Political chaos takes most blame for this year's slump, analysts agree

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Political chaos takes most blame for this year's slump, analysts agree
Erich Parpart
The Nation

BANGKOK: -- Prolonged political uncertainty since 2006 has led to a slowdown of public and private investment, and the protests in Bangkok at the beginning of this year interrupted government functions. That led to a slowdown in government spending and it affected the confidence of the private sector, slowing domestic consumption.

On top of that, the imposition of martial law led insurers to deny travel insurance.

These are just some of the effects of the political side on the Thai economy in 2014.

The Fiscal Policy Office (FPO) expects gross domestic product this year to post growth of 1.2-1.7 per cent. The National Economic and Social Development Board (NESDB) expects only 1-per-cent GDP growth, lower than last year's 2.9 per cent and below the average annual growth rate of around 3.68 per cent since 1994.

The FPO and the Bank of Thailand's Monetary Policy Committee (MPC) agree that the main reasons for the sluggish economy are related to the political situation in the first half.

"The Bank of Thailand's 1.5-per-cent [GDP growth] projection for the whole year might seem low, but we have to consider that this is the result of the political turmoil in the first half of the year," MPC secretary Paiboon Kittisrikangwan said in August.

According to FPO data, the Consumer Confidence Index was at 64.9 (100 indicating full confidence) in the last quarter of 2013 and dropped to 59.9 in the first quarter of 2014 before bouncing back up to 69.3 in the third quarter and 69.9 in October.

The NESDB said that in the first nine months of 2014, private expenditure contracted by 0.2 per cent but bounced back to expand by 2.2 per cent in the third quarter.

The FPO said import of capital goods dropped from 3.7-per-cent year-on-year expansion in the first quarter of 2013 to a 14.1-per-cent decline in the first quarter of 2014 before flattening out in the third quarter and increasing by 8 per cent in October.

The NESDB said total investment grew by 2.9 per cent in the third quarter, much better than the average for the first nine months of 2014, which posted a contraction of 4.5 per cent, with a 7.8-per-cent contraction in public investment and a 3.6-per-cent contraction in private investment.

All in all, domestic demand and private investments seem to have picked up, for now.

While the Asian Development Bank (ADB) and the World Bank Group agree that the prolonged political turbulence was partly to blame for the weakness of the Thai economy, they blame other factors as well.

The export sector suffers structural problems due to the lack of research and development and innovation, which led to lower competitiveness in some products. Declines in global crop prices led by excess supplies due to the sluggish global economy hurt the Thai agricultural sector. The Kingdom's ageing society led to shortages of labour, while populist policies such as the first-car tax incentives contributed to high household debt, posing a strain on consumption.

"Structural change in global consumer demand means that the country's export sector needs time to think where we will [fit] into this new global production and value chain. We have to innovate," Luxmon Attapich, the ADB's senior country economist for Thailand, said in November.

In its latest prediction, the BOT expects exports of merchandise to be flat this year.

As for the tourism sector, Prime Minister General Prayut Chan-o-cha believes that the number of inbound travellers this year will end up at around 25 million. While this is below the 26.7 million seen in 2013, he denied that martial law had affected the tourism sector, choosing to blame the political situation at the beginning of the year instead.

"I do not know how there can be 25 million inbound tourists this year when virtually nobody visited here at the beginning of the year, and some people are still claiming that some law is preventing people from visiting the country," Prayut said recently.

Most inbound tourists from January to November were from China despite the slowdown of this tourist group at the beginning of the year. Their numbers increased substantially after the military's ruling National Council for Peace and Order approved a visa-fee exemption for them in August.

About 18.82 per cent of the 21.94 million foreigners who visited Thailand between January and November were from China, while 26.58 per cent were from the Asean countries and 24.55 per cent from the euro zone.

Despite fears that the number of tourists from Russia (which provided the biggest portion of European tourists at 6.6 per cent in 2013) might drop because of the decline in its economy, that number between January and November was 1,419,561, almost the same as the 1,492,943 during the same period last year, according to the Tourism Department.

Overall, the latest economic slump seems to be due to the slower-than-expected government spending and the delay in the government stimulus package. This was admitted by the deputy prime minister in charge of the economy, MR Pridiyathorn Devakula, himself.

