Thai treasury reserves down 85% since coup

[davehowden]

Indeed impressive!

[ExpatOilWorker]

1 hour ago, JB300 said:

 

I got that bit (use "Savings" instead of borrowing money)

& this bit threw me at first... "Having a high treasury balance is a burden on the government"... "Apisak said higher cash reserves meant the government had to pay more interest on its debt obligations".

But I guess what they're really saying is the money in reserve is (net) borrowed so if they use it instead of borrowing more then it's better for the economy (assuming they don't suddenly need to borrow money).

But what a way to spin it!

 

 

They will borrow and borrow big:

 

" The next fiscal year's (2018) budget expenditure is set at 2.9 trillion baht, with revenue collection of 2.45 trillion baht, leaving a deficit of 450 billion, said Deputy Prime Minister Somkid Jatusripitak."

 

The deficits were:

 

2015 = 250 billion baht

2016 = 390 billion baht

2017 = 390 billion baht
 

[ExpatOilWorker]

1 hour ago, chiang mai said:

I presume the article is referring to Thailands budget deficit which is very low by comparison to other countries. As I recall they said last year that they would increase that deficit this year hence what's being reported is a non-event and old news at that. I know it wont go down well with many readers but the man is correct that it's more cost effective to pay down loans and pay cash rather than pay interest on loans to complete those projects, which is why every governement in the world does the exact same thing. Sorry to interrupt your bashing, please continue with the conspiracy theories and tales of financial mismanagement and highlighting how little you understand about economics.

 

Public debt is about 45% of GDP, so you are right it is low by international standard.

[Srikcir]

3 hours ago, webfact said:

Thai treasury reserves down 85% since coup

Just the cost to maintain a strong baht value in the global market¹ throughout 2016 to save the government from political reaction (and more importantly "face") for poorly managing the Thai economy, especially since BOT will not lower interest rates to make the baht more competitive in the global marketplace. Obviously, such an approach is time-limited, ie., exhaust the reserves, that will force the government to lower interest rates if it can't substantially increase economic growth rate. Given the ever increasing competition by just the other ASEAN members and their corresponding higher growth rates, the economic success for Thailand in 2017 will be challenging - and so will the legitimacy of the military to govern.

 

¹ As an example of using foreign reserves to manipulates currency value see http://www.businessinsider.com/russian-currency-reserves-are-running-out-2015-2

[sfokevin]

2 hours ago, lemonjelly said:

It's like just discovering that the guy you lent your car to for the weekend turned out to be a joyrider.

Lent!!!... more like a carjacking... 

[chiang mai]

7 minutes ago, Srikcir said:

Just the cost to maintain a strong baht value in the global market¹ throughout 2016 to save the government from political reaction (and more importantly "face") for poorly managing the Thai economy, especially since BOT will not lower interest rates to make the baht more competitive in the global marketplace. Obviously, such an approach is time-limited, ie., exhaust the reserves, that will force the government to lower interest rates if it can't substantially increase economic growth rate. Given the ever increasing competition by just the other ASEAN members and their corresponding higher growth rates, the economic success for Thailand in 2017 will be challenging - and so will the legitimacy of the military to govern.

 

¹ As an example of using foreign reserves to manipulates currency value see http://www.businessinsider.com/russian-currency-reserves-are-running-out-2015-2

You haven't read the thread, have you, we can tell!

[Jimbo2014]

To be fair I often have that problem.  See a few subs and cant help myself, goto have them - so much fun.  Get a nice trip to Hawaii, some booze and ladeez and membership to the four mile club.  Throw a big national referendum party with a forgone conclusion.  All fun times but when I check my little pink piggy bank is almost empty. 

Edited February 7, 2017 by Jimbo2014

[harada]

[Emster23]

People often get their panties in a knot when looking at these economic charts. "Lies, damn lies and statistics" comes to mind.

