Two trillion baht infrastructure programme to spur Thai economy next year

[webfact]

Two trillion baht infrastructure programme to spur Thai economy next year
By English News



BANGKOK, Nov 19 – The Thai government’s two trillion baht infrastructure development programme will help contribute to GDP growth next year, Minister of Finance Kittiratt Na-Ranong said yesterday.

Speaking at an Economic Reporters Association seminar on Thailand’s economic direction next year, Mr Kittiratt admitted that the country’s grim economic growth performance this year is closely linked to many negative external factors. Through the year, the country has faced a set of disappointments ranging from lower-than-projected GDP and revenue in the past three quarters as well as reduced exports and investment.

The minister, however, said that the exchange rate is stable and the current tourism high season will help prevent further decline.

The government’s Bt2 trillion infrastructure development programme and the Bt350 billion water management project will help boost the Thai economy next year. The seven-year infrastructure programme alone will help increase the country’s GDP from Bt12 trillion baht to Bt150 trillion, he said.

Mr Kittiratt affirmed that the government would try not to let public debt exceed 50 per cent and that it will carry on with the planned disbursement process, and that he would welcome private sector participation for improved transparency.

GDP is expected to grow 4.5 per cent on a continuing basis until 2020 due to the recovery of the global economy, he said.

Deputy Prime Minister/Commerce Minister Niwatthamrong Boonsongpaisan, meanwhile, admitted that the Thai economy this year expanded only for one per cent due to sluggish growth of global economy. However, the global economy is expected to grow up to 3.5 per cent from 2.9 per cent as previously expected. Exports will also increase by 5-7 per cent.

Following the upcoming consideration of the government's Bt2 trillion infrastructure development bill, Transport Minister Chatchart Sittiphan said his ministry is ready to clarify to the public and Parliament the project’s details. He also said most of the projects are prepared and ready to commence. (MCOT online news)


-- TNA 2013-11-19

[PaullyW]

The minister, however, said that the exchange rate is stable and the current tourism high season will help prevent further decline.

Again, how is it that tourism represents only 6% of Thai GDP if it's so very prominent in ALL discussions RE revenue? One must think it contributes significantly more than 6%. Perhaps even it's the one thing holding the country's economy afloat.

[waza]

The minister, however, said that the exchange rate is stable and the current tourism high season will help prevent further decline.

Again, how is it that tourism represents only 6% of Thai GDP if it's so very prominent in ALL discussions RE revenue? One must think it contributes significantly more than 6%. Perhaps even it's the one thing holding the country's economy afloat.

"The Thai government’s two trillion baht infrastructure development programme will help contribute to GDP growth next year, Minister of Finance Kittiratt Na-Ranong said yesterday."

He is right the 2.2 trillion baht loan will have a positive effect on Thai GDP for not only next year but for the next few years. Then it will have a negative effect on GDP, Thai quality of life and the Thai treasury for the following 50 years.

"The government’s Bt2 trillion infrastructure development programme and the Bt350 billion water management project will help boost the Thai economy next year. The seven-year infrastructure programme alone will help increase the country’s GDP from Bt12 trillion baht to Bt150 trillion, he said."

Either this is another example of Kittiratt creative arithmetic or a typo......

Edited November 19, 2013 by waza

[draftvader]

Which specific Thai is this going to keep afloat? Initials are obvious G.D. as they will be in profit.

[Local Drunk]

Section 3 of the borrowing bill states "the government is not required to specify the projects that will be funded by the loan." was passed by the Senate last night.

[Thai at Heart]

Not if they don't borrow it, and it doesn't get built it won't.

[Thainy Tim]

'The government’s Bt2 trillion infrastructure development programme and the Bt350 billion water management project will help boost the Thai economy next year. The seven-year infrastructure programme alone will help increase the country’s GDP from Bt12 trillion baht to Bt150 trillion, he said.'

So they think Thailand will have the fifth biggest economy in the world? That's a typo.

Anyway... Don't forget the 273 million baht a day repayment for the next 50 years. As soon as all that 2.2 trillion has been siphoned off, the country will be sliding backwards. I can not see how their high speed trains and their water management is going to put that amount in the coffers. I can see Thailand heading for a disaster.

Especially once the first high speed train flies off the tracks at 150 KM/H killing hundreds. Always reminds me of this gem from The Simpsons.

http://www.youtube.com/watch?v=QVqVdQYC44Y

Edited November 19, 2013 by Thainy Tim

[NongKhaiKid]

It will also spur deposits in many bank accounts especially those held overseas or in the names of drivers, housemaids and Daisy the family carabao.

