Thread: Thailand to suffer most in economic crisis

"Thailand to suffer most from crisis

By: BangkokPost.comPublished: 24/02/2009 at 12:21 PM Thailand will likely suffer the most from the global economic crisis in Asia, according to forecast of Moody's Analytics.
The forecast was made after the National Economic and Social Development Board (NESDB) revealed that the country's gross domestic product (GDP) in the fourth quarter of last year fell 4.3 per cent while the industrial output shrank 22.3 per cent when compared to the same period of 2007.

Moreover, the demands for electronics, electrical appliances, automobiles and other industrial products went down, and the plummeting agricultural product prices severely affected the export sector.

The tourism industry lost a significant amount of revenue after the People's Alliance for Democracy (PAD) blockaded Suvarnabhumi and Don Mueang airports last year. Public spending also declined while foreign investors became more hesitant to do businesses in the country due to continuing political uncertainties."


The ludicrous idea that the millions of Thais that moved from rural areas to the metropols to make a living, just can go back to farming is nothing but fantasy, there is a reason for the migration to city centres by millions in 3 world Country's, the land could not provide a viable living. Thailand is going to hurt and I feel very sorry for the millions of Thais with no security net.

NESDB: Thai recession likely

January saw deepest export fall in 18 years

By: CHATRUDEE THEPARAT Published: 24/02/2009 at 12:00 AMNewspaper section: Business The country's economy shrank more than expected in the fourth quarter last year, as exports and tourism slumped, with growth this year forecast between -1% and 0% due to the lingering global recession.
The National Economic and Social Development Board revealed yesterday Thailand's economy in the last three months of 2008 contracted by 4.3%.
It is the first contraction in 10 years since the aftershocks of the 1997 crisis.
The Thai economy grew 2.6% in 2008, a substantial drop from 4.9% in 2007.
The agency said the economy may contract as much as 1% in 2009 due to sharp drops in exports and tourism falloff with global recession. It previously forecast growth of as much as 4%.
"The global economy is moving into a recession and Thailand, like other countries, has been hard hit and the situation is worse than expected," the board's secretary-general Ampon Kittiampon said yesterday.
The decline was due to declines in exports, tourism and production.
"The Thai economy is likely to slip further in the first quarter of this year. We may see the worst figure in the second quarter before it climbs in the second half," Mr Ampon said.
The final quarter of 2009 would be a "turning point" for the Thai economy, as the government's 117-billion-baht supplementary budget for fiscal 2009 starts taking effect, he said.
"The budget injection in May should boost the Thai economy slightly at the end of the second quarter or early in the third quarter," he said. "The economy needs to grow by 4-5% in the final quarter if we want to see zero growth in GDP in 2009."
Dr Ampon said despite sluggish export and tourism sectors, the agency still projects greater domestic consumption will help the Thai economy.
Overall consumption was projected to grow 3.1%, with private consumption up 2% and government consumption increasing 8.3%.
According to the government's planning agency, Thai exports were likely to contract by 13.1% this year, with imports dipping by 14%.
NESDB projected the trade balance was estimated at US$1.8 billion with inflation projected at 0.5% to minus 0.5%, down from 2.5-3.5% in the previous projection.
The unemployment rate was projected at 2.5-3.5% of the total workforce, or 950,000-1.3 million, an increase from 1.5-2.5% in an earlier projection.
Sompob Manarungsan, an economist at Chulalongkorn University, said the Thai economy this year is likely to contract by more than the NESDB projection because of export slowdown and a reduction in asset values.
He said the government's plans to stimulate domestic consumption and government spending would deliver only a slight impact to the Thai economy, as government expenditure accounts for just 20% of the economy.
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Makes you wonder what dimension the so called, in the know Thais are living in, until very recently the mantra still was "this crisis is not going to affect Thailand" ??

Originally Posted by larvidchr

By: BangkokPost.comPublished: 24/02/2009 at 12:21 PM Thailand will likely suffer the most from the global economic crisis in Asia, according to forecast of Moody's Analytics.

