Fiscal Policy Office: 2016 Thai economy can expand by 3.3%

[webfact]

Fiscal Policy Office: 2016 Thai economy can expand by 3.3%

BANGKOK, 29 July 2016 (NNT) - The Fiscal Policy Office has maintained this year's economic growth forecast at 3.3% following public spending and expanding tourism.

Director of the Fiscal Policy Office Kritsada Chiranawicharana said the Thai economy in the second half of 2016 would grow better than the first half. The growth rate would likely stand between 3.0% - 3.6% mainly due to the government's policy to expedite spending.

As for tourism, the number of foreign tourists continuously grew. In the first six months this year, there were more than 16.6 million foreign tourists, an increase of 12%, visiting Thailand. Private consumption will likely increase by 2.3%.

The office also predicted that investment in the private sector would be better than last year by expanding by 2.6%. However, it forecast that this year's export growth would be -19% due to the global economic slowdown.

-- NNT 2016-07-29

[petermik]

Of course this prediction may be subject to alteration at a later date............

[ChrisY1]

-19% export growth is a serious imbalance of trade for Thailand and the crumbling seems to be continuing.....does it show global importers are shunning Thailand.....protesting the military junta.....or is it simply typical of the global slowdown?

With the likelyhood of military influence here for the next decade or more....they need to lift their game quickly.

Edited July 29, 2016 by ChrisY1

[waldroj]

The crystal ball has been getting a workout at FPO again! One has to wonder whether Director Kritsada's performance bonus will be affected by the validity of these claims later down the track?

Growth dominated by public spending and tourism - they had better hope that "ill intentioned" dissenters don't affect the outcome of the referendum - as this will be sure to impact of confidence across a raft of sectors.

Tourism numbers do look impressive though. But, even here the statistics don't tell the true story. The TAT data (http://www.tourism.go.th/home/listcontent/11/221/276) does indeed indicate that there were more than 16.6 million foreign tourists visiting Thailand between January and June (an increase of 12.3% over the same period last year).

However, almost 5 million of those visitors (over a quarter) are Chinese (not renown to be big tourist spenders). So, continued increase in their numbers should be ringing alarm bells, as it will place additional pressure on Thailand's tourist venues, and negatively influence the destination-choice of other potential visitors (who would normally spend far more per person as tourists).

[webfact]

Government remains confident of 3℅ growth this year



BANGKOK: -- The confidence of the government in economic growth remains steady that it will stay at 3℅ as it earlier forecast.

The confidence in economic growth at 3℅ came as tourism is rising and public spending in infrastructure projects is died up to stimulate economy.

The Fiscal Policy Office (FPO) released its forecast of this year’s economic growth at 3.3℅ as there are positive indications in public spending and expanding tourism.

FPO director Kritsada Chiranawicharana said that economic growth in the second half of 2016 would show improvement over the first half.

The growth rate would likely stand between 3.0 – 3.6 percent, owing mainly to the government’s policy to expedite spending.

As for tourism, the number of foreign tourists is also rising.

In the first six months of this year, more than 16.6 million foreign tourists visiting Thailand, an increase of 12℅ year-on-year.

He predicted that investment in the private sector would improve over last year at 2.6℅ growth.

However, he said that this year’s exports would contract by 1.9℅ as global economic growth remains slow.

Source: http://englishnews.thaipbs.or.th/government-remains-confident-3℅-growth-year/


-- Thai PBS 2016-07-29

[Hawk]

"Director of the Fiscal Policy Office Kritsada Chiranawicharana said the Thai economy in the second half of 2016 would grow better than the first half. The growth rate would likely stand between 3.0% - 3.6% mainly due to the government's policy to expedite spending.

As for tourism, the number of foreign tourists continuously grew. In the first six months this year, there were more than 16.6 million foreign tourists, an increase of 12%, visiting Thailand. "

Firstly the Thai economy is seriously struggling and non of the government's so called mega projects have made a jot of difference, so a growth rate of 3% is not even feasible. Foreign investors are extremely reluctant to invest in a third world country that has serious political issues, caused by a military coup. Vietnam, Cambodia and Laos offer stability and are much more investor friendly.

Secondly, yes we all know that foreign tourist numbers are up but the 12% figure sounds untrue, more like 6%. Anyway, the truth is that tourist revenues are actually decreasing and will continue to decrease as the "quality" tourists have even less money to spend. Eventually there will be a downturn in the number of tourists visiting Thailand which will lead to mass unemployment in the tourism sector, leading to even more economic woes for the country.