[yourauntbob]

was my first thought. then

first the

2 trillion stimulas will equal one new road and a fleet of new Mercedes for all the government employees. This looks more like a stimulas to the German economy. Maybe this is to make up for stepping out of the submarine deal.

then the

Even if they did spend the money on badly needed infrastructure, the EU, USA, Japan, and numerous other countries have already proved that government spending does nothing for the economy. this money comes from somewhere, the private (productive) sector. so they are going to tax efficent businesses 2 trillion baht extra and squander it away. how is this going to help the economy ?

if they want to help the economy then how about a crackdown on corruption. imagine all the businesses who would love to open up shop here if they didnt need to pay off politicians and police right and left. imagine if the roads were safe to drive on, or the trains were a safe method of transportation. how glorious it would be to rent a jet ski without being assulted when you return it. imagine a Thailand that doesnt have a protest in process. or if a foriegner could own his own land instead of the constant fear of a Thai person (partner or wife) confiscating it and kicking him back to his own country. if they want to stimulate the economy then start holding people accountable!

[Thai at Heart]

was my first thought. then

first the

2 trillion stimulas will equal one new road and a fleet of new Mercedes for all the government employees. This looks more like a stimulas to the German economy. Maybe this is to make up for stepping out of the submarine deal.

then the

Even if they did spend the money on badly needed infrastructure, the EU, USA, Japan, and numerous other countries have already proved that government spending does nothing for the economy. this money comes from somewhere, the private (productive) sector. so they are going to tax efficent businesses 2 trillion baht extra and squander it away. how is this going to help the economy ?

if they want to help the economy then how about a crackdown on corruption. imagine all the businesses who would love to open up shop here if they didnt need to pay off politicians and police right and left. imagine if the roads were safe to drive on, or the trains were a safe method of transportation. how glorious it would be to rent a jet ski without being assulted when you return it. imagine a Thailand that doesnt have a protest in process. or if a foriegner could own his own land instead of the constant fear of a Thai person (partner or wife) confiscating it and kicking him back to his own country. if they want to stimulate the economy then start holding people accountable!

I am so glad that the USA didn't spend anything to stimulate their way out if recession. Just imagine how good it would have been if no one spent anything and unemployment was now 25% instead of 10%.

[aguy30]

It is always amazing how these officials throw magic numbers at the fan to justify huge expenses. It is also amazing that a reliable budget can be established for such a huge project when so little actual design and study has been done. Perhaps there really isn't any intent to actually ever finish the project after funds are available. More likely it is just a big guess instead of fact. This project will still be a debt for the great grand children yet to be born.

The high speed trains aren't going to help or even provide affordable priced travel for the average Thai. Who are the expected riders? Where do they expect the train revenue to come from? No indication has been given of what frequency of schedules they might run, the size of trains, anticipated speeds, cost of tickets, cost of running and maintenance of the trains and of course, profitability. Very little has been said about the actual design of the system, actual paths of tracks, and if it will handle any freight trains (unlikely). Will the new tracks replace the narrow rails, be next to narrow rails or be laid to be a combination of narrow inside and wide outside. What about flood areas and related down time?

The routes seem to be more a concept drawn with a marker on a map. Even more scary when they justify the trains with faulty ideas like by somehow combining the high speed fiasco with the ridiculous and apparently abandoned Pattaya monorail concept and stations on the dark side near Jomtien or wherever. Not many will ride the train if it doesn't have properly located and with convenient stations. How can trains reach high speed if running a ground level. Thais are frequently killed by slow speed freight trains at crossings. Do they really think that this won't happen to the high speed trains crossing local roads? It is a plan doomed from the start if this kind of thinking is used for the system.

I hope this isn't just a desperate attempt at filling the feeding troughs before the PTP decline and possible demise. History might be calling Thailand's high speed train system "Taksin's ultimate revenge".

[EricBerg]

This is criminal. The pawns of the missunderstood fugitive will finally push the country over the edge and then force it to be robbed clean by international banks. All Thais will suffer to make the bad billionaire even richer. He doesn't care shit for the country and the people.

[Ricardo]

Mr Kittirat admitted that the country's grip economic growth performance this year is closely linked to many negative external factors.

Blame the Farangs, as usual, rather than the Big Boss's government's flawed economic-policies !

But the infrastructure-spending will save their bacon next year, even though the detailed-plans don't yet exist, did anyone see an economic justification or environmental-impact-assessment for the High-Speed Passenger-Railway yet, and just how happy will banks (Thai or overseas) be to buy bonds to finance it all, unless the interest-rates are juicy ?

The 350-billion flood-prevention work has yet to really start, two years on from the budget being allowed, so how likely is it that the infrastructure-spending will be any different ?

"the Thai economy this year expanded for only one per cent"

Finally admitting that GDP isn't growing at 3 or 4 or 5 percent, and that statements over the past few weeks were just more 'white lies', by the government.

They should have been reading ThaiVisa !

