SURVEY: What direction is the Thai Economy headed?

[fred Kubasa]

The Thai economy must head UP as they are already at the bottom !

[Sharchen]

Advise to expats, sell Thai baht, sit on cash until the crisis passes overhead. You'll come out with a much improved exchange rate and plenty of cheap assets to choose from at the end of the year.

Would that really be a sound advice?

If the finance storms hits globally, what will be different in Thailand than, let's say, in Europe?

Why would THB take a hit and not EUR or USD?

In a crisis, there's always a flight to safety. In 2008-9, despite the financial crisis originating in America, American T-Bills were selling like hotcakes. When you're scared, you run home to momma. That's the US, especially now that the Euro has shown it's underbelly.

[micmichd]

Guess there will not be a real decline in tourism, tourists might just come from other countries.

Thailand is actually a perfect site for the care-taking industry, and I expect more pensioners to come here. Guess many Thai families could be turned into guest families for expats that don't (yet) need intensive medical care, so here's an open niche.

Farang Social Securities should support this outsourcing to Thailand, would be cheaper for them, and with the high unemployment rates in the West they won't have too much money to spend anymore.

Edited June 23, 2015 by micmichd

[phuketandsee]

The Thai economy must head UP as they are already at the bottom !

Not even close yet

[elgordo38]

They have alot of rice, if the weather patterns are indeed el nino of the drought variety this stockpile could well be a saving grace, given that the majority of it is stored correctly....maybe they have a large asset base of an essential element of survival....food......sometimes a wild card comes good........they also have decent cash reserves at the moment and are hopefully well placed with the extra trade asean should bring.....they have the best infrastructure of the neighbouring countries, not flash by western standards but the best of the bunch......if push comes to shove they will still have a functioning local economy, and they can just trade with goods and services......they are survivors that is for sure........does appear as if much of the western world could be in an economic tailspin....the planes about to crash.

Ask the Russians how long it can take to be totally taken out of the economic framework and dumped...it happens fast and nobody seems to see it coming.....when oil was heading up to 140 a barrel, how many would have picked the future price.......like the americans and the start of this global turndown, it happens fast...guess thats why they call it a crash....

Sadly these countries have been paying their bills with high oil prices my country included. For years these countries have been told to diversify or die but like the junkies they are they paid no heed. If the global economy crashes and oil production keeps increasing we could be again looking at $10 a barrel the Saudi break even point is $7 but to cover their annual budget they need $100. This could be a scary scenario as some of these countries have nukes and if their government collapses we could be looking at nukes listed on EBay( a little levity) I am watching a new series called "The Brink" dealing in exactly this subject. Episode 1 just aired and its a hilarious show never laughed so much in my life and at my advanced age that is saying a lot. The jokes (but they are delivered fast and furious) were so good I found myself rewinding and rewinding and re-laughing. If your life is lacking laughter I highly recommend this show. I can hardly wait for episode 2. They poke fun at everything political. Jack Black and Tim Burton.

[millwall_fan]

Thailand will survive by becoming a de facto Chinese state like Myanmar, relying on Chinese investment, Chinese tourist and Chinese products.

That will be another plus for the ruling ethnic Chinese elite here, who will be rubbing their hands in glee. Chinese tourists, come in busloads of Thai-Chinese owned tour buses, stay in Thai-Chinese owned hotels, eat in Thai-Chinese owned restaurants need lots of Thai-Chinese translators and go home without complaining or criticising the Thai-Chinese elite who triggered the coup in order to reassert their authority. The losers? The ethnic Thais who own Mom and Pop guest houses and food stalls frequented by (mainly) Western independent tourists and backpackers.

[Jessi]

There are some very interesting comments on this topic.

When I speak to the average Thai about How is business?

They all seem worried about where it will end.

Just been talking with a Thai from Korat province & he tells me a lot more

Thais are returning to their village after loosing their jobs on the eastern sea board.

I think it will get a lot worse before it gets better.

I find the best way to find out how its all going is by talking to the small

retailers.