For retirees Thailand's immigration policies are a nightmare compared to Malaysia, Cambodia and even Laos where you get far better deals and service.

Lastly that old currency story, yes the baht is overvalued, artificially propped up by the Bank of Thailand and its supporters.

[Brer Fox]

The Fiscal Policy Officer says that public spending and tourism will drive the expansion of the economy. That is a sad commentary if those are the only two major factors that are driving the Thai economy.

Public spending is a nice sounding euphemism suggesting they have plenty of money lying around to spend on things that matter. In Thailand's case the opposite applies. The deficit according to the budget is 390 million baht. That has gone up by 34 million for the subs, 10 million for the tanks and 44 million for the red train (plus whatever no one knows about) taking the total up to nearly half a trillion baht.

The military are Keynesion economists and believe that spending from the public purse promotes economic growth. That is fair enough but buying war games toys like submarines and tanks from foreign countries doesn't expand economic growth. Spending it on infrastructure does.

The FPO also says private investment will also stimulate the economy. Since 2014 foreign investors have taken their money and gone elsewhere.

As for local investors I have just been reading articles in the TVN about how Thai investors are looking toward China and Myanmar to invest their money rather than Thailand. They have already made their move into Vietnam. Their patriotism seems to have deserted them.

As for the FPO's comments on tourism that is just wishful thinking. The growth that Chinese tourists singularly bring to the the economy is minimal. The influx of the Chinese is partially cancelled out by the many non- Chinese tourists now going instead to nearby countries like Vietnam, Cambodia, Laos and Myanmar.

Good luck Thailand; better times are ahead when democracy is restored which the PM assures everyone it will be.

[Gweiloman]

A lot of posters like to jump on the bandwagon that the Chinese tourists' contribution to the Thai economy is minimal. This is understandable as most of these posters don't actually know how the tourism industry functions.

A lot of Chinese tourists come to Thailand on what is known in the trade as zero tour fare tours. What this means is that the tourists basically do not pay anything for the tours in their home country. Naturally, they are then expected to do lots of shopping at the destination in order to compensate the ground operators providing the services (commissions from the shops). Some of the money from these purchases might find it's way back to China but a large proportion stays in Thailand as well.

Posters also talk about the places the Chinese tourists eat at. Lots say that these are restaurants owned by Chinese and that the funds would be repatriated back to China. Maybe so but these restaurants still need to purchase the produce locally, be it meat or fish or vegetables. Who do you think benefits from these purchases?

[Redline]

It can also expand by 1034%, but it won't!

[Brer Fox]

A lot of posters like to jump on the bandwagon that the Chinese tourists' contribution to the Thai economy is minimal. This is understandable as most of these posters don't actually know how the tourism industry functions.

A lot of Chinese tourists come to Thailand on what is known in the trade as zero tour fare tours. What this means is that the tourists basically do not pay anything for the tours in their home country. Naturally, they are then expected to do lots of shopping at the destination in order to compensate the ground operators providing the services (commissions from the shops). Some of the money from these purchases might find it's way back to China but a large proportion stays in Thailand as well.

Posters also talk about the places the Chinese tourists eat at. Lots say that these are restaurants owned by Chinese and that the funds would be repatriated back to China. Maybe so but these restaurants still need to purchase the produce locally, be it meat or fish or vegetables. Who do you think benefits from these purchases?

What you say about services and supplies is quite true but you are taking the word minimal out of context.

The Chinese tourists contribution to the economy is minimal in relation to everything else that contributes to the economy. Just like the contribution by sex tourists although some might argue that is probably a bit larger than minimal.

[Srikcir]

it forecast that this year's export growth would be -19% due to the global economic slowdown.

If a 19% contraction of export growth was true - game over for the Thai economy. Fortunately, it appears this is a typo as in the followup article this year’s exports would contract by 1.9℅ as global economic growth remains slow. In June 2016 exports contracted 0.1% following a 1.6% contraction for the first six months of this year cmpared to the same period last year.

But rather than becoming more competitive and innovative in manufacturing industries, the Thai government has given higher prilority and significant funding to low-value tourism and the agricultural industries. Investments that may prove elusive in the long term for a sustainable econmic growth.