Thai economy: BOT plays down stagnation concerns

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ECONOMY
BOT plays down stagnation concerns
The Nation

BANGKOK: -- While Thailand could be said to have gone through a period of stagnation, and the economic situation certainly requires close monitoring, people should not be overly concerned, the Bank of Thailand said yesterday.

Economists believe the economy has emerged from a stagnationary period, although there could be a further slowing down of export and tourism performance.

However, given the economic slowdown - and the prolonged period of below-potential growth in particular - Finance Minister Sommai Phasi said he believed the economy was currently in a state of stagnation due to low spending, which stemmed from a lack of confidence.

That said, the fiscal stimulus provided by the government would enable the country to move to the next economic phase, he said.

Chirathep Senivongs Na Ayudhya, spokesman for the central bank, said that for the first half of the year, it could be said that the economy had been in a state of stagnation, but the situation had now passed.

Thailand has no unemployment problem, he stressed.

The economy is now in a transitional period and close monitoring is needed for the improvement of economic activities, he said, advising people not to be overly concerned about the situation.

"Presently, the Thai economy is recovering, having passed the stagnation period," he added.

The central bank expects domestic spending for both investment and consumption to be the economic driver for the rest of this year, as well as next year.

Government policy will become clearer, and this will result in more private confidence, he explained.

"We have to concede that growth may not be as strong as previously, as the recovery is in the early stage and the economy has not made a broad-based recovery yet. The economy has been highly dependent on indebtedness in the past two years. The structure of manufacturing in terms of both the workforce and infrastructure has to be more developed," said the spokesman.

Charl Kengchon, managing director of Kasikorn Research Centre, believes the economy has already passed the stagnation period, with a likely improvement in growth as a result of the government's stimulus.

Stagnation means low economic expansion of close to zero, with below-potential growth, and is normally accompanied by unemployment, he said.

"We are passing through such a [below-potential growth] situation, but there may be more limitations in exports and tourism, which could see low growth," said the MD.

Benjarong Suwankiri, head of TMB Analytics at TMB Bank, said: "We don't think Thailand is in a state of stagnation. The country began slowing down from the latter half of last year, but looking forward, the economy is tending to recover."

While there could be a risk of stagnation, the fiscal stimulus should improve the economic situation, he added.

Somprawin Manprasert, a professor at Chulalongkorn University's Faculty of Economics, said that despite low growth, Thailand would not necessarily enter a period of stagnation.

However, if it were to do so, the Finance Ministry could launch short-term measures to drive the economy out of such a situation, he said.

Tada Phutthitada, president of the Thai Bond Market Association, said economic growth next year would have to depend on government spending - and the efficiency of such expenditure - in order to escape from any period of economic immobilisation.

Source: http://www.nationmultimedia.com/business/BOT-plays-down-stagnation-concerns-30245987.html


-- The Nation 2014-10-22

[Somtamnication]

Typical. Mai pben rai!!! The world is heading towards a recession and or WW3 and these guys will continue with positive GDP and tourism numbers going up!

[Thailand]

Recession here by early 2015?

[noitom]

Thais have no level of consciousness regarding the outside world. They exist on a single plane of consciousness.

[thesetat2013]

Unbelievable! Thailand has No unemployment problem? How about below average wages, or all the women who are forced to go to big cities to sell their bodies to support their family? (although I am no complaining about all thise sexy bodies)

How can they claim next year will be so good when tourism is on a downward slide with nothin happening her to make people want to come? They must be in cohoots with TAT to get their crazy figures. I mean! Is it called growth when the average household debt is +150000?

[clockman]

Well, we have had white lies before!

[trogers]

Just need to look at how much household debts has increased. This means more disposable income used to pay off debts and less for consumption.

[Utley]

Excuse me but how does "close monitoring is needed for the improvement of economic activities" actually contribute to the improvement of economic activities? Monitoring is a passive activity and does nothing to improve anything except fatten the bank accounts of those doing the monitoring.

[Gomyway]

Quote: "Thailand has no unemployment problem, he stressed." - the German Democratic Republic never had an unemployment problem and this even less than Thailand, but they -> went bankrupt...

[Ricardo]

Excuse me but how does "close monitoring is needed for the improvement of economic activities" actually contribute to the improvement of economic activities? Monitoring is a passive activity and does nothing to improve anything except fatten the bank accounts of those doing the monitoring.

It's a common government response here, and attempts to show that the bureaucrats are aware of, not to mention fully in control of the situation.

I doubt that the BOT really believed the situation was sustainable, with rising consumer debt continuing to flow into consumer-spending & economic-activity, forever.

Not that they did very much to change the trend of recent years, apart from hoping it wouldn't go tits-up, on their watch.

Fully up to recent international standards of central-banking, IMO !

