newspapers and holding on to what they've got. That jokes economic activity through the chain and makes recessions worse.

It becomes a self fulfilling prophesy.

GDP fell for two consecutive quarters. It wasn't a relative reduction in growth, it was an absolute fall.

[Thai at Heart]

Economists can't agree a definition. Some say that a slow down in growth is a recession, others particularly in the UK say a contraction of the economy in negative growth area is a recession.

No Sign of Recession

The BBC should stick to the accepted British definition. A slow down in growth is exactly that, not recession. I think the Thai government would be right to request an apology from the BBC, they have a case to answer.

...Fair enough points, theblether...but, nevertheless: a SIGN is a SIGN, no? and giving a reason for a fact does not make the fact go away, either, does it?

**Mr. Kittiratt said that lower growth in the second quarter resulted from the disruption of the natural gas supply from Myanmar for more than one week in April, when manufacturers in Thailand had to slow down their production in order to save energy.**

4xForeheadPalmSlapCropped.jpg

I specifically pointed out that under British terminology the so called recession in Thailand would be considered a slow down in growth based upon the criteria settled and agreed by the UK Treasury.

Our state broadcaster should be consistent in it's application of terminology. It's giving a false impression of a recession. If they ran this article in the UK applied to our economy in the same circumstances they would be crucified.

The UK would love to have the growth rate of Thailand. In fact there would be street parties and fireworks.

A slow down in growth is an indicator of a reduction in activity. Short term problems can cause short term reductions. That Myanmar gas situation was well trailed here on Thaivisa, when the government advised factories of the implications. Even booming economies like the BRIC countries will have lower quarters due to short term problems such as spikes in oil price, political turmoil, whatever.

You're little face palm episode there is making one of us look stupid, and it's not me. Try to understand what is written before answering.

There is currently no positive growth rate in Thailand.....

[wordchild]

Economists can't agree a definition. Some say that a slow down in growth is a recession, others particularly in the UK say a contraction of the economy in negative growth area is a recession.

The BBC should stick to the accepted British definition. A slow down in growth is exactly that, not recession. I think the Thai government would be right to request an apology from the BBC, they have a case to answer.

False assessments like this hit confidence, and confidence is the quiet killer of economies. There's still plenty of personal wealth in the UK but people are reading the newspapers and holding on to what they've got. That jokes economic activity through the chain and makes recessions worse.

It becomes a self fulfilling prophesy.

GDP fell for two consecutive quarters. It wasn't a relative reduction in growth, it was an absolute fall.

No it wasn't an absolute fall. There was a seasonally adjusted decline in the 2nd quarter over the first quarter and also (adjusted) in the 1st quarter compared to the 4th quarter last year. But these are both quarter on quarter declines , the economy still grew in each quarter compared to the same period last year which is what counts. In an absolute sense the Thai economy is bigger now than it was in 2012. Look again at the source, if you doubt this, it clearly states that the seasonally adjusted figure is Q on Q. Its a (fairly sharp) slowdown in the rate of growth but not a contraction in the economy. If you applied this measure of a recession to the UK the country would be "in recession" every few months or so. That is the point Kittirat is trying to make.

Edited August 25, 2013 by wordchild

[Thai at Heart]

Economists can't agree a definition. Some say that a slow down in growth is a recession, others particularly in the UK say a contraction of the economy in negative growth area is a recession.

The BBC should stick to the accepted British definition. A slow down in growth is exactly that, not recession. I think the Thai government would be right to request an apology from the BBC, they have a case to answer.

False assessments like this hit confidence, and confidence is the quiet killer of economies. There's still plenty of personal wealth in the UK but people are reading the newspapers and holding on to what they've got. That jokes economic activity through the chain and makes recessions worse.

It becomes a self fulfilling prophesy.

GDP fell for two consecutive quarters. It wasn't a relative reduction in growth, it was an absolute fall.

