Thai export target revised to minus 3%

[HoHoHoHoHoHoHo]

Thailand's exports are 70% of GDP so 3 down is recession level economy we are in now. Financial markets are pointing to more downside ahead. Without unemployment and disability insurance to absorb some of the pain, there are going to be a lot of pissed off poor people.

One advantage of democracy is, in this situation, you can gracefully lose the next election and let the other guy try to sort it out. Grim choices ahead for this government when voices start to raise.

[JimGant]

The bank advised it would not do so whilst Thailand remained under a military junta as policy.....

You think all companies are going good to invest while Thailand is under a junta govt?

Vietnam too, is doing very, very well from the Thai problems.

Vietnam? You mean that bastion of free speech and populist elections? Thailand under the generals is still a much more open and free country than Vietnam -- or China. Yeah, it's gotten a little harder to practice sedition out in the streets. But that doesn't bother the ordinary Thai citizen -- only the academic in his ivory tower. I'm sure the ordinary citizen is overjoyed that there are no more blockades and bloodshed in the streets. Yeah, this stability comes at a cost -- the cost of no longer being free to riot in the streets. And such stability should, you'd think, attract foreign investment (and their bankers), not repel.

I'm pretty sure there are other benefits to relocating to Indonesia vs Thailand as well.

.....but the minimum wage is not one of them.

I am in regular conversation with companies involved in light manufacturing in Asia and, when it comes to Indonesia, the message at present is consistent: new investment is on hold due to uncertainty over the country’s minimum wage policy. http://www.forbes.com/sites/forbesasia/2015/03/19/minimum-wage-setting-reforms-on-the-horizon-in-indonesia/

Prayut certainly wasted no time in putting the kibosh to raising the minimum wage. This should be a real positive for attracting foreign investment, particularly since the Thai minimum wage is actually going down, at least in terms of the US dollar.

No, this big, bad junta thingy must be driven strictly by pre-conceived definitions. Thailand had a "coup," which sounds really scary, but which, in reality, was a Thai impeachment process -- particularly since there was no bloodshed or indefinite incarcerations. But, the US, for one, said this was really bad news -- and withheld military aid. Egypt, on the other hand, also had their government relieved by a general -- but where thousands were killed, thousands locked up indefinitely, and where blood in the streets still persists. But, apparently by US definition, it wasn't actually a "coup" -- and so now Egypt is getting the last of its F-16s (among other military hardware). Go figure.....

Anyway, you'd think businesses would be a lot smarter than the US (and other Western gov'ts) vis-a-vis Thailand -- and take advantage of foreign investment in Thailand. And, maybe that's what's happening, as the title of this thread doesn't really say anything about foreign investment on the decline. That one bank (HSBC) sees the big bad junta running amok may be an isolated case -- based on too many cocktail parties at the US embassy.

[Solomon]

-3%

Thaksin's return to power is getting ever closer.

Goodbye Am-mart.

Hello democracy, freedom, equality and competent governance.

When this war is finally won and the people are free, let us hope Thaksin doesn't take it easy on the geriatric crooks and thieves who have orchestrated coup after coup to keep the Thai people enslaved and that they get exactly what they deserve.

[brucec64]

The bank advised it would not do so whilst Thailand remained under a military junta as policy.....

You think all companies are going good to invest while Thailand is under a junta govt?

Vietnam too, is doing very, very well from the Thai problems.

Vietnam? You mean that bastion of free speech and populist elections? Thailand under the generals is still a much more open and free country than Vietnam -- or China. Yeah, it's gotten a little harder to practice sedition out in the streets. But that doesn't bother the ordinary Thai citizen -- only the academic in his ivory tower. I'm sure the ordinary citizen is overjoyed that there are no more blockades and bloodshed in the streets. Yeah, this stability comes at a cost -- the cost of no longer being free to riot in the streets. And such stability should, you'd think, attract foreign investment (and their bankers), not repel.

I'm pretty sure there are other benefits to relocating to Indonesia vs Thailand as well.