"Has the stimulus package produced any effect? My answer is not yet, and it is slower than what I expected," he said last month.

BOT Assistant Governor Mathee Supapongse noted after the MPC meeting of December 17: "Less-than-expected government spending weighs on private investment, as most businesses await the implementation of public investment plans. In addition, a recovery in exports of goods is subject to the more uncertain global economic outlook."

Inflation rate

With fuel prices expected to remain low and goods prices stable in 2015, the Commerce Ministry projects inflation in the range of 1.8-2.5 per cent, compared with 2-2.8 per cent this year.

The ministry reported that the Consumer Price Index in the first 11 months of 2014 grew 2.02 per cent year on year

Trade balance

The ministry expects exports this year to contract by 0.1 per cent or post only flat growth, after the total value of shipments in the first 11 months dropped 0.42 per cent year on year to US$209.18 billion (Bt6.89 trillion). In the same period, imports saw an 8.99-per-cent slide to $210.75 billion. Thailand locked in a trade deficit of $1.56 billion.

The Commerce Ministry targets export growth of 4 per cent to $236 billion in 2015, while the Bank of Thailand predicts only 1-per-cent growth in the new year.

Source: http://www.nationmultimedia.com/business/Political-chaos-takes-most-blame-for-this-years-sl-30250937.html


-- The Nation 2014-12-30

[Thailand]

All down to the un-elected MVP (According to the Nation) and teammates, and next year will be worse!

[sweatalot]

This is the opportunity for the "Thaksin democwacy" fan boys to blame it all on the coup

-which in truth was the welcomed redemption after the political chaos produced by the corrupt governments that they like to praise

[ikke]

This is the opportunity for the "Thaksin democwacy" fan boys to blame it all on the coup

-which in truth was the welcomed redemption after the political chaos produced by the corrupt governments that they like to praise

It is not just a blame, it is caused only by Suthep and after by the Junta, but I assume you are not involved in business or never in a senior management position.

[scorecard]

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This is the opportunity for the "Thaksin democwacy" fan boys to blame it all on the coup

-which in truth was the welcomed redemption after the political chaos produced by the corrupt governments that they like to praise

It is not just a blame, it is caused only by Suthep and after by the Junta, but I assume you are not involved in business or never in a senior management position.

Wrong.

[Strangebrew]

You wouldn't dare think that the failed leadership or just the lack of leadership would have cause this problem? or maybe the policies of the government.

[sweatalot]

This is the opportunity for the "Thaksin democwacy" fan boys to blame it all on the coup

-which in truth was the welcomed redemption after the political chaos produced by the corrupt governments that they like to praise

It is not just a blame, it is caused only by Suthep and after by the Junta, but I assume you are not involved in business or never in a senior management position.

You cannot blame Suthep. His actions were caused only by the mismanagement of the then government. And that government made it even worse by its unwillingness and unability to negotiate honestly. They just stuck to their positions (seats in parliament etc.) because of the advantages they got from there while telling the lie it were for democracy and the people

[JOC]

This is the opportunity for the "Thaksin democwacy" fan boys to blame it all on the coup

-which in truth was the welcomed redemption after the political chaos produced by the corrupt governments that they like to praise

It is not just a blame, it is caused only by Suthep and after by the Junta, but I assume you are not involved in business or never in a senior management position.

You cannot blame Suthep. His actions were caused only by the mismanagement of the then government. And that government made it even worse by its unwillingness and unability to negotiate honestly. They just stuck to their positions (seats in parliament etc.) because of the advantages they got from there.

Selective memory??

You "forgot" the scheduled Feb election, which was prevented from taking place in many parts of the country by Suthep and his henchmen!!

[rickirs]

"Less-than-expected government spending weighs on private investment, as most businesses await the implementation of public investment plans."

Whomever one might blame for the sluggish economy for 2014, the 2015 economy will be saved or lost by the Junta. The Junta gave itself a trillion baht 2015 budget for the fiscal year October 1, 2014 - September 31, 2014 with which to make stimilus capital investments to grow the economy. There is concensus in the Thai financial community that exports which account for 70% of the Thai economy will not add to GDP growth in 2015.

