Overdrawn: Bungling burglar caught cracking into bank in Phuket

[ExpatOilWorker]

Although the Thai economy is more than twice the size now than it was prior to the Asian Crisis in 1997, the current trade deficit is also on average comparable with the pre-1997 deficit.

Is this a sign that the global financial crises is at our doorstep?

There sure seem to be more bad than good news.

Bad News:

- The US Federal reserve are starting to taper off bond buying, meaning an end to easy money flowing to smaller markets like Thailand.

- China, one of Thailand's biggest export markets, seems to be heading for a rough year in 2014 with slower growth.

- The rice buying experiment is hurting Thailand credit rating.

- Riots in the streets of Bangkok and political instability. 7 years now, when will it ever end?

Good news:

- A weaker Thai baht will increase export. Yes, but it will take time

- Political stability after the February 2nd election. I don't even dare to hope.

- Another million tourist every year. Marginal effect on the trade deficit.

- Lower crude oil price. Oil could drop to $90 in 2014, but again it could also go to $120.

- Car manufactures had a golden year in 2012, so sound unlikely that industry can pull off another magic double digit increase in production.

[Naam]

difference export($210b) / imports ($232) estimated for 2013 is $20 billion = ~10% = not too bad.

[brit1984]

op - please could you make your point / question a bit more specific / clear... ?

[ExpatOilWorker]

op - please could you make your point / question a bit more specific / clear... ?

I have always have a fundamental positive believe in the Thai economy.

After the military coup in 2006 - Thai economy grew and SET went up.

After years of street protest, airport closure and Bangkok burning - Thai economy grew and SET went up.

After the 2011 flood of industrial parks and half of urban Bangkok - Thai economy grew and SET went up.

Come Hell or high water - Thai economy will grow and SET goes up....or will it?

I am starting to doubt and I honestly think too much is stacked against this little economy.

[i claudius]

I have always have a fundamental positive believe in the Thai economy.

After the military coup in 2006 - Thai economy grew and SET went up.

After years of street protest, airport closure and Bangkok burning - Thai economy grew and SET went up.

After the 2011 flood of industrial parks and half of urban Bangkok - Thai economy grew and SET went up.

Come Hell or high water - Thai economy will grow and SET goes up....or will it?

I am starting to doubt and I honestly think too much is stacked against this little economy.

I am begining to agree ,while all those other things were happening the west was in bad trouble ,but things are now starting to look up a bit ,so i do believe that the baht will weaken ,also those in power i think do not give a toss for what happens to the country as long as they are all ok.

[Time Traveller]

difference export($210b) / imports ($232) estimated for 2013 is $20 billion = ~10% = not too bad.

Well considering that the US trade deficit is almost $700 billion for the year, but it's economy is more than 40 times larger than Thailand, I'd say that $20 billion Thai trade deficit is quite bad.

[Naam]

difference export($210b) / imports ($232) estimated for 2013 is $20 billion = ~10% = not too bad.

Well considering that the US trade deficit is almost $700 billion for the year, but it's economy is more than 40 times larger than Thailand, I'd say that $20 billion Thai trade deficit is quite bad.

if one compares apples with apples the trade deficit looks excellent compared to that of the US.

the "larger" economy is not a representative inch stick but totally irrelevant. what counts is the percentage between exports and imports and the probability that this gap can be closed.

in this respect Thailand beats the U.S. with ~10% difference hands down as the U.S. difference is ~50%.

[brit1984]

op - please could you make your point / question a bit more specific / clear... ?

I have always have a fundamental positive believe in the Thai economy.

After the military coup in 2006 - Thai economy grew and SET went up.

After years of street protest, airport closure and Bangkok burning - Thai economy grew and SET went up.

After the 2011 flood of industrial parks and half of urban Bangkok - Thai economy grew and SET went up.

Come Hell or high water - Thai economy will grow and SET goes up....or will it?

