Thai economy 'close to recession': KResearch

[webfact]

Thai economy 'close to recession': KResearch
THE NATION


Charl

BANGKOK: -- THE THAI economy is close to entering recession mode, given the difficulty of achieving a recovery this quarter when nearly all the normal growth drivers are still heavily weighed down by the political turmoil, according to Kasikorn Research Centre's latest analysis paper.

The research house echoes previous recession forecasts for the economy by the Bank of Thailand and the National Economic and Social Development Board (NESDB).

However, the central bank acknowledged that gross domestic product in the first quarter might shrink from the previous quarter, probably resulting in just a technical recession if it showed a further dip in the current quarter.

Investors 'shocked'

The NESDB had shocked investors by announcing in its forecast for 2014 Thai GDP growth that the economy has already entered a real recession.

The agency predicted that GDP in the current quarter would contract by 0.3 per cent from the first quarter, and that first-quarter GDP would fall by 1.7 per cent from the final three months of 2013.

Charl Kengchon, managing director of KResearch, said the prolonged political unrest had seriously hit the economy, causing the pressure on domestic spending in the first three months.

Public investment and the tourism sector have also dipped, while the export sector has showed flat growth, he said.

Given these factors, KResearch expects GDP in the first quarter to have declined by 1.8 per cent from the previous quarter, but to have expanded 0.7 per cent on a year-on-year basis.

Export 'cannot offset

negative factors'

"For the second quarter, exports are the only key driver of the economy expected to post a better performance than in the first quarter.

"Yet export growth is unable to offset all the other negative figures, such as domestic spending, tourism income, and investment expenditures - making the second quarter's economic growth rate likely to come in at 0.9 per cent, which is considered a low level," Charl said.

However, the economy in the second half has room to rebound when compared with the same period last year, which had a low base, he said.

Economic growth can be recovered if the political unrest is resolved, plus the prospects are that the export sector will significantly rebound from the economic recovery of trading-partner markets, he added.

KResearch expects the economy in the second half to expand by 3 per cent, based on overall domestic spending not yet having recovered.

The private sector will face higher funding costs and a higher inflation rate, driven by higher wage costs as well as a rise in public utility rates by the end of the year.

These factors will be taken into account by the Bank of Thailand when it considers its monetary-policy stance, said the research house. Therefore, full-year GDP is forecast to expand by 1.8 per cent, it concluded.


-- The Nation 2014-04-17

[bino]

Charl Kengchon, managing director of KResearch, said the prolonged political unrest had seriously hit the economy, causing the pressure on domestic spending in the first three months.

I find it ironic that the former Thai Farmers Bank is saying this. A huge aspect should be patently obvious to them that in that there are a lot of unpaid farmers who are in no position to do any "domestic spending".

[Cylon]

Im in business here, I can tell you we already are.

[Somtamnication]

Wake up call for Thailand. But then again, 1997 was also a wake up call and it was all forgotten years later.

[sirineou]

Some one needs to explain to Thai politicians the inherent flaws in forming a circular firing squad.

[Robby nz]

The protests are a convenient thing to blame and no doubt have an impact on some sectors.

However they can not be blamed for flat exports, the 40% drop in new car sales reported elsewhere, nor the rapid growth in private and public debt.

It is difficult to see how domestic spending can increase significantly with the present level of debt without increasing that debt.

[Minnehaha]

Wake up call for Thailand. But then again, 1997 was also a wake up call and it was all forgotten years later.

Not exactly. Monetary policy got fixed. Current account turned around. They paid off the IMF ahead of schedule. But your point is well taken. The govt needs to spend money and manage things for growth, and they are not doing this cause they are deadlocked in stupidity. So, in that sense I agree. Still the tools are in place that were not before.

[shirtless]

I surprised this report did not state that all is well tourism is up exports are up what recession,

[kurnell]

I am lucky to work in a job that is recession proof.

[tezzainoz]

I am lucky to work in a job that is recession proof.

Oh my god

your an undertaker

[ezzra]

Recession? what recession? Go tell that to the 40,000 + people who had placed orders for new cars at the last car's show..

[cmiuc]

I think if they outlawed and imprisioned corruptive people that would solve the recession problem... there would be plenty of money to go all around to shore up the economy... it is unbelievable how corruptions is becoming more and more flagrant.. I wonder how it will play out with ASEAN because Singapore and Malaysia are so anti-corruptive in their measures to individuals who are caught... (Is Thailand becoming the Greece of EU?) hehe

[cmiuc]

Recession? what recession? Go tell that to the 40,000 + people who had placed orders for new cars at the last car's show..

555...

i bet it wasn't from working honestly you think?

[noitom]

Too bad the Thai press runs a story like this with a full page photo of the guy instead of a chart showing some comparative catastrophe in the economy. The guy looks good but that's not the point of credibility, the data is the point. The Thai press should learn to use informative graphics to lead economic stories.

[kurnell]

I am lucky to work in a job that is recession proof.

Oh my god

your an undertaker

So close it's not funny

[Mrjlh]

Recession? what recession? Go tell that to the 40,000 + people who had placed orders for new cars at the last car's show..

They never tell you about the 39,000 that turn their new cars back in because they find out they can't afford them after one year.

[gerry123]

I surprised this report did not state that all is well tourism is up exports are up what recessio

Because it is not a TAT report

[Pib]

Recession? what recession? Go tell that to the 40,000 + people who had placed orders for new cars at the last car's show..

They never tell you about the 39,000 that turn their new cars back in because they find out they can't afford them after one year.

Several of my in-laws are part of that 39,000. But I wouldn't say they turned their cars back in; it's more like the finance company came and took it back.

And the durn shame about it is how some of these in-laws borrowed money from family & friends (not me) to make the downpayment and some of the monthly payments with those family/friends still owed the borrowed money.

