Tourism strong enough to expand Thai economy by 3%

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MACROECONOMIC
Tourism strong enough to expand economy by 3%
Erich Parpart
The Nation

BANGKOK: -- THE ECONOMY will be able to expand by more than 3 per cent in 2015 as tourism is still going strong, the Council of Economic Ministers has maintained.

Exports are predicted to pick up in the fourth quarter with the weaker baht while the process of private investment is still ongoing, they said, but most of the construction and real investment is expected to begin next year.

MR Pridiyathorn Devakula, deputy prime minister in charge of the economy, said exports had contracted by 4.84 per cent in the first six months due to the drop in global oil prices, which affected commodities and agriculture prices. But other countries are facing a similar situation and Thailand is lucky to have a flourishing tourism sector to help support the economy during the slowdown of global demand.

"Almost every economy will have one or two commodities or agriculture products as part of their trade arsenal so the severe drop in global oil prices by around 50 per cent has affected the export situation of the entire world and it would take until August or September until a new base price can be found," he said after the Cabinet meeting yesterday.

"Thailand's exports have contracted by around 5 per cent in the first six months but the country is still lucky to have the tourism sector, which is currently doing well and it should be able to compensate against the decline of the export sector," he added.

Pridiyathorn explained that exports currently account for 56 per cent of the gross domestic product, which means that a 5 per cent contraction in the sector would already contribute to a subtraction of around 2.5-2.6 per cent from the overall GDP.

Slump in exports

Nevertheless, the year on year expansion of the tourism sector during the same period should be able to compensate with the slump in exports since the tourism sector currently accounts for 12 per cent of the GDP. This means that a 28 per cent expansion from the sector should already add around 3 per cent to the overall GDP expansion.

A weaker baht should also help Thailand's exports to Japan as the deputy prime minister claimed that the Japan External Trade Organisation revealed to him the fact that exports to Japan will increase in the fourth quarter. The strengthening of the yen and the deprecation of the baht could add around 6-7 per cent profit from products that are being exported back to Japan."The GDP that has been gained from the excellent expansion in the tourism sector over the past six months is more that the GDP that has been lost from the contraction of the export sector in the same period, so the performance of the tourism sector should be able to continue to support the country's economic expansion this year," said the deputy prime minister.

Pridiyathorn also revealed that around 2,000 factories obtained Ror Ngor 4 licenses in the first six months and BOI has approved around 1,200 projects during the same period and he expects these investments to tangibly begin next year.

Deputy Commerce Minister Apiradi Tantraporn said the export sector of other countries contracted more than that of the Kingdom's 4.84 in the first six months. Exports in Singapore and Malaysia contracted by more than 13 per cent during the same period.

Yesterday, the Finance Ministry's Fiscal Policy Office (FPO) said the Thai economy could be driven by tourism and acceleration of the government budget disbursement for the latter half of 2015 with growth for the whole year estimated at 3.0 per cent from the earlier estimate of 3.7 per cent this year, said Krisda Chinavicharana, director-general and also finance spokesman of the FPO.

Thailand's current account is expected to face a surplus of about US$20.6 billion or 5.1 per cent of the nation's gross domestic product, which is higher than last year's, he said.

The trade account is projected to see a surplus of $26.5 billion after estimated contractions of imports and exports, in terms of value, by 5.5 per cent and 4.0 per cent, respectively.

Source: http://www.nationmultimedia.com/business/Tourism-strong-enough-to-expand-economy-by-3-30265433.html


-- The Nation 2015-07-29

[BSJ]

Yadda Yadda Yadda!

[shirtless]

These guys are not in the real world , they should be selling somtam not running the country.

[BuckBee]

wouldn't even trust these top class clown to do my somtam, all they good for is drivel talk & milking any perk available.

[deckape]

Tourism doesn't do squat for my neighbors.

[ezzra]

As a minister or high ranking government official, you're expected to fart a prediction or two every now

and then, never mind that even the man in the street, can also predict this and that and probably

be more accurate... in this country, if you don't come out with some nonsense balloons to remind

everyone that you're still alive, then you're not doing your job....

[naboo]

Factories near me are doing 10 days on, 10 days shutdown cycles. Others are paying their staff 75% salary as a retainer hoping to reopen soon. Others are only offering staff 2 days work a week.

But it will all be OK because those tourists in other provinces will save the economy.

[bangkokheat]

i accidentally started reading this dribble without my morning coffee stimulation

[Tatsujin]

These "stories" are definitely targeted at the "sheeple" ... those who simply believe all they are told without question or thought ... even when the article completely contradicts everything a previous article stated. Unbelievable. Literally.

[Ulic]

If you say so.

[Partenavia]

Not sure where all these tourists are, but they are not in the North of the country, so somewhere must be getting overrun?????

[Cam Khao]

Brings to mind an image of Nero fiddling whilst Rome burned, or maybe King Canute hoping his feet don't get wet.

[jimstar1]

Ha Ha need my morning coffee and laugh Tourist up where there not around Chiang Mai

[northernphil]

Brings to mind an image of Nero fiddling whilst Rome burned, or maybe King Canute hoping his feet don't get wet.