Note that the "floor" of numbers is 15500, not 0. However our minds are wired to see that bottom as zero, so panic response could result. 180,000 going to 172,000 is about a 5% drop. If you just use figures and subtract 15500 from each, making that "0", then the drop looks like 1/3 of total.

[chiang mai]

3 minutes ago, Emster23 said:

People often get their panties in a knot when looking at these economic charts. "Lies, damn lies and statistics" comes to mind.

Note that the "floor" of numbers is 15500, not 0. However our minds are wired to see that bottom as zero, so panic response could result. 180,000 going to 172,000 is about a 5% drop. If you just use figures and subtract 15500 from each, making that "0", then the drop looks like 1/3 of total.

You have to look at year on year growth, looking at shorter timescales is like looking at intra-day trading on the forex market.

 

The other point worth reminding is that the chart is in billions of US Dollars, not THB.

[leeneeds]

The money spent on infastucture mainly roads in the last year and half 

has been greatly appreciated by myself, I work overseas and see and use the abysmal 

roads that are in use there, 

 and it is a great pleasure to come home and drive here, 

[Emster23]

4 minutes ago, chiang mai said:

You have to look at year on year growth, looking at shorter timescales is like looking at intra-day trading on the forex market.

 

The other point worth reminding is that the chart is in billions of US Dollars, not THB.

I agree. I was commenting on Davehowden's chart, and how easy it is to jump to somewhat questionable conclusions, that's all. Agree the year to year better.

[tracker1]

I am sure I read a week or two ago nurses in public hospitals haven't been paid for months ! when a Government can't pay its employees something is drastically wrong

[clockman]

Just ask the fortune teller! Remember there is no transparency in any sector. Remember the last finance minister. White lies are ok!

[MichaelJohn]

3 hours ago, The man from udon said:

So how is the government in the position to cover the banks.i have my life savings in a bank that could go tits up and it should be covered by the government.im questioning myself should I really leave my money in the hands of this man.in fact it's time for a rethink about investing somewhere else.pronto.

The Thai government has never had the money to cover a Thai bank bankruptcy.

If a bank goes down then it will be every man for himself.

You're right; time to move the money elsewhere (if you haven't already).

[Allstars]

3 hours ago, chiang mai said:

The actual numbers are here:

 

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=94&language=ENG

 

Your chart over dramatises the ranges which are historically normal (which is why naam posted a much longer period of time), it also doesn't consider the impact of exchange rate fluctuations which is a key component in valuing the foreign currency reserves.

But since the Baht is higher than end of last year against all major currencies, and we are in the traditional tourist high season now, I would think the foreign currency reserves should rise instead of decline in January

Edited February 7, 2017 by Allstars

[The man from udon]

2 minutes ago, MichaelJohn said:

The Thai government has never had the money to cover a Thai bank bankruptcy.

If a bank goes down then it will be every man for himself.

You're right; time to move the money elsewhere (if you haven't already).

Thanks for that,just im not really an investor and hate these companies offering 10-13% pa returns.i just want my savings safe and not too bothered about interest although it helps against inflation.ive invested in enough property out here for rental to give me some sort of income but only enough to cover day to day living.amazingly my wife has loads of ideas but I would be better off sticking it all on a 3 legged donkey an the grand national.funny that,the poorest people have the greatest ideas when it come to investing other people's money.im interested to hear from anyone who has invested in accuvest or similar with 6% returns.

[lemonjelly]

its scary, 75 billion baht isn't much in reality when you look at a country the size of Thailand..... if this trend continues until there's only 20 billion left, then 10, then 5....  who's going to lend Thailand money when there's nothing left of its  reserves but some Big C food court coupons?

[MorristheRunt]

I wonder if its all been accounted for?

 

I am sure large sums are now residing in some very private Swiss bank accounts, awaiting their owners at the appropriate time.

[funandsuninbangkok]

Article is on treasury reserves(difference of income and loans of gov  to spend) not foreign reserves(international trade surplus/ deficit).