Instead the Junta has been relunctant to any major stimilus, placing its priority with relatively insignificant populist subsidies, government handouts, and a debt arrangement with the Chinese for a future rail system. The government has discussed many investment plans such as power plants, mass transit systems, and bridges but none will have any impact in FY 2015. There are even those in the Cabinet and Junta that resist a 2015 economic stimilus such as Finance Minister Sommai Phasee and NCPO Advisor Somkid Jatusripitak. Obviously, time is running out for the Junta and it alone will carry responsibility for any economic failure.

Amelia Earhart once said "it is far easier to start something than it is to finish it.” The NCPO may become just as lost as she did.
–

[sweatalot]

"Less-than-expected government spending weighs on private investment, as most businesses await the implementation of public investment plans."

Whomever one might blame for the sluggish economy for 2014, the 2015 economy will be saved or lost by the Junta. The Junta gave itself a trillion baht 2015 budget for the fiscal year October 1, 2014 - September 31, 2014 with which to make stimilus capital investments to grow the economy. There is concensus in the Thai financial community that exports which account for 70% of the Thai economy will not add to GDP growth in 2015.

Instead the Junta has been relunctant to any major stimilus, placing its priority with relatively insignificant populist subsidies, government handouts, and a debt arrangement with the Chinese for a future rail system. The government has discussed many investment plans such as power plants, mass transit systems, and bridges but none will have any impact in FY 2015. There are even those in the Cabinet and Junta that resist a 2015 economic stimilus such as Finance Minister Sommai Phasee and NCPO Advisor Somkid Jatusripitak. Obviously, time is running out for the Junta and it alone will carry responsibility for any economic failure.

Amelia Earhart once said "it is far easier to start something than it is to finish it.” The NCPO may become just as lost as she did.

–

"it is far easier to start something than it is to finish it."

Do you agree that the before government was quite advanced in finishing the country?

So may be the government now could have done better - but the Yingluck government would have done much worse for sure.

It is the difficult fate of the Prayuth government to serve the meal that the governments before cooked / spoiled

[ExPratt]

Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

[sweatalot]

Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

How anyone British person can support a Military dictatorship

You just have to compare the alternatives

and

1. see the government that caused the chaos

if there were a truly democratic party (may be is kind of)

2. and a truly democratic basis in the people

I would prefer that for sure

Unfortunately

No. 1 no acceptable alternative

No. 2 not existing after brainwashing, corruption and disinterest

[Thailand]

Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

I think many of them are closet uniform wearers with little altars in their smallest room.

How many of them would be saying the same thing in a group of the peers as opposed to hiding behind their usernames and avatars on a forum?

[scorecard]

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Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

Your entitled to your opinion, but it's just your opinion.

[ExPratt]

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Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

Your entitled to your opinion, but it's just your opinion.

And you are entitled to show some respect to the Millions of men from your own country who died defending democracy. People like you would have been agents for the Nazi , Traitors !

[rubl]

"Less-than-expected government spending weighs on private investment, as most businesses await the implementation of public investment plans."

Whomever one might blame for the sluggish economy for 2014, the 2015 economy will be saved or lost by the Junta. The Junta gave itself a trillion baht 2015 budget for the fiscal year October 1, 2014 - September 31, 2014 with which to make stimilus capital investments to grow the economy. There is concensus in the Thai financial community that exports which account for 70% of the Thai economy will not add to GDP growth in 2015.

Instead the Junta has been relunctant to any major stimilus, placing its priority with relatively insignificant populist subsidies, government handouts, and a debt arrangement with the Chinese for a future rail system. The government has discussed many investment plans such as power plants, mass transit systems, and bridges but none will have any impact in FY 2015. There are even those in the Cabinet and Junta that resist a 2015 economic stimilus such as Finance Minister Sommai Phasee and NCPO Advisor Somkid Jatusripitak. Obviously, time is running out for the Junta and it alone will carry responsibility for any economic failure.

Amelia Earhart once said "it is far easier to start something than it is to finish it.” The NCPO may become just as lost as she did.

–

You always seem to have a problem with figures, now don't you?

The NLA has a National Budget of 2.5 or 2.6 trillion Baht that includes various budgets for stimulation the economy and even 107 billion Baht as first installment to repay the BAAC for the non-revolving funds.

[rubl]

Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

I think many of them are closet uniform wearers with little altars in their smallest room.

How many of them would be saying the same thing in a group of the peers as opposed to hiding behind their usernames and avatars on a forum?