No it wasn't an absolute fall. There was a seasonally adjusted decline in the 2nd quarter over the first quarter and also (adjusted) in the 1st quarter compared to the 4th quarter last year. But these are both quarter on quarter declines , the economy still grew in each quarter compared to the same period last year. Look again at the source, if you doubt this, it clearly states that the seasonally adjusted figure is Q on Q. Its a (fairly sharp) slowdown in the rate of growth but not a contraction in the economy. If you applied this measure of a recession to the UK the country would be "in recession" every few months or so. That is the point Kittirat is trying to make.

The comparison of same quarter last year is irrelevant in economic analysis. 2 consecutive quartets of decline is the measure that the whole world uses.

the economy is slowing down since January, and as things like the car policy wind out of the economy, getting it dragged back up again is going to be difficult.

I may be wrong, but also these figures in growth terms are still skewed by the flood figures on a quarterly basis.

[wordchild]

Economists can't agree a definition. Some say that a slow down in growth is a recession, others particularly in the UK say a contraction of the economy in negative growth area is a recession.

The BBC should stick to the accepted British definition. A slow down in growth is exactly that, not recession. I think the Thai government would be right to request an apology from the BBC, they have a case to answer.

False assessments like this hit confidence, and confidence is the quiet killer of economies. There's still plenty of personal wealth in the UK but people are reading the newspapers and holding on to what they've got. That jokes economic activity through the chain and makes recessions worse.

It becomes a self fulfilling prophesy.

GDP fell for two consecutive quarters. It wasn't a relative reduction in growth, it was an absolute fall.

No it wasn't an absolute fall. There was a seasonally adjusted decline in the 2nd quarter over the first quarter and also (adjusted) in the 1st quarter compared to the 4th quarter last year. But these are both quarter on quarter declines , the economy still grew in each quarter compared to the same period last year. Look again at the source, if you doubt this, it clearly states that the seasonally adjusted figure is Q on Q. Its a (fairly sharp) slowdown in the rate of growth but not a contraction in the economy. If you applied this measure of a recession to the UK the country would be "in recession" every few months or so. That is the point Kittirat is trying to make.

The comparison of same quarter last year is irrelevant in economic analysis. 2 consecutive quartets of decline is the measure that the whole world uses.

the economy is slowing down since January, and as things like the car policy wind out of the economy, getting it dragged back up again is going to be difficult.

I may be wrong, but also these figures in growth terms are still skewed by the flood figures on a quarterly basis.

The classic definition is two consecutive quarters of YEAR over YEAR declines not quarter over quarter declines. Calling a recession based on Q on Q numbers would be just too volatile.

Edited August 25, 2013 by wordchild

[bangkockney]

Name a scholarly group who doesn't use Q on Q.

[bigbamboo]

The problem here is that Kittiratt has a reputation for being..... erm.... economical with the truth. No one knows whether to believe him or not.

Now technically Thailand is in recession but the signs are that this may not be ongoing, providing the figures are taken at face value.

And Mr. K, here's some friendly advice for you. It would make life so much easier for everyone concerned, including yourself, if you just cut out the 'white lies', there's a good chap.

Toodle pip!

[CPH]

Here is the general US and Euro definition of a recession :

a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

I do not know if Thailand is in a recession, but the time with easy money from QE is over and foreign money will be pulled back from Asia. That will mean a drop in the

stockmarket and higher interest rates and lower currency. Does anyone have an idea of how much the stock market in Thailand will fall. I would say to around 1100.

But it is very hard to estimate.

[Thai at Heart]

Economists can't agree a definition. Some say that a slow down in growth is a recession, others particularly in the UK say a contraction of the economy in negative growth area is a recession.

The BBC should stick to the accepted British definition. A slow down in growth is exactly that, not recession. I think the Thai government would be right to request an apology from the BBC, they have a case to answer.

False assessments like this hit confidence, and confidence is the quiet killer of economies. There's still plenty of personal wealth in the UK but people are reading the newspapers and holding on to what they've got. That jokes economic activity through the chain and makes recessions worse.

It becomes a self fulfilling prophesy.

GDP fell for two consecutive quarters. It wasn't a relative reduction in growth, it was an absolute fall.

