Thailand’s economic outlook worst in 40 years

[Robert24]

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

I think it is being manipulated for some reason possibly pegged to the American dollar. I notice it rises and falls in tandem with the USA greenback. Bad news takes time to filter into exchange rates. I am waiting for a big move to bring money over.

No peg with the US$. As previously mentioned, the baht has weakened considerably against the US$ from 29 to now above 32. The problem is the baht relative strength to other Asian currencies and the Euro.

[stoffel45]

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

One is reminded of the great crook duo of 97/98 - the Banharn-Chavalit Tango.

Cranes dotted the skylines of Bangkok and Pattaya.

Tens of thousands of condos and apartments where the profit was never to be taken in the sale of the units - but in the planning, designing, building and financing stages.

and "THEY" are building hundreds of thousands of these "Lead Balloons" again.

Drive by in the evening....a tiny number of lights are on - no sales.

So the Property Market Lead Balloon will, as usual lead the way,

Hopefully this will drop the baht by at least 50% - if PRC allow that to happen.

Against this - the euro is in free fall. If Greece leaves the toxic eurozone - and hopefully fully defaults French banks will start falling like rotten plums - and Germany will be happy, smug and content.

Until Target2 arrives on the heels of Grexit - T2 the Nemesis of Merkel's campaign to undermine the value of German savers by propping up a corrupt and incompetently managed currency.

When the German people learn what Merkel and Schaueble have been doing - they will be put out of office. As one wag at ECB said,"There won't be enough lamposts in all of Frankfurt for us."

Euro will drop to $0.65 maybe a lot less. Which stymies any drop in the Thai Baht.

Then the other Asian currencies will need to adjust - and before long there is likely to be a terrible mess.

Watch gold sales and the Italian Debt repayments.

[The Deerhunter]

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

AND, I will equally bet that most of the damage to the economy did not occur under his watch, but that will not stop the UDD/PTP apologists crying for blood. It is impossible for this much economic damage to occur in only 11 months. Look back over the previous several years of gross economic mis-(or lack-of) - management.

Under the new PM things are happening but way too slowly. Radical action is required to stamp on some (to me) simple and obvious things that are being ignored. And the radical overhaul of certain departments is just not happening

The Navy was put in to run Phuket and we all hoped that this was a trial; run to sort out the details before rolling out on an as-need basis to other problem areas. Over 6 months later Phuket is dealing with new illegal building extensions on the beach (built since the coup??? and cannot implement a workable format for controlling vendors, umbrellas or beach chairs. If the homework had been done properly it would just have been a process of liaising with the operators, implementing the new laws and enforcing them. No sign of a nation roll out of a policy to fix these problems in all tourist areas.

The new 90 day reporting system will free up Immigration staff time & reduce the difficulties for Non O visa holders but the situation of Immigration officials individually and by office administering the act by their own versions remains. There is still no national policy of uniform application of Immigration law.

The Police shakedowns of tourists is only because they need money. to replace other sources`of income that are being squeezed by misguided moralistic crackdowns or one-up-man-ship attacks on traditional Police revenue sources by other agencies. And Police wages are too low so they all have to do corruption to live.

How many police per capita does Thailand have compared to Malaysia, Vietnam, India etc. What percentage of police time is spend collecting bribes & controlling corruption to shore up low wages? If we have too many police then downsize the outfit & pay the remaining more but with a ruthless ZERO tolerance attitude to corruption. We have police taking cash bribes from drivers of unsafe or overloaded vehicles but with no attempt to address the problem by taking the vehicle or driver off the road. Police go knocking on doors to request private drive-by security checks of rural properties. In two words, that is protection money. They are meant to be patrolling to prevent crime anyway.

Etc Etc.

[elgordo38]

The world is not in a recession ,but much worse in a depression that stands for a deepening in recession/ level beyond.So how can you expect growth.[/

Sorry but there is no depression in the world. By definition a depression is a very deep and prolonged recession characterized by negative economic growth over years, very high unemployment, reduced debt availability etc. People usually refer to the 1930s as an example for a depression. Hope this helps people understand the terms recession and depression better.