.....but the minimum wage is not one of them.

I am in regular conversation with companies involved in light manufacturing in Asia and, when it comes to Indonesia, the message at present is consistent: new investment is on hold due to uncertainty over the country’s minimum wage policy. http://www.forbes.com/sites/forbesasia/2015/03/19/minimum-wage-setting-reforms-on-the-horizon-in-indonesia/

Prayut certainly wasted no time in putting the kibosh to raising the minimum wage. This should be a real positive for attracting foreign investment, particularly since the Thai minimum wage is actually going down, at least in terms of the US dollar.

No, this big, bad junta thingy must be driven strictly by pre-conceived definitions. Thailand had a "coup," which sounds really scary, but which, in reality, was a Thai impeachment process -- particularly since there was no bloodshed or indefinite incarcerations. But, the US, for one, said this was really bad news -- and withheld military aid. Egypt, on the other hand, also had their government relieved by a general -- but where thousands were killed, thousands locked up indefinitely, and where blood in the streets still persists. But, apparently by US definition, it wasn't actually a "coup" -- and so now Egypt is getting the last of its F-16s (among other military hardware). Go figure.....

Anyway, you'd think businesses would be a lot smarter than the US (and other Western gov'ts) vis-a-vis Thailand -- and take advantage of foreign investment in Thailand. And, maybe that's what's happening, as the title of this thread doesn't really say anything about foreign investment on the decline. That one bank (HSBC) sees the big bad junta running amok may be an isolated case -- based on too many cocktail parties at the US embassy.

And yet, for all your blathering, exports are still down 3 percent.

[jabis]

The bank advised it would not do so whilst Thailand remained under a military junta as policy.....

You think all companies are going good to invest while Thailand is under a junta govt?

Vietnam too, is doing very, very well from the Thai problems.

Vietnam? You mean that bastion of free speech and populist elections? Thailand under the generals is still a much more open and free country than Vietnam -- or China. Yeah, it's gotten a little harder to practice sedition out in the streets. But that doesn't bother the ordinary Thai citizen -- only the academic in his ivory tower. I'm sure the ordinary citizen is overjoyed that there are no more blockades and bloodshed in the streets. Yeah, this stability comes at a cost -- the cost of no longer being free to riot in the streets. And such stability should, you'd think, attract foreign investment (and their bankers), not repel.

I'm pretty sure there are other benefits to relocating to Indonesia vs Thailand as well.

.....but the minimum wage is not one of them.

I am in regular conversation with companies involved in light manufacturing in Asia and, when it comes to Indonesia, the message at present is consistent: new investment is on hold due to uncertainty over the country’s minimum wage policy. http://www.forbes.com/sites/forbesasia/2015/03/19/minimum-wage-setting-reforms-on-the-horizon-in-indonesia/

Prayut certainly wasted no time in putting the kibosh to raising the minimum wage. This should be a real positive for attracting foreign investment, particularly since the Thai minimum wage is actually going down, at least in terms of the US dollar.

No, this big, bad junta thingy must be driven strictly by pre-conceived definitions. Thailand had a "coup," which sounds really scary, but which, in reality, was a Thai impeachment process -- particularly since there was no bloodshed or indefinite incarcerations. But, the US, for one, said this was really bad news -- and withheld military aid. Egypt, on the other hand, also had their government relieved by a general -- but where thousands were killed, thousands locked up indefinitely, and where blood in the streets still persists. But, apparently by US definition, it wasn't actually a "coup" -- and so now Egypt is getting the last of its F-16s (among other military hardware). Go figure.....

Anyway, you'd think businesses would be a lot smarter than the US (and other Western gov'ts) vis-a-vis Thailand -- and take advantage of foreign investment in Thailand. And, maybe that's what's happening, as the title of this thread doesn't really say anything about foreign investment on the decline. That one bank (HSBC) sees the big bad junta running amok may be an isolated case -- based on too many cocktail parties at the US embassy.

Only real thing I could gather from that post was that if someone else is doing shit - why blame the otherone doing shit - please elaborate.

