Is the Thai economy collapsing?

[Taffyfromflint]

A nice new coffee shop has opened near me. I'm their only customer in the 2 weeks they have been open.

I hope they last 2 months, because it's a really nice place and only 30bht for a cup.

It was stated some time back that there are more coffee shops opening in Chiang Mai than 7Elevens. I drive past dozens every day, not just in the city but these newly built business terraces popping up in the suburbs. All devoid of customers. yes the coffee is cheap. and yes on the whole the coffee isn't too bad. But when will Thais realise it's not just a matter of opening the doors and thousands flocking in. No business plan (sorry need to wash my mouth out).My wife is of the same ilk, she wants to open a "little shop" to sell coffee and fried bananas, no finance from this side of the partnership as I know what it's like to try and survive with a mom and pop store.

[Harveyg]

I'm not much on economics. Reading the comments here I'm wondering if having alot in the Thai bank, say, 1 mill bt, is a risky deal.

Perhaps better to keep most everything back home and transfer as needed?

[gandalf12]

It must be pretty bad, where I live there is a Pharmacy that has closed down.

[Peterw42]

If you listen to the dopes on TV, the fact that a few skint European tourists go to Cambo or Burma because beer prices in Thailand have risen by 20 baht is tantamount to a deep and damaging recession.

They think their "family" shopping excursions at Big C to buy bright pastel-coloured, Chinese-made plastic crap are the absolute bedrock of the Thai consumer revolution

Seriously, though, the economy is doing fine.

Hardly great guns but it's doing fine.

"Seriously, though, the economy is doing fine."

And you can support your statement with facts and links?

Thailand's forex reserves indicate "quite satisfactory":

thailand-foreign-exchange-reserves.jpg

That is a great indicator of the Thai economy relative to other countries. But is that relevant to the internal economy, how much money is in a soi, a village, a town.etc.

[Naam]

If you listen to the dopes on TV, the fact that a few skint European tourists go to Cambo or Burma because beer prices in Thailand have risen by 20 baht is tantamount to a deep and damaging recession.

They think their "family" shopping excursions at Big C to buy bright pastel-coloured, Chinese-made plastic crap are the absolute bedrock of the Thai consumer revolution

Seriously, though, the economy is doing fine.

Hardly great guns but it's doing fine.

"Seriously, though, the economy is doing fine."

And you can support your statement with facts and links?

Thailand's forex reserves indicate "quite satisfactory":

thailand-foreign-exchange-reserves.jpg

That is a great indicator of the Thai economy relative to other countries. But is that relevant to the internal economy, how much money is in a soi, a village, a town.etc.

this thread's title is "Thai economy", not soi, village or town economy

very high forex reserves do not necessarily mean an economy is doing "fine" but they are definitely evidence that an economy is not on the verge of a "collapse".

[mzep]

Real & reliable data that reflect the true economic health may not be available. But all one has to do is look at the drastic drop (over 70%) in crucial foreign investment, and the price rise in basic foods (i.e. eggs, pork, vegetables, fruit, etc) of over 20% - to conclude that the economy is moving in the wrong direction. Although, most expats & tourists may not be affected by these increases, just imagine how difficult it is for many Thai's who were struggling before these increases to put food on the table for their family. Hopefully, things will change and ease-up soon before their frustration boils over!

[sharecropper]

I noticed two currency exchange booths which had been open for a few years had closed down in central Pattaya yesterday. No doubt oversupply of such services (following the on-every-street-corner opticians, pharmacy, real estate office, nail and hairdressing salons crazes of previous years) but for sure lack of money-changing tourists too.

[Naam]

If you listen to the dopes on TV, the fact that a few skint European tourists go to Cambo or Burma because beer prices in Thailand have risen by 20 baht is tantamount to a deep and damaging recession.

They think their "family" shopping excursions at Big C to buy bright pastel-coloured, Chinese-made plastic crap are the absolute bedrock of the Thai consumer revolution

Seriously, though, the economy is doing fine.

Hardly great guns but it's doing fine.

"Seriously, though, the economy is doing fine."

And you can support your statement with facts and links?

