KBank Research Center sees positive but cautious recovery for Thai economy in 2016

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KBank Research Center sees positive but cautious recovery for Thai economy in 2016

BANGKOK, 5 January 2016 (NNT) - According to the Kasikorn Research Center, Thailand’s overall economic outlook is positive in the new year as increased domestic spending is expected to stimulate the economy along with increased automobile sales and higher VAT collection.

Other factors contributing to the positive outlook include the boost in consumer spending at the end of the year due to tax incentives for purchases of goods and services. The Kasikorn Research Center forecast that the overall Thai economy during the fourth quarter of 2015 expanded by 1.2 percent compared to the third quarter, which grew by 1 percent. The Thai economy for the year 2015 grew by 2.8 percent.

In 2016, the research center estimates that economic activity will gradually improve and the overall economy will expand by 3 percent. The economy is likely to show clear signs of recover in the second half of the year if the government pushes forward investment projects as planned and if commodity prices in the world market do not decline.

Recovery in the first half of 2016 will depend on whether increased capital spending, stimulus measures by the government and private investments will be enough to offset the weakness of other sectors of in the economy.

The performance of Thailand’s export sector will continue depend on the degree of recovery of the global economy and can be burdened by volatility the financial markets as they await the next round of interest rate hike by the US Federal Reserve.


-- NNT 2016-01-05

[Hawk]

"The economy is likely to show clear signs of recover in the second half of the year if the government pushes forward investment projects as planned and if commodity prices in the world market do not decline."

All these predictions depend upon the word "IF"! So the bank is basically guessing at best, trying to put an optimist spin on a very negative situation. Thailand must expect some bad economic woes this year.

[Nbarch]

There is another big ‘IF’ not mentioned; the economy might improve if there are no large scale anti-government demonstrations.

I believe this has happened before?

[chainarong]

Thailand's economy will like nearly every other country perform the same as 2015 or get worse, talking up the economy is not helpful and creates a false impression , something a bank doesn't need............................................. .

[clockman]

It is just Thainess.! And rose coloured glass

[Pib]

Increased auto sales?! Might not happen with the revised vehicle excise tax on new vehicles which is projected to raise prices on all types of vehicles, especially those with engine sizes of 3L or more.

[NeverSure]

Even the USA is starting to slow down again. Thailand missed this last up cycle. The US recovered nicely including in housing in most places. If there's another worldwide down cycle Thailand will be on its lips.

Cheers.

[Srikcir]

Kasikorn is okay with a 3% GDP growth rate for 2016, all things being equal - but they're not.

The economy is now in an economic depression: six months or more with "negative inflation." This creates a liquidity trap wherein government capital investment no longer affects GDP growth. Foreign capital is already fleeing the stock market, contributing to its overall loss for 2015.

Export growth is likely to remain flat and particularly at risk with the EU, USA and China. All that remains to drive GDP growth is domestic investment, foreign tourism and domestic consumption. With 40% of its industry in agriculture, the economy will remain at risk to continued droughts and depressed world prices. Domestic consumption will be burdened by increasing household debt with little or no increase in earnings.

Throw in the potential political conflict over the draft constitution and increased government suppresion of civil rights, a bet on recovery of the economy in 2016 might better be placed in a lottery ticket.

[mikebell]

Kasikorn don't even know how to run a bank. It took me 30 minutes to pay a bill in their Thepprasit Tesco branch Pattaya.