[JimGant]

Only real thing I could gather from that post was that if someone else is doing shit - why blame the otherone doing shit - please elaborate.

Someone threw in HSBC's disinterest in loaning money to new FDI investors in Thailand. That ball bounced to, yeah, investors are moving to Indonesia, Vietnam, wherever because of the junta. And because of that, the connection was somehow made that this in part -- or large part -- was the reason for the minus 3% projection on exports.

I don't know what part of that minus 3% is from exports generated by foreign businesses. Some, yes, as its been reported that truck exports are down 11%. But agricultural exports are the largest culprit, due mainly to declining prices. And the agricultural sector of Thailand has no value added from FDI that I'm aware of....

And, contrary to conjecture that, indeed, FDI in Thailand is heading south, the following link says 2015 has done just fine -- at least until the last reported month of May. http://www.tradingeconomics.com/thailand/foreign-direct-investment

Also, this:

In anticipation of the new investment policy and after political stability had been restored in the second half of 2014 [i.e., post coup], demands recorded by the Board of Investment reached record levels; the number of registered projects increased by 73% and their value by 117% compared to 2013. In 2015, the government's new seven-year strategy to stimulate investment should further encourage FDI. https://en.santandertrade.com/establish-overseas/thailand/foreign-investment?&actualiser_id_banque=oui&id_banque=18&memoriser_choix=memoriser

Anyway, sorry for the thread creep. But somebody threw in the declining FDI in Thailand, presumably to connect some/most of the minus 3% export decline to this. My point was, foreign investors who evaluate the junta situation realistically, shouldn't be discouraged. And, in fact, the links posted above indicate this.

Bigger question I can't answer is: Is net FDI in Thailand positive, i.e., are the figures in the link above greater than FDI lost when companies exited Thailand? Dunno. Same for what part of that minus 3% is FDI related. But certainly not all of it -- or even most of it.

[NongKhaiKid]

What surprises me is they are admitting a contraction. So unlike them to say, no spin?

Yes, very negative which is unusual so standby for all sorts of positive claims from all sorts of sources. TAT made an exaggerated claim only a couple of days ago but that doesn't mean they won't have something ridiculous to say.

[Cake Monster]

The Thai economy is really starting to suffer from many issues.

One of the major issues affecting the economy is the lack of FDI, and a perception by investors of a weak Government, that has little, or no clearly defined path of growth for the Country.

Bond sales are also sluggish due to Government pledges made on infrastructure, Etc, that have been broken.

The fiscal year ends at the end Sept, and only about 60% of the earmarked money for Government projects has so far been allocated for spending. These kind of things are the reason the economy is tanking - really big money does not like Thailand at the moment.

[hugh2121]

Time to blame the rest of the world again I guess.

Offshore sources said the General's putsch had lost Thailand $15bln in the first few months. Of course that figure has now been multiplied several times, dwarfing any losses that the ill-judged rice scheme cost Thailand.

Sadly this will only worsen. Suthep's elite-serving antics then Herr General and his cabal of incompetents have taken one of SEA's most robust economies and turned it into the sick old basket case of Asia. So sad.

I think you give far too much weight to the impact of the coup, Suthep's recent jailbreak, and the junta's economic policies on Thailand's export market. The primary reason for the collapse of exports has been that the Thai baht was inflated so that it remained pegged to the dollar (this trend is now reversing), a sluggish Chinese economy (Thailand's main trading partner), the recent drought (affecting Thailand's #1 export, agricultural goods), reduced seafood exports (due to threat of EU sanctions) and global economic downturn (especially Australia, Europe and the Mid-East).

I know you want to place all the blame on the junta, but, with respect to the drop of exports, their failure has more to do with not taking measures to quickly react to the change in conditions. I don't think anyone stopped trading with Thailand because Yingluck is no longer in power.

So, in a nutshell.

You're saying it's not the fault of the junta, just world economics.

And, you're saying it is the fault of the junta for not reacting to the changed conditions.

