BOT confident that Thailand would not face an economic crisis

[webfact]

BOT confident that Thailand would not face an economic crisis

BANGKOK, 9 May 2014 (NNT) - BOT Governor Prasarn Trairatvorakul has accepted that even though the Thai economy is having problems due to less companies operating businesses this year and lower income levels among workers. However, he sees these situations as temporary short-term problems.

Mr. Prasarn said that even though the nation’s GDP growth for 2014 would likely be low, it would not lead to a negative growth or an economic crisis as Thailand’s economic fundamentals still remain strong.

The governor stated that it’s best to follow up on the progress of the political situation after the Constitution Court reached a verdict on May 7th to remove Ms. Yingluck out of her prime ministerial position.

He said that the BOT would have to adjust the GDP and export growths down from their original targets of 2.7 percent and 4.5 respectively, citing the reason that Thai exports during the first quarter had grown lower than expected.


-- NNT 2014-05-09

[Piichai]

...problems due to less companies operating businesses this year and lower income levels among workers.

I guess raising the minimum wage wasn't such a great idea after all.

[baxida]

Clear as mud, the fundamentals don't help when you have the facts in front of you.

Edited May 9, 2014 by baxida

[trogers]

"it would not lead to a negative growth..."

In maths, a fall in growth from the period before means there is negative growth...

If growth is zero or positive, growth would not fall. I am teaching maths to grade 5-6 students...

[robblok]

In my time here in Thailand I have almost never seen a negative comment from officials about the economy or stuff like that. They always have to give it a positive spin. Sometimes they just lie like the minister of white and evil lies Kittiratt

[Soi Sauce]

"it would not lead to a negative growth..."

In maths, a fall in growth from the period before means there is negative growth...

If growth is zero or positive, growth would not fall. I am teaching maths to grade 5-6 students...

So if my business grows 5% year on year one month and 2% year on year the next, I'm experiencing negative growth? Don't think so as the income is still growing.

Please explain.

[trogers]

"it would not lead to a negative growth..."

In maths, a fall in growth from the period before means there is negative growth...

If growth is zero or positive, growth would not fall. I am teaching maths to grade 5-6 students...

So if my business grows 5% year on year one month and 2% year on year the next, I'm experiencing negative growth? Don't think so as the income is still growing.

Please explain.

Growth is falling in a trend (negative from year 2)...and in a straight line projection, your business volume will be less than the start after the 4th year.

Edited May 9, 2014 by trogers

[JeremyBowskill]

Well nobody ever talks about a crisis unless there is a fair to middle chance of it happening IMO. Seems to me the very mention of it implies it a real possibility.

[belg]

miracle thailand, where wordly economics do not matter

[mexxx]

i think thailand is struggling with inflation but dont want to say.

look at the heavily subsidised prices being earned on rice, the skyrocketing prices of limes & real estate in the stratosphere.

the poor old thais are earning developing world wages but paying developed world prices & even higher for a lot of stuff.

[Benmart]

I suppose this gentleman is not aware of the economic slowdown in China, which by the way, is the major recipient of Thai exports. The economic indicators seem to contradict the positive outlook he is projecting.

I'm not an economist, but I've been following what is going on in and around the Thailand. There may be an economic Tsunami heading towards Thailand, and those in positions of power and trust seem to be telling everyone not to run to higher ground. The results may be disastrous.

[carstenp]

I suppose this gentleman is not aware of the economic slowdown in China, which by the way, is the major recipient of Thai exports. The economic indicators seem to contradict the positive outlook he is projecting.

I'm not an economist, but I've been following what is going on in and around the Thailand. There may be an economic Tsunami heading towards Thailand, and those in positions of power and trust seem to be telling everyone not to run to higher ground. The results may be disastrous.

Me neither a economist, but as you followed this.

I have like you been reading a lot about the oconomy . Forbes was writing this for some months ago

How Thailands Bubble Economy Will Pop

Thailands bubble will most likely pop when Chinas economic bubble pops and/or as global and local interest rates continue to rise, which are what caused the countrys credit and asset bubble in the first place. The resumption of the U.S. Federal Reserves QE taper plans may put pressure on Thailands financial markets in the near future.

As Ive been saying even before this summers EM panic, I expect the ultimate popping of the emerging markets bubble to cause another crisis that is similar to the 1997 Asian Financial Crisis, and there is a strong chance that it will be even worse this time due to the fact that more countries are involved (Latin America, China, and Africa), and because the global economy is in a far weaker state now than it was during the booming late-1990s.

