Thailand’s economic outlook worst in 40 years

[lostoday]

The Chinese are making a strong effort to slow their rate of growth..... they call it "the New Normal". China will be importing less and buying less from it's neighboring countries in the next couple of years or so.

That means Thai exports to China will drop, which means a slowdown in the Thai 'economy".

Some people forecast China's growth rate to be down below 6% by 2017 in former 7% annual growth rate.

If so, that will mean big changes in Asian growth, including Thailand..

In addition the Chinese just announced new restrictions on trading on the Chinese stock market which has been going up to fast from speculation money flowing in form Chinese firms.

These restrictions and capital requirements are intended to slow down the "bubble" in runaway growth of the Chinese stock exchange..

I think you are correct. For a retired guy with money coming in from another country the low inflation of minus 2% seems like a good idea. Less tourism means less crowds and traffic. There are those Thais who will raise prices to combat less volume but they will be out of business soon.

[Anthony5]

The Chinese are making a strong effort to slow their rate of growth..... they call it "the New Normal". China will be importing less and buying less from it's neighboring countries in the next couple of years or so.

That means Thai exports to China will drop, which means a slowdown in the Thai 'economy".

Some people forecast China's growth rate to be down below 6% by 2017 in former 7% annual growth rate.

If so, that will mean big changes in Asian growth, including Thailand..

In addition the Chinese just announced new restrictions on trading on the Chinese stock market which has been going up to fast from speculation money flowing in form Chinese firms.

These restrictions and capital requirements are intended to slow down the "bubble" in runaway growth of the Chinese stock exchange..

I think you are correct. For a retired guy with money coming in from another country the low inflation of minus 2% seems like a good idea. Less tourism means less crowds and traffic. There are those Thais who will raise prices to combat less volume but they will be out of business soon.

You mean the major supermarkets will be out of business soon?

http://www.thaivisa.com/forum/topic/818435-i-must-be-missing-something/

[lostoday]

The Chinese are making a strong effort to slow their rate of growth..... they call it "the New Normal". China will be importing less and buying less from it's neighboring countries in the next couple of years or so.

That means Thai exports to China will drop, which means a slowdown in the Thai 'economy".

Some people forecast China's growth rate to be down below 6% by 2017 in former 7% annual growth rate.

If so, that will mean big changes in Asian growth, including Thailand..

In addition the Chinese just announced new restrictions on trading on the Chinese stock market which has been going up to fast from speculation money flowing in form Chinese firms.

These restrictions and capital requirements are intended to slow down the "bubble" in runaway growth of the Chinese stock exchange..

I think you are correct. For a retired guy with money coming in from another country the low inflation of minus 2% seems like a good idea. Less tourism means less crowds and traffic. There are those Thais who will raise prices to combat less volume but they will be out of business soon.

You mean the major supermarkets will be out of business soon?

http://www.thaivisa.com/forum/topic/818435-i-must-be-missing-something/

I didn't know that was why Carrefour closed. I shop at Lotus and have not noticed any large price increases in the past 6 months. I use a program called, "out of milk" on my phone for shopping and I have not noticed many price increases lately. I don't really have the program fine tuned yet so I can't tell you for sure.

I just put in a new big AC unit and was very happy with the results of my latest bill which only went up 400 baht a month for cooling my living room and office. It's a Daikin and I think it is made in Thailand.

Of course anecdotal evidence is not worth much I only mention it because I've been tracking my power usage daily to see how much the new unit costs.

Edited April 19, 2015 by lostoday

[Anthony5]

The Chinese are making a strong effort to slow their rate of growth..... they call it "the New Normal". China will be importing less and buying less from it's neighboring countries in the next couple of years or so.

That means Thai exports to China will drop, which means a slowdown in the Thai 'economy".

Some people forecast China's growth rate to be down below 6% by 2017 in former 7% annual growth rate.

If so, that will mean big changes in Asian growth, including Thailand..

In addition the Chinese just announced new restrictions on trading on the Chinese stock market which has been going up to fast from speculation money flowing in form Chinese firms.

These restrictions and capital requirements are intended to slow down the "bubble" in runaway growth of the Chinese stock exchange..

I think you are correct. For a retired guy with money coming in from another country the low inflation of minus 2% seems like a good idea. Less tourism means less crowds and traffic. There are those Thais who will raise prices to combat less volume but they will be out of business soon.