I see......said the blind man.

[Bodene]

Time to blame the rest of the world again I guess.

Offshore sources said the General's putsch had lost Thailand $15bln in the first few months. Of course that figure has now been multiplied several times, dwarfing any losses that the ill-judged rice scheme cost Thailand.

Sadly this will only worsen. Suthep's elite-serving antics then Herr General and his cabal of incompetents have taken one of SEA's most robust economies and turned it into the sick old basket case of Asia. So sad.

Yes indeed! If only Yingluck had been in power things would have been so much better...

Maybe not much better - she was a Thai after all, but there would not have been so many tall hats walking around with small men underneath them.

[Bodene]

Time to blame the rest of the world again I guess.

Offshore sources said the General's putsch had lost Thailand $15bln in the first few months. Of course that figure has now been multiplied several times, dwarfing any losses that the ill-judged rice scheme cost Thailand.

Sadly this will only worsen. Suthep's elite-serving antics then Herr General and his cabal of incompetents have taken one of SEA's most robust economies and turned it into the sick old basket case of Asia. So sad.

I think you give far too much weight to the impact of the coup, Suthep's recent jailbreak, and the junta's economic policies on Thailand's export market. The primary reason for the collapse of exports has been that the Thai baht was inflated so that it remained pegged to the dollar (this trend is now reversing), a sluggish Chinese economy (Thailand's main trading partner), the recent drought (affecting Thailand's #1 export, agricultural goods), reduced seafood exports (due to threat of EU sanctions) and global economic downturn (especially Australia, Europe and the Mid-East).

I know you want to place all the blame on the junta, but, with respect to the drop of exports, their failure has more to do with not taking measures to quickly react to the change in conditions. I don't think anyone stopped trading with Thailand because Yingluck is no longer in power.

So, in a nutshell.

You're saying it's not the fault of the junta, just world economics.

And, you're saying it is the fault of the junta for not reacting to the changed conditions.

I see......said the blind man.

"I see all" said the blind man "fark all".

Edited August 7, 2015 by Bodene

[Bodene]

Only real thing I could gather from that post was that if someone else is doing shit - why blame the otherone doing shit - please elaborate.

Someone threw in HSBC's disinterest in loaning money to new FDI investors in Thailand. That ball bounced to, yeah, investors are moving to Indonesia, Vietnam, wherever because of the junta. And because of that, the connection was somehow made that this in part -- or large part -- was the reason for the minus 3% projection on exports.

I don't know what part of that minus 3% is from exports generated by foreign businesses. Some, yes, as its been reported that truck exports are down 11%. But agricultural exports are the largest culprit, due mainly to declining prices. And the agricultural sector of Thailand has no value added from FDI that I'm aware of....

And, contrary to conjecture that, indeed, FDI in Thailand is heading south, the following link says 2015 has done just fine -- at least until the last reported month of May. http://www.tradingeconomics.com/thailand/foreign-direct-investment

Also, this:

In anticipation of the new investment policy and after political stability had been restored in the second half of 2014 [i.e., post coup], demands recorded by the Board of Investment reached record levels; the number of registered projects increased by 73% and their value by 117% compared to 2013. In 2015, the government's new seven-year strategy to stimulate investment should further encourage FDI. https://en.santandertrade.com/establish-overseas/thailand/foreign-investment?&actualiser_id_banque=oui&id_banque=18&memoriser_choix=memoriser

Anyway, sorry for the thread creep. But somebody threw in the declining FDI in Thailand, presumably to connect some/most of the minus 3% export decline to this. My point was, foreign investors who evaluate the junta situation realistically, shouldn't be discouraged. And, in fact, the links posted above indicate this.

Bigger question I can't answer is: Is net FDI in Thailand positive, i.e., are the figures in the link above greater than FDI lost when companies exited Thailand? Dunno. Same for what part of that minus 3% is FDI related. But certainly not all of it -- or even most of it.

Well, as always, there's been a procession of people online to say what it isn't, but the reality is that it sure as hell is something.