I really hope some oconomist in here can explain why the baht is still strong and foreigner still buying on the stock marked

Link http://www.forbes.com/sites/jessecolombo/2013/11/04/thailands-bubble-economy-is-heading-for-a-1997-style-crash/

[carstenp]

Look at the rice, car, house scheme there has being going on. Forbes says this about it

Thailands Boom Is Driven By An Underlying Credit Bubble

As with most other emerging market nations, Thailand is currently experiencing a dangerous credit bubble that is helping to boost its economic growth and consumer spending. Though traditionally an export-driven economy, debt-funded domestic demand has replaced the countrys export sector as the primary economic growth engine since 2008.

Right now in Thailand.

Export is falling

Private Debt is about 90 % of GDP

Consumer index 58%

Bad loan extended to 3-4%

Tourist down

No government

And so on

Edited May 9, 2014 by carstenp

[frozin1]

...problems due to less companies operating businesses this year and lower income levels among workers.

I guess raising the minimum wage wasn't such a great idea after all.

An example of specious reasoning at it's best.

Okay Mr Nobel Prize In Econ101.

A company sells a hamburger in Los Angeles for $1.19 USD.

The same company sells the same burger in New York City for $1.89 USD.

Which city has the higher minimum wage? Both cities are located in the USA just to clarify that point.

LA at $8.00 USD. NYC at $7.25 USD.

So why, Mr Economist, does the same hamburger cost less at the location with the higher minimum wage?

It's because real estate prices are much higher in NYC. That is the major factor in the price discrepancy. The labor cost is rarely the driver behind rising prices at the checkout. Raising the minimum wage stimulates the economy as business's now have more customers capable of buying their products.

F1

[robblok]

...problems due to less companies operating businesses this year and lower income levels among workers.

I guess raising the minimum wage wasn't such a great idea after all.

An example of specious reasoning at it's best.

Okay Mr Nobel Prize In Econ101.

A company sells a hamburger in Los Angeles for $1.19 USD.

The same company sells the same burger in New York City for $1.89 USD.

Which city has the higher minimum wage? Both cities are located in the USA just to clarify that point.

LA at $8.00 USD. NYC at $7.25 USD.

So why, Mr Economist, does the same hamburger cost less at the location with the higher minimum wage?

It's because real estate prices are much higher in NYC. That is the major factor in the price discrepancy. The labor cost is rarely the driver behind rising prices at the checkout. Raising the minimum wage stimulates the economy as business's now have more customers capable of buying their products.

F1

Normally not but a 60% rise of minimum wage has an impact. This is not a simple rise of wages this was a massive raise and it has impacted Thailand hard and proof is all around. This government is one of the most incompetent ever.

I would accept your reasoning if the raise was less... but not with the numbers it was raised here.

And your example has no relevance to Thailand. But have fun dreaming.

[trogers]

...problems due to less companies operating businesses this year and lower income levels among workers.

I guess raising the minimum wage wasn't such a great idea after all.

An example of specious reasoning at it's best.

Okay Mr Nobel Prize In Econ101.

A company sells a hamburger in Los Angeles for $1.19 USD.

The same company sells the same burger in New York City for $1.89 USD.

Which city has the higher minimum wage? Both cities are located in the USA just to clarify that point.

LA at $8.00 USD. NYC at $7.25 USD.

So why, Mr Economist, does the same hamburger cost less at the location with the higher minimum wage?

It's because real estate prices are much higher in NYC. That is the major factor in the price discrepancy. The labor cost is rarely the driver behind rising prices at the checkout. Raising the minimum wage stimulates the economy as business's now have more customers capable of buying their products.

F1

The legal minimum wage for Thais may have risen, but employment is going to migrant workers from Burma, Laos and Cambodia because they can be paid below this minimum...

These migrant workers are the ones buying the hamburgers back in their capital cities...

[trainman34014]

''Grown Lower '' ? I think the word is Shrunk....and it will continue shrinking for the rest of this year..at least.

[Crushdepth]

As if they would ever say anything else.

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

[Piichai]

...problems due to less companies operating businesses this year and lower income levels among workers.

I guess raising the minimum wage wasn't such a great idea after all.

An example of specious reasoning at it's best.

Okay Mr Nobel Prize In Econ101.

A company sells a hamburger in Los Angeles for $1.19 USD.

The same company sells the same burger in New York City for $1.89 USD.

Which city has the higher minimum wage? Both cities are located in the USA just to clarify that point.

LA at $8.00 USD. NYC at $7.25 USD.

So why, Mr Economist, does the same hamburger cost less at the location with the higher minimum wage?

It's because real estate prices are much higher in NYC. That is the major factor in the price discrepancy. The labor cost is rarely the driver behind rising prices at the checkout. Raising the minimum wage stimulates the economy as business's now have more customers capable of buying their products.

Well, you better run and tell someone because after raising the minimum wage 60% there are "less companies operating businesses this year and lower income levels among workers."

