Top economist warns of risk of bubble in household debt

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Top economist warns of risk of bubble in household debt
By SUCHEERA PINIJPARAKARN

THE NATION

 

Supachai

 

BANGKOK: -- SUPACHAI Panitchpakdi, former secretary-general of the United Nations Conference on Trade and Development (UNCTAD) and former director-general of the World Trade Organisation, yesterday warned the Thai government that if it focused too much on boosting domestic consumption without also supporting exports, it |could risk a household debt bubble.

 

If household debt reaches 100 per cent of gross domestic product, it would be regarded as a crisis point for the country, he told a symposium on “Thailand, a New Decade of Economic Reforms under AEC Cooperation” organised by Bangkok Bank.

The government is shifting the country from relying on exports to riding domestic consumption because the global economy does not support exports. However, the government should not abandon exports, but should proceed in parallel with trends in international trade because some markets are still growing, he said.

Full story: http://www.nationmultimedia.com/news/business/macroeconomics/30297974

 

-- © Copyright The Nation 2016-10-20

[kannot]

anyone with any sense here will be ignored

[Brer Fox]

The PM certainly has not abandoned exports. He has visited just about every tin-pot country in the world trying to drum up export business. Only the other week Thailand sign a free trade agreement with the Maldives. Very few major trading countries are interested in listening to his sales spiel. Among the few who do listen are his best buddies Russia (tanks), China (railways) and India (trinkets for tourists) which in any case are more import related.

Military governments are better known for doing close order drill, pinning medals and their knowledge of doing battle on the battlefield. Like when to advance and when to retreat. Military economic skills are at the bottom of the barrel.

This gentleman's advice will be ignored with a dose of contempt. Exports can be lifted simply by lowering the Baht but that won't happen as the wealthy will not want to have value of their stashed away cash reduced.

[trogers]

Which major developed country that Thailand is already exporting to does not have household debts higher than Thailand?

 

It's a worldwide problem, and a cancer that is being taught in MBAs of those debtor countries... ?

[Asiantravel]

10 minutes ago, trogers said:

Which major developed country that Thailand is already exporting to does not have household debts higher than Thailand?

 

It's a worldwide problem, and a cancer that is being taught in MBAs of those debtor countries... ?

 

 

Australia has now reached 123.08% of GDP

 

[soalbundy]

1 hour ago, trogers said:

Which major developed country that Thailand is already exporting to does not have household debts higher than Thailand?

 

It's a worldwide problem, and a cancer that is being taught in MBAs of those debtor countries... ?

Our paper money burns better than Thai paper money. We have one advantage,economies can be destroyed but you cant destroy the knowledge that built them up in the first place.

[Grubster]

3 hours ago, Brer Fox said:

The PM certainly has not abandoned exports. He has visited just about every tin-pot country in the world trying to drum up export business. Only the other week Thailand sign a free trade agreement with the Maldives. Very few major trading countries are interested in listening to his sales spiel. Among the few who do listen are his best buddies Russia (tanks), China (railways) and India (trinkets for tourists) which in any case are more import related.

Military governments are better known for doing close order drill, pinning medals and their knowledge of doing battle on the battlefield. Like when to advance and when to retreat. Military economic skills are at the bottom of the barrel.

This gentleman's advice will be ignored with a dose of contempt. Exports can be lifted simply by lowering the Baht but that won't happen as the wealthy will not want to have value of their stashed away cash reduced.

I agree but you forgot to mention where the Rich are stashing their money. In foreign countries, buying land, investing in foreign business, etc. Keeping the baht high greatly improves their buying power there. Win, Win situation for them, when the bubble bursts then they can buy Thailand for cheap.

[trogers]

30 minutes ago, soalbundy said:

Our paper money burns better than Thai paper money. We have one advantage,economies can be destroyed but you cant destroy the knowledge that built them up in the first place.

 

Why would these economies be destroyed when the knowledge that built them up is so great?

[Srikcir]

2 hours ago, trogers said:

Which major developed country that Thailand is already exporting to does not have household debts higher than Thailand?

Thailand has at least gained parity with its host country China:

" The three biggest rises in the household debt-to-GDP gap were in Thailand, Malaysia and China."

http://www.thaivisa.com/forum/topic/869869-thailand-malaysia-and-china-have-biggest-rise-in-household-debt/

(November 2015)

 

[trogers]

1 hour ago, Srikcir said:

Thailand has at least gained parity with its host country China:

" The three biggest rises in the household debt-to-GDP gap were in Thailand, Malaysia and China."

http://www.thaivisa.com/forum/topic/869869-thailand-malaysia-and-china-have-biggest-rise-in-household-debt/

(November 2015)

 

 

Yes, I know.

 

From initial 10% to 40% is a very big rise - 300% increase.

 

While from 150% to 180% is a small rise - only 20% increase

[williamgeorgeallen]

wont be a problem for many as they will never pay back their debts here.

[Brer Fox]

3 hours ago, Grubster said:

I agree but you forgot to mention where the Rich are stashing their money. In foreign countries, buying land, investing in foreign business, etc. Keeping the baht high greatly improves their buying power there. Win, Win situation for them, when the bubble bursts then they can buy Thailand for cheap.

Yes agreed Grubster. In my previous submissions on matters related to the baht I have often mention offshore hoardings of money and assets by the high flyers and silvertails. I didn't say so this time because I was lazy and trying to save space. Thank you for completing the picture.

[kannot]

6 hours ago, Asiantravel said:

 

 

Australia has now reached 123.08% of GDP

 

guess Skippy's  gonna have to  do more than  just rescue dumb folk from mine shafts then?

[kannot]

2 hours ago, williamgeorgeallen said:

wont be a problem for many as they will never pay back their debts here.

Thailand paid  back its imf  debt  early after the financial  crash

[soalbundy]

22 hours ago, trogers said:

 

Why would these economies be destroyed when the knowledge that built them up is so great?

Technocrats and bankers destroy that which was built up by the hard work of engineers and scientists, after the paper has burnt the knowledge of these people who are the foundation of a nations wealth is still there to start again.

[trogers]

59 minutes ago, soalbundy said:

Technocrats and bankers destroy that which was built up by the hard work of engineers and scientists, after the paper has burnt the knowledge of these people who are the foundation of a nations wealth is still there to start again.

 

Unfortunately, mankind would be starting from the discovery of the wheel, after the Third World War...

[soalbundy]

2 minutes ago, trogers said:

 

Unfortunately, mankind would be starting from the discovery of the wheel, after the Third World War...

It's a start, and we would know about metal working and electricity and weaving and hygiene, wouldn't take very long to get back up again but i don't think humanity is stupid enough for MAD, stupid,yes but not that stupid.