I am starting to doubt and I honestly think too much is stacked against this little economy.

i'm still not totally clear what objective thesis / theses you are looking for opinions on...

if your thesis is that the thai economy (based on gdp) is going to stop growing / start shrinking, i doubt it

(thailand is still relatively undeveloped with competitive advantages across various industries)

if your thesis is that the set index will stop rising / start falling, i doubt it although i'm no psychologist

(index is lower than ~20 years ago, market p/e ratio is not crazy high and earnings growth continues)

[mogo51]

This site has no rating

I think many missing the point. Thai economy is going through what Australia has just gone through for past 6 years. Labor government, no sound economic strategies, too fast increase in labour market, all equates to problems on the horizon. The weakening of the Thai bht is the start, with increased deficit and policies based on borrowings!

[gerry123]

Mmmmmmmmmmmmmmm can you please repeat the question

[brit1984]

This site has no rating

I think many missing the point. Thai economy is going through what Australia has just gone through for past 6 years. Labor government, no sound economic strategies, too fast increase in labour market, all equates to problems on the horizon. The weakening of the Thai bht is the start, with increased deficit and policies based on borrowings!

interest post... please could you just clarify do you mean a budget deficit? or a trade deficit?... i can see the link between borrowings and budget deficit but not between currency depreciation and budget deficit... not sure why borrowing would contribute to a trade deficit either, and i think currency depreciation would result from a trade deficit rather than causing it... what are the "problems on the horizon" you mention and what is "the point" we are missing?

[jacko45k]

difference export($210b) / imports ($232) estimated for 2013 is $20 billion = ~10% = not too bad.

Well considering that the US trade deficit is almost $700 billion for the year, but it's economy is more than 40 times larger than Thailand, I'd say that $20 billion Thai trade deficit is quite bad.

The USA is hard to compare to, it having the world's reserve currency to support what is really massive debt.

So may countries carry large trade deficits ....is Thailand any worse?

[howiem]

There seems to be an impression on the part of some that imports are bad and exports are good. That is not really the point. When a company imports products it is not as if the money disappears into thin air, rather the importer is willing to relinquish money for something he finds more valuable, i.e., the product he is buying. But note that Imports of raw materials, for example, are often used to make products that are both sold domestically and are also exported. Whether imported or exported, the process does not stop there. All products mustr be made, marketed, distributed, and sold to have any consumer benefits. Let’s say I import $20 billion worth of oil from Saudi. Saudi will have $20 billion but I will have the oil. Saudi will have the money, bu8t since in Saud, dollars are not the local currency, the only thing that Saudi can do with the dollars is store them (which takes them out of circulation) or use them to import products that are sold by another country in dollars.

Exports on the other hand are merely an exchange of goods from the seller for money from the buyer. If the money gained from the sale is in the local currency, then the exporter has that amount of mo0ney to use as he sees fit. If the money he gets from the sale is in, say, dollars and not baht, then the exporter wil probably exchan ge the money for baht at a local bank. The bank can lo9an that money to importers to make purchases of goods and services they need that are denominated in dollars.

When a country exports more than it imports, it just means that it gets more foreign currency, but what good is foreign currency unless you use it to buy something or invest? With more imports than exports it means that another country has your currency that it cannot spend except to buy things denominated in your currency. So, a trade deficit (more imports than exports) just means that the money has not returned to its home country yet.

A trade surplus really means that you have more foeign currency than you need at the time to buy products using that foreign currency.

The media has a way of trying to sensationalizing trade deficits by onloy reporting raw numbers. What we should really want to see is ratios, like the trade difference as a percent of GDP, and since GDP for Thailand is over 10 trillion baht and using 32 baht to the dollar, the $20 billionj comes to B625,000,000, thus the trade “deficit” comes to only 0.0000625. And this only means that other countries have not yet used their baht to buy Thai products. But as noted above, keep in mind that one could also call the trade “deficit” a surplus of imports, because imports have more value to the buyer than the money he spends for them. If they did not, there would be no deal.

[Time Traveller]

difference export($210b) / imports ($232) estimated for 2013 is $20 billion = ~10% = not too bad.

Well considering that the US trade deficit is almost $700 billion for the year, but it's economy is more than 40 times larger than Thailand, I'd say that $20 billion Thai trade deficit is quite bad.

if one compares apples with apples the trade deficit looks excellent compared to that of the US.

the "larger" economy is not a representative inch stick but totally irrelevant. what counts is the percentage between exports and imports and the probability that this gap can be closed.

in this respect Thailand beats the U.S. with ~10% difference hands down as the U.S. difference is ~50%.