I would think that depends on how you would describe that 'group of peers'.

BTW do you have a mirror?

[ikke]

"Less-than-expected government spending weighs on private investment, as most businesses await the implementation of public investment plans."

Whomever one might blame for the sluggish economy for 2014, the 2015 economy will be saved or lost by the Junta. The Junta gave itself a trillion baht 2015 budget for the fiscal year October 1, 2014 - September 31, 2014 with which to make stimilus capital investments to grow the economy. There is concensus in the Thai financial community that exports which account for 70% of the Thai economy will not add to GDP growth in 2015.

Instead the Junta has been relunctant to any major stimilus, placing its priority with relatively insignificant populist subsidies, government handouts, and a debt arrangement with the Chinese for a future rail system. The government has discussed many investment plans such as power plants, mass transit systems, and bridges but none will have any impact in FY 2015. There are even those in the Cabinet and Junta that resist a 2015 economic stimilus such as Finance Minister Sommai Phasee and NCPO Advisor Somkid Jatusripitak. Obviously, time is running out for the Junta and it alone will carry responsibility for any economic failure.

Amelia Earhart once said "it is far easier to start something than it is to finish it.” The NCPO may become just as lost as she did.

–

"it is far easier to start something than it is to finish it."

Do you agree that the before government was quite advanced in finishing the country?

So may be the government now could have done better - but the Yingluck government would have done much worse for sure.

It is the difficult fate of the Prayuth government to serve the meal that the governments before cooked / spoiled

If you talk about economy, there is nothing to blame the Shin's , and second all the populist policies that this government is serving was pre-cooked by the former government.

[rubl]

"Less-than-expected government spending weighs on private investment, as most businesses await the implementation of public investment plans."

Whomever one might blame for the sluggish economy for 2014, the 2015 economy will be saved or lost by the Junta. The Junta gave itself a trillion baht 2015 budget for the fiscal year October 1, 2014 - September 31, 2014 with which to make stimilus capital investments to grow the economy. There is concensus in the Thai financial community that exports which account for 70% of the Thai economy will not add to GDP growth in 2015.

Instead the Junta has been relunctant to any major stimilus, placing its priority with relatively insignificant populist subsidies, government handouts, and a debt arrangement with the Chinese for a future rail system. The government has discussed many investment plans such as power plants, mass transit systems, and bridges but none will have any impact in FY 2015. There are even those in the Cabinet and Junta that resist a 2015 economic stimilus such as Finance Minister Sommai Phasee and NCPO Advisor Somkid Jatusripitak. Obviously, time is running out for the Junta and it alone will carry responsibility for any economic failure.

Amelia Earhart once said "it is far easier to start something than it is to finish it.” The NCPO may become just as lost as she did.

–

"it is far easier to start something than it is to finish it."

Do you agree that the before government was quite advanced in finishing the country?

So may be the government now could have done better - but the Yingluck government would have done much worse for sure.

It is the difficult fate of the Prayuth government to serve the meal that the governments before cooked / spoiled

If you talk about economy, there is nothing to blame the Shin's , and second all the populist policies that this government is serving was pre-cooked by the former government.

Care to name a few of those 'pre-cooked' populist policies and details on the pre-cooked and Prayut adapted versions ?

[Robby nz]

Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

Its not a matter of supporting anyone its looking at the truth that counts.

If you care to read the OP you will see that it does not blame the military but states a range of factors.

Saying the military stopped the violence and sent all the protesters and those attacking them home is not supporting them it is stating the truth.

Saying they are attempting to kick start the economy which was stalled by previous factors is not supporting them it is telling the truth.

Saying they are making a start on getting down on corruption is not supporting them it is being truthful.

To say the rice pledging is now being properly investigated is not supporting them it is telling the truth.

There are some things they are doing and have done that has and is not helping the economy such as martial law which can nullify insurance for tourists.

The military are there now as a government, it is a fact of life, while not an ideal situation it is something that has to be accepted for none of us on here can change that.

To continually squeal, rant and call names will not help improve the situation or move or country forward.

Sure, watch and comment on where they went wrong but don't try to blame everything that has happened in the last year or two on them.

If you have any interest in the truth then you must accept that it was the actions of the previous administration that led to the situation the country is in now.

Coups, military Governments and martial law are bad things but from a personal point of view they have not affected me in the least, I can still do what I want to do, go where I want to go, are you any different ?