Of course Thailand will be the most affected because the currency is obscenely overvalued and when compared to neigbouring competition.

Buy the same products at a rate of 46 pescos to the dollar or 35!

Whats a trader too do?

larvidchr , I see your signature and think of this

^^^^ #3
'zactly

I don't get how they have stayed so strong yet here in Kimchistan another export driven economy they got hammered.

Why has the baht hung on so long.

Is it purely down to government meddling fingers?

Originally Posted by larvidchr

Makes you wonder what dimension the so called, in the know Thais are living in, until very recently the mantra still was "this crisis is not going to affect Thailand" ??

Dimension Thai! Yeah, when I look at them where I live in Thonglor or at the Paragon mall where I took my kid this morning (to see the fish) I can't help by marvel at how feckless and clueless the upper and upper middles appear here. This crisis is going to breed a ton of resentment, at possibly the most inopportune time in recent Thai history.

Originally Posted by mrsquirrel

I don't get how they have stayed so strong yet here in Kimchistan another export driven economy they got hammered.

Why has the baht hung on so long.

Is it purely down to government meddling fingers?

In terms of export value I expect Korea is losing more, plus they have further to fall. While exports are obviously important, the primary driver of Thai economic growth has been foreign investment (as it was pre-1996), which is not the case in Korea. When Thailand falls, it may not fall far but I expect it is going to fall hard.

Originally Posted by baldrick

larvidchr , I see your signature and think of this

Me to, good old "Hagard" as we call him, and his lovely sweet wife, I love him (not in a gay sense)

Originally Posted by robuzo

I wonder less about what the poor are going to do, because after all their survival (shall we call "subsistence" what it really is, or is that lese majeste?) skills are fairly well-developed, and their expectations probably never got too high (i.e., they expect to be fucked over). How about the middle-class urbanites? What the hell are they going to do in an economy gone south?

Right. The poor are accustomed to fishing in klongs and don't mind hunting around at night for large insects and other perfectly viable forms of protein. Middle- and upper-class denizens of Bangkok most likely wouldn't have a clue how to "subsist" but may one day be forced to emulate their northeastern cousins instead of looking down their noses at them.

The writing's on the wall, it seems, but when's the shit going to hit the fan?

Well Thailand can't be any worse that Germany where I have lived and worked for the past 10 years, as that has really gone to shit. Bankrupt banks, manufacturing and engineering dead and complete collapse on the cards. That's why I have escaped!!!

Thailand can't be worse - surely!!!???

wanta hear one about the frying pan and the fire ?

Hmmm. Anyway, its warmer here.

Tarisa Watanagase

Sounds like a right old gas bag...

BOT may cut policy interest rate

By: BangkokPost.comPublished: 25/02/2009 at 10:59 AM The Bank of Thailand (BOT)'s Monetary Policy Committee held a meeting on Wednesday to consider cutting the policy interest rate by 0.50 to 0.75 per cent to ease the economic crisis.
The meeting will take into account the economic figures released by the National Economic and Social Development Board (NESDB), the central bank revealed.

According to the NESDB, the gross domestic product (GDP) in the fourth quarter of 2008 fell 4.3 per cent while the import and export sectors also contracted 38 per cent and 26 per cent respectively.

The policy interest rate would likely be slashed by 0.50 to 0.75 per cent, not one per cent as the Fiscal Policy Office predicted since it was already reduced earlier.

cuts a given ,

question is how much .

Here is an interesting quote from the Thailand crisis blog:
Thailand Crisis


"In Thailand, the morons are very proud of the plan “2000 THB for 8 millions or 9 millions people”… They think it’s going to “start up” the economy… Like Bush with his “stimulus check” last spring…
It’s just derisory. It will make a fart, a blip on the GDP on Q2.
It’s not sure yet of course. But more and more, the picture appears clearly : we have an unprecedented crisis, because of its scale, its globality (all the countries), its simultaneity and… its duration.
The politicians can’t imagine a long crisis.
For them, it’s the real nightmare scenario."