How does it look excellent?

Based upon these numbers, the Thai trade deficit is around 5% of GDP ($20 bln out of an economy of almost $400 bln), the American trade deficit is by far the largest in the world but it is just 4.4% of GDP ($700 bln against GDP of $16 trillion). In fact, consider that the Thai export industries comprise around 60% of Thai GDP, that's a pretty poor performance from Thailand.

[Time Traveller]

What we should really want to see is ratios, like the trade difference as a percent of GDP, and since GDP for Thailand is over 10 trillion baht and using 32 baht to the dollar, the $20 billionj comes to B625,000,000, thus the trade “deficit” comes to only 0.0000625.

You need to check your math howiem

[howiem]

What we should really want to see is ratios, like the trade difference as a percent of GDP, and since GDP for Thailand is over 10 trillion baht and using 32 baht to the dollar, the $20 billionj comes to B625,000,000, thus the trade “deficit” comes to only 0.0000625.

You need to check your math howiem

Thanks for point it out. You are right. The import surplus as a percentage of GDP should have read 6.4%, not 0.0000625. In any event it is still relatively small in terms of GDP.

[h90]

to add: a lower Baht will also decrease imports.

[Acharn]

op - please could you make your point / question a bit more specific / clear... ?

I have always have a fundamental positive believe in the Thai economy.

After the military coup in 2006 - Thai economy grew and SET went up.

After years of street protest, airport closure and Bangkok burning - Thai economy grew and SET went up.

After the 2011 flood of industrial parks and half of urban Bangkok - Thai economy grew and SET went up.

Come Hell or high water - Thai economy will grow and SET goes up....or will it?

I am starting to doubt and I honestly think too much is stacked against this little economy.

I think you're starting to sound like the inflationistas in the U.S. There are some very smart economists who have been predicting for the last five years that because of the terrifying deficit or unimaginably huge national debt we are sure to have a Zimbabwe or Weimar style hyperinflation -- any day now. The numbers they look at seem so huge to them. Well, the deficit is going down, tne hational debt as a percentage of GDP is going down, interest rates on government bonds are at historically low levels, and inflation is only about half what the Fed wants and seems to be still going down (frankly, I'm worried about deflation, not inflation).

What I'm trying to gt at here is that I think your anxiety is probably baseless. I don't have the numbers, but my impression is that the amount of Thai debt in foreign currency denominated loans is far below the level it was in 1997. I don't see the kind of real estate bubble that was so obvious in 1993-7. The fevered atmosphere we had then doesn't seem to be here now (well, my interaction with well-off Thai families is much less now so maybe I just am not aware of it). To summarize, I think your fears are baseless. Breathe in deeply; breathe out.

I admit I'm seriously anxious about the political situation. I think the people behind it (the monarchists and Yellow Shirts) are getting panicky because they believe they need to get control of the country before the succession, and His Majesty is not in good health. I fear they are getting desperate and may do something really stupid that will set off a real civil war.

[Naam]

difference export($210b) / imports ($232) estimated for 2013 is $20 billion = ~10% = not too bad.

Well considering that the US trade deficit is almost $700 billion for the year, but it's economy is more than 40 times larger than Thailand, I'd say that $20 billion Thai trade deficit is quite bad.

if one compares apples with apples the trade deficit looks excellent compared to that of the US.

the "larger" economy is not a representative inch stick but totally irrelevant. what counts is the percentage between exports and imports and the probability that this gap can be closed.

in this respect Thailand beats the U.S. with ~10% difference hands down as the U.S. difference is ~50%.

How does it look excellent?

Based upon these numbers, the Thai trade deficit is around 5% of GDP ($20 bln out of an economy of almost $400 bln), the American trade deficit is by far the largest in the world but it is just 4.4% of GDP ($700 bln against GDP of $16 trillion). In fact, consider that the Thai export industries comprise around 60% of Thai GDP, that's a pretty poor performance from Thailand.

the ratio trade deficit / gdp is as irrelevant as are pregnancy exercises of a nun who has vowed eternal celibacy.

note to myself: sick and tired to point out for the umpteenth time the irrelevance of most GDP/XYZ ratios.

