Thai economy in a bumpy ride

[Thaivisa News]

Bangkok: –Key economic indicators, particularly, decreasing purchasing power and rising household debt, paint a bleak picture of the economy, an economist said.

Montree Socatiyanurak of the National Institute for Development Administration has called for the policy rate to be kept at 2 per cent until the country could overcome the liquidity trap.

The low policy rate is deemed necessary in view of weakening purchasing power caused by lowering commodity prices and household debt which has reached 85 per cent of GDP.

Montree has suggested the government to speedily implement fiscal measures designed to revitalise the economy.

The Finance Ministry should not just focus on a single measure like adjusting the tax collection but rely on multiple fiscal tools such as debt-finance public investment and the mobilisation of funds through the stock exchange, he said.

In the past two months, the country has plunged into liquidity trap as indicated by negative inflationary rate of -0.52 per cent.

The next survey within three to six months would prove whether the country is facing deflation.

Based on key indicators, the economy is in the doldrums.

Exports for January dropped at escalating rate of -7.95 per cent in comparison with -2.34 in the same period last year.

The arrivals of foreign visitors have dropped by 6.66 per cent. Inbound tourists from key markets like Malaysia, China and Russia have been declining.

In regard to domestic demand, there has been a lowering trend for electricity consumption, vehicle purchase and fuel consumption.

The January collection of value added tax has decreased by -2 per cent, indicating slackened business transaction.

Imports of consumers’ goods have declined by -0.2 per cent. And the investment outlays for machinery have been lowered by -4.5 per cent.

[harada]

I wonder why.

[halloween]

I wonder why.

It could be because they are facing similar economic conditions to the other countries facing deflation this year, 8 in Europe alone.

http://www.bloomberg.com/news/articles/2015-02-06/the-eight-unlucky-countries-facing-deflation-this-year

[Bkungbank]

In 1997 only Asia and overseas market still strong but today due to lower fuel price main oil export countries like Russia and Malaysia the value of thier money are drop nearly 50%, China GDP only 7% where few years back 9%.

They are few reasons behind fuel price drop saction against Russia due to Ukaraine issue and stop IS funding which main income is from oil, the effect now feel the pitch of it around the world.

[ezzra]

Yep.. the Thai economy is in a bumpy ride, sitting in a new, millions of baht luxury cars,

filling up the elitist and glitziest shopping centers... they're are suffering badly I tell ya...

[trogers]

Economic cycles have been with mankind since trading began. Times of depressed activities are times for restructuring with the aim to increase productivity. This means the skill of labor, cost of capital and methods of production.

No one wants to rock the boat when the economy is in full swing.

[ExpatOilWorker]

Lets see if the central bank is dropping interest rate. They are meeting today.

[NCC1701A]

i wonder if the endless condo and house construction around hua hin will stop or at least slow down?

[trogers]

i wonder if the endless condo and house construction around hua hin will stop or at least slow down?

It will if developers have to pay taxes on completed but unsold units.

[zierf1]

Won't devalue so numbers will keep getting worse..

[Utley]

This is total nonsense! The PM said that the economy is his number one priority and that everyone should be happy - so don't confuse the issue with facts.

[geriatrickid]

i wonder if the endless condo and house construction around hua hin will stop or at least slow down?

Driving in from Cha Am one sees al those expensive projects. I just don't understand where the buyers are coming from? Many of those projects are smack dab in the middle of nowhere save for access to one very congested main road. There are scores of condos sitting empty between the raiway line and the mountain. The banks must be up to their eyeballs in potential non performing loans. The Phuket region is drowning in expensive condo projects all being promoted as great investment earners to the foreign tourists. I am so happy I never bought anything and have no investment stake.

[trogers]

i wonder if the endless condo and house construction around hua hin will stop or at least slow down?

Driving in from Cha Am one sees al those expensive projects. I just don't understand where the buyers are coming from? Many of those projects are smack dab in the middle of nowhere save for access to one very congested main road. There are scores of condos sitting empty between the raiway line and the mountain. The banks must be up to their eyeballs in potential non performing loans. The Phuket region is drowning in expensive condo projects all being promoted as great investment earners to the foreign tourists. I am so happy I never bought anything and have no investment stake.

Pattaya repeating in other holiday spots

[ColdSingha]

seems like a perfect time to raise taxes and add some more!

[emilymat]

.......and the baht keeps strengthening against European currencies.

[Thailand]

Happiness is recession!

[chopin2]

And SET is approaching all time high......champagne!

[kotsak]

As long as people need to unload the ill-gotten money there always be buyers.

[baboon]

i wonder if the endless condo and house construction around hua hin will stop or at least slow down?

Passed through on the train the other day. Good God,'endless' is exactly the word...

[maidee]

happy are the ones that can just ignore as this panic football

[Eric Loh]

The good General had that covered and his solution to our poor economy situation is to raise more taxes. Military men should stay as military men and not try to act as economist.

[soalbundy]

.......and the baht keeps strengthening against European currencies.

No, the Euro is weakening against just about everything

[ExPratt]

Have TAT commented on this yet , must be a silver lining somewhere ?

[The manic]

The power elite will not suffer.

[soalbundy]

happy are the ones that can just ignore as this panic football

Especially those on a fixed Euro income whose worth has now fallen below what is needed for a Visa extension.

[trogers]

happy are the ones that can just ignore as this panic football

Especially those on a fixed Euro income whose worth has now fallen below what is needed for a Visa extension.

Nahhhh...just less bar hopping for a few months to make up the shortfall...

[Thian]

I see pawnshops growing like mushrooms. The weird thing is that we can't look inside to see what's for sale there. Imagine we see a hi-so Thai in there selling his/her gold/I-phone or Louis Vuiton.....

[Pib]

i wonder if the endless condo and house construction around hua hin will stop or at least slow down?

Driving in from Cha Am one sees al those expensive projects. I just don't understand where the buyers are coming from? Many of those projects are smack dab in the middle of nowhere save for access to one very congested main road. There are scores of condos sitting empty between the raiway line and the mountain. The banks must be up to their eyeballs in potential non performing loans. The Phuket region is drowning in expensive condo projects all being promoted as great investment earners to the foreign tourists. I am so happy I never bought anything and have no investment stake.

Still plenty past expensive and no so expensive projects from years gone by (like the late 90's financial crisis in Thailand) scattered across the country. Many times during a financial downturn construction projects turn into expensive, partially completed birdhouses.

[chainarong]

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Have TAT commented on this yet , must be a silver lining somewhere ?

There will be a comment shortly either from TAT the Government Bank or KBank and possibly Prayut h - O

[Anon999]

In 1997 only Asia and overseas market still strong but today due to lower fuel price main oil export countries like Russia and Malaysia the value of thier money are drop nearly 50%, China GDP only 7% where few years back 9%.

They are few reasons behind fuel price drop saction against Russia due to Ukaraine issue and stop IS funding which main income is from oil, the effect now feel the pitch of it around the world.

One of the main reasons for the drop in oil prices is the massive fracking iin the US that has meant they are almost self sufficient in oil production. Previously they were a major importer on top of which Saudi Arabia refuses to raise the price/barrel.