[micmichd]

Why must those ethnic Thais be the losers?

If the Chinese really took over, then they would need some infrastructure like roads etc. If they pay for this, then the ethnic Thais could use it, too. It must just be clear that Chinese investors don't get exclusive access, no private roads or "Chinese only" shops eg.

Western independent tourists and bagpackers will still come to Thailand, because it's a lovely country, and it's still comparably cheap.

Edited June 23, 2015 by micmichd

[phuketandsee]

I was talking to some real estate guys in Hua Hin last week. They are VERY pessimistic and say business has dropped off a cliff since the coup.

[NCFC]

Advise to expats, sell Thai baht, sit on cash until the crisis passes overhead. You'll come out with a much improved exchange rate and plenty of cheap assets to choose from at the end of the year.

Would that really be a sound advice?

If the finance storms hits globally, what will be different in Thailand than, let's say, in Europe?

Why would THB take a hit and not EUR or USD?

When the FED raises interest rates, money will flow into the $ and the exchange rate vis-a-vis currencies like the Thai baht will rise. Thai property developers who have financed projects through cheap foreign loans get hit with a double whammy. 1st their loan rates increase, 2nd they are paying a higher price for the foreign currency they have to repay. Of course it is not just property, but all large companies that have borrowed on cheap foreign credit to finance their business. Add to that he amount of hidden corruption that won't get revealed until the market turns and you have the scenario as the '97 Thai crash.

The one difference between then and now is that back in '97 the baht was pegged to the dollar. When it was unpegged, due to the meltdown of the Thai economy the currency halved in value overnight. This time it may slide over a period of 3-6 months, the only question is how far will the baht fall.

[micmichd]

Then the right advice for expats would be to pay back their $ debts now before the $ price rises. Or do I see something wrong in your scenario?

BTW what means "sit on cash"?

Collect Thai Baht until (after your scenario) they are completely worthless?

Edited June 23, 2015 by micmichd

[NCFC]

Then the right advice for expats would be to pay back their $ debts now before the $ price rises. Or do I see something wrong in your scenario?

BTW what means "sit on cash"?

Collect Thai Baht until (after your scenario) they are completely worthless?

Sell Thai baht now and buy $. The reference to sit on your cash was in the context of those thinking to buy condos and land at the present time. The time to buy is after the Thai baht devaluation. Paying back debt depends on what real interest rates are when taking inflation into account.

[carstenp]

Advise to expats, sell Thai baht, sit on cash until the crisis passes overhead. You'll come out with a much improved exchange rate and plenty of cheap assets to choose from at the end of the year.

Would that really be a sound advice?

If the finance storms hits globally, what will be different in Thailand than, let's say, in Europe?

Why would THB take a hit and not EUR or USD?

When the FED raises interest rates, money will flow into the $ and the exchange rate vis-a-vis currencies like the Thai baht will rise. Thai property developers who have financed projects through cheap foreign loans get hit with a double whammy. 1st their loan rates increase, 2nd they are paying a higher price for the foreign currency they have to repay. Of course it is not just property, but all large companies that have borrowed on cheap foreign credit to finance their business. Add to that he amount of hidden corruption that won't get revealed until the market turns and you have the scenario as the '97 Thai crash.

The one difference between then and now is that back in '97 the baht was pegged to the dollar. When it was unpegged, due to the meltdown of the Thai economy the currency halved in value overnight. This time it may slide over a period of 3-6 months, the only question is how far will the baht fall.

I agree with you on many of you statements, but that the baht is pegged to the dollar right now. That's the biggest problem for Thailand right now. the government has already slashing its export growth figure for 2015 from 4% to 1.2%

The Bank of Thailand (BOT) it cut its benchmarkinterest rate by 25 basis-points to 1.5 percent by 2 times In its statement, the BOT mentioned its concerns about the continued strength of the baht.

Another thing we should look at, is since the 14 May last year the baht just get stronger and stronger, because the dollar was strengthen. There do we have the peg.