A 5% downward revision is actually a big deal, even in Thailand which is known for rubbery numbers and wishful thinking projections.

The reality is that for whatever reason, since the coup, the Thai economy has gone down the toilet.

Not their fault of course, it never is.

[Robert24]

@Snig27: that's rubbish. Main reason for export slow down is the economic weakness in China and other Asian countries. Other countries are similarly impacted and those with a larger commodities/mining exposure even more so. This is not about politics.

http://www.wsj.com/articles/eu-agrees-free-trade-deal-with-vietnam-1438692135?mg=id-wsj

http://www.eastasiaforum.org/2015/07/14/strong-export-growth-in-vietnam-masks-underlying-challenges/

Take your head out of your arse. No civilised countries want to deal with a military government. Add to that trafficking & aviation problems and Thailand is quickly becoming a pariah.

well, all Asian countries have no problem dealing with the Thai junta. To the contrary, China and especially Japan have welcomed that the internal security has improved especially their business representatives. You may not consider China, Japan, Singapore, Indonesia etc as civilized countries but their governments have no issues working with he Thai government. also you overestimate the impact a government (elected or not elected) on export numbers in the short term in Thailand. All they can do is create an environment to increase investments (tax breaks etc) which may drive export numbers in the long run. But this you see in the numbers only after 3-5 years. Reality is that the China economic downturn has negative impact on the Thai economy similar to Malaysia, Taiwan, South Korea, Japan, Indo etc. fortunately Thailand doesn't have a big mining industry and therefore is less impacted by the lack of demand from China for those products than countries like Australia or Indo. Make sense?

[Thai at Heart]

Only real thing I could gather from that post was that if someone else is doing shit - why blame the otherone doing shit - please elaborate.

Someone threw in HSBC's disinterest in loaning money to new FDI investors in Thailand. That ball bounced to, yeah, investors are moving to Indonesia, Vietnam, wherever because of the junta. And because of that, the connection was somehow made that this in part -- or large part -- was the reason for the minus 3% projection on exports.

I don't know what part of that minus 3% is from exports generated by foreign businesses. Some, yes, as its been reported that truck exports are down 11%. But agricultural exports are the largest culprit, due mainly to declining prices. And the agricultural sector of Thailand has no value added from FDI that I'm aware of....

And, contrary to conjecture that, indeed, FDI in Thailand is heading south, the following link says 2015 has done just fine -- at least until the last reported month of May. http://www.tradingeconomics.com/thailand/foreign-direct-investment

Also, this:

In anticipation of the new investment policy and after political stability had been restored in the second half of 2014 [i.e., post coup], demands recorded by the Board of Investment reached record levels; the number of registered projects increased by 73% and their value by 117% compared to 2013. In 2015, the government's new seven-year strategy to stimulate investment should further encourage FDI. https://en.santandertrade.com/establish-overseas/thailand/foreign-investment?&actualiser_id_banque=oui&id_banque=18&memoriser_choix=memoriser

Anyway, sorry for the thread creep. But somebody threw in the declining FDI in Thailand, presumably to connect some/most of the minus 3% export decline to this. My point was, foreign investors who evaluate the junta situation realistically, shouldn't be discouraged. And, in fact, the links posted above indicate this.

Bigger question I can't answer is: Is net FDI in Thailand positive, i.e., are the figures in the link above greater than FDI lost when companies exited Thailand? Dunno. Same for what part of that minus 3% is FDI related. But certainly not all of it -- or even most of it.

Well its an obvious connection. Foreigners invest in factories to sell a bit to domestic Thai consumers and a lot to overseas consumers. Overseas consumers might not be spending as they were, but in the end, if foreigners open factories, just building and equipping them boosts Thai gdp. The moment Thailand stops getting its repetitive share of FDI, exports have stopped growing. Its not so much about FDI exiting Thailand but its more about maintaining the same level of continued FDI.

the figures for fdi are available. All the numbers I have seen is that it is flat or falling since 2011.