[JOC]

Unbelievable! Thailand has No unemployment problem? How about below average wages, or all the women who are forced to go to big cities to sell their bodies to support their family? (although I am no complaining about all thise sexy bodies)

How can they claim next year will be so good when tourism is on a downward slide with nothin happening her to make people want to come? They must be in cohoots with TAT to get their crazy figures. I mean! Is it called growth when the average household debt is +150000?

"or all the women forced to go to the big cities to sell their bodies to support their family"

My Lord, are there still suckers buying that story?? (How much do you send her each month to be a "good girl"?)

Being a BG is in 90% of the cases a lifestyle choice. Want the newest i-phone and motorbike, and easiest way to achieve it, is by opening their legs!! And the 1000 baht the fat farang pays, beats the 50 baht Somchai used to pay in the village!!

[GiantFan]

Unbelievable! Thailand has No unemployment problem? How about below average wages, or all the women who are forced to go to big cities to sell their bodies to support their family? (although I am no complaining about all thise sexy bodies)

How can they claim next year will be so good when tourism is on a downward slide with nothin happening her to make people want to come? They must be in cohoots with TAT to get their crazy figures. I mean! Is it called growth when the average household debt is +150000?

"or all the women forced to go to the big cities to sell their bodies to support their family"

My Lord, are there still suckers buying that story?? (How much do you send her each month to be a "good girl"?)

Being a BG is in 90% of the cases a lifestyle choice. Want the newest i-phone and motorbike, and easiest way to achieve it, is by opening their legs!! And the 1000 baht the fat farang pays, beats the 50 baht Somchai used to pay in the village!!

+1

[shirtless]

The world economy is struggling , so of course Thailand will be affected,

[Thai at Heart]

Unbelievable! Thailand has No unemployment problem? How about below average wages, or all the women who are forced to go to big cities to sell their bodies to support their family? (although I am no complaining about all thise sexy bodies)

How can they claim next year will be so good when tourism is on a downward slide with nothin happening her to make people want to come? They must be in cohoots with TAT to get their crazy figures. I mean! Is it called growth when the average household debt is +150000?

"or all the women forced to go to the big cities to sell their bodies to support their family"

My Lord, are there still suckers buying that story?? (How much do you send her each month to be a "good girl"?)

Being a BG is in 90% of the cases a lifestyle choice. Want the newest i-phone and motorbike, and easiest way to achieve it, is by opening their legs!! And the 1000 baht the fat farang pays, beats the 50 baht Somchai used to pay in the village!!

That is complete and utter piffle.

You try to support a family on a minimum wage job up country

[Time Traveller]

Personally I think they are in a difficult situation. At full employment - which is where Thailand is now - high household debt and a reluctant to copy the previous government's mega projects policies, there is very little the BOT or government can do . In fact, they are the problem, with all of this market distorting policies they create inflation and ordinary people's real wages fall so have limited spending power. Worse is that the worker productiviity is not improving.

Edited October 22, 2014 by Time Traveller

[h90]

Quote: "Thailand has no unemployment problem, he stressed." - the German Democratic Republic never had an unemployment problem and this even less than Thailand, but they -> went bankrupt...

But they also built that wall so the poor western victims of capitalism can't enter their paradise.

And at the end they won...now a East German Stasi member is chancellor

(just joking.....)

[h90]

Personally I think they are in a difficult situation. At full employment - which is where Thailand is now - high household debt and a reluctant to copy the previous government's mega projects policies, there is very little the BOT or government can do . In fact, they are the problem, with all of this market distorting policies they create inflation and ordinary people's real wages fall so have limited spending power. Worse is that the worker productiviity is not improving.

Well dangerous: if the employment rate drops the household debts of the people can't be financed anymore and it will cause big troubles for the banks......1997 is knocking on the door.

[rickirs]

There may be an economic doomsday coming.

Sommai Phasi

“although there could be a further slowing down of export and tourism performance.”

Chirathep Senivongs Na Ayudhya,

“the Thai economy is recovering, having passed the stagnation period.”

General Chatchai Sarikulya

“the Commerce Ministry expected exports next year to grow by more than 5 per cent, a challenging target that is larger than the country's economic-growth forecast of 4-5 per cent in 2015.”

“Although gross domestic product next year is projected to grow by only 4-5 per cent, exports could grow more. …. This year, exports are expected to grow by only about 1 per cent.”

It is beginning to look like there is at least a consensus in the current government as to the direction of the Thai economy for 2015: no one really has the faintest idea where it’s going.

[trogers]

Personally I think they are in a difficult situation. At full employment - which is where Thailand is now - high household debt and a reluctant to copy the previous government's mega projects policies, there is very little the BOT or government can do . In fact, they are the problem, with all of this market distorting policies they create inflation and ordinary people's real wages fall so have limited spending power. Worse is that the worker productiviity is not improving.

Having high household debts is not sufficient worry for the country, you are suggesting to increase government debts as well.

Taking on debts is like being hooked on drugs. The remedy is cold turkey.