<deleted>

[brownbear]

In my time here in Thailand I have almost never seen a negative comment from officials about the economy or stuff like that. They always have to give it a positive spin. Sometimes they just lie like the minister of white and evil lies Kittiratt

I'd agree with that. There is however a difference between optimism (even if blind) and false and/or misrepresented information. I can't prove but TIT so I suspect there is an element of both.

On the other hand and assuming it is for the moment simply that, there is nothing wrong with optimism. If foreign investors don't do their research properly or internal investors who should know better believe the BS and then get burned, then more fools they.

The rest of us just have to swallow our exasperation as part of the cost of living here and take everything we hear with a pinch of salt. There will always be some naive innocents who will lose out and for them I do feel sorry.

[Strangebrew]

If Jan 2013 your company made 100,000,000 baht then jan. 2014 your company only make 50,000,000 the value dropped 50% over last year so negative growth. But if baht which is overvalued gets corrected then your screwed

[Piichai]

In my time here in Thailand I have almost never seen a negative comment from officials about the economy or stuff like that. They always have to give it a positive spin. Sometimes they just lie like the minister of white and evil lies Kittiratt

I'd agree with that. There is however a difference between optimism (even if blind) and false and/or misrepresented information. I can't prove but TIT so I suspect there is an element of both.

On the other hand and assuming it is for the moment simply that, there is nothing wrong with optimism. If foreign investors don't do their research properly or internal investors who should know better believe the BS and then get burned, then more fools they.

The rest of us just have to swallow our exasperation as part of the cost of living here and take everything we hear with a pinch of salt. There will always be some naive innocents who will lose out and for them I do feel sorry.

Mendacity is a very big problem in Thailand, and it's not just confined to the BOT and TAT.

Last year I did some research on Thailand's traffic statistics and found that since the beginning of Yingluck's administration, WHO no longer uses numbers published by Thailand's government. Instead, WHO canvases hospitals and compiles there own statistics for Thailand. The first year, WHO published the statistics side by side, and I was shocked to see the difference between what Thailand claimed and WHO found. And that was even assuming WHO's numbers might be low; easy to miss clinics that seem to pop up like mushrooms, and of course injuries and deaths that aren't reported.

If they are lying about traffic statistics, what else are they lying about? AIDS/HIV? Malaria? Dengue Fever? One could go on and on.

While I have no doubt the cabinet ministers are congratulating each other for successfully jiggering the numbers and disseminating "little white lies," it actually does a great disservice to the country, as the government, NGOs, and foreign agencies really have no idea what is really a problem or where to best put their resources. And that can be translated to dollars for the poor who need it most.

[brownbear]

In my time here in Thailand I have almost never seen a negative comment from officials about the economy or stuff like that. They always have to give it a positive spin. Sometimes they just lie like the minister of white and evil lies Kittiratt

I'd agree with that. There is however a difference between optimism (even if blind) and false and/or misrepresented information. I can't prove but TIT so I suspect there is an element of both.

On the other hand and assuming it is for the moment simply that, there is nothing wrong with optimism. If foreign investors don't do their research properly or internal investors who should know better believe the BS and then get burned, then more fools they.

The rest of us just have to swallow our exasperation as part of the cost of living here and take everything we hear with a pinch of salt. There will always be some naive innocents who will lose out and for them I do feel sorry.

Mendacity is a very big problem in Thailand, and it's not just confined to the BOT and TAT.

Last year I did some research on Thailand's traffic statistics and found that since the beginning of Yingluck's administration, WHO no longer uses numbers published by Thailand's government. Instead, WHO canvases hospitals and compiles there own statistics for Thailand. The first year, WHO published the statistics side by side, and I was shocked to see the difference between what Thailand claimed and WHO found. And that was even assuming WHO's numbers might be low; easy to miss clinics that seem to pop up like mushrooms, and of course injuries and deaths that aren't reported.

If they are lying about traffic statistics, what else are they lying about? AIDS/HIV? Malaria? Dengue Fever? One could go on and on.?

While I have no doubt the cabinet ministers are congratulating each other for successfully jiggering the numbers and disseminating "little white lies," it actually does a great disservice to the country, as the government, NGOs, and foreign agencies really have no idea what is really a problem or where to best put their resources. And that can be translated to dollars for the poor who need it most.

I fear you are correct although the concept is frankly repulsive and a disgrace to this nation. However, that is what this whole debate is about is it not?

Those that choose to believe everything that is told them and regretfully, that extends beyond pro-Thaksinists and red-shirts to foreign supposedly independent press agencies and governments and those that do not. Easy there to see some of the root causes behind the polarisation we are now witnessing.

