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  1. #1
    Thailand Expat tomcat's Avatar
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    Dark Clouds Ahead






    Thailand Risks First Double-Dip Recession Since 1998 Crisis

    By Suttinee Yuvejwattana (Bloomberg)

    Thu, July 29, 2021, 1:32 PM

    (Bloomberg) -- Thailand will likely be the worst economic performer in Southeast Asia this year, with economists continuing to slash the country’s growth forecast amid surging Covid-19 infections, mounting political tensions and fading hopes for a tourism revival.

    The Finance Ministry on Thursday cut its 2021 gross domestic product forecast to 1.3% growth, from the 2.3% it expected in April. With new Covid infections and deaths continually breaking records since the latest surge began in April, some economists are flagging the possibility of a technical recession in the second half of the year -- or even a second straight annual contraction, something the country hasn’t seen since the Asian Financial Crisis more than two decades ago.

    According to the latest weighted average of 36 economists surveyed by Bloomberg, GDP should grow 1.8% this year. That’s particularly weak considering it’s a comparison to last year, when Thailand’s economy contracted 6.1%, the most in more than two decades.

    “We see Thailand as a laggard in the region, penciling in the lowest GDP growth forecasts in Asean for both 2021 and 2022,” said Charnon Boonnuch, an economist at Nomura Holdings Inc. in Singapore. “Our forecast implies economic output will not return to pre-Covid levels before the third quarter of 2022, the slowest in Asean, partly reflecting the high dependence on foreign tourists.”

    Bangkok and 12 other provinces, which account for more than half of the Thai economy, have been under lockdown and curfew since last week as the delta variant threatens to overwhelm the country’s public health system. The Bank of Thailand has said the outbreak could shave as much as two percentage points off this year’s GDP if current measures fail to quell it and the pandemic endures for the rest of the year.
    The Finance Ministry’s new forecast, which carries a range of 0.8%-1.8%, assumes Thailand will receive 300,000 tourists this year, a fall of 96% from last year. The ministry also expects the current lockdown to last just one month, and sees the outbreak peaking in August.

    “We expect that exports and government spending will help support the economy and should prevent GDP shrinkage this year,” said Kulaya Tantitemit, head of the ministry’s Fiscal Policy Office. The ministry raised this year’s export forecast to 16.6% growth, from 11% predicted in April, as global demand recovers.

    The Thai baht is down 8.9% against the dollar so far this year, the worst performer among Asian currencies tracked by Bloomberg. The local currency was little changed at 32.875 to the dollar as of 12:54 p.m. local time. The ministry forecast the baht’s average level for the year at 31.48 per dollar.

    What Bloomberg Economics Says...

    Thailand’s worsening coronavirus outbreak looks set to push the economy into a double-dip recession in the third quarter, as well as a back-to-back yearly contraction for 2021. The high-frequency indicators tracked by Bloomberg Economics show no let up in the country’s weakening recovery momentum. We now see significant risks that the Thai economy will shrink further in 2021, compared with our previous forecast of a 2.3% expansion.

    Thailand reported 17,669 new infections and 165 deaths Thursday, both single-day records. Total cases rose to 561,030, of which 95% have come since the latest wave began in April, official data show. The Health Ministry expects the current wave to begin easing by October.
    Thailand has administered about 16 million vaccine doses, enough to cover about 11% of the population, according to the Bloomberg Covid-19 Vaccine Tracker. The central bank, which previously expected the country to achieve herd immunity in the first half of next year, now says that milestone won’t be reached until after 2022.

    “There’s now increasing chatter that the Thai economy will contract again this year,” said Maria Lapiz, managing director of Maybank Kim Eng Securities Thailand. “There’s no reason for optimism.”

    The economic and health crises coincide with a rise in political unrest. The pro-democracy movement has returned to the streets in Bangkok after a six-month lull, with near-daily gatherings organized by different groups since June 24.

    “We are in a severe crisis and our health system is on the brink of collapse,” said Burin Adulwattana, chief economist at Bangkok Bank Pcl. “The compensation program is inadequate. More and more people are losing faith with the government, which led some of them to take to the streets. This can undermine the government’s stability and further damage confidence.”

    Troubled ‘Sandbox’

    Prime Minister Prayuth Chan-Ocha aims to allow more foreign arrivals from October, but infections are already rising in Phuket, a resort island that began a quarantine-free program for vaccinated tourists in July. That could threaten the goal of rescuing the tourism industry, which contributed one-fifth of Thailand’s economy before the pandemic and employed about 20% of its workforce.

    The government planned a 1 trillion baht ($30.4 billion) borrowing program last year to combat the pandemic and added another 500 billion baht this year amid the recent wave of infections. The Cabinet approved a further budget of as much as 30 billion baht in mid-July to compensate businesses and workers affected by the latest restrictions.