[MrJohnson]

I think if they outlawed and imprisioned corruptive people that would solve the recession problem... there would be plenty of money to go all around to shore up the economy... it is unbelievable how corruptions is becoming more and more flagrant.. I wonder how it will play out with ASEAN because Singapore and Malaysia are so anti-corruptive in their measures to individuals who are caught... (Is Thailand becoming the Greece of EU?) hehe

Corruption is a cancer on this and all nations where it exists. There is compelling evidence for a direct correlation between corruption and development and the relationship is inverse. i.e. the higher the level of corruption, the lower the level of development. Unfortunately in Thailand and many other countries, it is a question of definition and selfishness. A major paradigm shift must occur before any changes are seen and part of the change must include tough penalties that are enforced.

[majhiggins]

Gee, let's keep building more and more apartments and houses that nobody can afford or wants. When I first moved here (Korat), 8 years ago, I was struck by all of the vacant houses scattered throughout the place. Over time I discovered more and more and more of them. Learned that then, 2006, over 25% of residential property was unoccupied. With the unprecedented building boom, that number is probably closer to 35% today. Some of those places have been owned by the banks since the baht crash in the late 1990s. What does everybody who's taken a business class, or even a history class, learn? When supply exceeds demand, the price goes down, and vice versa. Not here. In the US, if a bank re-possesses a property, they can hold it on their books for a maximum of 90 days. Then it has to be sold by "public outcry" (auction) for whatever the market will offer. That's why US housing values periodically crash. Sad for the owners bur a real boon for those working class slobs who are lucky to get in on a dip. In most of Asia, Thailand included, banks can hold property indefinitely. And, they can keep its book value at the value they set for the property when it was new. In other words, even though it will never sell, it's over priced to beging with and now vacant for 10 years, there's pigeons living inside it and the wiring is shot, it shows up as 100% of the original asking price as a bank asset. IOW, if you were to really let property prices go to what they should, a condo would go for about 750k, a fancy condo or a simple house for 1-mill, and a large nice house for about 1.5 -mill. Possibly less, based on most Thai's wages. I own my own place here. Paid 2.7 but it honestly should be worth 1.5. It also means that virtually every bank is insolvent. This place is headed for such a day of financial reckoning! And they build more and more and more of these condos and row homes and shop/homes every day. Years after they have finished them, most of the units are still vacant but the price never drops 1 Satang.

[phetaroi]

I keep wondering when Thailand will wake up.

Daily murders and bombings in the South for years now? No.

Riots and the burning of 30 major buildings 4 years ago? No.

The current political crisis with hand grenades and bombs being thrown around Bangkok? No.

A recession? I doubt it.

In terms of politics, mai pben rai is dead.

In terms of solving issues and problems, mai pben rai is alive and well.

It wasn't what was predicted in the 1960s and 1970s that will lead to the demise of a vibrant Thailand -- external dominoes. It's the internal dominoes that will do the deed. The party is almost over.

[webfact]

Thai economy on blink of recession



BANGKOK: -- Thailand’s leading private "think tank" Kasikorn Research Center or KResearch says the country’s economy is on the verge of recession, blaming the prolonged political turmoil as main reason.

The think tank center said the Thai economy during the first and second quarters of the year is showing limited growth of less than one percent, due to the ongoing political conflicts.

It said under such environment, the country’s economy might be facing a recession soon.

At the same time KResearch also reported zero growth in exports during the first quarter of 2014 which is close to that of the last quarter of the previous year, which is still seeing a minus growth of 1.8 percent.

This showed that the country is at risk of on the blink of a recession, the research center noted.

It further said that economic growth in the second quarter of the year would still rely mainly on the country’s political situation.

It revealed that Thailand would be seeing a hike of only around 0.9 percent, which is deemed lower than the standard of the country.

KResearch also forecast that the country’s economy would increase by about 1.8 percent for the whole year.

Bangkok Bank executive vice president Kobsak Pootrakool estimated that the Thai economy this year could grow by about 2-3 percent, while exports could expand by 5-7 percent, thanks to the recovering global economy.

Source: http://englishnews.thaipbs.or.th/thai-economy-blink-recession/


-- Thai PBS 2014-04-17

[belg]

and they will blame everything one some people closing some few streets in bangkok, or mismanagement of funds & corruption ?

[Danbit]

I do not understand the economy in Thailand. I am surprised I see new condoes and small houses build everywhere in Thailand. Who can afford to buy and live there ? With all that activity in the housing market it seems strange, that there could be a recession, before the market (banks) crash. The building activity must be in the BNP ?

[Bkungbank]

Government spending have really benefit for the country ,people and the whole economy and on certain popular spending for own party benefit but harm the GDP of the country, What my personal view the spending should based on economy strength with both opposition and government discuss in parliament to find correct path for the nation.

Currently the government ego to make own decision without listen to any side which a disaster for the nation,Some good projects like free buses and train for the poor should continue but some bad project like rice pledging programmed shouldn't be continued.

Every year of Songkran they have a deity for certain year but this year a expensive on petrol and inflation which not so good news.

[MobileContent]

I put my cards on Bangkok Bank and do not believe that their will be a recession in Thailand at least not this year.

[X pat]

Some times I think my gold fish have more intelligence then some of the people that run this country.

[bangkapi]

Sum Ting Wong caused the economy to be on the blink of recession.

[zaZa9]

^ Yes , was just going to comment that if something is broken it is 'on the blink'.

If something is on the verge of breaking , its 'on the brink'...

But hey , this is the Thai media .... no plobrem!

[TallGuyJohninBKK]

Thai economy on blink of recession

Is that the kind where if you blink, you've missed it, and it's gone???