You mean the major supermarkets will be out of business soon?

http://www.thaivisa.com/forum/topic/818435-i-must-be-missing-something/

I didn't know that was why Carrefour closed. I shop at Lotus and have not noticed any large price increases in the past 6 months. I use a program called, "out of milk" on my phone for shopping and I have not noticed many price increases lately. I don't really have the program fine tuned yet so I can't tell you for sure.

I just put in a new big AC unit and was very happy with the results of my latest bill which only went up 400 baht a month for cooling my living room and office. It's a Daikin and I think it is made in Thailand.

Of course anecdotal evidence is not worth much I only mention it because I've been tracking my power usage daily to see how much the new unit costs.

Carrefour closed many years ago, not in the past 6 months, and is not related in any way to this thread or the thread I linked to.

If you don't see any price increase than I assume you don't buy any imported food products, or fail to see that the products that are sold at the same price are now reduced in size.

[issanaus]

The Chinese are making a strong effort to slow their rate of growth..... they call it "the New Normal". China will be importing less and buying less from it's neighboring countries in the next couple of years or so.

That means Thai exports to China will drop, which means a slowdown in the Thai 'economy".

Some people forecast China's growth rate to be down below 6% by 2017 in former 7% annual growth rate.

If so, that will mean big changes in Asian growth, including Thailand..

In addition the Chinese just announced new restrictions on trading on the Chinese stock market which has been going up to fast from speculation money flowing in form Chinese and foreign investors.

These restrictions and capital requirements are intended to slow down the "bubble" in runaway growth of the Chinese stock exchange..

This could affect Thailand as the Chinese stock market has been regarded as a good place to

make money by many wealthy Thais.

see below

There has been much fretting about China's growth over the past five years. One special focus for hand-wringing has been the Chinese financial system and its non-banking component – the shadow banking system – in particular.

Financial growth in China has certainly been rapid since 2007, a classic warning of impending trouble. In the decade before 2007, credit grew only a little faster than GDP, reaching 187 per cent of GDP, which is about normal for an emerging economy.

Then China applied a huge stimulus in 2009 in response to the global financial crisis, mainly in the form of easing the constraints on credit expansion. As a result, China sailed through the crisis with double-digit growth. But by 2014 the credit to GDP ratio had risen to 282 per cent, a bit more than Australia or the US and much more than is normal in emerging economies. The shadow banking component led the expansion, growing at 37 per cent annually since 2007

http://www.businessspectator.com.au/article/2015/3/31/china/are-chinas-shadow-banks-going-bring-economy-downhttp://www.businessspectator.com.au/article/2015/3/31/china/are-chinas-shadow-banks-going-bring-economy-down

or Google "china shadow banks" or China shadow loans"

It used to be said "that if America sneezed then the world caught a cold" - Given Chinas role in the global economy and the quantity of USA bonds that it holds in reserve I am not sure what the effect of Chinas potential illness is

[lostoday]

You mean the major supermarkets will be out of business soon?

http://www.thaivisa.com/forum/topic/818435-i-must-be-missing-something/

I didn't know that was why Carrefour closed. I shop at Lotus and have not noticed any large price increases in the past 6 months. I use a program called, "out of milk" on my phone for shopping and I have not noticed many price increases lately. I don't really have the program fine tuned yet so I can't tell you for sure.

I just put in a new big AC unit and was very happy with the results of my latest bill which only went up 400 baht a month for cooling my living room and office. It's a Daikin and I think it is made in Thailand.

Of course anecdotal evidence is not worth much I only mention it because I've been tracking my power usage daily to see how much the new unit costs.

Carrefour closed many years ago, not in the past 6 months, and is not related in any way to this thread or the thread I linked to.

If you don't see any price increase than I assume you don't buy any imported food products, or fail to see that the products that are sold at the same price are now reduced in size.

When it was 50 baht to 1 USD the US stuff was quite a bit more money but the Thai things were cheaper.

I've seen prices go up and down. Seems to me diet Pepsi has been 25 baht at Lotus for 5 years.

I don't know why Carrefour closed. Maybe it was because they increased prices in a downturn which would have been stupid. I haven't had a lot of respect for French critical thinking since they built the Maginot line.

Getting away from useless anecdotal evidence and into hard facts..............