    The economy’s two remaining engines -- government spending and exports -- also face uncertainties. June exports rose 43.8% from the same period last year, the fastest pace in 11 years, in line with recovering global demand. Yet this growth driver may also be at risk if vaccination remains slow, an industry group warned.

    “It’s hard to hang on to the hope that the country will re-open in October,” Maybank’s Lapiz said, “or whether this re-opening -- if it does happen -- will make a big difference.”
    Majestically enthroned amid the vulgar herd

  2. #2
    Thailand Expat misskit's Avatar
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    Thailand’s Finance Ministry Slashes 2021 Economic Growth Forecast to 1.3%

    BANGKOK (NNT) - Thailand’s Finance Ministry has slashed its 2021 economic growth forecast to 1.3%, from 2.3%, the third such revision this year, as Thailand fights its biggest COVID-19 outbreak to date.


    Fiscal Policy Office Director-General Kulaya Tantitemit said the current outbreak is impacting economic activity and the expected number of foreign tourists this year, but improved exports and fiscal measures will lend some support.


    She said, although Thailand is preparing to reopen, the ministry now expects only 300,000 foreign tourists this year, down from an earlier forecast of 2 million.


    According to Ms. Kulaya, the government expects to use 200 billion baht, of a new 500-billion baht borrowing plan this year, to finance stimulus measures. The Finance Ministry is also ready to implement additional support measures, as appropriate, as the fiscal position remains strong and that the public debt to GDP ceiling of 60% can be raised if necessary.

    https://thainews.prd.go.th/en/news/d...10730135425267

  3. #3
    Thailand Expat tomcat's Avatar
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    ...unless the current incompetents are quickly replaced, there is little hope of local economic salvation: by focusing early vaccinations on cronies, their friends and families and the "elite", i.e., the least productive members of the swamp's gene pool, the leadership shaped and encouraged an economic mess...workers unable to produce, distribute or consume goods because of illness and a desperate middle class hunting with little success for vaccinations...Thainess heal thyself...

  4. #4
    Thailand Expat Slick's Avatar
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    Personally I hope the baht tanks from all this and im already regretting moving money to my local bank last month, but I didn't have much of a choice at the time.

  5. #5
    Hangin' Around cyrille's Avatar
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    Quote Originally Posted by Slick View Post
    Personally I hope the baht tanks from all this
    Even though the only way that will happen is by sky high mortality rates?

  6. #6
    Thailand Expat Slick's Avatar
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    Quote Originally Posted by cyrille View Post
    Even though the only way that will happen is by sky high mortality rates?
    Its not going to take a sky high mortality rate, just enough economic doubt that people sell off/stop investing in the baht and the thai economy as a whole, and we are already at that tipping point and it can be seen everywhere. USD/Baht exchange is already higher right now than its been in the last couple of years. Sure its not all just the baht depreciating but its definitely part of it and shows no signs of getting better in the short term.

    And I couldn't give a single solitary fuck, to be honest. Ill take all the "free" money I can get.

  7. #7
    Hangin' Around cyrille's Avatar
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    Quote Originally Posted by Slick View Post
    Its not going to take a sky high mortality rate
    That's clearly been the biggest influence over the last 16 months.

    A strong baht for over a year because the virus hardly had a foothold, and swift declines once people started dying in significant numbers.

    And yes, of course it's because of the resulting economic doubts.

  8. #8
    Thailand Expat Slick's Avatar
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    Quote Originally Posted by cyrille View Post
    That's clearly been the biggest influence over the last 16 months.
    Economically speaking, nobody cares how many people die. Its the lockdowns and closed borders everything else that results from having sky high uncontrolled cases. Thailand went from the most optimistic country in SEA to the least optimistic all by their own complacency and incompetence.

    People were investing in the baht and the thai economy in the hopes that it was going to open up soon and be functioning but thats obviously not going to happen due to the uncontrolled spread, lack of vaccinations, and a government that has shown total stupidity - and this is why its tanking, not the deaths. Youre trying to use appeal to emotion fallacy against an economic outcome and the two have no bearing on one another.

  9. #9
    Hangin' Around cyrille's Avatar
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    Quote Originally Posted by Slick View Post
    Economically speaking, nobody cares how many people die
    You're being obtuse.

    More deaths = More economic disruption = Weaker economic future = Weaker baht.

    I'm not using any appeal to emotion, whether fallacious or not.

  10. #10
    Thailand Expat
    Shutree's Avatar
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    Quote Originally Posted by tomcat View Post
    said Maria Lapiz, managing director of Maybank Kim Eng Securities Thailand. “There’s no reason for optimism.”
    I don't think this is pure pessimism. Sadly, I think it is realism.

