Political Uncertainty Is Hurting Thai Economy And Investments

[Jai Dee]

Political uncertainty is hurting Thai economy and investments

The continuing political uncertainty has begun to hurt the Thai economy, as investors are becoming more cautious, caretaker Finance Minister Thanong Bidaya said Wednesday

Thanong is concerned about declining investments, especially in the construction sector, because the political conflict has delayed state investment in the mega-projects by about a year, he said.

Bidding for the mega projects was to begin last month, but the political uncertainty has delayed the process for at least a year.

Source: The Nation - 17 May 2006

[Jai Dee]

Mr. Thanong: the govt must urgently solve the nation's political problems

Finance Minister Thanong Bidaya (ทนง พิทยะ) has indicated that the government must urgently solve Thailand’s political problems, following the economic slowdown this year.

According to Mr. Thanong, the economic figures in the first trimester of this year show positive results, but the figures concerning the real estate industry are worrying as they are related to the employment rate.

He said the Finance Ministry is closely monitoring the domestic investment in Thailand.

He added that the ministry also considers the mistakes of the Electricity Generating Authority of Thailand’s (EGAT) privatization, and will use them as the guideline for other similar projects.

The economy in the second and third trimesters is predicted to face recession.

Source: Thai National News Bureau Public Relations Department - 17 May 2006

[Ned]

Does Thailand actually need a govt ?

[xbusman]

When they mention that there might be smoke somewhere, you can count on a complete reactor meltdown currently in progress. There are way too many stories about smoke, the housing sector has slowed down dramatically, the export sector has taken a big hit, pawn shops are running out of money, I am starting to multiple alarms going off. It may be the reason Thaksin has decided to take a vacation for a few months.

Fasten your seatbelts and make sure loose items are secured, this could get scary pretty quickly.

[Jai Dee]

Caretaker finance minister Thanong expresses concerns about effects on the economy from political problems

The political vacuum being experienced in Thailand can affect the investment climate.

Caretaker Finance Minister Thanong Bidaya (ทะนง พิทยะ) said he was concerned that political uncertainties might cause the economy to slow down next year as confidence of investors could reduce.

Mr. Thanong said the caretaker government has no authority to approve the budget for the 2007 fiscal year to stimulate the economy.

Thailand will hold the general election on October 15.

Source: Thai National News Bureau Public Relations Department - 01 June 2006

[Jai Dee]

PM calls a special meeting with the Cabinet tomorrow

Prime Minister Thaksin Shinawatra will call a special meeting with the Cabinet members tomorrow to find ways to stimulate the national economy. He has discovered that the economy is current facing a slowdown due to the instable political situation of the country.

In the meantime, Pol. Lt. Col. Thaksin has received a one million baht donation from Mr. Boonsong Srifuengfung (บุญทรง ศรีเฟื่องฟุ้ง), the President of Thai-Chinese Chamber of Commerce. The money will be used to assist the flood victims in the four northern provinces of Thailand.

Mr. Boonsong has also given a flower banquet to the Prime Minister and encouraged him to continue his political role.

Source: Thai National News Bureau Public Relations Department - 01 June 2006

[ovenman]

Prime Minister Thaksin Shinawatra will call a special meeting with the Cabinet members tomorrow to find ways to stimulate the national economy. He has discovered that the economy is current facing a slowdown due to the instable political situation of the country.

That is simply a classic sentence.

[joe beets]

Prime Minister Thaksin Shinawatra will call a special meeting with the Cabinet members tomorrow to find ways to stimulate the national economy. He has discovered that the economy is current facing a slowdown due to the instable political situation of the country.

That is simply a classic sentence.

A regular Columbus he is.

The next paragraph:

In the meantime, Pol. Lt. Col. Thaksin has received a one million baht donation from Mr. Boonsong Srifuengfung (บุญทรง ศรีเฟื่องฟุ้ง), the President of Thai-Chinese Chamber of Commerce.

It's like they're talking about somebody other than the PM.

The money will be used to assist the flood victims in the four northern provinces of Thailand.

Of course it will.

How dare you think otherwise!

Mr. Boonsong has also given a flower banquet to the Prime Minister and encouraged him to continue his political role.