I wonder if Canute lived in BKK at one point.

[asdecas]

Putting a positive spin on what is a pretty poor economic outlook - this, and fudging the stats, is what all governments do.

But Thailand just doesn't tell one tall story and stick to it, it contradicts itself so much that the tale quickly becomes incoherent and unbelievable.

[pjmansions]

No good counting on tourism to save the economy especially as all the worlds eyes are on Thailand it has a PR nightmare with the Khao Tao case which will put many tourists off coming, the military government will make people change holiday destinations, Thai aviation authority has been classed as unsafe, a dreadful human trafficking report, drought, rice pledging scheme, facing European ban on seafood exports, factories closing, huge household debts, ever changing immigration rules, falling gold prices, Thailand spent years targeting Russian tourists then their economy tanked so moved on to the Chinese tourists just as their economy might be in trouble, Thailand somehow manages to survive problems but happy thoughts just won't cut it

[i claudius]

These reports are for the Thai people so as to keep their spirits up ,just like the rich telling them how wonderfull and lucky they are compared with us foreigners . Tourist numbers are definatly down here in Pattaya and yesterday in TEsco the woman in front of me paying for her groceries on her credir card had it rejected , the debt ratio here for the people is terrible , to be blunt i think Thailand at the moment is on a downward spiral ,such a shame.

[phoenixdoglover]

Tourism only makes it contribution this year because of a bad slump mid year 2014. The "year on year" growth in tourism is not sustainable.

Likewise, an acceleration of government expenditures in Q4 is a short term stimulus, and not likely to have a big impact on 2015 numbers anyway, since it is the "stimulative effect" of the spending that leads to growth, not the actual base spending.

So the article could have had the following headline:

2014 Growth Forecast Reduced 19%, No Long Term Recovery Measures Identified

[Srikcir]

The key to the predicted 3% GDP growth for 2015 is that there is a 28% expansion IN REVENUES from the tourist sector. Not in number of tourists.

Since the Junta is eschewing most nonAsian tourists for Chinese tourists, such as expansion will not happen during 2015.

This GDP growth prediction is based on Pridiyathorn's belief that exports account for 56% of the GDP.

However, according to the Joint Standing Committee on Commerce, Industry and Banking comprised of the Thai Chamber of Commerce, the Federation of Thai Industries and Thai Bankers' Association, exports account for 70% of GDP (The Nation 2015-04-08). Using Pridiyathorn's math, tourist revenues would have to expand 35%.

Prayut better start conscripting farmers to tour guides.

[Thaddeus]

Brings to mind an image of Nero fiddling whilst Rome burned, or maybe King Canute hoping his feet don't get wet.

I wonder if Canute lived in BKK at one point.

Canute made the attempt to turn the sea back to prove to his subjects that he wasn't all-powerful, he already knew that.

Unfortunately, the vacant suits that make these statement really do think that every word they utter is gold, there is no other rational explanation.

Rational, Thailand, what was I thinking!

[FredNL]

So the tourists have to save Thailand if they were coming....

In reality they don't come !!!

At the end they will just blame it on the tourists....

[heybruce]

This is the backpacker time of year, and there are still a lot of empty guesthouses in the north. Where are all these tourists hiding?

[tigermoth]

What a load of bullshit. Everyone, Thais and farangs who live here all know that the tourist industry is dying faster than a fish out of water.

[wabothai]

Council of economic ministers is going to be shuffled.

A last cry of desperacy.

[Red Queen]

This is the backpacker time of year, and there are still a lot of empty guesthouses in the north. Where are all these tourists hiding?

Thailand has yet to discover that people outside of Thailand do not consider Thailand to be as 'special' as many of the native population do.

Most tourists arguably select a tourism destination where they feel safe, have good weather (and preferably scenery). won't get ripped off or killed and where the government is not soldiers. Otherwisde, surely North Korea would be a much sought-after destination...

Thais believe they are special but the rest of the world doen't seem to give a hoot what Thais think, and Thais badly need to wake up to this reality, as someone in here said already "Dogs do not bark at aeroplanes". That's a nice comment, I'll try to remember that.

I've just finished watching a recorded Thai TV program in which some clown said that Thailand should not sell their producta to USA or Europe becauase 'ThaIand does not need USA and Europe as much as USA and Europe need Thailand'. I kid you not, he actually said that.

Sounds like a really good idea to me. Tell USA and Europe that Thailand does not wish to do business with you any more.

See what happens.

Edited July 29, 2015 by Red Queen

[sawadee1947]

Exports are predicted to pick up in the fourth quarter

Oh they are very good to foresee the future. And if it doesn't come according predictions then it is somebody else's fault...Farangs most times. Or other bad people.

And If I predict according to Chinese stock market there are not as many Chinese tourists as this year in future. So be careful to put all eggs into one basket...

[Wombat6]

The figures would improve if they stopped ripping off Tourists with their two tier pricing system plus scrapping the Alcohol ban for Tourists on Buddhist holidays (Just apply it to Thais ) and the latest School Zone Fiasco (Only needs enforcing existing drinking age Laws} and the 2 to 5 P.M. ban (brought in by Thaksin) (one again....enforce existing under age laws)