Thailand’s economic outlook worst in 40 years



BANGKOK: -- All the economic engines appear to have stopped functioning rendering Thailand’s economic outlook the worst in 40 years, said Mr Thanawat Polvichai, director of the Economic and Business Forecast Centre of the University of Thai Chamber of Commerce.

The contraction of economic growth, the shrinking of export and domestic consumption, farm price slump and delayed disbursement of government’s spending budget have combined to make the private sector feel not confident with the state of the economy, he explained.

Total export of the whole year which was earlier projected to grow by 4.1 percent has been revised down to 0.4 percent with 3.2 percent expansion of the industrial sector, 1.8 percent of consumption expansion and 3.6 percent growth of private sector’s investment.

With the exception of tourism sector which is projected to grow 13.7 percent with 28.8 million tourist arrivals.

Since economic growth is dependent on exports, the centre has painted three scenarios: if exports grow by 0.4 percent, the growth rate will be 3.2 percent; if export growth is zero, the economic growth rate will be 2.9 percent ; if export growth rate registers minus 1 percent, the economic growth rate will be 1.9 percent and if export growth is 1.5 percent, the GDP will be 4.1 percent.

Mr Thanawat said however that there is a slim chance that exports will pick up because Thailand’s major trading partners such as the European Union and Japan are experiencing economic slowdown.

Source: http://englishnews.thaipbs.or.th/thailands-economic-outlook-worst-in-40-years


-- Thai PBS 2015-04-17

I'll bet nothing like this will feature in the PM's 6 month report.

Ok, I understand that.....now, when will the baht drop against other currencies? I am talking a significant drop, not half a point!

M. Thanawat had, since, be invited to get re-adjustment in a military barrack.

Economy is going very well since 10 months. Period.

Yet the supported Baht stays strong!

But when it finally crashes, what will they say then?

Let's see. How long ago was the Asian Economic Crisis that nearly wiped Thailand off the map? 1997? Bit more recent than 40 years. Do they teach history at the University of Thai Chamber of Commerce?

Not only Thailand, the WTO and other international agencies are all dropping the world economic outlook numbers. http://uk.reuters.com/article/2015/04/14/uk-global-economy-trade-idUKKBN0N50V820150414

Yet the Thai Baht grows stronger every day making Exporting harder and with a strong baht surely tourism must drop as well but what do i know .................................

Far be it from me to question this organisation's mathematical ability, but it does claim to have put forward three scenarios, all dependent on export growth being one of the following figures: 0.4%, 0%, -1% and 1.5%. While I fully appreciate that he is/ they are not comparing like with like (export growth and GDP are not the same), I make that four scenarios. This from a University of a Chamber of Commerce.

Is it me?

H.

No country is in control of its economy because of globalisation. No country is in control of its money supply due to financial markets and the development of financial products. Globalisation, increasing free trade and financial markets are the things that have powered the growth of the world economy but at the same time makes the global economy fragile.

All the Thai government can due is to try and create an economic environment that is conducive to economic development but outcomes need to me considered in relation to global economic out comes,

I'll bet nothing like this will feature in the PM's 6 month report.

Kid, it probably will. But it will be someone/country/rice scheme/not enough Thainess/cold shoulder fault. And the General is out there day in day out fixing the problem with new found friends and Chinese subs as reported.

Ah, yes the other problem with the US still complaining about human trafficking even though the General has put out many press release's saying that they are doing something (but no prosecutions of major companies, only the persecution of foreign investigative journalist’s that are not sensitive enough and hurt people's feelings by exposing the truth).

The main focus this regime has is the exclusion of political foes that will disrupt the elite's stranglehold they want to have over the country. The real effect is that they are strangling the nation’s economy. But when you have money one can afford these conceited self-absorbed moments?

Yet the supported Baht stays strong!

But when it finally crashes, what will they say then?

I believe the reason for it not to fall as it should, is because no one (very few) are trading it anyway.

It's overvalued and pegged against US$ for a reason.

Imagine how much the families in BKK would lose if THB would be depreciated, just import of "luxury" cars and other "luxury" products creates both high tax revenues as profit on top, especially if all other currencies are low.

Prices are still the same for consumers, but where is the currency difference when a BMW is now cheaper than ever before when Euro has fallen more than 20%.

Don't believe for a second Thailand is buying in US$.

Why do you think THB is pegged against US$.

Economy is not my field but I have over the years tried to understand the Thai economy and the politics behind it.

I still don't get it, but I believe I can see a pattern, please correct me if I'm off target.

Let's see. How long ago was the Asian Economic Crisis that nearly wiped Thailand off the map? 1997? Bit more recent than 40 years. Do they teach history at the University of Thai Chamber of Commerce?

Thai math : 2558 -1997 = 561 years ago .

It is an outright fallacy that economies must grow.

Lower the THB will show immediate results...

Now your starting to see what I knew all along Unless BOT comes out with new exchange rate along the lines Of say 44 to 1 USD that would in deed give Thailand a shot in it's economic engine that is needed. It would not only create more jobs and investments inflow but exports would double Construction would reboot defaults would halt because of new jobs allowing people who owe money earn and pay it back. The rate I suggested would have to remain in place at least 2 to 3 years then slowly adjust up wards. I would also venture a guess the expats living here would go on a buying spree unseen in Thailand in years Tourism would double if not triple. Crops prices would rise to to demand of feeding all the people coming into Thailand. And the BOT would be thought of as a genius. It boils down to supply and demand, You have the supply you need to create the demand.