[bigbamboo]

Kittikat....... the only man who makes Gordon Brown look shrewd.

[Spare]

I am buying stock today. SET will go up.

[MaxLee]

Somebody needs to smash that maggot's face really hard...

[Bpuumike]

Section 3 of the borrowing bill states "the government is not required to specify the projects that will be funded by the loan." was passed by the Senate last night. [/size]

Indeed. A last throw at the cookie jar before she leaves office?

[yourauntbob]

was my first thought. then

first the

2 trillion stimulas will equal one new road and a fleet of new Mercedes for all the government employees. This looks more like a stimulas to the German economy. Maybe this is to make up for stepping out of the submarine deal.

then the

Even if they did spend the money on badly needed infrastructure, the EU, USA, Japan, and numerous other countries have already proved that government spending does nothing for the economy. this money comes from somewhere, the private (productive) sector. so they are going to tax efficent businesses 2 trillion baht extra and squander it away. how is this going to help the economy ?

if they want to help the economy then how about a crackdown on corruption. imagine all the businesses who would love to open up shop here if they didnt need to pay off politicians and police right and left. imagine if the roads were safe to drive on, or the trains were a safe method of transportation. how glorious it would be to rent a jet ski without being assulted when you return it. imagine a Thailand that doesnt have a protest in process. or if a foriegner could own his own land instead of the constant fear of a Thai person (partner or wife) confiscating it and kicking him back to his own country. if they want to stimulate the economy then start holding people accountable!

I am so glad that the USA didn't spend anything to stimulate their way out if recession. Just imagine how good it would have been if no one spent anything and unemployment was now 25% instead of 10%.

huh? if no one spent anything? i honestly dont understand your comment.

[bigbamboo]

I am buying stock today. SET will go up.

Oxo or Bisto?

[GeorgeO]

'The government’s Bt2 trillion infrastructure development programme and the Bt350 billion water management project will help boost the Thai economy next year. The seven-year infrastructure programme alone will help increase the country’s GDP from Bt12 trillion baht to Bt150 trillion, he said.'

So they think Thailand will have the fifth biggest economy in the world? That's a typo.

Anyway... Don't forget the 273 million baht a day repayment for the next 50 years. As soon as all that 2.2 trillion has been siphoned off, the country will be sliding backwards. I can not see how their high speed trains and their water management is going to put that amount in the coffers. I can see Thailand heading for a disaster.

Especially once the first high speed train flies off the tracks at 150 KM/H killing hundreds. Always reminds me of this gem from The Simpsons.

http://www.youtube.com/watch?v=QVqVdQYC44Y

It's just a much larger version of the THB 100,000 first car scheme, with everyone focusing on the benefits that such a loan might have on GDP, but completely ignoring the fact that the loan has to be repaid.

I envisage around 40% of this loan being siphoned off and the rest of it being squandered on costly and useless infrastructure projects. We are looking at another case of self-destruction here as occurred in the Philippines.

And BTW, don't you just love that 'throw away' line that he used ... "the country’s grim economic growth performance this year is closely linked to many negative external factors" ... that's it, continue to blame someone else...!!

[PeterSmiles]

Two trillion baht infrastructure programme to spur Thai economy next year

It's very much spurring something else currently, not even sure if it will make it to the spur next year.

[Brevity]

It does not seem that any of the stimulus programs have worked from this government. I think they are all really just populist ideas that will be very bad for Thailand in the future. I hope the Thai people can see that they probably should not trust what this government says.

[spirit47]

I think, the biggest position in his GDP calculating is the overstock of rice to dream-prices.

[fab4]

The minister, however, said that the exchange rate is stable and the current tourism high season will help prevent further decline.

Again, how is it that tourism represents only 6% of Thai GDP if it's so very prominent in ALL discussions RE revenue? One must think it contributes significantly more than 6%. Perhaps even it's the one thing holding the country's economy afloat.

Look heres an idea why not google it? The first page would give you a figure of between 6 - 7%.

[NongKhaiKid]

Frightening photo, Kittirat's lips are moving.

[Thaddeus]

I am buying stock today. SET will go up.

Oxo or Bisto?

Definitely not Knorr, too salty.

One question.

This vast sum of money they are borrowing ...... who from?

[webfact]

Transport Ministry: 2 trillion baht mega project to go ahead

Bangkok, 19 November 2013 (NNT) – Despite the opposition party’s petition against the loan bill, the Transport Ministry has affirmed that the 2 trillion baht infrastructure mega project will proceed as planned.

Speaking at the Econmass Award 2013 seminar, Transport Minister Chadchart Sittipunt stated that the ministry would forge ahead with the mega project, despite delays by the opposition party’s petition to the Constitutional Court against the 2 trillion baht loan bill.

