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Somkid confident GDP will pick up in the fourth quarter

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Somkid confident GDP will pick up in the fourth quarter

By THE NATION

 

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Somkid

 

Deputy Prime Minister Somkid Jatusripitak is confident Thailand’s gross domestic product will pick up in the fourth quarter of this year, following the launch of Bt316 billion economic stimulus packages and the rice price guarantee scheme.

 

The Cabinet approved the stimulus packages at a meeting on Tuesday, while the National Rice Policy Committee on Wednesday approved a budget of Bt21 billion to guarantee the price of rice harvested in 2019 and 2020.

 

The deputy prime minister said the movement of interest rates is no more an indicator of the investment trend but it is the people’s confidence that will indicate the level of investment. 

 

Somkid recently held a meeting involving the Bank of Thailand (BoT) and the Finance Ministry to discuss a plan to set up a joint committee to steer the economy.

 

In a related matter, Standard Chartered Bank has lowered its 2019 GDP growth forecast for Thailand to 3.0 per cent from 3.3 per cent. The bank expects growth in the second half to improve from a weak 2.6 per cent in the first half. 

 

The bank said coordinated policy easing in the form of BoT interest rate cuts and a soon-to-be-implemented fiscal stimulus package should support growth from late in the third quarter and strengthen exports and tourism. 

 

Stimulus measures implemented in the past have proved effective in shoring up the economy.

 

According to the National Economic and Social Development Council, the country’s GDP expanded 2.3 per cent in the second quarter compared to the previous quarter’s growth of 2.8 per cent.

 

Fiscal stimuli won’t drive up debt, official insists

 

Jindarat Viriyataveekul, director of the Public Debt Management Office’s policy and planning bureau, said on Thursday there is no need for concern over the government’s economic stimulus packages boosting public debt.

 

Jindarat put the debt level as of this month at 41.45 per cent of GDP, much lower than the debt-to-GDP ratio ceiling of 60 per cent set out in the Finance Ministry’s policy framework on fiscal sustainability.

 

The debt level in the next five years is expected to be 46.73 per cent, while the GDP next year is expected to expand by 3.5 per cent, then 3.6 per cent in 2021, 3.8 per cent in 2022 and 4 per cent in 2023.

 

The budget deficit is forecast at Bt500 billion per year, peaking at Bt570 billion in 2022.

 

The country also enjoys low risk in borrowing, she noted. Of total debt, 90 per cent is long-term and 97 per cent is baht-nominated.

 

Source: https://www.nationthailand.com/business/30375193

 

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-- © Copyright The Nation Thailand 2019-08-23

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1 hour ago, webfact said:

Somkid confident GDP will pick up in the fourth quarter

And many might be equally confident that Somkid will be wrong. These desperate economic "managers" with their stimulus packages are just clutching at straws.

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Just pick some numbers , your almighty baht is what's really important.

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You see these types at the race tracks. 'Next one is the winner'.

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And when asked for the next winning lottery numbers this Earsling gladly provided them confident that he knew what he was talking about. Just another example of shooting yourself in the foot.

Sent from my CMR-AL19 using Thailand Forum - Thaivisa mobile app

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At least this guy has some business background, and a good education, unlike alot of his cronies. But, I doubt he has much in the way of power to steer the economy. There are alot of forces at work, that are way bigger than a junta advisor's abilities and acumen. None of his policies will have an affect on tourism, which is declining by the day. Thailand is only able to attract lower and middle income tourists from China and India at the moment, with Western tourism falling off dramatically, for two dozen good reasons. And despite their best intentions to attract more foreign investment, visa policy remains an issue. as does public and traffic safety, the lack of law and order, and many other factors. The slowing real estate market, and massive over development is another issue. 

 

The International Monetary Fund (IMF) projects China will see growth of 6.2%, down from 6.6% this year, as the impact of its trade war with the US continues to be felt. The US economy next year will also slow from 2.9% to 2.5% as a result of the trade war and Washington’s difficulty in passing stimulus measures as it no longer enjoys a majority in the lower House.

 

The slowing of emerging market economies and the weakening of their currencies against the Thai baht will negatively impact Thai exports and inbound tourism in 2019. Although exports are concentrated in a handful of companies, and tourism in a handful of provinces, there is evidence of a trickle-down effect on the entire economy. Yet it is happening slowly. The incomes received by export and tourism companies and their employees have all been spent, benefiting other sectors of the economy.

 

https://www.thailand-business-news.com/economics/73113-thai-economy-faces-headwinds-in-2019.html

 

Something significant is happening in the Thai economy and it is not good news. Whether Thailand continues to grow this year albeit at a slower pace, according to the IMF is one thing. Government policies, visions and investment programmes are another. But the people who know what is happening are the people who make their livelihoods doing so. They are Thailand’s bankers. What they are reporting is big trouble in Thailand’s traditional small and medium-sized business sectors and among the farming community. The problem is not only the negative external economic environment, it also the disruptive nature of new technology as well as the super baht. The result is an increase in non-performing loans in both sectors which face a deeply uncertain future. To some extent, the small and medium business sectors, just like the western tourists and the informal black economy, are being written off as the price Thailand must pay for the move to the new ‘high income’ economy that exists at the moment in theory while Thailand’s ecosystem of small businesses is being ravaged in reality.