[GAZZPA]

This is the opportunity for the "Thaksin democwacy" fan boys to blame it all on the coup

-which in truth was the welcomed redemption after the political chaos produced by the corrupt governments that they like to praise

It is not just a blame, it is caused only by Suthep and after by the Junta, but I assume you are not involved in business or never in a senior management position.

Well I am involved in business at a Senior level and your over simplification of the issues tells me you are probably not.

There are very challenging times ahead for Thailand. There are multiples if issues such as business attitude (old style Thai denial which means issues are not tackled effectively), a lack of serious investment in technology and innovation, a loss of GSP for mainland Europe and the US markets across a huge range of products (and zero effort by the Government in tackling this despite appropriate notice), no serious planning for positioning Thailand at the forefront of the Asean region for 2015 leading to loss of confidence, etc, etc,

There is also serious competition around Thailand that is wide open and welcoming foreign investment such as Vietnam while Thailand is tightening up and making investment difficult if not impossible.

So, the coup and political turmoil certainly have an impact but Thailand is heading for tough times with or without the coup most of which is its own doing..

[halloween]

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Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

Your entitled to your opinion, but it's just your opinion.

And you are entitled to show some respect to the Millions of men from your own country who died defending democracy. People like you would have been agents for the Nazi , Traitors !

If the Wermacht had stepped in when Hitler was using his militia to force his way in to office, some of those millions would not have died prematurely. Should the UK have invaded to restore the popularly elected leader to his rightful position?

BTW evidence indicated the Ex is unwarranted.

[Baerboxer]

All down to the un-elected MVP (According to the Nation) and teammates, and next year will be worse!

Nonsense. The previous administration's loss of control and self serving caused far more damage. To be expected when you allow the government to be controlled by a non elected criminal fugitive fraudster.

[MaxLee]

Irresponsible and ignorant influential rich cronies and party leaders abusing the poor for the sake of saving Face,.... need I say more?

[Baerboxer]

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Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

Your entitled to your opinion, but it's just your opinion.

And you are entitled to show some respect to the Millions of men from your own country who died defending democracy. People like you would have been agents for the Nazi , Traitors !

What complete nonsense you write. Prat by name, prat by nature!

Britain and the US aligned with military dictatorships, or wannabee dictatorships to fight the evils of Nazism. Have you heard of Stalin, Tito, Mao, and Chiang Kai Sheck?

I heard first hand how Cossacks who'd fought with the British army were shoved off ships at bayonet point when repatriated to "Uncle Joe's" lovely soviet utopia where they were machine gunned.

If you think supporting a bunch of corrupt, inefficient, ineffective, self serving parasites, headed and dictated to by a convicted criminal fugitive is the right thing to do then yes, it is embarrassing for the rest of us.

[MaxLee]

Typical influential, political face saving procedure:

"Screw the uneducated follower over with populist policies, and then blame the same poor people for Thailand's mysery."

[Jai Dee]

Let's keep this topic Thailand related please and stop making reference to Nazi's, Stalin etc.

Let's also stop the personal insults, flames, and baiting of other members.

Thank you.

[ExPratt]

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Jesus Christ there are some children of Mosely on here. How anyone British person can support a Military dictatorship is beyond me and Embarrassing for the rest of us

Your entitled to your opinion, but it's just your opinion.

And you are entitled to show some respect to the Millions of men from your own country who died defending democracy. People like you would have been agents for the Nazi , Traitors !

What complete nonsense you write. Prat by name, prat by nature!

Britain and the US aligned with military dictatorships, or wannabee dictatorships to fight the evils of Nazism. Have you heard of Stalin, Tito, Mao, and Chiang Kai Sheck?

I heard first hand how Cossacks who'd fought with the British army were shoved off ships at bayonet point when repatriated to "Uncle Joe's" lovely soviet utopia where they were machine gunned.

If you think supporting a bunch of corrupt, inefficient, ineffective, self serving parasites, headed and dictated to by a convicted criminal fugitive is the right thing to do then yes, it is embarrassing for the rest of us.

They did ally with Russia eventually but that was after the soviet-Nazi pact collapsed in July 1941. they were not natural allies just countries with a common enemy. Churchills "Stand" in 1940 was solely intended to defend democracy