Thai economy to face another blow

[webfact]

Economy to face another blow
ACHARA DEBOONME
THE NATION

BANGKOK: -- THE UNITED STATES' withdrawal of quantitative easing will deal another blow to the Thai economy, as capital inflows may cease and reduce its potential for economic growth this year, warns the United Nations Economic and Social Commission for Asia and the Pacific.

In its annual flagship publication "Economic and Social Survey of Asia and the Pacific", Escap estimates that further financial-market volatility from the expected continued normalisation of monetary policy in the US could cut annual growth by 0.7-0.9 per cent in Thailand, India, Indonesia, Malaysia, Russia and Turkey.

The US Federal Reserve has this year cut its monthly bond purchases. Reaffirming its plan towards normalisation, last week it decided to cut them further, from US$35 billion to $25 billion. As of yesterday, foreign investors were net-sellers of Thai shares for a total of Bt26.47 billion so far this year.

Escap expects Thailand's gross domestic product to grow by only 2 per cent this year, mainly on poor performance in the first half. Political uncertainty led to low disbursement of the fiscal 2013 state budget. The fiscal deficit thus narrowed to 1.8 per cent of GDP, from 2.6 per cent in 2012.

Large-scale infrastructure programmes, which had been expected to drive growth, were either delayed by legal challenges or ruled unconstitutional. Large investments by state-owned enterprises were also on hold, while the delayed approval of investment privileges held back private-sector investments.

Rebound in H2

A rebound is expected in the second half, supported by higher exports from an improved external environment and accelerated public spending.

In its report, Escap also foresees slower growth in Southeast Asia, at 4.6 per cent this year from 4.9 per cent last year. Throughout the Asia-Pacific region, developing countries are forecast to grow at an average of 5.8 per cent in 2014, up from 5.6 per cent last year. Leading them is Myanmar, with projected growth of 7.8 per cent.

"The constrained domestic growth prospects of the region have underlined the importance of productive counter-cyclical public spending to support inclusive growth and sustainable development," Escap executive secretary Shamshad Akhtar said.

She stressed the urgency for bridging gaps in infrastructure and development in the region and addressing environmental degradation to promote higher, well-balanced and sustainable growth. Another priority for ensuring the sustainability of growth is to address climate change better through improved climate finance.

Escap estimated that the region would need between $800 billion and $900 billion (Bt26 trillion to Bt29 trillion) annually for infrastructure development. However, these countries are witnessing trade-restrictive measures in advanced economies, which deprived them of $255 billion in goods-export opportunities between 2009 and 2013. They also carried high public debt levels.

In this scenario, tax revenue must be strengthened.

Tax gap, the amount of tax governments fail to earn because of evasion and fraud, is estimated to be as high as 12.5 per cent of GDP in some countries. Escap said that closing existing tax gaps in 16 Asia-Pacific developing economies would increase total revenue by more than $300 billion, boosting tax revenues by more than 70 per cent in some countries.

Source: http://www.nationmultimedia.com/business/Economy-to-face-another-blow-30240401.html

[thenation]2014-08-07[/thenation]

[trogers]

Ahhh...so a lack of easy credit of the past that led to asset bubbles will cause a slow down in economic growth.

Easily fixed. Follow the dance of China that led to ghost cities, roads going to nowhere, and over production capacity to prop the growth numbers.

[Roadman]

Akin to most other suppliers in the China dominated Asia Pacific market. We have all taken a light to medium towelling (depending on internal project budgeting) at the hands of China as it works through market over supplies due to easy and false money in many of its imported raw materials and food supplies. Prices have fallen year to date and the Chinese over supply has balanced in some areas which as the Commission is predicting is starting to show a steading of price and demand for product returning as wharfs have been cleared of over priced inventory. Some lower priced raw materials into China are also starting to show price improvement but hopefully this time around prices will be kept to mid range to keep long term supply available to Asian Pacific fellow traders but keep the Americans (north and south) and Canada - all short term profit makers - out of the market on shipping rates alone.

[shirtless]

I  tell you we may be down but not out, Q 4 will be a bonanza tourism and exports will be back to levels of 2009.

[Ozziepat]

Thailand might actually benefit if equity investors in the hyper-inflated US stock market finally bail over fears of collapse back to sane levels. That money will be seeking attractive debt offerings (The Asian Tiger is a kitty now, and BRIC is deeply flawed.). This puts Thailand into an interesting dilemma: It can attract international investment through higher interest rates, but those same rates will make Thai-government-created debt less desirable and could put a damper on ambitious infrastructure plans. Oh, what to do...