"Consumer prices fell 0.6% over the same month last year, which followed February’s 0.5% drop and marked the fastest decrease since September 2009. The result was below the 0.5% decline the market had expected. As a consequence, annual inflation is well below the Central Bank’s tolerance margin of plus/minus 1.5 percentage points around its target of 2.5%. Core consumer prices, which exclude prices for energy and fresh food, fell 0.06% over the previous month (February: +0.09% month-on-month). Annual core inflation inched down from 1.5% in February to 1.3% in March and now stands at its lowest level since March 2014.".............".The Bank of Thailand projects that inflation will average 2.1% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 2.1% in 2015, which is down 0.2 percentage points from last month’s Consensus."

https://www.focus-economics.com/country-indicator/thailand/inflation

Bad news is the economy is flopping good news is there is almost no inflation. Those who benefit from low inflation (like retired folks) will be happy.

Edited April 19, 2015 by lostoday

[NeverSure]

The Thai baht is valued against the USD because the bills are paid in USD. It is like an international currency of trade and has been since that status was lost by the British pound in the 1950's or around there.

All countries have the same situation with the USD yet some of them have had significant depreciation against the USD. If the baht devalues Thailand will have to use more baht to buy USD and things will be more expensive in baht.

Trading in dollars doesn't support another currency as can be seen worldwide. Each currency must stand on its own.

China holds a lot of USD in the form of treasuries to back its international trades. This is where some people get the mistaken idea that "the US owes China a lot of money." No, China is struggling financially but it can't let go of the USD or it would be out of the trade business. Its own currency can't readily be exchanged worldwide.

[Thai at Heart]

Hey Thailand welcome to the rest of the world.

I do hope you quit supporting the Thai baht so much, and let it slump a bit

toward the real value of Baht versus USA dollar.

Just saying!

What is USA govt debt to gdp now? 80%? 85? Go look up Thailand and understand why the USD is so weak.

the $ has been strong (not weak) against most other currencies including the Thai baht. Have a look at $ index chart in post 120.

Currency valuations have little correlation to the debt to GDP ratios.

It all sets the tone. Thailand has wound it's way back from the 97 crisis. The rate today is the rate today. What prevents it from being 40 to the USD?

Debt levels and interest rates..

[issanaus]

The Thai baht is valued against the USD because the bills are paid in USD. It is like an international currency of trade and has been since that status was lost by the British pound in the 1950's or around there.

All countries have the same situation with the USD yet some of them have had significant depreciation against the USD. If the baht devalues Thailand will have to use more baht to buy USD and things will be more expensive in baht.

Trading in dollars doesn't support another currency as can be seen worldwide. Each currency must stand on its own.

China holds a lot of USD in the form of treasuries to back its international trades. This is where some people get the mistaken idea that "the US owes China a lot of money." No, China is struggling financially but it can't let go of the USD or it would be out of the trade business. Its own currency can't readily be exchanged worldwide.

In BloombergBusiness on the 28 Jan 2015

The yuan overtook Canada’s dollar to rank fifth for use in global payments, bolstering the case for the International Monetary Fund to endorse it as a reserve currency.

The proportion of transactions denominated in yuan climbed to a record 2.17 percent in December, from 1.59 percent in October, the Society for Worldwide Financial Telecommunications said in a statement. Later this year, the IMF will conduct the next twice-a-decade review of the basket of currencies in its Special Drawing Rights that members can count toward their official reserves. The basket currently comprises U.S. dollars, euros, yen and British pounds.

“The yuan has a very high chance of being chosen as a reserve currency in the next IMF review,” said Nathan Chow, an economist at DBS Group Holdings Ltd. in Hong Kong. “The yuan could even surpass the yen in the rankings this year

http://www.bloomberg.com/news/articles/2015-01-28/yuan-replaces-canadian-dollar-as-5th-most-used-currency-swift

[chiang mai]

Just to balance more appropriately, earlier comments regarding the availability of THB overseas, the link below explains BOT regulations on currency control:

, https://www.bot.or.th/English/FinancialMarkets/ForeignExchangeRegulations/FXRegulation/Pages/default.aspx

An extract from which reads:

"A person traveling to Vietnam, the People's Republic of China (only Yunnan province) and Thailand's bordering countries is allowed to take out up to THB 2,000,000. Taking out Thai Baht bank notes in an amount exceeding THB 450,000 requires declaration to a Customs Officer.

A person traveling to other countries is allowed up to THB 50,000".