Thailand’s economic outlook worst in 40 years

[LuckyLew]

Yet the supported Baht stays strong!

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

TAT have the slogan at the ready should the baht weaken

"Come to Thailand and get more bang for your baht"

[Fiddlesticks]

All I can say is I'm shocked!

[deecee10]

The baht is kept artificially high by being pegged to the USD.

If the currency were allowed to float it would definitely start sinking which would be great for exports and tourism but not so good for importers of eg. luxury items.

Now, who buys luxury items?

[issanaus]

The discussion of interest rates in relation to the Dollar (USA or AUS) is economical flawed and based on our self interest and egotistical view of our importance to the economy.

The discussion (and any consideration by BOT or Government) should be based on a Trade weighted index. A market drive currency influenced by Central bank suggestions and limited CB interventions to soften over corrections in the market would appear to be the way things should be.

[stingray]

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

Why the Bath should drop? Some foreigners think quite selfish, just to get more THB for their pension.

If the THB drops, the gas (petrol) prices will rise, transportation costs will rise, all import goods (cars, parts, electronics, tools, machines, etc.) will rise, even farming products will rise (because of higher gas prices) and finally salaries will increase as well.

Even land and building costs will increase (all tools and machines are made in China), because of higher import and transport costs and i guess the "Chinese landlord" take the chance to increase his land prices as well, because he know, that the foreigners get more cash for their foreign currency.

When i came here the THB was 25 to the USD, the German THB was 12.5 to the DM and no farangs whined about.

Edited April 17, 2015 by stingray

[kalbz]

I don't see the Baht as strong. I see our currencies are weak. Understandable i think, Thailand is still a productive country, unemployment is low and they don't have the weight of paying for an unsustainable welfare system. Even with the lower exchange rate i still have a comfortable life here, something i could not get back home.

[hugh2121]

Yet the supported Baht stays strong!

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

Not only the baht but SET also. Surely not manipulation!

[No Apologist]

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

Why the Bath should drop? Some foreigners think quite selfish, just to get more THB for their pension.

If the THB drops, the gas (petrol) prices will rise, transportation costs will rise, all import goods (cars, parts, electronics, tools, machines, etc.) will rise, even farming products will rise (because of higher gas prices) and finally salaries will increase as well.

Even land and building costs will increase (all tools and machines are made in China), because of higher import and transport costs and i guess the "Chinese landlord" take the chance to increase his land prices as well, because he know, that the foreigners get more cash for their foreign currency.

When i came here the THB was 25 to the USD, the German THB was 12.5 to the DM and no farangs whined about.

You came here when they were still on the DM? Christ, that's what....20 years ago?

[Miami Bob]

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.

Maybe the BIS [ bank of international settlements] in Zurich won't allow the Baht to be devalued right now. Don't underestimate the power of "the central bank of central banks".

[tardelli]

why actually ? well known western imperialists countries never interested in Thailand at all ? (or do they?)

it seem as easiest colonial ; they love farang ;believe in farangs blindly too; uneducated volk. look very yummy.

[Denim]

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?

They know but are not interested. They and their cronies have loads of money and this is their main interest area. Any measure that effectively reduces their own spending power will never see the light of day.

[micmichd]

What happened in 1975?

U.S. Imperialism finally lost the war against the people of Vietnam and surrounding countries, April 30,1975.

[tardelli]

why actually ? well known western imperialists countries never interested in Thailand at all ? (or do they?)

it seem as easiest colonial ; they love farang ;believe in farangs blindly too; uneducated volk. look very yummy.

probably The smart Thai-Chinese society blocked them till now.

[baboon]

The baht is kept artificially high by being pegged to the USD.

If the currency were allowed to float it would definitely start sinking which would be great for exports and tourism but not so good for importers of eg. luxury items.

Now, who buys luxury items?

People who don't need to look at the price tag regardless of the strength of the Baht. Why would they need it artificially propped up?

[Sealbash]

The baht is kept artificially high by being pegged to the USD.

If the currency were allowed to float it would definitely start sinking which would be great for exports and tourism but not so good for importers of eg. luxury items.