Thailand's forex reserves indicate "quite satisfactory":

thailand-foreign-exchange-reserves.jpg

hahaha hahaha hahaha and you believe that ? thinking the charts are true is the same as trusting the winter weasel to guard the hen house . forex ? you buy that ? dude i have a 1 owner low mileage donkey for sale , only worked on weekends by a sweet ol'granny .. make me a offer .

ignorants doubting and Thai bashing Dudes like you might check the figures of the IMF to realise that their decade long (or longer) wishful thinking of Thailand's economy and exchange rate collapsing is nothing but a wet dream.

take your Pounds, Dollars or EURos to an exchange booth and weep when comparing the rate to those a decade ago when the "collapse" started

[lannarebirth]

I noticed two currency exchange booths which had been open for a few years had closed down in central Pattaya yesterday. No doubt oversupply of such services (following the on-every-street-corner opticians, pharmacy, real estate office, nail and hairdressing salons crazes of previous years) but for sure lack of money-changing tourists too.

Thailand's is a supply side economy. Virtually too much of every imaginable good, service and housing. It keeps prices depressed for users. While it isn't a great long term way to build a viable economy with a large middle class it provides a lot of advantages for the expat.

[little mary sunshine]

Doesn't feel like "Low Season, more

Like Low, Low Season"

[jippytum]

Amazing a few mam and pop shops close and the doomsters are out in force .

Record numbers of arrivals .Stock market not too far off a record high.

Considering the global picture Thailand is doing well for a country with an Junta government . Your cash in a Thai Bank offers more protection guarantee than European banks Remember.Santander recently failed a stress test

[12DrinkMore]

When I first arrived in Thailand two years ago, the economy appeared to be humming along fine to me.

Then I realized it is all a debt funded facade.

If rates ever go higher, the economy is screwed as the banks will be screwed due to delinquent debts.

At least folks in the west with huge mortgages tend to win due to appreciation.

My experience here suggests that Thais lever up and buy depreciating assets such cars or real estate.

But in the West there are few buyers that will pay the correct price same thing happenning here.

Please define "correct price".

[Peterw42]

The OP is talking about the ecomomy in his village. Not Thai exchange rates or the Thai economy relative to other countries.

Unless the local noodle shop guy is playing the money market, exchange rates probably have no impact on weather he has customers, can pay the rent etc.

Noodle shop guy has no money, he stops getting his laundry done. Laundry has no money, they stop getting a massage. Massage shop has no money they stop buying noodles.

Yes, foreign exchange, exports etc eventually bring new money into Thailand.

Like the OP, I have seen local shops closing etc.

That is the real Thai economy. I I dont think its in great shape.

[IMA_FARANG]

No not collapsing, but then it is not doing well either.

The Thai economy id a typical "top down" economy, in which the money comes in at the top of the pyramid (often from outside of Thailand) and which, in theory, then "trickles down" to other parts of the economy below.

In short the Thai economy relies on exporting goods and services to other countries.

The slowdown of growth in China has hurt exports to China, and that is leading to a drop in exports to China; not only for Thailand but other Southeast Asia countries.

Unfortunately, the "trickle down" from above is slowing down now.

The Thais need to do something about that, but what?

[12DrinkMore]

Armchair economists - full of insights on anything and everything.

And carefully researched too.

"In the two minute journey I noticed ........".

[craigt3365]

The whole wide world is in a similar situation, just ticking over, the very fact interest rates world wide are so low tells you everything you need to know.

The world economy is in the same position it was around 10 years after the great depression, that makes it 1938, you know what happened in 1939.

Do i think a world war will happen no i dont but there easily could be and if it did happen it will destroy a third of the world and then economies will start kicking into gear to rebuild everything.

Not really. The West is hanging in there. It's not great, but not terrible. Asia is tied to China. Which isn't doing great. Look at the results from Singapore lately. Not good. But with stats you can trust. Thailand is not doing well at all.

http://www.straitstimes.com/business/economy/singapore-non-oil-exports-fall-23-in-june

“With China’s deceleration being a structural one, the lackluster NODX performance could last for a while."

The West has been "hanging in there" for the last 7 years.

What anaemic growth there is has been driven by ultra-accommodative monetary policy and sovereign debt is at unprecedented levels.

As if that wasn't bad enough, the central banks are about to start another round of quantitative easing to inject into their moribund economies.