Source: Thai National News Bureau Public Relations Department - 01 June 2006

Didn't these guys used to write for Seinfeld?

"This story is about - - - nothing!"

Enjoy the flowers, #######.

jb

[Ricardo]

Prime Minister Thaksin Shinawatra will call a special meeting with the Cabinet members tomorrow to find ways to stimulate the national economy. He has discovered that the economy is current facing a slowdown due to the instable political situation of the country.

That is simply a classic sentence.

So it's really nothing to do with the excessively strong baht, or the high price of oil, or the causes of the recent decline in stock-markets of many other emerging-economies ?

[Jai Dee]

Thailand's political confidence index drops to a 14 month low

Thai people’s political confidence in May drops to the lowest level in 14 months.

Suan Dusit Poll manager Sukhum Chaloeysap (สุขุม เฉลยทรัพย์) said an opinion survey on 5,816 people across the country between May 20 and 31 revealed the confidence index tumbled down to 90.44 points, a decrease of minus 11.71 points compared to that of the same period of last year. Mr. Sukhum said that was the lowest in 14 months.

Mr. Sukhum said major causes of the decrease in public confidence in politics included drug and security problems, violence in the far south, the opposition’s election boycott, a lack of safety to lives and property and the spread of crime.

Source: Thai National News Bureau Public Relations Department - 02 June 2006

[Jai Dee]

Economic related agencies urged to restore confidence of foreign investors

The government is gearing up to stimulate the economy. Prime Minister Thaksin Shinawatra attended a meeting with concerned agencies today to find ways to restore the foreign investors’ confidence.

Around 12:00 hours today, Prime Minister Thaksin chaired the meeting at the Government House to follow up with the economic and social developments following the Cabinet’s resolution.

Dr. Thaksin yesterday said that the meeting today will discuss the measures to stimulate the economy as it is slowing down and have affected the confidence of foreign investors on the stability of Thai politics and the investment direction.

The Finance Ministry, the Federation of Thai Industries, and the Thai Chamber of Commerce will submit a proposal for the government banks to assist farmers with an interest loan of 160 billion baht.

Source: Thai National News Bureau Public Relations Department - 02 June 2006

[Jai Dee]

DPM Somkid is confident that the government can control the economic situation

Deputy Prime Minister and Finance Minister Somkid Jatusripitak (สมคิด จาตุศรีพิทักษ์) is confident that the government can control the economic situation during this inflation period if the prices of fuel are stable.

He said that today’s meeting will be about the national economy and social affairs. He added that the measures to deal with the current economic crisis will be proposed will be discussed. He said that the Agriculture and Cooperatives Ministry and the Commerce Ministry will both be responsible in setting the product prices. The Agriculture and Cooperatives Ministry will be responsible in coordinating with the government banks to assist the low income people.

Dr. Somkid reported that the current inflation rate is 6.2%, and he also believes that the government can control this economic situation. He said that the most important thing that the government should be concerned is to prevent certain product prices to soar.

Source: Thai National News Bureau Public Relations Department - 02 June 2006

[Terminator]

When they mention that there might be smoke somewhere, you can count on a complete reactor meltdown currently in progress. There are way too many stories about smoke, the housing sector has slowed down dramatically, the export sector has taken a big hit, pawn shops are running out of money, I am starting to multiple alarms going off. It may be the reason Thaksin has decided to take a vacation for a few months.

Fasten your seatbelts and make sure loose items are secured, this could get scary pretty quickly.

taksin is still here...

when there is blood running down the street, then its time to invest, maybe in the next year or so, eat my words it will happen

[Plus]

A bit off topic

Does Thailand actually need a govt ?

The cheapest international call rates in Africa are in Somalia where there has been no government for a decade and telcos have been developing competing with each other without any regulating bodies.

[John K]

From time to time patient’s bodies reject transplanted organs that have been functioning for several years. Even with medication, once the rejection process has started little can be done to stop the rejection. After that there are but two choices, replace the organ or die.

[ratcatcher]

Mr. Boonsong has also given a flower banquet to the Prime minister and encouraged him to continue his political role.