Now, who buys luxury items?

I was under the impression the Thai baht has not been pegged to the USD since 1997. At least, that is what all currency exchange information indicates.

[Ricardo]

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.

For once, I would agree with you, perceived political-risk has not been helping matters.

Other factors would perhaps include :-

- the slowdown over the past few years in the Chinese economy (the regional super-power)

- the global economic crisis over the past several years (destination for exports & source of tourists)

- the decline in drugs-exports over the past few decades (which may have also previously helped the local economy)

- the maturing of the Thai tourism-industry, and switch to higher-volume lower-spending tourists

- the weak price for rice-exports over the past few years (and also other agricultural-exports such as rubber)

- the impact of a stronger Baht on exports & manufacturing

- a poorly-educated workforce

- unhelpful visa-regulations & land-ownership laws discouraging inward-investment

In my view the formerly-strong Thai economy, robust since it bounced back from the 1997-crisis, has been weakening over the longer-term regardless of whoever was in-power. That goes for the military (twice), the Dems and the five Thaksin-related governments.

[tardelli]

What happened in 1975?

U.S. Imperialism finally lost the war against the people of Vietnam and surrounding countries, April 30,1975.

There is a very deep difference between evel Vietnamese and naive Thai volk.

[tardelli]

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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.

For once, I would agree with you, perceived political-risk has not been helping matters.

Other factors would perhaps include :-

- the slowdown over the past few years in the Chinese economy (the regional super-power)

- the global economic crisis over the past several years (destination for exports & source of tourists)

- the decline in drugs-exports over the past few decades (which may have also previously helped the local economy)

- the maturing of the Thai tourism-industry, and switch to higher-volume lower-spending tourists

- the weak price for rice-exports over the past few years (and also other agricultural-exports such as rubber)

- the impact of a stronger Baht on exports & manufacturing

- a poorly-educated workforce

- unhelpful visa-regulations & land-ownership laws discouraging inward-investment

In my view the formerly-strong Thai economy, robust since it bounced back from the 1997-crisis, has been weakening over the longer-term regardless of whoever was in-power. That goes for the military (twice), the Dems and the five Thaksin-related governments.

The Baht will fall eventually ? i bet it will

[stingray]

The baht is kept artificially high by being pegged to the USD.

If the currency were allowed to float it would definitely start sinking which would be great for exports and tourism but not so good for importers of eg. luxury items.

Now, who buys luxury items?

People who don't need to look at the price tag regardless of the strength of the Baht. Why would they need it artificially propped up?

Not only luxury items. Almost everything is made in China today, just every tools, machines for farming industry, electronics, also car parts (some cars are only assembled over here, but parts are imported), textiles, etc.

[asianscouser]

I know my comment may seem like another greedy Farang. This could be good news for those of us living here.

I do Exporting and YES the farming community has been affected BIG TIME. My wife owns a Rubber Farm and Fruit Farm. I export both. I have noticed this year the value has gone down. Unlike last year when the "Coup" was happening. This New PM promised everything YET delivered nothing. My brother in Law is a Soldier as is the new PM.

What gets me is, I still use a UK bank as well as a Thai bank. The GBP rose considerably whilst this "Coup" was happening.

Only the future will bring the true out come of this recession..

Ken.. UK Expat.. Rayong

Edited April 17, 2015 by asianscouser

[thedude82]

all aboard the Thaitanic! Tourism to rise 13%??? I call complete bullshit on that one...

[micmichd]

What happened in 1975?

U.S. Imperialism finally lost the war against the people of Vietnam and surrounding countries, April 30,1975.

There is a very deep difference between evel Vietnamese and naive Thai volk.

I've been out and asked some of "naive Thai folk" who the winner of the last world war was.

Frequent answer: Vietnam.

[mike324]

I think Thailand has reached a point where it is slowly becoming a service oriented sector. The manufacturing sector has slowed due to the rising wages.combine with the the slowdown in the world economy, its not surprising what is happening here. Its the same for any Asian country such as Malaysia, Taiwan, even China that were once manufacturing powerhouses but turned service to hi-tech oriented. Thailand is in this transition.

