GDP growth this year to be over 4%

[snoop1130]

GDP growth this year to be over 4%

 

 

Thailand's economic growth this year will be over 4%, deputy prime minister Somkid Jatusri-Phitak said yesterday

 

He attributed the growth to government investments and increasing export.

 

Somkid said he expected this year’s GDP figure should rise no less than 4% if the government’s investments in national infrastructure projects goes ahead without any hitches.

 

Full Story: http://englishnews.thaipbs.or.th/gdp-growth-year-4/

 

-- © Copyright Thai PBS 2017-1-6

[daveAustin]

I hear ya, but why not go for an 'even' 5% and 40M tourist arrivals?

[Srikcir]

15 hours ago, snoop1130 said:

this year’s GDP figure should rise no less than 4% if the government’s investments in national infrastructure projects

No longer trying to predict growth of exports.

Growth in tourism only accounts for 10-12% of GDP so mostly minimal impact on overall economic growth. All that remains for GDP growth is government investments (apparently giving up on foreign investment), followed by a lot more debt. If inflation and household debt continue to rise, even government investment will be challenged in driving growth.

[elgordo38]

18 hours ago, daveAustin said:

I hear ya, but why not go for an 'even' 5% and 40M tourist arrivals?

He is a modest fellow who hates to brag. I am marking the 4% on my December page of the calendar. I always like a good laugh around Christmas. 

[chiang mai]

The addition of government stimulus and infrastructure project spending makes 4% quite dooable, even if tourism remains flat, don't forget that public debt at 43% of GDP is quite low by comparison to other economies.

[Srikcir]

22 minutes ago, chiang mai said:

The addition of government stimulus and infrastructure project spending makes 4% quite dooable, even if tourism remains flat, don't forget that public debt at 43% of GDP is quite low by comparison to other economies.

A budget deficit of 390 billion baht for FY 2017 (ends Sept. 31, 2017) supported a 0.4% increase on GDP growth over 2015. So how much more debt will be required to achieve an additional 0.8% for 2017 (bringing growth to 4% vs 3.2% in 2016) - double the debt to 789 billion baht? Looking only at debt to GDP ratio it's doable.

 

But there's more to the economic picture. 2015 and first part of 2016 saw baht deflation and negative to flat inflation. Neither positive conditions are likely to repeat in 2017 to shelter economic growth. Rather the baht value is holding/continuing to strengthen; inflation is now beginning a whole digit; unemployment/household debt are increasing; and new civil service 5% pay raises. Furthermore, the government during the last half of 2016 initiated a number of income-styled subsidy programs (no idea if off-budget), substantial tax reduction programs and agricultural price supports that will compete for government investment funds in 2017. Okay, so add even more debt. And that doesn't account for global surprises such as a POTUS Trump economic tidal wave that could depress all of Asia's recent GDP gains.

 

But the government is still operating under the FY 2017 budget that began Oct. 1, 2016 and ends Sept. 31, 2017. Unless the government begins massive off-budget borrowing until the next FY budget. Such action runs counter to Prayut's promise of no debt during his tenure made in 2014 and Somkid's declaration in 2016 that no further economic stimulus is needed to sustain growth. The solution for more stimulus off-budget funding is to substantially cut government operating and procurement spending in 2017 -

that includes military spending!

 

So maybe my analysis is convoluted, pessimistic and predictive. But my point is that economic growth in Thailand for 2017 is going to depend on a great many factors beyond a debt to GDP ratio.

[chiang mai]

7 minutes ago, Srikcir said:

A budget deficit of 390 billion baht for FY 2017 (ends Sept. 31, 2017) supported a 0.4% increase on GDP growth over 2015. So how much more debt will be required to achieve an additional 0.8% for 2017 (bringing growth to 4% vs 3.2% in 2016) - double the debt to 789 billion baht? Looking only at debt to GDP ratio it's doable.

 

But there's more to the economic picture. 2015 and first part of 2016 saw baht deflation and negative to flat inflation. Neither positive conditions are likely to repeat in 2017 to shelter economic growth. Rather the baht value is holding/continuing to strengthen; inflation is now beginning a whole digit; unemployment/household debt are increasing; and new civil service 5% pay raises. Furthermore, the government during the last half of 2016 initiated a number of income-styled subsidy programs (no idea if off-budget), substantial tax reduction programs and agricultural price supports that will compete for government investment funds in 2017. Okay, so add even more debt. And that doesn't account for global surprises such as a POTUS Trump economic tidal wave that could depress all of Asia's recent GDP gains.

 

But the government is still operating under the FY 2017 budget that began Oct. 1, 2016 and ends Sept. 31, 2017. Unless the government begins massive off-budget borrowing until the next FY budget. Such action runs counter to Prayut's promise of no debt during his tenure made in 2014 and Somkid's declaration in 2016 that no further economic stimulus is needed to sustain growth. The solution for more stimulus off-budget funding is to substantially cut government operating and procurement spending in 2017 -

that includes military spending!

 

So maybe my analysis is convoluted, pessimistic and predictive. But my point is that economic growth in Thailand for 2017 is going to depend on a great many factors beyond a debt to GDP ratio.

 

Absolutely agree that a range of factors are involved which is why I wrote, "the addition of governement stimulus", and that was exactly my point, economic growth is not restricted to simply tourism and exports as many may believe.

[chiang mai]

1 hour ago, Srikcir said:

A budget deficit of 390 billion baht for FY 2017 (ends Sept. 31, 2017) supported a 0.4% increase on GDP growth over 2015. So how much more debt will be required to achieve an additional 0.8% for 2017 (bringing growth to 4% vs 3.2% in 2016) - double the debt to 789 billion baht? Looking only at debt to GDP ratio it's doable.

 

But there's more to the economic picture. 2015 and first part of 2016 saw baht deflation and negative to flat inflation. Neither positive conditions are likely to repeat in 2017 to shelter economic growth. Rather the baht value is holding/continuing to strengthen; inflation is now beginning a whole digit; unemployment/household debt are increasing; and new civil service 5% pay raises. Furthermore, the government during the last half of 2016 initiated a number of income-styled subsidy programs (no idea if off-budget), substantial tax reduction programs and agricultural price supports that will compete for government investment funds in 2017. Okay, so add even more debt. And that doesn't account for global surprises such as a POTUS Trump economic tidal wave that could depress all of Asia's recent GDP gains.

 

But the government is still operating under the FY 2017 budget that began Oct. 1, 2016 and ends Sept. 31, 2017. Unless the government begins massive off-budget borrowing until the next FY budget. Such action runs counter to Prayut's promise of no debt during his tenure made in 2014 and Somkid's declaration in 2016 that no further economic stimulus is needed to sustain growth. The solution for more stimulus off-budget funding is to substantially cut government operating and procurement spending in 2017 -

that includes military spending!

 

So maybe my analysis is convoluted, pessimistic and predictive. But my point is that economic growth in Thailand for 2017 is going to depend on a great many factors beyond a debt to GDP ratio.

 

To add: you say THB is holding strengthening, the 90 day picture suggests THB is weakening, very much so. http://www.xe.com/currencycharts/?from=USD&to=THB&view=1Y