At least Thailand has something approaching full employment and they're not printing money to fund their GDP growth.

Asia is tied to China, sure, but China is officially growing at 6.5% (more like 5% in reality).

A damn sight better than 2% in the UK or the US.

Since the numbers can't be trustred, who knows China's real growth. Many are saying it's less than 3 %.

http://www.telegraph.co.uk/finance/economics/11930766/The-truth-behind-Chinas-manipulated-economic-numbers.html

And unemployment could be close to 13%. Possibly going higher after the upcoming reforms in the coal and steel industries.

http://www.bloomberg.com/news/articles/2016-06-05/china-s-hidden-unemployment-rate

[mfd101]

Vehicle numbers declining? Not in my part of the world (south Surin). When I first came here 4 years ago, there were water buffalo everywhere, the old little tractors transporting people in carts ... now the roads are packed with new cars, pickups and heavy trucks, particularly on the main west/east road from BKK to Laos & Vietnam. New houses are abuilding in many places, and not just for rich falangs. Water buffalo have all but disappeared - I gather there is a move to breed them to preserve a disappearing species.

None of this looks like an economy in trouble, at least not for the rural poor, quite a few of whom have started the long hard clamber up the ladder. The process takes time but, visually on the roads here, the change in just 4 years is quite dramatic.

[craigt3365]

I noticed two currency exchange booths which had been open for a few years had closed down in central Pattaya yesterday. No doubt oversupply of such services (following the on-every-street-corner opticians, pharmacy, real estate office, nail and hairdressing salons crazes of previous years) but for sure lack of money-changing tourists too.

Pattaya is crashing for sure. The rest of the nation seems to be slowing down, but I'd hesitate to say crashing. The global economy isn't doing well. Which helps drive Asia.

[craigt3365]

Vehicle numbers declining? Not in my part of the world (south Surin). When I first came here 4 years ago, there were water buffalo everywhere, the old little tractors transporting people in carts ... now the roads are packed with new cars, pickups and heavy trucks, particularly on the main west/east road from BKK to Laos & Vietnam. New houses are abuilding in many places, and not just for rich falangs. Water buffalo have all but disappeared - I gather there is a move to breed them to preserve a disappearing species.

None of this looks like an economy in trouble, at least not for the rural poor, quite a few of whom have started the long hard clamber up the ladder. The process takes time but, visually on the roads here, the change in just 4 years is quite dramatic.

Vehicle production is definitely down. Toyota just laid off a bunch.

[Peterw42]

Vehicle numbers declining? Not in my part of the world (south Surin). When I first came here 4 years ago, there were water buffalo everywhere, the old little tractors transporting people in carts ... now the roads are packed with new cars, pickups and heavy trucks, particularly on the main west/east road from BKK to Laos & Vietnam. New houses are abuilding in many places, and not just for rich falangs. Water buffalo have all but disappeared - I gather there is a move to breed them to preserve a disappearing species.

None of this looks like an economy in trouble, at least not for the rural poor, quite a few of whom have started the long hard clamber up the ladder. The process takes time but, visually on the roads here, the change in just 4 years is quite dramatic.

New vehicles are certainly an indicator. But if they are all brought on credit. An indicator of a huge hidden debt problem.

I know in my local soi, all the business owners have a new car, but the rent goes on a credit card every month.

Average wage of 10-15k a mouth and new car repayments of 10-15k a month. it doesn't appear to add up.

[craigt3365]

http://www.thaivisa.com/forum/index.php?/topic/929861-Toyota-Thailand-to-shed-800-900-jobs-among-temporary-staff

[hdkane]

About 2 years ago, I visited someone in Pattaya. She was in the process of purchasing some land and developing it into a small hotel. She had borrowed 12 million baht from the bank to do so. I asked her how she was able to secure the loan, since she was unemployed most of her life, and had little money to her name. Her family was poor as well....She took me to a little shop house in Pattaya. Inside were a group of Thai workers, making receipts for fake businesses. They would fill up a large box with receipt books and label the box with the client's name. Each box was a different fake "business". The client would pay the bank representative 50,000 baht to "process' a loan. The client would be given the name of the guy who made the fake receipts...with all this fake documentation and another 50,000 baht tip for the representative in BKK, the loan would be approved...This was just in Pattaya, so if there are similar businesses and banking practices throughout Thailand, I'm guessing that the economy is a sham...btw...the hotel failed, and she sold it shortly after its completion...for a loss...