 

 

Strong evidence is emerging from Thailand’s retail banking sector that Thailand’s traditional small and medium enterprise business base is experiencing what can only be described as a crisis. One banker, the President of Kasikorn Bank, this week was reported as saying that the former stability of such businesses is now open to question. This has consequently made the bank’s more prudent about advancing loan and as one banker put it, adopting a ‘hands-on’ approach to the management of loans that are already on the books. The reasons for this are primarily two-fold. There is the disruption caused by technology and the movement of business and trade online but also the current economic environment. Banks are beginning to report higher levels of non-performing loans and a contraction of loans being advanced to these sectors.

 

https://www.thaiexaminer.com/thai-news-foreigners/2019/07/23/thai-economy-small-business-sector-thailand-bank-loans-medium-businesses/

 

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Never a shortage of confidence from Thais. 👍

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14 minutes ago, spidermike007 said:

At least this guy has some business background, and a good education, unlike alot of his cronies. But, I doubt he has much in the way of power to steer the economy. There are alot of forces at work, that are way bigger than a junta advisor's abilities and acumen. None of his policies will have an affect on tourism, which is declining by the day. Thailand is only able to attract lower and middle income tourists from China and India at the moment, with Western tourism falling off dramatically, for two dozen good reasons. And despite their best intentions to attract more foreign investment, visa policy remains an issue. as does public and traffic safety, the lack of law and order, and many other factors. The slowing real estate market, and massive over development is another issue. 

 

The International Monetary Fund (IMF) projects China will see growth of 6.2%, down from 6.6% this year, as the impact of its trade war with the US continues to be felt. The US economy next year will also slow from 2.9% to 2.5% as a result of the trade war and Washington’s difficulty in passing stimulus measures as it no longer enjoys a majority in the lower House.

 

The slowing of emerging market economies and the weakening of their currencies against the Thai baht will negatively impact Thai exports and inbound tourism in 2019. Although exports are concentrated in a handful of companies, and tourism in a handful of provinces, there is evidence of a trickle-down effect on the entire economy. Yet it is happening slowly. The incomes received by export and tourism companies and their employees have all been spent, benefiting other sectors of the economy.

 

https://www.thailand-business-news.com/economics/73113-thai-economy-faces-headwinds-in-2019.html

 

Something significant is happening in the Thai economy and it is not good news. Whether Thailand continues to grow this year albeit at a slower pace, according to the IMF is one thing. Government policies, visions and investment programmes are another. But the people who know what is happening are the people who make their livelihoods doing so. They are Thailand’s bankers. What they are reporting is big trouble in Thailand’s traditional small and medium-sized business sectors and among the farming community. The problem is not only the negative external economic environment, it also the disruptive nature of new technology as well as the super baht. The result is an increase in non-performing loans in both sectors which face a deeply uncertain future. To some extent, the small and medium business sectors, just like the western tourists and the informal black economy, are being written off as the price Thailand must pay for the move to the new ‘high income’ economy that exists at the moment in theory while Thailand’s ecosystem of small businesses is being ravaged in reality.

 

 

Strong evidence is emerging from Thailand’s retail banking sector that Thailand’s traditional small and medium enterprise business base is experiencing what can only be described as a crisis. One banker, the President of Kasikorn Bank, this week was reported as saying that the former stability of such businesses is now open to question. This has consequently made the bank’s more prudent about advancing loan and as one banker put it, adopting a ‘hands-on’ approach to the management of loans that are already on the books. The reasons for this are primarily two-fold. There is the disruption caused by technology and the movement of business and trade online but also the current economic environment. Banks are beginning to report higher levels of non-performing loans and a contraction of loans being advanced to these sectors.

 

https://www.thaiexaminer.com/thai-news-foreigners/2019/07/23/thai-economy-small-business-sector-thailand-bank-loans-medium-businesses/

 

Staff at a Khaosan guesthouse chain told their salary will be reduced by 12.5%.

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2 minutes ago, greeneking said:

Staff at a Khaosan guesthouse chain told their salary will be reduced by 12.5%.

There are millions of Thai people associated with the tourism markets that are hurting, and face a very uncertain future. I have spoken with GM's at five star hotels, owners of small hotels, have several friends who own small guest houses, people who own restaurants, massage parlors, bars, gift shops, motorbike rental shops, travel agencies. They are say the same thing. Business is way down. Their income is way down. Alot say of this keeps up, they will close. Alot of hotel owners and guest house owners are trying to sell, but that is a tough sale. 

 

A decade of mismanagement of the tourism industry has exacted a heavy toll on Thailand. And the past five years have been the worst. Western tourists are disappearing, and the Indians and Chinese are at the lower end of the income spectrum, with a small amount of middle class in the mix. Very few wealthy tourists come anymore. 

