Thailand expected to conclude 2015 with 2.8% GDP growth

[webfact]

Thailand expected to conclude 2015 with 2.8% GDP growth

BANGKOK, 29 October 2015 (NNT) - Thailand’s Fiscal Policy Office has maintained its forecast of 2.8 percent for the country’s GDP growth in 2015, whereas the tourism sector and government stimulus measures will likely contribute to economic expansion into the following year, with an estimated growth of 3.8 percent.

According to Kulaya Tantitemit, Executive Director of the Macroeconomic Policy Bureau, the government’s commitment to act swiftly on its budget disbursement and stimulus policies along with the country’s robust tourism industry will likely serve as key drivers of continued economic growth. However, the global economic slowdown, particularly in China, will have greater adverse effect on the country’s exports than previously expected. Export numbers for this year are expected fall by 5.4 percent.

Ms Kulaya added that Thailand’s economy in 2016 is expected to grow by approximately 3.8 percent or within the range of 3.3 - 4.3 percent, due to the continued expansion of government investment. The construction of state highways and dual-track railway systems, in particular, will further contribute to economic confidence. In addition, economic recovery of Thailand’s main trade partners along with the depreciation of the Thai baht will likely increase the country’s export volume in the following year.


-- NNT 2015-10-29

[angiolo]

lol

[ExpatOilWorker]

GDP is always calculated in US-$, right?

Since the Thai economy is basically flat in Thai baht, maybe with 2-3% growth, shouldn't the last years change in the $ exchange rate from 30 to 35 baht/$ have a dramatic effect on the Thai $-GDP?

[Thai at Heart]

So probably 2.2% then

[clockman]

With out Chinese tourism, They really would be in trouble!

[zaphod reborn]

That's quite optimistic. Most economists have it pegged at 2.4%.

[trogers]

Still higher than the GDP growth of the UK...

[Joe Brennan]

Hold up folx, it's 'pluck-a-figure-out-of-the-air' time again.

Plenty of time for adjustment between now and the end of next year. SNAFU abounds and many more to come from the go-getters at the ministry. No need to deliver on any estimates, its a given that the numbers are all a bit bouncy. It's the normal Thai way, the numbers don't need to be true, or even close. The history of 2014 is an excellent example but it will become more obvious in 2016 as the chickens come-a-fluttering home to roost. But not to worry, plenty of time to reshuffle themselves out of responsibility for the fiasco.

Just like the AIDS cure, the Ebola cure and the medical tourism lark where cosmetic surgery was so incompetent it actually killed some people. No matter, this is teflon Thailand.

It's only the PM that counts really, and he'll just scowl his way through it all and blame everyone else. Tried and tested, why change something that works?

Edited October 29, 2015 by Joe Brennan

[chainarong]

That's about what it would be , in line with many other countries and next year more of the same, there's more hurt to come next year and Thailand might even be asked which side is it on, you can never tell these days.

[Hawk]

This country has serious issues and the longer the government flip-flops around the worse it will become. The baht actually needs to depreciate more, give more spending money to the tourists and to make Thailands goods cheaper.

[elgordo38]

Up up and away if you believe in Superman.

[Prbkk]

Still higher than the GDP growth of the UK...

Yes but an apples and oranges comparison. Developing economies require a higher level of growth , eg China in significant difficulty with growth at 6.something, close to 7. Thailand needs growth at 5 or more, the UK will not see anything like that in the next decades and as a mature economy it doesn't need it ( however desirable)

[Srikcir]

"Thailand’s Fiscal Policy Office has maintained its forecast of 2.8 percent for the country’s GDP growth in 2015"

It looks like FPO didn't get the memo:

"Projections of economic growth for the whole of this year have dropped from 3 per cent to somewhere between 2.5 and 2.7 per cent [2015]." - Deputy Premier for economic affairs Somkid Jatusripitak, The Nation 2015-10-22

"The Bank of Thailand has cut the 2015 growth forecast from 4 per cent to 2.7 per cent [2015]" - The Nation 2015-10-21

Frankly, any growth greater than 2.5% is highly speculative. Menawhile the rest of the ASEAN countries will average DOUBLE Thailand's growth rate for 2015 so the Junta can't blame a regional depression.

[anto]

The reality i am seeing here in Chiang mai is a minus growth rate this year .Does anyone really believe those figures ? All Chinese Growth figures are figments of the imagination also .

Edited October 29, 2015 by anto

[retarius]

 

GDP is always calculated in US-$, right?

Since the Thai economy is basically flat in Thai baht, maybe with 2-3% growth, shouldn't the last years change in the $ exchange rate from 30 to 35 baht/$ have a dramatic effect on the Thai $-GDP?

 

I don't think that this is the case. It is some time since I read about this on Wiki, but I think there are two GDP growth figures...one is nominal, ie your growth in local currency not adjusted for inflation, and a second one calculated at constant prices, ie the same as the prior period ie inflation adjusted.

[Joe Brennan]

With the Thai government's track record of forecasting economic performance, it would be more sensible to wait and see, then forecast retrospectively, you know, like their laws.

Be more accurate like as not as well...

[Srikcir]

Still higher than the GDP growth of the UK...