[soalbundy]

I  tell you we may be down but not out, Q 4 will be a bonanza tourism and exports will be back to levels of 2009.

WE are all thrilled about this

[Ricardo]

Ahhh...so a lack of easy credit of the past that led to asset bubbles will cause a slow down in economic growth.

Easily fixed. Follow the dance of China that led to ghost cities, roads going to nowhere, and over production capacity to prop the growth numbers.

 

I believe the Thai version proposes 50-year zero-premium loans/bonds, to finance a loss-making high-speed passenger-only train-network, with 30% brown-envelopes attached.

 

The property-bubble of speculative unsold-condominiums is privately-financed here, unlike in China ?

 

Yay for Economic-Miracles !

[trogers]

Ahhh...so a lack of easy credit of the past that led to asset bubbles will cause a slow down in economic growth.

Easily fixed. Follow the dance of China that led to ghost cities, roads going to nowhere, and over production capacity to prop the growth numbers.

 
I believe the Thai version proposes 50-year zero-premium loans/bonds, to finance a loss-making high-speed passenger-only train-network, with 30% brown-envelopes attached.
 
The property-bubble of speculative unsold-condominiums is privately-financed here, unlike in China ?
 
Yay for Economic-Miracles !

Property bubbles here are deeply financed by banks, both the developers and the buyers.

[khounteen]

I see it as bad news for the whole region. Guess its time to buy dollars.

[whiteman]

 

I  tell you we may be down but not out, Q 4 will be a bonanza tourism and exports will be back to levels of 2009.

 

If tourism accounts for only 7% of the Thai economy and the Immigration department is doing all it can to rid itself of the overstayers and teaching crowd, I don't see how that will help the Thai baht, which means exports will indeed be affected.

 

Ohhh, and tourism is down 43% based on the ATTA.
http://khonkaen.ws/thai-tourism-down-43

 

Where do you get your hope from?

 

 

 

Me I am still spending and loving it Thailand the land of positive thoughts

[Thai at Heart]

But won't this weaken the baht and supposedly help exporters?

[chiang mai]

But won't this weaken the baht and supposedly help exporters?

 

It is not permitted to interject reason and fact into these debates, please cease immediately, it aggravates the masses!

[nidieunimaitre]

Will you all please stop taking macro economists seriously?

This is very serious advise.

From a macro economist (me).

.

 

 

[nidieunimaitre]

I see it as bad news for the whole region. Guess its time to buy dollars.

or Chang

[metisdead]

Off topic posts have been removed.

[laocowboy2]

 

I see it as bad news for the whole region. Guess its time to buy dollars.

or Chang

 

 

Definitely Chang (and I too am an economist)

[BuaBS]

I see it as bad news for the whole region. Guess its time to buy dollars.

 

NO ! GOLD...

[Suradit69]

Interesting that so many people were proclaiming that QE had no positive effect on economies, but now they fear the impact to world economies if it is withdrawn.

[bangkapi]

It was all funny money.  The whole world economy and middle class has been destroyed by the rampant printing and inflation of fiat currencies.

 Most millionaires nowadays must continue to work like dogs after slaving away their whole lives because of the trillionaire central bankers and political insiders conjuring more and more fiat currency and taking control of the world by buying everything of real value with it and making the labor of the masses unimportant in comparison.

Quantitive easing was good for nobody. We need sound money and money that is backed by gold or silver only.

[SteveFong]

Thailand might actually benefit if equity investors in the hyper-inflated US stock market finally bail over fears of collapse back to sane levels. That money will be seeking attractive debt offerings (The Asian Tiger is a kitty now, and BRIC is deeply flawed.). This puts Thailand into an interesting dilemma: It can attract international investment through higher interest rates, but those same rates will make Thai-government-created debt less desirable and could put a damper on ambitious infrastructure plans. Oh, what to do...

 

That money is not going to Thailand, that is a pipe dream

 

it is going in to US real estate as we speak, particularly, the Chinese and Singapore sovereign wealth funds

 

there is no attractive opportunity in Thailand until they sort out their political problems

[SteveFong]

 

I see it as bad news for the whole region. Guess its time to buy dollars.

 

NO ! GOLD...