 

My tourism rant. Please ignore if you have seen it before:

 

Thailand thought the country was something very special, and was he center of the known universe, and that nobody would ever say no, or find alternative places to visit. The fact is that there are countless other spots, many in this region, that offer better service, more expertise in food and beverage (especially wine service and selection at fair prices, which rich tourists demand), reasonable import duties to sustain a luxury goods market, better training, and far better english skills. Thailand simply lost sight of the big picture, and had very little vision, with regard to big spending tourists, who need to be catered to, instead of scorned.  

 

There are countless things the government could be doing, if they wanted to attract the high quality tourists. The very first thing would be to repeal the anti fareng wine bill, that was passed by a few very corrupt senators way back when, to protect an anemic and truly pathetic local wine industry. They are losing billions of dollars a year in revenue, that could be had from a 100% wine duty, instead of over 300%. The five star hotels would have major wine events, and the entire industry would flourish here. If you are a rich tourist, spending $600 a night at the Banyan Tree in Bangkok, it is difficult to even find someone to have an intelligent conversation with, about the intricacies, the best vintages, and the qualities of the wine you want to order, here in Thailand. The expertise in F & B is really lacking. 

 

Same applies to luxury tax. If it were reasonable, Thailand would be able to attract rich tourists from around the world, who want to spend $25,000 on luxury goods, while on vacation. Will they buy a Prada handbag here for $16,000, that costs $5,000 in Singapore, Hong Kong, Macau, London, New York, Paris, Rome, Milan, Monaco, Prague, Moscow, Istanbul, or Dubai? Of course not. What will they do? They will choose any one of those spots, and others for vacation, and Thailand will never even be discussed. 

 

Sorry to say, but the high spending tourists are lost for good. They WILL NOT come back to Thailand, for a dozen different reasons. 

 

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8 hours ago, webfact said:

Somkid confident GDP will pick up in the fourth quarter

I'll start packing up now to return to the uk then

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As an investor and technical trader with access to quantitive algorithms let me tell you in these markets we are going down there is no inflows the funds have pulled out because they can see the same data i can.

We have a huge problem here and we need to address it - businesses are overleveraged in their debt for expansion which is unsustainable they are in ladders maybe 4 or 5 layers deep of debt like russian dolls this really screams out every tell tale sign of the 2008 meltdown coming all over again

First we must fix the current holes because you cannot carry water in a wicker basket - we must seal the holes and what are they?

Loss of earnings in tourism sector (which is majority of GDP and the seed or root of our economy if looking at it like a tree of life)

Why such loss of earnings? Tourists get a better deal in other countries we need QE and we need it fast

Next we need tax incentives to corporates to setup shop in Thailand to which there is no such olive branch extended

Finally for this short list we need to ensure there are amicable areas for tourism to flourish that means good food, good whisky, relaxed atmosphere with a safe enivornment that is policed well without cheap measure by competent officers that will enforce a good fair and justice system

There is many bad bad bad things that have happened we must work as a country to address that - there have been far to many deaths and unsolved cases. It needs to be addressed and we must roll out the red carpet for our visitors if we wish to reclaim the title of best tourist destination in the world which we did hold very successfully until the interventions so reversion to that (as it is the average after all!) is possible - mean reversion is a wonder of the world and so we can do it MTG Make Thailand Great

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9 hours ago, webfact said:

Somkid confident GDP will pick up in the fourth quarter

This might better read:

Somkid not confident he'll last beyond the next quarter

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4 hours ago, MartiniMan said:

As an investor and technical trader with access to quantitive algorithms let me tell you in these markets we are going down there is no inflows the funds have pulled out because they can see the same data i can.

We have a huge problem here and we need to address it - businesses are overleveraged in their debt for expansion which is unsustainable they are in ladders maybe 4 or 5 layers deep of debt like russian dolls this really screams out every tell tale sign of the 2008 meltdown coming all over again

First we must fix the current holes because you cannot carry water in a wicker basket - we must seal the holes and what are they?

Loss of earnings in tourism sector (which is majority of GDP and the seed or root of our economy if looking at it like a tree of life)

Why such loss of earnings? Tourists get a better deal in other countries we need QE and we need it fast

Next we need tax incentives to corporates to setup shop in Thailand to which there is no such olive branch extended

Finally for this short list we need to ensure there are amicable areas for tourism to flourish that means good food, good whisky, relaxed atmosphere with a safe enivornment that is policed well without cheap measure by competent officers that will enforce a good fair and justice system

There is many bad bad bad things that have happened we must work as a country to address that - there have been far to many deaths and unsolved cases. It needs to be addressed and we must roll out the red carpet for our visitors if we wish to reclaim the title of best tourist destination in the world which we did hold very successfully until the interventions so reversion to that (as it is the average after all!) is possible - mean reversion is a wonder of the world and so we can do it MTG Make Thailand Great

All true. And there is too much of everything. Malls, beauty shops, accommodation, staff in department stores, shops of all finds....How can they find buyers for their goods and services if visitors are being asked to pay a lot more for the same things as before?

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