Your basing your opinion on questionable numbers being given out by governments that want to sugar coat everything. Governments have strayed so far off of the mark of governing us its astounding. They have come out blatantly in the corner of big business. Just check the real cost of living versus the pittance of an increase they give us in our pension checks. When going over the unemployment figures check out the people on food stamps, people that have just given up looking for work the underemployed and so on. Look at how they are printing money and flooding the world with it including the stock markets its all Ponzi scheme. Companies spend their profits not on creating jobs but by buying back their shares thus reducing the number available for purchase and thus driving up the price of the remaining shares. Last year 4 trillion dollars worth of shares were retired by companies. 1% of the population control half of the wealth. There is much more but my fingers are getting tired.

[lostoday]

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

I think it is being manipulated for some reason possibly pegged to the American dollar. I notice it rises and falls in tandem with the USA greenback. Bad news takes time to filter into exchange rates. I am waiting for a big move to bring money over.

Not pegged to USA dollar in 20 years. For example Switzerland gave up trying to keep the Swiss Franc low because they ran out of foreign exchange dollars to buy Francs. Thailand had large foreign reserves but they have decreased.

[elgordo38]

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

This negative speech will surely earn this fellow some time in "Returning Peace and Happiness to The People" centrifuge.

[elgordo38]

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

Yes they are and its only April

[Robert24]

The world is not in a recession ,but much worse in a depression that stands for a deepening in recession/ level beyond.So how can you expect growth.[/

Sorry but there is no depression in the world. By definition a depression is a very deep and prolonged recession characterized by negative economic growth over years, very high unemployment, reduced debt availability etc. People usually refer to the 1930s as an example for a depression. Hope this helps people understand the terms recession and depression better.

Your basing your opinion on questionable numbers being given out by governments that want to sugar coat everything. Governments have strayed so far off of the mark of governing us its astounding. They have come out blatantly in the corner of big business. Just check the real cost of living versus the pittance of an increase they give us in our pension checks. When going over the unemployment figures check out the people on food stamps, people that have just given up looking for work the underemployed and so on. Look at how they are printing money and flooding the world with it including the stock markets its all Ponzi scheme. Companies spend their profits not on creating jobs but by buying back their shares thus reducing the number available for purchase and thus driving up the price of the remaining shares. Last year 4 trillion dollars worth of shares were retired by companies. 1% of the population control half of the wealth. There is much more but my fingers are getting tired.

Agree with most of what you said, ie the fact companies are raising debt at low cost to buy back shares, the ultra low interest rates, printing of money and that some economic data points are questionable. Yet I hope you would agree that neither Thailand nor the U.S. Is in a recession and for sure there is no depression. I mean people should really study the 1930s to understand what a depression is. Our economic activity is far better than what we saw then.

[Sirbergan]

The world outlook is not much better.

Australia might even be worse off than Thailand with China's progress grinding to a halt. Like Australia, Thailand's economic prosperity relies heavily on China's economy.

Thank goodness there is a competent govt in power to weather this upcoming storm.

Well, at least there's that

[realenglish1]

The BoT is playing with the baht / As for the rest of it look out here comes the one two punch in many sectors

I suspect Real Estate will feel this as well

[elgordo38]

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".

Central banks are all inter connected and rule the world and its politicians. The sad part is central banks are now in uncharted territory and are clutching at straws rather than the levers of power.

[The Deerhunter]

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

I thought it was Vietnam. Indonesia too, now? Thailand needs these factories here. I wonder what part local corruption plays in these big company decisions. It acts as another poster said as an illegal tax on investment & business activity.

[elgordo38]

Can someone explain the quote below. If your major trading partners are experiencing economic slowdown how can they afford to buy your products? Is it the fact that your labor is cheaper and you can outsell them? Confusing statement

Quote 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.

[lostoday]

One is reminded of the great crook duo of 97/98 - the Banharn-Chavalit Tango.

Cranes dotted the skylines of Bangkok and Pattaya.

Tens of thousands of condos and apartments where the profit was never to be taken in the sale of the units - but in the planning, designing, building and financing stages.

and "THEY" are building hundreds of thousands of these "Lead Balloons" again.

Drive by in the evening....a tiny number of lights are on - no sales.

So the Property Market Lead Balloon will, as usual lead the way,

Hopefully this will drop the baht by at least 50% - if PRC allow that to happen.