 

The US Dollar has been climbing higher against most major currencies and the Euro, for the last 12 months,

 

Anyone who thinks this doesnt cause recessions, globally, doesnt know Forex

 

The QE programs were easing,

 

what is the opposite of that?

 

the party is over

 

countries such as Thailand, who falsely proclaim their policy's as the cause of economic growth, and then lie about it in all publications,

 

calling a collapse in tourism, an expected rise, that was a peach this week,

 

have more than a hard landing ahead,

 

its a reckoning

 

it is now 10 months since the QE's slowed down,

 

this is about the time when the pain starts to spread,

 

what happens, when the much heralded return of the western tourism and their business interests doesnt materialize?

Edited August 7, 2014 by SteveFong

[SteveFong]

It was all funny money.  The whole world economy and middle class has been destroyed by the rampant printing and inflation of fiat currencies.

 Most millionaires nowadays must continue to work like dogs after slaving away their whole lives because of the trillionaire central bankers and political insiders conjuring more and more fiat currency and taking control of the world by buying everything of real value with it and making the labor of the masses unimportant in comparison.

Quantitive easing was good for nobody. We need sound money and money that is backed by gold or silver only.

 

there re more middle class in the west and more millionaires sprouting daily here, in the face of all the talk of collapse,

 

there is a US dollar collapse being predicted every week,

 

meanwhile, it trucks higher

[trogers]

It was all funny money.  The whole world economy and middle class has been destroyed by the rampant printing and inflation of fiat currencies.
 Most millionaires nowadays must continue to work like dogs after slaving away their whole lives because of the trillionaire central bankers and political insiders conjuring more and more fiat currency and taking control of the world by buying everything of real value with it and making the labor of the masses unimportant in comparison.
Quantitive easing was good for nobody. We need sound money and money that is backed by gold or silver only.

 
there re more middle class in the west and more millionaires sprouting daily here, in the face of all the talk of collapse,
 
there is a US dollar collapse being predicted every week,
 
meanwhile, it trucks higher

The higher it trucks, the larger the fall. All things will return to the mean. Just a question of when.

We talked about the bubbles in China for over a year, and we are seeing the fall now.

[3NUMBAS]

strange that QE has been boosting other economies  and not US economy. they exported their manufacturing to china and left the blue collar workers to starve  and Motown to fall into decay

[chiang mai]

 

 

It was all funny money.  The whole world economy and middle class has been destroyed by the rampant printing and inflation of fiat currencies.
 Most millionaires nowadays must continue to work like dogs after slaving away their whole lives because of the trillionaire central bankers and political insiders conjuring more and more fiat currency and taking control of the world by buying everything of real value with it and making the labor of the masses unimportant in comparison.
Quantitive easing was good for nobody. We need sound money and money that is backed by gold or silver only.

 
there re more middle class in the west and more millionaires sprouting daily here, in the face of all the talk of collapse,
 
there is a US dollar collapse being predicted every week,
 
meanwhile, it trucks higher

The higher it trucks, the larger the fall. All things will return to the mean. Just a question of when.

We talked about the bubbles in China for over a year, and we are seeing the fall now.

 

 

Except we're now seeing this month a record trade surplus, not exactly a fall!

 

http://www.reuters.com/article/2014/08/08/us-china-economy-trade-idUSKBN0G808N20140808
 

[Thai at Heart]

It was all funny money.  The whole world economy and middle class has been destroyed by the rampant printing and inflation of fiat currencies.
 Most millionaires nowadays must continue to work like dogs after slaving away their whole lives because of the trillionaire central bankers and political insiders conjuring more and more fiat currency and taking control of the world by buying everything of real value with it and making the labor of the masses unimportant in comparison.
Quantitive easing was good for nobody. We need sound money and money that is backed by gold or silver only.

 
there re more middle class in the west and more millionaires sprouting daily here, in the face of all the talk of collapse,
 
there is a US dollar collapse being predicted every week,
 
meanwhile, it trucks higher

The higher it trucks, the larger the fall. All things will return to the mean. Just a question of when.

We talked about the bubbles in China for over a year, and we are seeing the fall now.

How strong will the USD finally get when the QE tap is switched off?

Just look what reducing it a bit has done, but it is still 25bn a month. Gargantuan amounts really.

[chiang mai]

To put it in perspective, it was US$80 billion a month, that's more than a bit.