An initial investment of 100 billion baht will be allocated to the renovations and expansion of roads, as well as the commencement of the Bangkok - Phitsanulok dual rail system.

In addition, Tourism Council of Thailand (TCT) President Piyamarn Techapaibul said Thailand should see a 17% increase in the number of foreign travelers this year and a 22% increase in tourism revenue. She expressed little concern over the impact of the current demonstrations, as foreigners, she said, understood the situation.

Meanwhile, Payungsak Chartsutipol, the president of the Federation of Thai Industries (FTI), added that he expected a 3% growth in the Thai economy this year.


-- NNT 2013-11-19

[futsukayoi]

was my first thought. then

first the

2 trillion stimulas will equal one new road and a fleet of new Mercedes for all the government employees. This looks more like a stimulas to the German economy. Maybe this is to make up for stepping out of the submarine deal.

then the

Even if they did spend the money on badly needed infrastructure, the EU, USA, Japan, and numerous other countries have already proved that government spending does nothing for the economy. this money comes from somewhere, the private (productive) sector. so they are going to tax efficent businesses 2 trillion baht extra and squander it away. how is this going to help the economy ?

if they want to help the economy then how about a crackdown on corruption. imagine all the businesses who would love to open up shop here if they didnt need to pay off politicians and police right and left. imagine if the roads were safe to drive on, or the trains were a safe method of transportation. how glorious it would be to rent a jet ski without being assulted when you return it. imagine a Thailand that doesnt have a protest in process. or if a foriegner could own his own land instead of the constant fear of a Thai person (partner or wife) confiscating it and kicking him back to his own country. if they want to stimulate the economy then start holding people accountable!

I am so glad that the USA didn't spend anything to stimulate their way out if recession. Just imagine how good it would have been if no one spent anything and unemployment was now 25% instead of 10%.

huh? if no one spent anything? i honestly dont understand your comment.

I partly agree and partly disagree with both of you.

I think the vast majority of economists would agree with Keynes that in a recession government stimulus spending can provide a boost to GDP. Where they would have differing views are over the extent of that boost, how quickly you reach diminishing returns and whether the benefits will be significant enough to overcome the negative impacts. To provide the stimulus the government borrows it does not tax more so they are not hitting efficient businesses by taxing them more. However government borrowing will increase interest rates and competing for lenders funds is likely to crowd out some private sector borrowing so efficient firms do find it harder to borow and may pay higher interst to fund their own investments.

The key word is can. If the funds are spent optimally to create new jobs, effectively upgrade infrastructure and provide business to efficient local businesses then there should be a benefit of well over the money spent (all the salaries, profits etc get spent providing further salaries and profits). Higher salaries and profits also mean higher taxes without increasing tax rates so that the debt can be paid off. Of course in the real world the money is not spent efficiently and large amounts are siphoned off, pumped into unproductive but well conected industries or provide bridges to nowhere and other useless infrastructure. In that case of course the benefits are negative and the proposed solution is to spend and skim more.

Wonder which scenario is likely in Thailand

[noitom]

The minister, however, said that the exchange rate is stable and the current tourism high season will help prevent further decline.

Again, how is it that tourism represents only 6% of Thai GDP if it's so very prominent in ALL discussions RE revenue? One must think it contributes significantly more than 6%. Perhaps even it's the one thing holding the country's economy afloat.

They never discuss the "black money" or unregulated flow. Thailand's economy is supported by the black underbelly. Illegal counterfeit goods, human trafficking, sex trade and on and on. For example, a tourist arrives and checks in to a small hotel in the Bangkok area, not a regulated hotel, a mm and pop affair. He goes out for two weeks and drinks and screws his brains out. All that revenue from booze and sex is not counted in the tourist published data. You can use your imagination to project this scenario on to tours, illegal copied music, movies, clothes, accessories...etc. You know, the subject matter that is constantly in denial in Thailand.

[dru2]

I am buying stock today. SET will go up.

Oxo or Bisto?

Definitely not Knorr, too salty.

One question.

This vast sum of money they are borrowing ...... who from?

I have been wondering that too... Can it all be raised domestically? Surely no major international banking institutions or foreign governments will be willing to lend large sums for yet unspecified projects? At least I hope not!

For political concessions? Maybe from China in exchange for Thai backing in the South China Sea - but even with a worthless aircraft carrier and empty submarine pens, what possible use would Thailand's backing in the South China Sea be?

It's also worth noting that the Thai government has been trying to develop Dawei in Myanmar for their own advantage but wanted Japan to stump up the funds for it all. That has now been cut from under their feet, and a good thing too.

Where is the loan to come from? Maybe one of the more serious and intelligent Thaksin supporters on TV could enlighten us? That would, of course, limit the field to Fab4 or Hammered. Still, I'd like to hear...

Edited November 19, 2013 by dru2