Against this - the euro is in free fall. If Greece leaves the toxic eurozone - and hopefully fully defaults French banks will start falling like rotten plums - and Germany will be happy, smug and content.

Until Target2 arrives on the heels of Grexit - T2 the Nemesis of Merkel's campaign to undermine the value of German savers by propping up a corrupt and incompetently managed currency.

When the German people learn what Merkel and Schaueble have been doing - they will be put out of office. As one wag at ECB said,"There won't be enough lamposts in all of Frankfurt for us."

Euro will drop to $0.65 maybe a lot less. Which stymies any drop in the Thai Baht.

Then the other Asian currencies will need to adjust - and before long there is likely to be a terrible mess.

Watch gold sales and the Italian Debt repayments.

I can support some of what you say but there are a few points you are wrong:

1) French banks do not hold Greek debt anymore. They were highly exposed in the last Euro crisis but have since sold all of their Greek debt to the ECB. Most of Greek debt is held by the ECB.

2) contagion risk from GREXIT is overestimated. Draghi has all tools in his hands to manage government bond market of Spain, Italy, France etc. He only needs to say that and market participants will remain quiet.

3) I think a 0.80 rate of the Euro vs $ is a more realistic currency target in my opinion than the 0.65$. At least I will close my short Euro positions at this level:)

Don't France and Germany hold the majority (14 and 17 %) of the ECB?

Edited April 17, 2015 by lostoday

[Robert24]

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

Yes they are and its only April

Maybe I'm wrong but I have somewhat a contrarian view of the Global economy forecasts. I personally think economic growth in China and subsequently across the world will pick up in the second half of this year. Have a look at the Chinese stock market. A nice leading indicator in terms of where the economy is going. Again I might be wrong but I certainly recommend to be long Chinese equities now.

[elgordo38]

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

These people are like gypsies and have no loyalty its only profit profit profit and wages are cheaper there and incentives no doubt higher to relocate. At the first sign of trouble or escalating wages they fold up their tent get on the camels and ride. They play countries off against each other to see where the relocation incentives are higher and wages and environmental laws the weakest. Its the new normal the new world order of things.

[Robert24]

One is reminded of the great crook duo of 97/98 - the Banharn-Chavalit Tango.

Cranes dotted the skylines of Bangkok and Pattaya.

Tens of thousands of condos and apartments where the profit was never to be taken in the sale of the units - but in the planning, designing, building and financing stages.

and "THEY" are building hundreds of thousands of these "Lead Balloons" again.

Drive by in the evening....a tiny number of lights are on - no sales.

So the Property Market Lead Balloon will, as usual lead the way,

Hopefully this will drop the baht by at least 50% - if PRC allow that to happen.

Against this - the euro is in free fall. If Greece leaves the toxic eurozone - and hopefully fully defaults French banks will start falling like rotten plums - and Germany will be happy, smug and content.

Until Target2 arrives on the heels of Grexit - T2 the Nemesis of Merkel's campaign to undermine the value of German savers by propping up a corrupt and incompetently managed currency.

When the German people learn what Merkel and Schaueble have been doing - they will be put out of office. As one wag at ECB said,"There won't be enough lamposts in all of Frankfurt for us."

Euro will drop to $0.65 maybe a lot less. Which stymies any drop in the Thai Baht.

Then the other Asian currencies will need to adjust - and before long there is likely to be a terrible mess.

Watch gold sales and the Italian Debt repayments.

I can support some of what you say but there are a few points you are wrong:

1) French banks do not hold Greek debt anymore. They were highly exposed in the last Euro crisis but have since sold all of their Greek debt to the ECB. Most of Greek debt is held by the ECB.

2) contagion risk from GREXIT is overestimated. Draghi has all tools in his hands to manage government bond market of Spain, Italy, France etc. He only needs to say that and market participants will remain quiet.

3) I think a 0.80 rate of the Euro vs $ is a more realistic currency target in my opinion than the 0.65$. At least I will close my short Euro positions at this level:)

Don't France and Germany hold the majority (14 and 17 %) of the ECB?