[Krataiboy]

Playing golf with Adolph Hitler and Elvis Presley the other day, I bumped into a bloke who said the world is going to end next Tuesday. Should I stay make my -day report to Hua Hin immigration on Monday?

[GOLDBUGGY]

Areas that primary depend on farming are in fact suffering. Udon Thani, and a major shopping area in the N.E. is really feeling it right now. Many malls remain half empty. Car and truck sales are way down.

Although Sugar Cain is doing okay, Rice and Rubber prices were very low last harvest and farmers just don't have the money to spend on things that they did before. I suspect that is the problems you are having in your area.

[maximillian]

Going by the number of empty shops in Central Plaza, Khon Kaen, that were once trading, and by the huge number of shops-houses that are built but never occupied, and, to my eyes, the fewer cars on the road, I think the economy is not good.

the fewer cars on the road...?

Are you serious ?

I am often travelling the South to North AH2 and AH 1 from the very South up to Nakhon Sawan.

I see an increase in the numbers of cars, big and new cars and trucks of all sizes.

Guess we should have the official numbers of registered cars to compare - lets say - over the last 5 years.

[maximillian]

Going by the number of empty shops in Central Plaza, Khon Kaen, that were once trading, and by the huge number of shops-houses that are built but never occupied, and, to my eyes, the fewer cars on the road, I think the economy is not good.

the fewer cars on the road...?

Are you serious ?

I am often travelling the South to North AH2 and AH 1 from the very South up to Nakhon Sawan.

I see an increase in the numbers of cars, big and new cars and trucks of all sizes.

Guess we should have the official numbers of registered cars to compare - lets say - over the last 5 years.

[abrahamzvi]

A nice new coffee shop has opened near me. I'm their only customer in the 2 weeks they have been open.

I hope they last 2 months, because it's a really nice place and only 30bht for a cup.

Is it in the right location? Unfortunately some coffee shops (a popular trend) open in the wrong location and then have to close down very shortly after opening up.

[Peterw42]

About 2 years ago, I visited someone in Pattaya. She was in the process of purchasing some land and developing it into a small hotel. She had borrowed 12 million baht from the bank to do so. I asked her how she was able to secure the loan, since she was unemployed most of her life, and had little money to her name. Her family was poor as well....She took me to a little shop house in Pattaya. Inside were a group of Thai workers, making receipts for fake businesses. They would fill up a large box with receipt books and label the box with the client's name. Each box was a different fake "business". The client would pay the bank representative 50,000 baht to "process' a loan. The client would be given the name of the guy who made the fake receipts...with all this fake documentation and another 50,000 baht tip for the representative in BKK, the loan would be approved...This was just in Pattaya, so if there are similar businesses and banking practices throughout Thailand, I'm guessing that the economy is a sham...btw...the hotel failed, and she sold it shortly after its completion...for a loss...

My wife is always transferring money to a girlfriends account.

And the girlfriend gives it back.

So the girlfriend can show regular income and get a bank loan.

[Agent Sumo]

People have been praying for a collapse of the exchange rate for as long as I've been here (just over 8 years)

Admittedly, those "people" just want a re-run of the Asian Financial Crisis so they can pretend to be rich and impress equally vacuous peers with the hooker upgrades they can afford

The thai baht isn't "strong" - it's other currencies that are weak.

Why should the authorities join everyone else in the race to the bottom when keeping a lid on inflation is a major concern?

[Suradit69]

Most Thais think you just need to start a business , open the doors and the money rolls on in. The reality is they run it into the ground over a year draining family and farang finances and disappear to be quickly replaced by the next in line. Ive lost count of these type of small business around me in Bangkok that turn over sometimes 4 in a year...same shop

More to do with zero research and experience than a collapsed economy

"Most Thais think ..."

Amazing what some farang think they know about Thais, but don't know about their own countries. I guess most farang think small business failure is somehow unique to Thailand.

From Forbes re Farang Land.

According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. A whopping 80% crash and burn.

http://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/#5c50c3df5e3c

Edited July 20, 2016 by Suradit69