Thailand's ecomomy in sharp decline

[Spitfire]

Sharp decline in Thailand economy
Thailand's economy shrank at a record pace in the last three months of 2008 amid plummeting exports and tourism.

The economy shrank 6.1% in the October to December period from the previous quarter, the National Economic and Social Development Board (NESDB) said.

This was the largest contraction since records began in 1993. The NESDB said the economy might contract 1% in 2009.

The export-oriented Asian economy has been hit by the global downturn and political unrest at the end of 2008.

Anti-government protesters shut down Bangkok's airports, hitting tourism, one of the key sectors of the economy.

'Surprise to everyone'


“ The numbers are bad, and well below market and government expectations ”
Carl Rajoo, Forecast
Compared with the same period a year earlier, the economy contracted by 4.3% in the fourth quarter.

Exports, which account for more than 60% of Thailand's gross domestic product, dropped 9.4%.

The NESDB also forecast that exports would fall 13.1% in 2009 after growing by 16.8% in 2008.

Carl Rajoo, an economist at Forecast, said: "The numbers are bad, and well below market and government expectations.

"While we have been consistently expecting weakness in economic growth, the extremely sharp drop in manufacturing and trade data towards the year-end came as a surprise to everyone, indicating the clear susceptibility of the nation to external demand pressures."

The Bank of Thailand has reduced its key lending rate by a combined 1.75 percentage point to 2% since December in an attempt to save the economy from sliding into its first recession in over a decade.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/b ... 905411.stm

OK, we all know things are not good but I thought it was worth posting a few present facts and figures. These are not good figures for Thailand at all. What I found interesting here is the bit(highlighted) about 60% of Thailand's GDP is export goods , didn't know it was that high, and how much of the remaining 40% is tourism, most revealing. There seems to be very little sense in having a high value currency if the above is correct.

[baron_wastelanduk]

from my own personal and selfish view i cant wait for the days when we used to get nearly a 100 baht to the pound

[PeteC]

Yeah, it also displays the traditional old bad habits: react rather than plan, mai pen rai, lie to save face until you're caught out.

Compared to many other countries though, Thai workers have an alternative, they can go back to the family farm in most cases if necessary. We could see a huge increase in farm output in coming months. This could stabilize the currency as food exports could increase dramatically to places suffering from global warming problems. Just an off the cuff guess. Pete

[Sabai Jai]

Don't suppose fall in exports could have anything to do with the Exchange rate could it?

Sorry....it's just a bit of sore point at the moment, probably not one only felt by myself.

What sector is worst hit? I'm not sure where the real volume comes from.

Thai restaurants in London are complaining. Business is down and their imported ingredients are costing a fortune.

SJ

[baron_wastelanduk]

i just had a call from my rice supplier because he buys his rice in dollars the price has gone up again now £11 for a ten kilo bag of hom mali

[buksida]

Yep all doom and gloom on the economy front, it'll all go back to protectionism and 'sufficiency economy', city workers heading back to the fields and villages, crime rates increasing, 'foreigners' getting the blame.

You really see the true colours of a society and real feelings when the chips are down.

[loverboy44]

Baron,
i know that the brits really suffer with the current exchange rate.
This is a British problem scince Britain swapped from production to the banking sector.
There is no big industry any more.
The countries with a strong banking sector are hit the worst like Island, England and now as well Ireland.
Those with a strong production like Germany, Japan and so on don't have this currency downturn.
If the Uk would have joined the Euro it wouldn't have been hit that hard because it would have been feathered up by the European community.

[Sabai Jai]

Not sure Loverboy

When the Southern European Countries, plus a few more members, stop lying or get found out about the real state of their economies I think the Euro is in for a bit of a re-think to put it mildly.

SJ

[JimmyGreaves]

Not sure Loverboy

When the Southern European Countries, plus a few more members, stop lying or get found out about the real state of their economies I think the Euro is in for a bit of a re-think to put it mildly.

SJ

Agree

[loverboy44]

Might be Sabai but i didn't look into the future.
The Pound lost a lot but the Euro and the Dollar didn't.
That's a fact.
Anyway i think this goes too fsr for this thread.
If you just think about how much money has been taken in the hand in so many countries at the moment and noone includes the east like Russia yet which is all paid by western credits of about 1500 billion Euros i just do hope that i don't have to rent out my garden to a banana farmer and get paid in a currency called rice.

Cheers

[lazerlab]

Might be Sabai but i didn't look into the future.
The Pound lost a lot but the Euro and the Dollar didn't.
That's a fact.
Anyway i think this goes too fsr for this thread.
If you just think about how much money has been taken in the hand in so many countries at the moment and noone includes the east like Russia yet which is all paid by western credits of about 1500 billion Euros i just do hope that i don't have to rent out my garden to a banana farmer and get paid in a currency called rice.

Cheers

You don`t need to rent out your property to a banana farmer. If the crises get to deep the big brother will claim your property for free to grow their bananas. They can also claim your Vigo !

[cozza]

What came out of the 1997 crash was a massive devaluation of the Baht, which is the best thing for a country which exports food and other resources not forgetting labour costs for foreign corporates. Which in turn opens up interest in investment.

The worst thing Thailand is facing is that the Baht has strengthened or at least held its strength in the financial downturn. While everyone is tightening their belts they are also looking at financial alternatives for imports, looking for the cheapest.

IMHO, I believe Thailand needs to disconnect the Baht from the US dollar to maintain competitiveness and keep the Baht at a lower value, this will actually help to boost its economy in terms of exports.

The side effect of this devaluation is imports become more expensive.

What would be a very good thing for Thailand is to regulate the education system better to not be so biased towards wealthy students and push the need for homegrown engineers and scientists, which would cost a lot but would be the best investment for Thailands future.

[johnnyk]

Which economy isn't heading down?
BTW, due to the economic downturn the light at the end of the tunnel has been turned off.

[loverboy44]

There will be a light at the end of the tunnel again but for sure not this year. This year will be used to see how much this all costed us and then make a balance. I hope next year will be a light again but we still have to be careful that the light at the end of the tunnel is not a train heading towards us.

[Khundon1975]

Which economy isn't heading down?
BTW, due to the economic downturn the light at the end of the tunnel has been turned off.

Hi johnnyk

There is a light at the end of the tunnel, unfortunately it's a train coming the other way.

UK is almost in free fall, with 120 small and medium sized firms going to the wall every other day.

The banks here are just not lending to businesses, despite new government initiatives.

LDV the van maker is almost bust, and the government has said no more loans for you. That's another 5000 jobs gone!

Thailand is in for a rough ride soon, if the same happens there.