 

No influence on exchange rate( except may have to raise taxes or borrow a bit more). Foreign reserves are fine.  

 

Main take away is gov spending way up. Look for interest rates and inflation to follow. 

[Eric Loh]

Some here just don't see the danger of excessive, unaccountable and risky loans for government projects and expenditures that don't go through the regular checks and balances in a democratic system. This is a different time in Thailand where the cabinet are all generals, NLA just a rubber stamp stop and corruption agencies are selective in their cases. 

 

Instead of being alarmed at a 84.9% decline of the treasury reserves and news that the government had already borrowed 744.2B to cover previous year budget deficit, these junta supporters give excuses like reasonable budget deficit and low dept to GDP. 

 

This government has increase the defense budget by 2+% and decrease education by -4% for the 2017 budget, approved buying of military hardware, keep increasing the funds for infrastructures and borrowing for budget deficits. The way the junta government spend is a cause of concern and will indebt the country and burden the tax payers for years to come. 

[OldSiamHand]

2 hours ago, ExpatOilWorker said:

 

They will borrow and borrow big:

 

" The next fiscal year's (2018) budget expenditure is set at 2.9 trillion baht, with revenue collection of 2.45 trillion baht, leaving a deficit of 450 billion, said Deputy Prime Minister Somkid Jatusripitak."

 

The deficits were:

 

2015 = 250 billion baht

2016 = 390 billion baht

2017 = 390 billion baht
 

So, given these numbers, I assume you see the finances as relatively healthy, as this borrowing amounts to about 2.3% of GDP, compared to borrowing of nearly 4% of GDP in the UK and over 5% in Japan.  Seems to bode well for a stronger Baht compared to Sterling and the Yen.  Your point, right?

[docshock13]

Right on target! By the time elections are over with, the coffers will be just about empty. 

[mki8]

4 hours ago, The man from udon said:

So how is the government in the position to cover the banks.i have my life savings in a bank that could go tits up and it should be covered by the government.im questioning myself should I really leave my money in the hands of this man.in fact it's time for a rethink about investing somewhere else.pronto.

 

[Jonmarleesco]

6 hours ago, webfact said:

'Finance Minister Apisak Tantivorawong ... said ... that depletion of 420 billion baht from the coffers was a healthy adjustment and meant the government was relying less on loans.'

Not for much longer. Not when the government is sitting on just 18% of what it started with. 

[Jonmarleesco]

28 minutes ago, OldSiamHand said:

So, given these numbers, I assume you see the finances as relatively healthy, as this borrowing amounts to about 2.3% of GDP, compared to borrowing of nearly 4% of GDP in the UK and over 5% in Japan.  Seems to bode well for a stronger Baht compared to Sterling and the Yen.  Your point, right?

TiT, as you say. Not the UK; not Japan. But then the Baht's level has never been predicated on the usual factors.

[The man from udon]

7 minutes ago, mki8 said:

 

Kicking myself about that one,a pal told me about them when they had first come out.he was an anti capitalist and said it's the way forward but I took it as a joke as he said you can pay for drugs and hit men with them.

[heybruce]

So Thailand's treasury reserves are way down.  Any chance we can check the financial reserves of the generals?  It would be interesting if there were an inverse correlation.

[mki8]

Just now, The man from udon said:

Kicking myself about that one,a pal told me about them when they had first come out.he was an anti capitalist and said it's the way forward but I took it as a joke as he said you can pay for drugs and hit men with them.

it is still very early days in the bitcoin world,

i suggest you start stocking up on some,

i have thought about starting an AMA bitcoin thread on TV,

to help explain to TV members in laymans terms what bitcoin is.

[Eric Loh]

6 hours ago, webfact said:

But, he said, that depletion of 420 billion baht from the coffers was a healthy adjustment and meant the government was relying less on loans.

 

The 420 B Baht is earning interest in various banks. Not a healthy adjustment when you pay for risk for loans. Oxymoronic statement.