As already pointed up by many weaker baht would solve exports problems.

Rising prices coupled with bad exchange certainly of no help for exports or tourism

The junta scaring away entrepreneurs and making living in Thailand difficult does not help matters. The Baht will fall eventually. Would not touch Thailand with a 10 foot poll.

Now your starting to see what I knew all along Unless BOT comes out with new exchange rate along the lines Of say 44 to 1 USD that would in deed give Thailand a shot in it's economic engine that is needed. It would not only create more jobs and investments inflow but exports would double Construction would reboot defaults would halt because of new jobs allowing people who owe money earn and pay it back. The rate I suggested would have to remain in place at least 2 to 3 years then slowly adjust up wards. I would also venture a guess the expats living here would go on a buying spree unseen in Thailand in years Tourism would double if not triple. Crops prices would rise to to demand of feeding all the people coming into Thailand. And the BOT would be thought of as a genius. It boils down to supply and demand, You have the supply you need to create the demand.

Can you also see the pigs flying in the sky too

A reduction in the level of the baht would or should do the trick , for to long the baht has been kept at an inflated strength if the BOT do not do anything and leave it strong God knows what will happen , one thing is for sure tourists will go where they can get more value for there money !

Yet the supported Baht stays strong!

But when it finally crashes, what will they say then?

Well...they will probably blame it on foreign speculators.

As already pointed up by many weaker baht would solve exports problems.

Rising prices coupled with bad exchange certainly of no help for exports or tourism

Don't know if the Generals have an idea on how to do this? or what would happen?

Now your starting to see what I knew all along Unless BOT comes out with new exchange rate along the lines Of say 44 to 1 USD that would in deed give Thailand a shot in it's economic engine that is needed. It would not only create more jobs and investments inflow but exports would double Construction would reboot defaults would halt because of new jobs allowing people who owe money earn and pay it back. The rate I suggested would have to remain in place at least 2 to 3 years then slowly adjust up wards. I would also venture a guess the expats living here would go on a buying spree unseen in Thailand in years Tourism would double if not triple. Crops prices would rise to to demand of feeding all the people coming into Thailand. And the BOT would be thought of as a genius. It boils down to supply and demand, You have the supply you need to create the demand.

.....and Ferraris, gold, Gucchi bags, foreign holidays and foreign property etc will all be more expensive. How dare you suggest policies that will benefit Thailand over the elite.

What happened in 1975?

It would also appear that some vehicle manufacturers are looking elsewhere to invest large sums of money.

Toyota - China and Mexico

Ford - 2 drivetrain plants - Mexico

And also 1 other ( cant remember ) - Mexico

Could this mean the start of the demise of the car industry in Thailand ?, a sector so heavily relied upon for Thai GDP.

Yet the Thai Baht grows stronger every day making Exporting harder and with a strong baht surely tourism must drop as well but what do i know .................................

Along with a good few other expats, my pension has taken a beating as the baht stays strong and the Aussie dollar and others slowly sinks.

From 31 baht last year to 24 baht now. Makes it tough especially when all medical and dental costs remain high and many of us cannot even get insurance.

The biggest single reform that Thailand could make would be to drastically reduce corruption which acts like a tax in all the negative ways but not in positive ways. Thailand is a country with a lot of regulations but has little regulation - things are slowly changing I think.

Beyond that we need microeconomic reform in areas including education and infrastructure - spending on which should increase demand - but again the level of corruption increase the costs of the reforms, and try to avoid corruption in the projects delays them and the associate benefits to the economy in the context of macro economics.

I don't know much about economics either, but I am rather certain the value of the baht is unrelated to rich BK families and their desires to buy BMWs.

Are there more informed readers who know the reasons for the strength of the baht?

Yet the supported Baht stays strong!

But when it finally crashes, what will they say then?

I believe the reason for it not to fall as it should, is because no one (very few) are trading it anyway.

It's overvalued and pegged against US$ for a reason.

Imagine how much the families in BKK would lose if THB would be depreciated, just import of "luxury" cars and other "luxury" products creates both high tax revenues as profit on top, especially if all other currencies are low.

Prices are still the same for consumers, but where is the currency difference when a BMW is now cheaper than ever before when Euro has fallen more than 20%.

Don't believe for a second Thailand is buying in US$.

Why do you think THB is pegged against US$.

Economy is not my field but I have over the years tried to understand the Thai economy and the politics behind it.

I still don't get it, but I believe I can see a pattern, please correct me if I'm off target.

Just keep borrowing money and hope things get better eventually ! Dont forget the powers to be are exempt from prosecution.

If the exchange rate Thai baht to other major currencies was devalued by 15% this would make a huge difference to exports investment and tourist spending power. Yess it would weaken imported goods to a degree but the majority of Thais do not buy imported goods. OK some electrical goods but Thailand still has manufacturing here. Would be a shame for them to loose that in the long run.

It would also appear that some vehicle manufacturers are looking elsewhere to invest large sums of money.

Toyota - China and Mexico

Ford - 2 drivetrain plants - Mexico

And also 1 other ( cant remember ) - Mexico

Could this mean the start of the demise of the car industry in Thailand ?, a sector so heavily relied upon for Thai GDP.

Toyota has already moved some best selling 'Thai' models to manufacture them in Indonesia. http://www.nationmultimedia.com/business/Toyota-to-shift-Thai-output-base-to-Indonesia-30222597.html