Thai govt urged to speed up economic stimulus packages, encourage spending

[webfact]

Government urged to speed up economic stimulus packages, encourage spending



BANGKOK: -- Economists are advising the government to step up its stimulus measures in order to gain consumer confidence and encourage spending.

The advice came as director of the Center of Economics and Business Forecast of the Thai Chamber of Commerce University Mr Thanawat Polwichai warned that the Thai economy could be headed towards a state of deflation.

Deflation is a result of negative inflation of at least six consecutive months, he said.

But he said the Thai economy has so far only faced negative inflation for three consecutive months.

However there are already signs that this condition could be extended as the price of oil is expected to continue to drop in the second quarter of the year.

Meanwhile members of the public are already feeling the pinch as their salaries don’t match the current standard of living.

He stated that the government should take action as quickly as possible to bolster consumer confidence.

If not this could lead to a shrinking economy as people start to lower spending which could then adversely affect the country’s economic recovery.

Increasing government spending through investments in mega projects around the country in order to stimulate the job market and spending is probably the best way to inject money into the economy, he said.

This would mean launching projects and calling for bids within the second quarter of the year, and should involve investments at the billions of baht level, he said.

Moreover the government also needs to provide clarity on the development of the special economic zones.

All of these should be launched as soon as possible to ensure that the Thai economy meets the projected 3.5% growth for 2015.

Source: http://englishnews.thaipbs.or.th/government-urged-to-speed-up-economic-stimulus-packages-encourage-spending


-- Thai PBS 2015-04-15

[LuckyLew]

Did we not just read recently that Thais are world leaders in personal debt?

So what have they got to spend?

[NongKhaiKid]

This is very negative, is he allowed to say it or can he expect a knock on the door early morning ?

[Srikcir]

“All of these should be launched as soon as possible to ensure that the Thai economy meets the projected 3.5% growth for 2015.”

True, but too little, too late for 2015:

2015-02-11

“The military has promised to unleash billions of dollars on much-needed infrastructure projects. But the money is yet to kick into the economy. As Barclays Capital put it in a note last month: "The main impediment to growth at present is the slow pace of fiscal spending, which is also delaying investment and consumption decisions."

The Nation 2015-03-04

“Thailand’s three most powerful private-sector organisations have expressed concern over delayed budget disbursement in the government sector, as well as falling crop prices, which could lead to an economic slowdown and low consumer spending.”

2015-03-31

“Sommai Phasee, the finance minister, admitted yesterday that the country’s economic growth projections will stand between 2 – 3%.”

The Nation 2015-04-08

“The Thai National Shippers Council recently changed its export growth target to zero expansion in 2015.”

Exports contribute 70% of Thailand’s GDP growth with the balance divided between tourism, government spending, and personal consumption. Government spending comes from collected revenues that have fallen sharply; household debt continues to increase to abate consumption.

Unless the Junta generates funds from massive amounts of Treasury bond debt, it will be unable to provide the substantial economic stimulus needed to jumpstart the economy. But Prayut is dead set to increase the nation’s debt.

The nation’s economy for 2015 will flutter in the Junta’s hot air for a better future.

[elgordo38]

Did we not just read recently that Thais are world leaders in personal debt?

So what have they got to spend?

They always seem to come up with money. Its the same sick old routine lets spend our way out of the problem with the borrowed money savers were dumb enough to put in the bank at close to zero percent interest rates. If the banks run out of money hey we can print some more. What a world.

[Oziex1]

Economic stimulus packages the world over are clear sign of the unsustainability of economic growth. Everyone competing to manufacture and sell big TV's and other <deleted> just doesn't cut it.

Are we on the edge of the time to reform our capitalist model?

[Robby nz]

Have look at the WTO report on global outlook and you will see that Thailand isn't doing to bad on a world scale http://uk.reuters.com/article/2015/04/14/uk-global-economy-trade-idUKKBN0N50V820150414

[Balance]

There are not enough people with the cash to spend to make any difference. The rest of the Thais with decent jobs are in debt to the point that many are having problems servicing what they owe (that means paying the interest and reducing the principle a minimum amount.

There are probably not enough Thais with the technical skills to fill very many of the higher paying jobs that an infrastructure stimulus project would generate without stealing them from other companies.

I don't think anyone wants to say it, but it is becoming increasingly clear that there are some very serious structural problems that have have taken 60 years or more to create, the worst and most intractable being the educational system that does not teach anyone how to think. The second one is the fact that very few people control way too much of the economy. Everyone keeps yelling about the capitalist system in Thailand.

Thailand does not have a free market capitalist system, or anything even close. The oligarchies don't cotton to too much competition as it interferes with their ability to set prices. The rest of the world has experienced very similar periods in there histories in the 1800's and first have of the 1900's. After the Depression, the government finally took away the ability for the few to control the economy to the own benefit. However, the rules were relaxed during the 80's and 90's and we got the 2008 meltdown.