No it wasn't an absolute fall. There was a seasonally adjusted decline in the 2nd quarter over the first quarter and also (adjusted) in the 1st quarter compared to the 4th quarter last year. But these are both quarter on quarter declines , the economy still grew in each quarter compared to the same period last year. Look again at the source, if you doubt this, it clearly states that the seasonally adjusted figure is Q on Q. Its a (fairly sharp) slowdown in the rate of growth but not a contraction in the economy. If you applied this measure of a recession to the UK the country would be "in recession" every few months or so. That is the point Kittirat is trying to make.

The comparison of same quarter last year is irrelevant in economic analysis. 2 consecutive quartets of decline is the measure that the whole world uses.

the economy is slowing down since January, and as things like the car policy wind out of the economy, getting it dragged back up again is going to be difficult.

I may be wrong, but also these figures in growth terms are still skewed by the flood figures on a quarterly basis.

The classic definition is two consecutive quarters of YEAR over YEAR declines not quarter over quarter declines. Calling a recession based on Q on Q numbers would be just too volatile.

That is technically how it's defined. 2 consecutive quartets of a fall in GDP. Thailand is technically in recession, GDP is at the end of the first 2 quarters about 2% less than at the end of January.

It's quaint that it's risen a little in comparison with the same period last year, but the reason the measure it over 2 quarters is that it is normally enough to show a short term trend which is then trending into the medium term.

Pretending it's not significant misses the point. There should be some strategic intervention and believing that the policies are correct and all will be good in the next 2 quartets is naive.

Edited August 25, 2013 by Thai at Heart

[Tatsujin]

How about the total loss of rice sales which is off the books? What about the nearly 1 trillion baht in debt it has generated which is also off the books?

Let's get some real auditors in here.

I've always wondered, is it actual public news somewhere that the rice buying scheme done by the government incurred a huge loss as you say and that no one wants to buy it? Or is it just hearsay from TV? I'm genuinely curious and if someone could provide a source it would be much appreciated.

Do you not read the news at all? By the Govt's own admission they are expecting a 300+ Billion Baht loss on this rice scam scheme

[givenall]

Huh?

Huh_971380_562178277182948_1196625836_n.jpg

Didn't I read just last week that Thailand's Economy slipped into *Recession Territory* this past quarter? is this not a *SIGN of a Recession*, being the first of the requisite 3 months running to be *Officially* in Recession? ;-} rap.

this is why this government does not have any expert working with them. They re all experts on all matters and they always know what to say. and don't worry just be happy

[givenall]

this is why this government does not have any expert working with them. They re all experts on all matters and they always know what to say. and don't worry just be happy

[upena]

Remember, this is the Thai Government speaking. Anything bad, double the number(s). Anything good, cut them in half. You will be closer to the truth.

[drdoom6996]

Come on folks, it's Kittiratt. He and his white lies. He will say anything that he thinks will make "the people" feel better about themselves and their country.

[SICHONSTEVE]

Wait a minutre!!! Giving a reason for a Recession is not the same as determining that Recession levels of data had not been encountered... ;-} rap.

**Mr. Kittiratt said that lower growth in the second quarter resulted from the disruption of the natural gas supply from Myanmar for more than one week in April, when manufacturers in Thailand had to slow down their production in order to save energy.**

Whaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaat?

DragonWTF_FB_30Jul13_1005638_4783682563766_423773692_n.jpg

I know!!!

He is an idiot of the first order - he once stated that the 300 baht a day minimum wage would not have much of an impact on companies as it was a "one off thing"!!!!

[mikebell]

How about the total loss of rice sales which is off the books? What about the nearly 1 trillion baht in debt it has generated which is also off the books?

Let's get some real auditors in here.

I've always wondered, is it actual public news somewhere that the rice buying scheme done by the government incurred a huge loss as you say and that no one wants to buy it? Or is it just hearsay from TV? I'm genuinely curious and if someone could provide a source it would be much appreciated.

Do you not read the news at all? By the Govt's own admission they are expecting a 300+ Billion Baht loss on this rice scam scheme

Was this reported in the Thai Press? If so why hasn't the population taken to the streets? Why haven't the people responsible been arrested? Why no tanks outside Government House?

I don't understand why this can be announced without any consequences and people still vote the same way next time.