  11. #11
    Thailand Expat Slick's Avatar
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    Quote Originally Posted by cyrille View Post
    More deaths = More economic disruption = Weaker economic future = Weaker baht.
    False. Just look at the USA. Cases and deaths out the ass but never closed their borders and never really "locked down" and other than a few small dips in currency value and the occasional dip in stock market value, maintained a generally positive outlook and upward moving value overall throughout the pandemic no matter how bad it got.

    Business and economics is a immoral game and other than a few outliers, does not care about bodycount as long as they can operate and make money.

  12. #12
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    Thailand had an excellent platform following the lockdown. All they needed to do was vaccinate everyone before opening up. Letting those rich Indian families in was their downfall and charging for vaccinations will ensure the downward trend continues.
    Those in charge will not be replaced anytime soon, at least not until it's too late.

  13. #13
    Hangin' Around cyrille's Avatar
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    Quote Originally Posted by Slick View Post
    Business and economics is a immoral game and other than a few outliers, does not care about bodycount as long as they can operate and make money.
    I think it very much does involve death count in this case, but speculators are uncomfortable with that.

  14. #14
    Thailand Expat
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    Quote Originally Posted by Troy View Post
    Those in charge will not be replaced anytime soon, at least not until it's too late.
    I'd love to have some insights into what the power brokers are thinking. I don't. My feeling is that there are many who are very unhappy with the current people but the problem is that no one can really want the top job at the moment. It's already too late. I believe they'll let it slide further into chaos before anyone new steps forward.

  15. #15
    Thailand Expat tomcat's Avatar
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    Quote Originally Posted by Shutree View Post
    the problem is that no one can really want the top job at the moment.
    ...you apparently don't know politicians...eager contenders for local leadership range from Dubai through Chiang Mai to Buriram...like buzzards tightly packed on an old branch, waiting for nature to take its course...

  16. #16
    Thailand Expat
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    Quote Originally Posted by tomcat View Post
    .like buzzards tightly packed on an old branch, waiting for nature to take its course...
    I'd agree with that. I just don't think we are there at the moment.

  17. #17
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    Quote Originally Posted by Slick View Post
    Just look at the USA. Cases and deaths out the ass but never closed their borders
    I would love to drive across the border and play some of the great golf courses in Northern Washington State like I've done many times pre-Covid, but can't for some reason now. Wonder why that is? Oh, right. It's because the border is closed.

  18. #18
    Thailand Expat Slick's Avatar
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    Quote Originally Posted by pickel View Post
    I would love to drive across the border and play some of the great golf courses in Northern Washington State like I've done many times pre-Covid, but can't for some reason now. Wonder why that is? Oh, right. It's because the border is closed.
    It was your little homo PM that closed the border, not the US. Learn to read words.

  19. #19
    Elite Mumbler
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    Quote Originally Posted by Slick View Post
    It was your little homo PM that closed the border, not the US.
    Is that why snowbirds have to have their vehicles transported across the border by truck and then fly into the States?

    Quote Originally Posted by Slick View Post
    Learn to read words.
    Exactly.

    Quote Originally Posted by pickel View Post
    I would love to drive across the border

  20. #20
    Thailand Expat Slick's Avatar
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    Quote Originally Posted by pickel View Post
    Is that why snowbirds have to have their vehicles transported across the border by truck and then fly into the States?.
    Your creepy little weirdo of a PM closes the land border, forcing your countrymen to fly into the USA (open, as stated) and this is somehow in your head transformed into the USA closing its border?

  21. #21
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    FYI, on August 9th fully vaccinated Americans will be able to drive into Canada without quarantine. Still no word from the US on when Canadians can do the same into the States, regardless of a quarantine. When covid hit, you guys banned us at the border, and we laughed and laughed and said don't worry, we don't want to go.

  22. #22
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    Quote Originally Posted by Slick View Post
    Your creepy little weirdo of a PM closes the land border, forcing your countrymen to fly into the USA (open, as stated) and this is somehow in your head transformed into the USA closing its border?
    Do you really think our PM controls who can cross a land border into your country?

    Keep digging that hole.


    Quote Originally Posted by Slick View Post
    open, as stated
    Land border closed, as stated.

  23. #23
    Thailand Expat tomcat's Avatar
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    Quote Originally Posted by Slick View Post
    your little homo PM
    ...so, you'd prefer a big homo for PM then...getting a stronger sense of your appearance group...

  24. #24
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    It's so weird and so wrong that Thailand with advanced medical sector both private and public falls because of mismanagement of everything -is mentioning milita*ndacxzztop jun**xxtop allowed?

    Talking every day with friends on the front

  25. #25
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    Surprised THB hasn't fallen more yet. I'm shorting THB but on that mostly worried about political response by BOT and third hand that might artificially send THB up

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