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  1. #1
    Thailand Expat tomcat's Avatar
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    Virus Shrinks Economy

    Thailand Faces Biggest Economic Contraction Since Asian Crisis
    By Suttinee Yuvejwattana
    March 25, 2020, 2:05 PM GMT+7 Updated on March 25, 2020, 4:36 PM GMT+7


    • Bank of Thailand keeps rate on hold after emergency cut
    • Exports, tourism have been hit hard amid virus disruptions


    Photographer: Luke Duggleby/Bloomberg

    The Bank of Thailand left its benchmark interest rate unchanged after an emergency cut last week, while projecting the worst contraction in the economy since the Asian financial crisis more than two decades ago.

    The bank slashed its growth forecast for this year, now expecting the economy to shrink 5.3% compared with an earlier estimate of 2.8% expansion. Exports and tourism, the key
    drivers of Thailand’s economy, have both been hard hit as the coronavirus outbreak spreads around the world.

    The policy rate was maintained at a record low 0.75% Wednesday following a 25 basis-point reduction at an unscheduled meeting March 20. Four of the seven monetary policy committee members voted to hold, two called for a cut and one wasn’t able to attend.

    Near-Zero Zone

    “We believe they can cut by another 25 basis points. They could have used all the space they have now,” said Burin Adulwattana, chief economist at Bangkok Bank Pcl. “The economy is on the brink of a recession with huge downside risk, so it’s time to do all they can.”

    Bank of Thailand Assistant Governor Titanun Mallikamas said Wednesday that policy makers stand ready to lower rates further if needed and will keep a close watch on markets, including the baht exchange rate. In a statement delivered through the Bank of Thailand’s Facebook page due to social-distancing precautions, he said the economy would recover only next year.


    The benchmark SET Index extended gains after the decision, surging 6.3% to 1,099.32 as of 3:32 p.m. in Bangkok. The baht fell 0.3% against the dollar, paring an earlier loss of as much as 0.5%.

    What Bloomberg’s Economists Say


    Quantitative easing is looking more likely for Thailand’s central bank, in our view. Conventional policy ammunition is running low. The road ahead is long for the recovery of the country’s all-important tourism sector.
    Click here to read the full report.
    Tamara Mast Henderson, Asean economist

    Central bankers around the world are accelerating efforts to support the economy by slashing interest rates and boosting liquidity. With inflation-adjusted interest rates in Thailand near zero and the Bank of Thailand close to what officials see as the effective lower bound of its benchmark rate, policy options are becoming limited.


    The sizable cut to the central bank’s GDP forecast “is bold, but may not be unrealistic,” said Frances Cheung, head of Asia macro strategy at Westpac in Singapore. “With such a GDP forecast, the government should be ready to add to the fiscal package.”


    Emergency Footing


    Thailand’s prime minister has declared a month-long state of emergency starting Thursday, with some borders to be closed and Bangkok already under partial shutdown. Earlier this week the government approved a stimulus package worth about $3.6 billion, including $1.37 billion in cash handouts to some workers.

    Also Wednesday, the central bank:


    • cut its forecast for 2020 exports to 8.8% contraction, from 0.5% growth expected previously
    • lowered its 2020 inflation forecast to -1.0%, from 0.8% previously
    • predicted 3.0% GDP growth and headline inflation of 0.3% for 2021
    • announced measures to help borrowers such as postponing payments due. The steps cover credit-card debt, revolving loans and mortgages, among other products


    Eight of 17 analysts in a Bloomberg survey accurately predicted the central bank’s hold, with the rest expecting a quarter-point cut in the benchmark rate.




    Majestically enthroned amid the vulgar herd

  2. #2
    Thailand Expat jabir's Avatar
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    The Thai economy is hurting just like others, and while these measures are expected to help us through the coming storm I think Thailand is just another bouncing cork whose fate depends on stronger forces.

    One thing about these stimulus packages is that they do not support the masses at the lower end beyond a token airdrop. Start at the top, save the essentials and work your way down is what we see for the most part, and there's wisdom in this as we've never had such a situation before, so best they can do is what they think is best, which future inquests will conclude was both right and wrong.

    US and Germany were first to announce payments for everyone on the radar, which may sound substantial to millions for whom $1k is a fortune but in reality will not feed them beyond the first few weeks, and that assumes it will be spent on foods and not dope or gambling or some other momentary pleasures. And not everybody is on the radar, can't blame the system for that, but it's going to hurt just the same. Also expected, crims and opportunists will soon be on the case from both sides of the counter, so that when the dust settles a significant part of those trillions, quite a sum of money, will have been stolen, misdirected, scammed or otherwise did not reach its intended targets.

    But one thing all of these packages have in common is that they are fiscal, designed to save economies through the most unproductive world in living memory, with a mass recession heading our way and fast. They do not begin to address the human cost, and while that's also understandable it doesn't make it easier to bear.

    A random thought from this morning, and I'm not one to revel in cheesy humanitarian virtue signalling, but someone should shake up wealthy nations and institutions to the reality of this thing running unchecked within the 3W where conditions, lack of resources, ignorance, corruption and the usual shit, could easily have it knock up exponential infections and deaths. Sure you have to deal with home first, there is only so much anyone can do, and it's easy to fault with everything leaders have done to date, but the issue here is not a few million wog lives, never was, and that's not the point; point is, under such circumstances it becomes a perfect storm for the virus to mutate quickly, more than once and possibly even serially, without being identified, so that the second and subsequent wave/s rebound to a developed world that's at best still getting over the first wave, but with greater potency than we're used to which we clearly ain't.

  3. #3
    Thailand Expat tomcat's Avatar
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    Quote Originally Posted by jabir View Post
    a) Also expected, crims and opportunists will soon be on the case from both sides of the counter, so that when the dust settles a significant part of those trillions, quite a sum of money, will have been stolen, misdirected, scammed or otherwise did not reach its intended targets.
    b) A random thought from this morning
    a) agree: I already have a weighty premonition as to the identities of those miscreants...
    b) perish the thought...

  4. #4
    Thailand Expat
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    not so sure if this will be bigger than 2008, it was only a pause, not a financial breakdown

    it will recover quickly like the coronavirus, taking a few casualties along the way

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