Central bank: Thai economy weakens but far from recession

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Central bank: Thai economy weakens but far from recession
By Digital Content



BANGKOK, Apr 1 – The Bank of Thailand (BoT) has given assurances that the Thai economy, despite deteriorating growth, has yet to suffer recession.

Mathee Supapongse, the central bank’s senior director of the Macroeconomic and Monetary Policy Department, said the country’s Q1 gross domestic product (GDP) will possibly shrink compared to last year's Q4 which grew only 0.6 per cent.

A recession does not occur unless the country encounters two consecutive quarters of financial setbacks, he said, adding that the economy should pick up in the second quarter.

If the new government takes office in the second half of the year, public spending for the 2015 fiscal year will move on as planned, thus enhancing investors’ and tourists’ confidence, he said.

Now that the state of emergency has been cancelled, tourism should spring back in three months after the political situation returns to normal, he said.

Mr Mathee said the BoT will maintain projected GDP growth at 2.7 per cent and export growth at 4.5 per cent if relevant elements move as predicted.

Exports are the only positive factor contributing to economic growth and strengthened export will stimulate the industrial manufacturing sector, he said.

The business confidence index improved from 52 to 53.2 in February but investors’ concerns over the political impasse have slowed down their new investment, he said.

Economy in February declined from the preceeding month as people were more cautious in household spending and investment.

Indices in various sectors have fallen including private consumption by 2.5 per cent, private investment by 7.7 per cent, industrial manufacturing sector by 4.4 per cent and imports by 18.9 per cent.

Imports wee valued at US$14.254 billion while exports expanded by 2.2 per cent to US$18.15 billion. (MCOT online news)


-- TNA 2014-04-01

[HiSoLowSoNoSo]

Assurances and white lies again? While at the same time foreign companies seeking BOI deals are not able to register their businesses. Maybe they should consider that all foreign companies can own their businesses 100% instead of the bullshit they are facing now.

[Pib]

Now hints of recession from BOT since they are now beginning to explain recession. Personally I don't think Thailand will go into rescission but I think the GDP will go lower than the current projection of 2.7% which has already been revised downward once or twice by BOT.

[chainarong]

Did the economy go into recession in the last coup, Thailand has been very resilient since 1997 and full credit must go to the financial sector for this, they have a very strong presence in the country and one would hope this continues without interference from politicians.

[Thai at Heart]

Did the economy go into recession in the last coup, Thailand has been very resilient since 1997 and full credit must go to the financial sector for this, they have a very strong presence in the country and one would hope this continues without interference from politicians.

Gulp....the politicians are the banks, and the construction companies, and the agribusinesses, and the mall developers.

What do you mean the politicians shouldn't meddle with business. I wish business would stop meddling with politics.

[bigbamboo]

Did the economy go into recession in the last coup, Thailand has been very resilient since 1997 and full credit must go to the financial sector for this, they have a very strong presence in the country and one would hope this continues without interference from politicians.

Gulp....the politicians are the banks, and the construction companies, and the agribusinesses, and the mall developers.

What do you mean the politicians shouldn't meddle with business. I wish business would stop meddling with politics.

Business people should get out of politics....... starting from the very top.

[tingtongteesood]

If they use the unemployment figures as an indicator of recession, it seems Thailand's unemployment has been under 1% for decades. I guess as long as people are free to sell illegal bootleg copies of movies, music, computer software with impunity, very few people will ever see official 'unemployment'....

[Pib]

If they use the unemployment figures as an indicator of recession, it seems Thailand's unemployment has been under 1% for decades. I guess as long as people are free to sell illegal bootleg copies of movies, music, computer software with impunity, very few people will ever see official 'unemployment'....

Selling stuff on the sidewalk from food to everything else under the sun employs a LOT of Thais. I'm sure many of those folks would prefer a different/better job but that's the only job they have which is basically self-employment.

[digibum]

If they use the unemployment figures as an indicator of recession, it seems Thailand's unemployment has been under 1% for decades. I guess as long as people are free to sell illegal bootleg copies of movies, music, computer software with impunity, very few people will ever see official 'unemployment'....

Does anybody know how they calculate unemployment in Thailand? I know for most countries it's a measure of those applying for unemployment benefits. Since Thailand offers none, how do they count the number of people who are unemployed? Take a stroll down any major city in Thailand and a good percentage of the businesses seem, ahem, underground. The food vendors? The people selling stuff on the streets? Even some of the more legit businesses don't bother with paperwork on their employees.

I mean, this 1% number that is always touted seems abnormally low even for a country that has the growth rate Thailand has. This has to be a number that someone pulls out of their butt because it seems impossible to determine given the underground economy and the fact that nobody who was actually out of work has any incentive to communicate that fact to the government.

Another reason I suspect this number is complete BS is the fact that you can't keep growing without adding more workers. How can the economy grow by 6% or whatever a year and the unemployment rate be at 1% without increasing the demand for labor to the point where wage inflation becomes a problem? I don't see massive hiring schemes happening in Thailand as they look to import skilled labor to handle all of the new jobs created by the economic growth. Sure, they use a lot of illegal labor but for the lowest level jobs. What about IT? Engineering? Logistics? Transportation? Surely, Thai universities aren't pumping out enough qualified people to fill all of the openings 6% growth and 1% unemployment would imply.

I still see 3 or 4 security guys sitting around in front of apartment buildings, more staff in restaurants and bars than customers, department stores where it takes 4 people to ring up your purchase, etc. Does that sound like something you would see in an economy growing like wildfire but has an unemployment rate of less than 1%?

[Pib]

Thailand does have unemployment benefits but they are small...and unless you where paying into the system before losing your job you don't get anything. I don't expect many self-employed folks in Thailand pay into the system and many who are employed privately don't pay into the system...and I doubt many visit the unemployment office. See this Thai Social Security Office Link for more info. Yea, the unemployment stats in Thailand are no doubt calculated differently than in most western countries.

[VegasVic]

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Now hints of recession from BOT since they are now beginning to explain recession. Personally I don't think Thailand will go into rescission but I think the GDP will go lower than the current projection of 2.7% which has already been revised downward once or twice by BOT.

The standard definition of economic recession is two consecutive quarters of declining GDP, since the impact of these protests did not really begin to effect the Thai economy until very late last year, we will not know if Thailand is in recession until 2nd quarter GDP figures are out perhaps sometime in late July or early August My hunch is that Thailand could very well be in a mild recession, but as long as the political situation calms down this will pass almost unnoticed. On the other hand should the political situation escalate then a more steep recession would be a given. Longer term, Thailands economy will udoubtedly be effected by the slowdown in China so it is imperative that Thailand get its political house in order, or else the impact of the coming China slowdown could be magnified in the Thai economy