Look,at the dollar index between euro, UK and baht and there you can see the big difference and why baht is strong and pegged

[Thai at Heart]

Advise to expats, sell Thai baht, sit on cash until the crisis passes overhead. You'll come out with a much improved exchange rate and plenty of cheap assets to choose from at the end of the year.

Would that really be a sound advice?

If the finance storms hits globally, what will be different in Thailand than, let's say, in Europe?

Why would THB take a hit and not EUR or USD?

When the FED raises interest rates, money will flow into the $ and the exchange rate vis-a-vis currencies like the Thai baht will rise. Thai property developers who have financed projects through cheap foreign loans get hit with a double whammy. 1st their loan rates increase, 2nd they are paying a higher price for the foreign currency they have to repay. Of course it is not just property, but all large companies that have borrowed on cheap foreign credit to finance their business. Add to that he amount of hidden corruption that won't get revealed until the market turns and you have the scenario as the '97 Thai crash.

The one difference between then and now is that back in '97 the baht was pegged to the dollar. When it was unpegged, due to the meltdown of the Thai economy the currency halved in value overnight. This time it may slide over a period of 3-6 months, the only question is how far will the baht fall.

Who says that developers have used cheap USD loans to finance property?

[tonbridgebrit]

Thailand, basically, your neighbours (Cambodia, Laos, Burma and Vietnam) will have economic growth greater than you. But don't worry about it, your GDP per person is far greater than your neighbours, it will take them over two decades to catch up with you.

And don't feel bad about your growth being not so great. The European Union, those countries, their GDP (per person) growth is less than yours. At this rate, they will be at the same level as you in about one hundred years time. Notice how they don't really care about this. That's because almost none of us alive today will be here to see it.

[micmichd]

Someone might have babies...

[Nick167]

Think that everyone missed one mian economic fundamental when commenting. No country in the world has one resource that Thailand has........its sex industry. No matter whatever happens, thailand will be ok only more females and males freelancing or whoring fulltime!

[gyrosman]

I think they should build Casinos in ever village so the general who developed the idea can vacation in Japan with his gun and poor farmers will stop drinking and smoking because they will have no money. So, the economy may be better off because now the family unit will return because they'll have no extra income. The electric company will be richer because they will remain at home and watch more TV and increase the monthly bill. Rich get richer and the poor become poorer.

[micmichd]

Think that everyone missed one mian economic fundamental when commenting. No country in the world has one resource that Thailand has........its sex industry. No matter whatever happens, thailand will be ok only more females and males freelancing or whoring fulltime!

Hopefully not so many Thai girls will have to work in the sex industry once Thailand gets richer.

Maybe Farang girls will take their place, or at least try to. Prostitution will become a more and more common way to survive for Farang girls, doubtful if they're really good.

[Jessi]

Yesterday I was talking with some food sellers at the market and they cant understand why business is so quiet.

Simple, people have got less money now. All the debt from the credit cards and the new pick ups has caught up with them.

[abrahamzvi]

If we could refer to the military junta as "government", the answer is that they will not be able to lead Thailand through the economic downturn, respectively the coming collapse of the monetary system without serious damage to the country, its people and the local economy.

Why? Because the time since the coup has shown that most actions and implemented changes were nothing but blind activism, ever more crackdowns, tighter rules and regulations plus tourist scares... i.e. the beach cleanups and "Your private umbrella and beach recliner is confiscated now, get off the beach before I arrest you, you stupid, money paying tourist, this is Thailand!" alike incidents that have caused outrage in western newspapers, causing a drop of up to 40% in western tourist numbers (insider info gained in a meeting of hoteliers in Phuket, and don't expect to read anything about that in Thai media).

Then there were reports of confiscated billions of Thai Baht during the crackdown on corruption (pessimists would say, a "reshuffle of wealth"), but not a single word was spoken about where this money and assets would be invested to improve the country's current situation. The junta and its leader were not able to bring peace to the south, nor were they able to bring true peace to the rest of the country. A proper and honorable government would implement changes that would bring happiness and satisfaction to the people, but not instruct people to be happy.