Sure but who cares if the ECB is loosing money because of a Greek default. Or the ECB could just change the terms of the debt with Greece. I.e. Allow them not to pay interest or extend the loan duration. Whatever they do, ECB can manage the situation without a financial contagion to other vulnerable countries in Europe

[elgordo38]

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.

Last time I looked you need money to spend on consumption and as most articles tell you Thai are presently over extended. Citizens to have a better standard of living built on what bank loans they cannot afford. Your last statement I agree with. Service oriented service in what? Tourism is the only thing I can think of and as the world economy slows more first thing on the chopping block is travelling. Oh sorry you mean between the between the sheets economy hmm you might have a point there. Men always think with this rather than their brain. Yes the sireens are waving to us old Farangs to come hither.

[kaorop]

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

Hear! Hear! or is it Here! Here!?

Why 'they' let the Baht seemingly be manipulated I have no idea

[taabot]

When the people in Europa have paid there taxes,s there is almost no money left to pay the rent. Here where I live in the Netherlands are every month more than 300.000 who have problems with paying rent and health insurance. When the people have no money in the pocket to spend,how do you think economic growth will occur/Falling out of the sky?.They are breaking down the total social welfare in Europa,the call it here The participation society but almost a few milion people in my country are missing the boat unemployed ,disabled to old low education.

[Sirbergan]

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

These people are like gypsies and have no loyalty its only profit profit profit and wages are cheaper there and incentives no doubt higher to relocate. At the first sign of trouble or escalating wages they fold up their tent get on the camels and ride. They play countries off against each other to see where the relocation incentives are higher and wages and environmental laws the weakest. Its the new normal the new world order of things.

Loyalty to whom? If they had any sense of loyalty, they'd have kept the production in Japan to begin with. Why would they keep factories in Thailand if it's not to their advantage?

[how241]

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

Economy is going very well since 10 months. Period.

+1...Bye-bye for him, very soon.

[GOLDBUGGY]

And the Thai Baht remains strong and keeps rising.

[lostoday]

And the Thai Baht remains strong and keeps rising.

Same as it was 6 months ago to USD. How do you figure that's up?

[Bellacissa]

Why does the baht so closely follow the USD if it hasn't been pegged in nearly 20 years?

I'd appreciate a "Currency Exchange for Dummies" answer. I've only just reached the point when I can convert baht to USD in my head without having a dumbfounded look on my face. Math was never exactly my strong suit.

[Sealbash]

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

These people are like gypsies and have no loyalty its only profit profit profit and wages are cheaper there and incentives no doubt higher to relocate. At the first sign of trouble or escalating wages they fold up their tent get on the camels and ride. They play countries off against each other to see where the relocation incentives are higher and wages and environmental laws the weakest. Its the new normal the new world order of things.

It is the responsibility of corporate senior management to ensure optimum returns for investors. It is not their responsibility to incur losses to prove loyalty.

[lostoday]

Why does the baht so closely follow the USD if it hasn't been pegged in nearly 20 years?

I'd appreciate a "Currency Exchange for Dummies" answer. I've only just reached the point when I can convert baht to USD in my head without having a dumbfounded look on my face. Math was never exactly my strong suit.

10 years ago it was 40 baht to the dollar today it's 32. That's not close following.

[Naam]

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

neither today nor tomorrow and definitely not on sunday.

[micmichd]

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.

That's because you have your income and expenses in different currencies.

So you will always be at risk of unexpected problems.

No government ever will change their exchange rate simply because a handful of foreign welfare recipients living in their country are complaining.

Many pensioners are not welfare recipients but people that worked hard all their life. The pensions are their (constitutionally guaranteed) property.

Some of them might be workaholics that were forced into pensions and now feel ripped off. No reason for experts to be loyal to a rip-off system...

Edited April 17, 2015 by micmichd

[Bellacissa]

Why does the baht so closely follow the USD if it hasn't been pegged in nearly 20 years?

I'd appreciate a "Currency Exchange for Dummies" answer. I've only just reached the point when I can convert baht to USD in my head without having a dumbfounded look on my face. Math was never exactly my strong suit.

10 years ago it was 40 baht to the dollar today it's 32. That's not close following.

I meant a little more recently. It seems to have roughly followed what the USD is doing for the past few years. Although, it has flattened out some over the past year.