[ExpatOilWorker]

op - please could you make your point / question a bit more specific / clear... ?

I have always have a fundamental positive believe in the Thai economy.

After the military coup in 2006 - Thai economy grew and SET went up.

After years of street protest, airport closure and Bangkok burning - Thai economy grew and SET went up.

After the 2011 flood of industrial parks and half of urban Bangkok - Thai economy grew and SET went up.

Come Hell or high water - Thai economy will grow and SET goes up....or will it?

I am starting to doubt and I honestly think too much is stacked against this little economy.

I think you're starting to sound like the inflationistas in the U.S. There are some very smart economists who have been predicting for the last five years that because of the terrifying deficit or unimaginably huge national debt we are sure to have a Zimbabwe or Weimar style hyperinflation -- any day now. The numbers they look at seem so huge to them. Well, the deficit is going down, tne hational debt as a percentage of GDP is going down, interest rates on government bonds are at historically low levels, and inflation is only about half what the Fed wants and seems to be still going down (frankly, I'm worried about deflation, not inflation).

What I'm trying to gt at here is that I think your anxiety is probably baseless. I don't have the numbers, but my impression is that the amount of Thai debt in foreign currency denominated loans is far below the level it was in 1997. I don't see the kind of real estate bubble that was so obvious in 1993-7. The fevered atmosphere we had then doesn't seem to be here now (well, my interaction with well-off Thai families is much less now so maybe I just am not aware of it). To summarize, I think your fears are baseless. Breathe in deeply; breathe out.

I admit I'm seriously anxious about the political situation. I think the people behind it (the monarchists and Yellow Shirts) are getting panicky because they believe they need to get control of the country before the succession, and His Majesty is not in good health. I fear they are getting desperate and may do something really stupid that will set off a real civil war.

I hope you are right, but the numbers are just so convincing and alarming.

[ExpatOilWorker]

What we should really want to see is ratios, like the trade difference as a percent of GDP, and since GDP for Thailand is over 10 trillion baht and using 32 baht to the dollar, the $20 billionj comes to B625,000,000, thus the trade deficit comes to only 0.0000625.

You need to check your math howiem

Thanks for point it out. You are right. The import surplus as a percentage of GDP should have read 6.4%, not 0.0000625. In any event it is still relatively small in terms of GDP.

A 6.4% of GDP trade deficit is HUGE for an export driven economy. It is like The Bank of Thailand is using foreign reserves to subsidizing a country that addicted to cheap fuel and overpriced rice.

[Naam]

What we should really want to see is ratios, like the trade difference as a percent of GDP, and since GDP for Thailand is over 10 trillion baht and using 32 baht to the dollar, the $20 billionj comes to B625,000,000, thus the trade deficit comes to only 0.0000625.

You need to check your math howiem

Thanks for point it out. You are right. The import surplus as a percentage of GDP should have read 6.4%, not 0.0000625. In any event it is still relatively small in terms of GDP.

A 6.4% of GDP trade deficit is HUGE for an export driven economy. It is like The Bank of Thailand is using foreign reserves to subsidizing a country that addicted to cheap fuel and overpriced rice.

http://www.thaivisa.com/forum/topic/691879-thailands-trade-balance-how-bad-is-it/#entry7212634

[ExpatOilWorker]

It is now offical, the Thai economy will tank in 2015:

MahaNakhon is a luxury mixed-use skyscraper currently under construction in the Silom/Sathon central business area of Bangkok, Thailand. Designed to fit into the Thai landscape with a unique pixelated facade, it will have the unconventional appearance of a glass curtain-walled square tower with a cuboid-surfaced spiral cut into the side of the building. Upon its estimated completion in 2015, it will become the tallest building in Bangkok at 314 metres (1,030 ft) and 77 floors.

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

[paddyjenkins]

difference export($210b) / imports ($232) estimated for 2013 is $20 billion = ~10% = not too bad.