Capitalism is very good at creating wealth, and with wealth come power and with power the corruption needed to maintain it. Put very simply, it has to be controlled through a Democratic process. It is too bad that these simple lessons learned at the expense of millions of people keep slipping away.

[rubl]

“All of these should be launched as soon as possible to ensure that the Thai economy meets the projected 3.5% growth for 2015.”

True, but too little, too late for 2015:

2015-02-11

“The military has promised to unleash billions of dollars on much-needed infrastructure projects. But the money is yet to kick into the economy. As Barclays Capital put it in a note last month: "The main impediment to growth at present is the slow pace of fiscal spending, which is also delaying investment and consumption decisions."

The Nation 2015-03-04

“Thailand’s three most powerful private-sector organisations have expressed concern over delayed budget disbursement in the government sector, as well as falling crop prices, which could lead to an economic slowdown and low consumer spending.”

2015-03-31

“Sommai Phasee, the finance minister, admitted yesterday that the country’s economic growth projections will stand between 2 – 3%.”

The Nation 2015-04-08

“The Thai National Shippers Council recently changed its export growth target to zero expansion in 2015.”

Exports contribute 70% of Thailand’s GDP growth with the balance divided between tourism, government spending, and personal consumption. Government spending comes from collected revenues that have fallen sharply; household debt continues to increase to abate consumption.

Unless the Junta generates funds from massive amounts of Treasury bond debt, it will be unable to provide the substantial economic stimulus needed to jumpstart the economy. But Prayut is dead set to increase the nation’s debt.

The nation’s economy for 2015 will flutter in the Junta’s hot air for a better future.

So, you advise the government to issue a massive amount of Treasury bonds ?

[rmacee]

While Thailand tie the Baht to the US$ ..at a fixed rate of 31,5/32.5 to 1$ ...with a strong dollar right now all exports are expensive ...

Need to free up the currency and find a level where manufacturers can export and manufacturers want to invest in Thailand.

[realenglish1]

When you have a government tell you that tourism is up by 30% before the end of Soh Kran what do you expect with the economy

Until the economy is in a free fall no one will admit is is doing bad

[Thai at Heart]

If these economists had half a brain, the very fact that oil goes down lowering inflation is not the same as a defacto reduction is demand or asset price reduction. Duh. It's a good thing which puts more spenders in the consumers pocket.

[Cake Monster]

" Encourage spending " What a sick joke.

The Thai,s are leveraged up past their ears with debt now, and to encourage more is a total nonsense, when the personal debt load has to be reduced from the present 90% of GDP.

The people do not have the money to spend now, as they once had until a few months ago. This is mainly due to the slow down in manufacturing / exports which are seeing lay offs and reduced working hours in the factories, along with weak agricultural prices on all major commodities, and a very weak tourism sector.

Freeing up the Baht would be the answer IMO, but thats impossible to do with the massive personal debt loads in the country

[yellowboat]

The government did do something. They kicked out foreigners who had second homes in Thailand. Now they have even more of a glut of condos and unrented homes and apartments than before. Most have happily resettled in Cambodia. So the government has done something for the country of Cambodia.

Many Americans are now getting 10 year / 60 day transferable visas to China. What is Thailand trying to protect with lousy visa laws, and screwy work permit regulations? Nobody with any ambition is going to do anything in Thailand. Look how far behind they are in technology. Things could get better if the Thais would open up to entrepreneurs instead of trying to fleece them

[mike324]

Did we not just read recently that Thais are world leaders in personal debt?

So what have they got to spend?

Exactly, why do they think they need to encourage spending to balance things out. If they think living cost is high, than they should be tackling that, decrease the cost of raw materials and goods sold. I find that many daily items in Thailand cost about the same or more than what can be purchase in western countries. Decrease taxes can have a big effect on encouraging spending if goods are cheaper.

Thais spend a disproportionate amount of their salaries on living costs. I keep on saying this again and again, transportation cost such as BTS is way over price! They increased fares last year and they are planning to do so again this year I believe.

[rmacee]

If u were a manufacturer you would head to Indonesia as currency not tied to $ ..forget about Thai and the Philippines ..

[rubl]

Did we not just read recently that Thais are world leaders in personal debt?

So what have they got to spend?

Exactly, why do they think they need to encourage spending to balance things out. If they think living cost is high, than they should be tackling that, decrease the cost of raw materials and goods sold. I find that many daily items in Thailand cost about the same or more than what can be purchase in western countries. Decrease taxes can have a big effect on encouraging spending if goods are cheaper.

Thais spend a disproportionate amount of their salaries on living costs. I keep on saying this again and again, transportation cost such as BTS is way over price! They increased fares last year and they are planning to do so again this year I believe.

I think it's much more the low salaries than high prices which hurt Thai workers.