The problem is that simply decrying the data output by the authorities only reinforces the polarisation. My point I guess was that nothing is ever right or wrong, black or white, red or yellow. If we acknowledge that then we have a better chance of convincing the sceptics out there. Hopefully at least. The TVF reds are totally insignificant in all of this, as probably are we.

[Ricardo]

Nice to see consistency, that even after the departure of the caretaker-Finance-Minister, the Thai "White-Lie" school-of-economic-theory is still going strong !

Meanwhile the baht continues to drift lower, economic-growth forecasts continue to be cut, household-debt continues to soar, and weren't the rating-agencies expressing concerns recently ?

All clear signs (but only in Thailand) of a booming economy !

[JohnWoods]

Nice to see consistency, that even after the departure of the caretaker-Finance-Minister, the Thai "White-Lie" school-of-economic-theory is still going strong !

Meanwhile the baht continues to drift lower, economic-growth forecasts continue to be cut, household-debt continues to soar, and weren't the rating-agencies expressing concerns recently ?

All clear signs (but only in Thailand) of a booming economy !

Interesting that you mention the "rating agencies'! Could you link me to it, I would like to read what they r saying, cause there might be worth while! In my opinion, they are very important in this situation, I have to check them out further!

Sent from my iPhone using Thaivisa Connect Thailand

[brownbear]

Nice to see consistency, that even after the departure of the caretaker-Finance-Minister, the Thai "White-Lie" school-of-economic-theory is still going strong !

Meanwhile the baht continues to drift lower, economic-growth forecasts continue to be cut, household-debt continues to soar, and weren't the rating-agencies expressing concerns recently ?

All clear signs (but only in Thailand) of a booming economy !

Interesting that you mention the "rating agencies'! Could you link me to it, I would like to read what they r saying, cause there might be worth while! In my opinion, they are very important in this situation, I have to check them out further!

Sent from my iPhone using Thaivisa Connect Thailand

I might be wrong but I understand that the comments of the rating agencies are generally in the public domain although you may have to pay a fee for full articles. They are after all, not charitable organisations and maybe therein lies the rub.

Personally I wouldn't bother mate. From what I have read and as mentioned in a slightly different context earlier in this thread they tend to use government figures without much in the way of audit verifiable data: 'nuff said.

I have had direct experience of rating agencies in the context of a specific industry sector: load of BS in my opinion. But please, go ahead and fill your boots>

[RubbaJohnny]

Finance and Economics ministers have to sound positive even in dire straights,imagine they gave dire forecast this would exacerbate loss of confidence and stock prices and baht would fall faster.It may even start a run on banks,violence.

Regardless of the tragic loss of life,property and production no business likes uncertainty,There is as cited a credit and property bubble as in UK,OZ and USA.

While Thais have no choice International Investors and tourists will vote with their feet.There is a certin niche who will always want Pattaya's sordid attaractions who are probably immune but these are the very types the LOS seeks to discourage ,in public anyway.

There is no real demand for rule of law or enforcement against drugs ,prostitution,gambling and people smuggling,illegals etc.While these laws are ignored all policing is tainted,Decriminalisation may be a safer approach and take vice out of the hands of the gangs.

For example make the backdoor Casinos legal, regulated and pay tax.If there must be sex workers then ensure they are consenting adukts and not trafficked children.

Hublessness imminent,with ASEAN integration and more competition imminent a stable regime is ever more desireable.

While more violence may provoke a coup it is hard to see elections producing any different result,the nub of the problem is those who are required to finance change don't vote for it and vice versa.

There is a huge opportunity for a moderate centre party with honest leadership

Edited May 12, 2014 by RubbaJohnny

[movsrus]

The end is not too far off for the Thai economy. Consumer household debt is 83% of GDP, land speculation is rampant, lots of construction is being done on spec thinking that once the structure is finished people will line up to buy/rent and there are hordes of people who bought cars under the first time car buyer program who now know just how expensive a car is once you factor in gas, upkeep, licensing fees and maintenance. Not to mention the hundreds of thousands of tons of rice that the government is sitting on from the rice pledging scheme.

Yeah, no reason to worry. Buddha will take care of everything.

[AUSSIE BOB]

Is the price of real estate going to be affected by the coup? It appears everything else is or will suffer, so one has to ask the question. will the bubble burst with real estate?

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[johnbits]

Is the price of real estate going to be affected by the coup? It appears everything else is or will suffer, so one has to ask the question. will the bubble burst with real estate?

Sent from my iPad using Thaivisa Connect Thailand

IMO real estate prices won't go up, and are likely to decline.

I wouldn't buy RE in Thailand for at least 2-5 years. To see how everything that is going on plays out. (And global warming can't be good for Thailand either.) Things are heating up in more ways that one.