Yes, the ranting Suthep idiot and his cronies on stage are gone now, but under the surface the peoples' rage is still boiling, especially that of the hard working ones who face more restrictions, more crackdowns, more rules and regulations, increasing costs for living, food, rent, and healthcare, etc...

Show me anything positive, that the Thai man on the street could cling onto - any light at the end of the tunnel, any positive outlook that things are getting better, food cheaper, rental prices lower, so that less unfortunate Thais could live a life in dignity rather than finding comfort in alcohol and drugs (does one truly believe that the alcohol sales time restriction will change that?). There is no plan B for this current "government" letting alone they would have a plan A...

Then the "leader" says that he needs the input of the people to bring positive change to Thailand. Yeah right - and then if anyone speaks up, hush him down or retain him without trial for "attitude readjustment"... Right - kick anyone in the groins who dares to speak up. Laugh at the ones who try to give you ideas on what to change and the ones who try to tell you what the people truly think... Certainly this will change Thailand's future to the better...

So getting back to the question - all of the above combined with the oh, so typical Thai "we are the greatest people on earth and don't you white skinned idiots try to tell us what's right and what wrong" attitude, we have the perfect ingedients for a super storm in case another disaster (i.e. global economy meltdown) hits. Anyone who believes otherwise is either a hopeless dreamer or blind and deaf.

I may be a hopeless dreamer and possibly blind and deaf, but I really believe that Thailand is going in the right direction and it will weather financial difficulties and even a meltdown., Of course not everything is perfect, but the overall developments are very positive and promising.

[micmichd]

Guess this is the century of Asia.

An economic meltdown will hit Europe far more than Asian countries like Thailand.

In some European countries the natives will run mad like rats in panic when they face their economic end, forget everything about solidarity, they will rather kill each other than share. I won't give a damn about them.

Certainly better to invest in developing Thailand than in dying Europe.

Edited June 25, 2015 by micmichd

[djlest]

After 10+ years of living here - Teflon Thailand will survive just fine...

However, this isn't about recession, or a lack of government, whether the junta is in charge or any of its predecessors, it really makes absolutely no difference, they are all still Thai and nothing will change.
What will affect Thailand is the rest of the World is changing, More Chinese will come, less Russians are coming due to currency fluctuations. Less Europeans too.
The price of everything is Thailand is also way higher than before, everything has risen to a point where its not so cheap in comparison to the West, infact its more expensive for many items, Thais are struggling with debt and not spending so much on consumer items, before they were but now they are more careful.

Is that a bad thing? maybe not... Is it any different to the West where everyone needs to be more thrifty?
Everything changes, we cant compare Thailand to 10 years ago anymore.
And also perhaps Bangkok is slowing down, but in the North things are developing and improving, more seven elevens, garages, Macros, super markets, malls and roads and infrastructure, ive seen it change a lot, and for the better. This means more jobs and more spending.

Just because Bangkok and tourist destinations are slowing doesn't mean the rest of Thailand is.
Farming on the other hand isn't doing good right now, but that's got very little to do with development or govs anyway, and more to do with luck, weather, and the farmers choice and ability.

One of Thailand biggest problems is education and laziness, Companies cannot thrive in Thailand due to this, in my company 90% of staff are fired in first 6 months or leave because they are crap and cant handle the pressure. They want an easy life with zero stress and big salaries. This is another reason Thailand lost its manufacturing powers to china, hardly any factories can be found here anymore. Laziness has prevailed and an inability to grow up.
But this is also why we love Thailand - Happiness comes first!

[CapFarmer]

As long as senior officials are selectively free from prosecution and are able to disregard contracts and property law then the economy cannot right itself. Tragic...

[Jessi]

The Thai economy must head UP as they are already at the bottom !

Your joking right,

You aint seen nothing yet

[Crazy chef 1]

a bashers dream topic...

but if we see it from a realistic side the main problem for Thailand economy will be the impact of the Asean community with free labor flow. with the current work ethics and skills the unemployment rate will rise dramatically and therefore the purchase power will decrease...