It will make a fart, a blip on the GDP on Q2

bet it don't even do that .

there is "multiplier effect" with spending, so those 2,000 THB might have some substantial impact if everything else is equal, but since it won't be equal, the 2,000 THB "donation" might be a bit late.

Next plan for the poor: go to the Reds demonstration for 2000 THB a week,

Thai Central Bank Cuts Policy Rate 50 Basis Points To 1.50%

BoT cuts rate to 1.5%

SCB cuts savings deposit rate to 0.5%

By: PARISTA YUTHAMANOP Published: 26/02/2009 at 12:00 AMNewspaper section: Business The Bank of Thailand cut short-term interest rates by a half of a percentage point yesterday as part of its ongoing efforts to jumpstart the economy.
The rate cut brings the one-day repurchase policy rate to 1.5% from 2%. Over the past three months, the central bank's Monetary Policy Committee (MPC) has cut rates by 2.25 percentage points in an effort to spur growth.
Siam Commercial Bank, the country's fourth-largest, became the first Thai bank to announce a rate cut in response to the MPC measure, with a 0.25 percentage point cut in lending and deposit rates that also covered savings deposits.
"The ongoing global financial crisis resulted in a marked slowdown in world economic growth with high uncertainty surrounding the economic outlook," the MPC said in a statement.
"The sharp decline in external demand adversely affected regional countries including Thailand through a marked contraction in exports. In addition, domestic demand remained weak, while the impact of measures to stimulate the economy will take some time to come into full effect."
The MPC said risks to growth continued to increase while inflation was expected to decline. Core inflation, which excludes food and energy prices, could fall below the MPC's target "during certain periods of this year".
"The MPC therefore viewed that monetary policy could be eased further to support economic recovery and to safeguard price stability going forward," the committee said.
Duangmanee Vongpradhip, a central bank assistant governor, said current forecasts of growth of zero to 2% this year could be revised downward as the global economy deteriorated.
But she rebutted a report by Moody's Economy.com that suggested Thailand was among the worst performing economies in the region, with the fourth quarter of 2008 falling at an annualised rate of 22%.
"The Thai economy should be viewed from the point that it contracted 4.3% year-on-year and 6.1% quarter-on-quarter in the fourth quarter of last year. And it was not the worst performer in the region," Mrs Duangmanee said.
She said the economy could grow on a quarter-on-quarter basis in the first quarter, although full-year figures may be negative.
But Finance Minister Korn Chatikavanij said yesterday that the first quarter could be "even worse" than the fourth quarter of 2008, as the global economy continued to deteriorate hurting Thai exports.
He said the government was focused on encouraging domestic demand to compensate for falling exports, and that the target in any case was to maintain positive growth for the year.
Mrs Duangmanee said the central bank expected increases in public spending and gains in net trade due to falling imports would help the economy pick up from the fourth quarter of 2008.
The central bank expected the economy to start recording positive year-on-year growth in the fourth quarter, she said.
"The monetary easing continues to pursue a front-loaded path. The degree in interest rate cuts this time is on par with the past two rounds in December and January," Ms Duangmanee said.
Commercial banks cut deposit rates by 130 basis points and lending rates by 75 basis points the past few months.
"We hope that the economy follows our signal and reduces interest rates to reduce business financing costs. The short-term bond rate has been lower. However, the large base of term-deposits remain a significant cost for banks," Mrs Duangmanee said.
Siam Commercial Bank, meanwhile, announced that effective tomorrow, it would cut deposit and loan rates by 25 basis points, bringing minimum loan rates to 6.25%, minimum overdraft rates to 6.5% and minimum retail rates to 6.75%.
Savings deposit rates were cut to 0.5% from 0.75%, the first reduction in such rates by a Thai bank in a decade. Three-month fixed deposit rates for balances under five million baht were also cut to 0.75%, with larger balances set at 1% per year.
Other banks are expected to soon follow SCB with their own rate cuts.
Mrs Duangmanee said the one-day policy rate, in real terms, actually stood at 1.9%, as inflation rates were expected to turn negative.
She said core inflation could drop below the MPC's target of 0.5% to 3% this year, although this was part of government efforts to reduce expenses for households.