I think what would help the country is to cut back on taxes for everything in order to drive up consumption. That would greatly benefit the citizens to have a higher standard of living. Its not like the taxes collected were ever put to good use.

[lostoday]

The baht is kept artificially high by being pegged to the USD.

If the currency were allowed to float it would definitely start sinking which would be great for exports and tourism but not so good for importers of eg. luxury items.

Now, who buys luxury items?

"Although pegged to the U.S. dollar, by July 1997, the Thai government's supply of foreign currencies reserves available to buy baht and thus support it price, were nearly exhausted. Hit with a sustained speculative attack by currency traders, the Thai government abandoned the dollar peg and the baht devalued sharply as it became a floating currency."

http://www.colorado.edu/economics/courses/econ2020/6550/readings/Asian-currency.html

[ScarpoFongness4U]

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.

For once, I would agree with you, perceived political-risk has not been helping matters.

Other factors would perhaps include :-

- the slowdown over the past few years in the Chinese economy (the regional super-power)

- the global economic crisis over the past several years (destination for exports & source of tourists)

- the decline in drugs-exports over the past few decades (which may have also previously helped the local economy)

- the maturing of the Thai tourism-industry, and switch to higher-volume lower-spending tourists

- the weak price for rice-exports over the past few years (and also other agricultural-exports such as rubber)

- the impact of a stronger Baht on exports & manufacturing

- a poorly-educated workforce

- unhelpful visa-regulations & land-ownership laws discouraging inward-investment

In my view the formerly-strong Thai economy, robust since it bounced back from the 1997-crisis, has been weakening over the longer-term regardless of whoever was in-power. That goes for the military (twice), the Dems and the five Thaksin-related governments.

The China foreign reserve tally is now 1.4/ trillion and increasing in value with the continued rally in the dollar And us treasuries

To say the slower growth in China, oops, only 7% last quarter is weighing on Thailand only means one thing, they are taking their investing some where else because they dont see Thailand providing them any return, unless it is on cheap cell phones and knock off American branded clothing

Thai manufacturing is not desired when it can be done elsewhere with fewer hands in the pockets.

Its also possible the west, including china wants to see Thailand nosedive because they are tired of dealing with the instability And want a complete takeover by the west,

I wouldnt rule that out as, who is courting Thailand, the Russians,

To sell weapons, needed against who?

[stingray]

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

Why the Bath should drop? Some foreigners think quite selfish, just to get more THB for their pension.

If the THB drops, the gas (petrol) prices will rise, transportation costs will rise, all import goods (cars, parts, electronics, tools, machines, etc.) will rise, even farming products will rise (because of higher gas prices) and finally salaries will increase as well.

Even land and building costs will increase (all tools and machines are made in China), because of higher import and transport costs and i guess the "Chinese landlord" take the chance to increase his land prices as well, because he know, that the foreigners get more cash for their foreign currency.

When i came here the THB was 25 to the USD, the German THB was 12.5 to the DM and no farangs whined about.

You came here when they were still on the DM? Christ, that's what....20 years ago?

Yes, actually in 1990. Correct!

[Balance]

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

When the BOT stops using dollars and Euros to buy Bhat and prop it up. Also when those people sitting on billions and billions of Bhat say that it is O.K.

[Mot Dang]

Thailand should be a power-house economy by now. But poor government administration, coups, corruption, wantabe politicians and deteriorated cultural ethics has done that in. And what are they relying on, bloody tourism. Pushing this "resource" to the max allows more money to be able to flow into the diverse pockets of the greedy. The Russian experiment failed, and now we have the Chinese ? Locusts.

1997 was bad, but wait and see what the next crash is going to be like for a population with virtually no personal saving, and heavily in debt. Jesus wept.

[OmarZaidMD]

They need to forget US-Euro drives, dump the dollar and focus on local trading (Regionalization)

[Time Traveller]

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

When oil is back at $100+ a barrel. Otherwise, there's no chance the Baht will drop even with no growth in exports.

The amount of money that Thailand saves on Oil imports due to the halving in the price of oil - possibly as much as 5% of GDP - gives a strong benefit to the country's current account.