Which nation would would you rather have in terms of GDP growth?

United Kingdom with a GDP of 2.9 trillion USD as the world’s sixth largest economy and the third largest economy in Europe after Germany and France. or

Thailand with a GDP of 370 billion baht representing 0.60% of the world economy

Keeping in mind government and political stability of each.

Thailand needs a vigorous UK economy for its own growth. UK does not need Thailand.

[Joe Brennan]

Still higher than the GDP growth of the UK...

Which nation would would you rather have in terms of GDP growth?

United Kingdom with a GDP of 2.9 trillion USD as the world’s sixth largest economy and the third largest economy in Europe after Germany and France. or

Thailand with a GDP of 370 billion baht representing 0.60% of the world economy

Keeping in mind government and political stability of each.

Thailand needs a vigorous UK economy for its own growth. UK does not need Thailand.

Gee, I'm not sure, it's a tough choice.

Ask me again when the USA bans flights, Europe bans everything and Obama visits Malaysia while ignoring Thailand.

[ExpatOilWorker]

 

GDP is always calculated in US-$, right?

Since the Thai economy is basically flat in Thai baht, maybe with 2-3% growth, shouldn't the last years change in the $ exchange rate from 30 to 35 baht/$ have a dramatic effect on the Thai $-GDP?

 

I don't think that this is the case. It is some time since I read about this on Wiki, but I think there are two GDP growth figures...one is nominal, ie your growth in local currency not adjusted for inflation, and a second one calculated at constant prices, ie the same as the prior period ie inflation adjusted.

You might be right and to be honest I am not sure I understand how GDP is calculated, but apparently it is based on a 3 year weighted exchange rate, so it will be some time before we will see the weaker baht reflected in the GDP numbers.

[Thai at Heart]

 

GDP is always calculated in US-$, right?

Since the Thai economy is basically flat in Thai baht, maybe with 2-3% growth, shouldn't the last years change in the $ exchange rate from 30 to 35 baht/$ have a dramatic effect on the Thai $-GDP?

 

I don't think that this is the case. It is some time since I read about this on Wiki, but I think there are two GDP growth figures...one is nominal, ie your growth in local currency not adjusted for inflation, and a second one calculated at constant prices, ie the same as the prior period ie inflation adjusted.

You might be right and to be honest I am not sure I understand how GDP is calculated, but apparently it is based on a 3 year weighted exchange rate, so it will be some time before we will see the weaker baht reflected in the GDP numbers.

Consumption + Investment + govt spending + exports - imports

The change in the exchange rate effects all, but obviously effects the value of imports and exports the most quickly.

The baht has devalued but the exports and not jumping, even still falling, but imports are also dropping because they are more expensive.

It's very hard to devalue an economy to sustained economic growth in the long term. Genuine wealth creation through higher productivity and innovation is the only true way.

Calculations are done using a moving average.

Edited October 30, 2015 by Thai at Heart

[digibum]

Consumption + Investment + govt spending + exports - imports

The change in the exchange rate effects all, but obviously effects the value of imports and exports the most quickly.

The baht has devalued but the exports and not jumping, even still falling, but imports are also dropping because they are more expensive.

It's very hard to devalue an economy to sustained economic growth in the long term. Genuine wealth creation through higher productivity and innovation is the only true way.

Calculations are done using a moving average.

True that you cannot devalue to sustained economic growth but allowing the baht to fall more would at least be a good sign that the government is willing to take the painful measures that are prerequisites for sustained growth.

One of Thailand's biggest problems is not a lack of ideas but an inability and unwillingness to execute them. They always go for the short-term fix.

[Thai at Heart]

Consumption + Investment + govt spending + exports - imports

The change in the exchange rate effects all, but obviously effects the value of imports and exports the most quickly.

The baht has devalued but the exports and not jumping, even still falling, but imports are also dropping because they are more expensive.

It's very hard to devalue an economy to sustained economic growth in the long term. Genuine wealth creation through higher productivity and innovation is the only true way.

Calculations are done using a moving average.

True that you cannot devalue to sustained economic growth but allowing the baht to fall more would at least be a good sign that the government is willing to take the painful measures that are prerequisites for sustained growth.

One of Thailand's biggest problems is not a lack of ideas but an inability and unwillingness to execute them. They always go for the short-term fix.

Their problem is the mix of imports versus exports. Oil and raw materials for exports make up a big percentage of imports so, devaluing doesn't necessarily aid exports that much because of cost push.

Plus, devaluing the baht will cause inflation to take off. Fortunately though oil prices are low. At the end of the day global demand is low at the moment. Economies aren't growing and people aren't spending.

Demand is lacking externally and domestically. They can cut interest rates, but it will only cause a bigger property bubble. Better to sit tight, stimulate the domestic economy as they can with govt spending and ride it out.

Devaluing the baht won't give a massive push to exports I don't think. What they can do is reform investment rules to attract more FDI. That is money put straight into the economy and provides instant jobs.

Edited October 30, 2015 by Thai at Heart

[Bender]

Thailand expected to conclude 2015 with 2.8% GDP growth

armageddon is scheduled for december, Fed will certainly raise their interest rate...its the begining of the end (for developping country).