Source: Thai National News Bureau Public Relations Department - 01 June 2006

Thereby demonstrating the age old custom of "Kissing ass"

BTW, the last time I looked it was "CARETAKER PRIME MINISTER" have I missed something?

[Jai Dee]

Thai economy pays price for political limbo

During April and much of May, Thaksin Shinawatra, Thailand’s billionaire prime minister, sought to defuse political tensions by conspicuously acting the unemployed man of leisure – playing golf, travelling overseas and visiting upscale Bangkok malls with his family.

Mr Thaksin’s political “cooling off” period ended on May 20 when he took back the reins of government ostensibly to tackle pressing national problems, including worsening violence in the south and a slowdown in the economy. But with elections still months ahead, analysts say Mr Thaksin has few tools to reinvigorate an economy now losing steam after months of political turbulence.

“I’m writing off 2006,” said Supavud Saicheau, managing director of Phatra Securities. “We are drifting along with 4-4.5 per cent growth, or maybe less. The direction is not going to be there. We are rudderless.”

Gross domestic product grew 6 per cent in the first quarter, in spite of mass protests in Bangkok against Mr Thaksin. But with the country now in legal and constitutional limbo, “the economy is softening gradually”, said Sriyan Pietersz, head of research at JPMorgan.

“The real issue is that investment – public and private – will falter as a direct result of the political uncertainty,” he said.

While government agencies are paring their growth forecasts for this year, Thanong Bidaya, the finance minister, has expressed concern that the economic fall-out from the prolonged political crisis could persist through next year. “For 2007, I dread to imagine how things would look,” he said last week.

At the start of the year, Thailand’s economy app-eared poised to grow by up to 6 per cent this year, pushed by an expected strong pick-up in private investment and the beginning of a surge in large-scale infrastructure projects.

But that was before Mr Thaksin’s family sold Shin Corp, its telecommunications empire, to Singapore’s Temasek Holdings for a tax-free Bt79bn ($2bn, €1.6bn, £1.1bn), triggering a mass outcry, the dissolution of parliament and a bizarre election that has left the country without a fully functioning government. Last month the constitutional court annulled the controversial April 2 election, which was boycotted by the opposition, and fresh polls have been tentatively set for October 15. But a stand-off between the courts and the discredited Election Commission over the supervision of new polls, and speculation that Mr Thaksin’s Thai Rak Thai party could be dissolved for legal violations, is weighing on sentiment.

Amid the political tensions, consumer confidence is being eroded by record high retail oil prices and high inflation, which hit 6.2 per cent in May. Banks are paring back projected loan growth and warning of early signs of rising defaults, while property companies are cutting estimates for sales of new homes.

The stock market has fallen 9 per cent since its peak on May 10, two days after the election was annulled. Talks with the US on a free trade agreement are at a standstill.

“You have people not wanting to make foreign direct investment commitments, or that incremental capacity expansion decision if they have no idea what policy decisions are in the offing,” said Mr Pietersz. “It doesn’t make sense to make the final decision unless you are certain policies will not be detrimental.

“For local investors, the issue is visibility of growth,” he said. “If you are seeing the economy softening now, why would you want to make that upfront bet be-cause you may be misreading demand.”

The government’s spending, especially on long-awaited infrastructure pro-jects, will also be impeded as the lack of a functioning parliament is creating serious delays in the budget process.

Normally, parliament approves the budget for the next fiscal year – which starts on October 1 – by August. But Thailand will not have a fully functioning government until November or December. Even if a new budget is approved quickly, the time required for tendering and bidding means big projects may not get under way until mid-2007.

To keep his core support base – poor rural voters – happy ahead of the next polls, Mr Thaksin has pledged Bt59bn in new rural spending and to lower interest rates for farmers. He also intends to start development of three new subway lines, although analysts are sceptical about his ability to proceed in the present climate.

So far, robust exports, which grew a better-than-expected 17 per cent in the first quarter, have cushioned the impact of the political crisis on the domestic economy. But export growth, which was a slower 11 per cent in April, may also be softening because of the weakening dollar and global imbalances.

“The only engine that is still humming strong is exports,” said Kitti Nathisuwan, head of research for Macquarie Securities. “If exports slow down, we are talking about even more downside to GDP growth.”

Source: Financial Times - June 6 2006