Well considering that the US trade deficit is almost $700 billion for the year, but it's economy is more than 40 times larger than Thailand, I'd say that $20 billion Thai trade deficit is quite bad.

if one compares apples with apples the trade deficit looks excellent compared to that of the US.

the "larger" economy is not a representative inch stick but totally irrelevant. what counts is the percentage between exports and imports and the probability that this gap can be closed.

in this respect Thailand beats the U.S. with ~10% difference hands down as the U.S. difference is ~50%.

You seem to be out of your intellectual depth here...the size of the economy is certainly relevant in gauging the impact of a country's deficit.....i.e., the size of the deficit versus gdp is relevant, a huge economy can absorb each $ of deficit more easily than a smaller economy....mathematical and economic fact...and frankly just common sense

[SheungWan]

op - please could you make your point / question a bit more specific / clear... ?

I have always have a fundamental positive believe in the Thai economy.

After the military coup in 2006 - Thai economy grew and SET went up.

After years of street protest, airport closure and Bangkok burning - Thai economy grew and SET went up.

After the 2011 flood of industrial parks and half of urban Bangkok - Thai economy grew and SET went up.

Come Hell or high water - Thai economy will grow and SET goes up....or will it?

I am starting to doubt and I honestly think too much is stacked against this little economy.

I think you're starting to sound like the inflationistas in the U.S. There are some very smart economists who have been predicting for the last five years that because of the terrifying deficit or unimaginably huge national debt we are sure to have a Zimbabwe or Weimar style hyperinflation -- any day now. The numbers they look at seem so huge to them. Well, the deficit is going down, tne hational debt as a percentage of GDP is going down, interest rates on government bonds are at historically low levels, and inflation is only about half what the Fed wants and seems to be still going down (frankly, I'm worried about deflation, not inflation).

What I'm trying to gt at here is that I think your anxiety is probably baseless. I don't have the numbers, but my impression is that the amount of Thai debt in foreign currency denominated loans is far below the level it was in 1997. I don't see the kind of real estate bubble that was so obvious in 1993-7. The fevered atmosphere we had then doesn't seem to be here now (well, my interaction with well-off Thai families is much less now so maybe I just am not aware of it). To summarize, I think your fears are baseless. Breathe in deeply; breathe out.

I admit I'm seriously anxious about the political situation. I think the people behind it (the monarchists and Yellow Shirts) are getting panicky because they believe they need to get control of the country before the succession, and His Majesty is not in good health. I fear they are getting desperate and may do something really stupid that will set off a real civil war.

The person who is getting desperate and is a threat to the Thai economy is Thaksin. If one assumes that the ruling class split will continue unresolved and until the guy is off the historical stage, then monies will persist to drain the public purse and weaken the economy. During the 2010 events FDI was not substantially derailed due to positive sentiment towards the region. That sentiment has reversed and so is more accentuating political and economic trends. The more than 20% drop in the baht since April is a reflection of this. The problem for the trade balance is not the actual figure but rather the trend and perception of whether the country is dealing with problems in a practical manner. Well its not rocket science to see how that is going. Exporting a few more prawns and getting in some more tourists may cut it for some, but 2014 doesn't look enticing in the slightest right now to fill my boots with baht.

[Naam]

difference export($210b) / imports ($232) estimated for 2013 is $20 billion = ~10% = not too bad.

Well considering that the US trade deficit is almost $700 billion for the year, but it's economy is more than 40 times larger than Thailand, I'd say that $20 billion Thai trade deficit is quite bad.

if one compares apples with apples the trade deficit looks excellent compared to that of the US.

the "larger" economy is not a representative inch stick but totally irrelevant. what counts is the percentage between exports and imports and the probability that this gap can be closed.

in this respect Thailand beats the U.S. with ~10% difference hands down as the U.S. difference is ~50%.

You seem to be out of your intellectual depth here...the size of the economy is certainly relevant in gauging the impact of a country's deficit.....i.e., the size of the deficit versus gdp is relevant, a huge economy can absorb each $ of deficit more easily than a smaller economy....mathematical and economic fact...and frankly just common sense

it would be interesting to compare portfolios and find out which one has, for the last 35 years, a better track record. the one managed based on "frankly common sense" or the one managed based on "out of intellectual depth"?