The Thai Economy Is In Crisis

[Mid]

annual budget was passed later than schduled, due to the coup

back up sunshine ,

the reason is well BEFORE that .................................

[ThaiGoon]

All right, sweetheart. I forgot to mention that during the last few months of the previous gov't, it wasn't meant to be a legitimate gov't as well. The re-election should have happened, but didn't. So it put that gov't in a limbo and the budget wasn't passed.

<snip>

Edited May 22, 2007 by Jai Dee
Off topic comments deleted.

[highdiver]

The investments pointed out are the type of investments not planned in months but years. my guess it has really very little to do with he currnet situation but a part of a very long term plan.

The green light I see is they have not been stopped yet.

Doesn't the current financial situation really have a lot to do with the current budget surplus?

If you look at that closely yes some things were done to the positive, but were those actions recent actions, or something that was already in the pipeline.? Could a contributor to that be that the Government halted projeects and stopped spending money?

It appears that in the near future the money will be spent again as before. How will that effect Budget surplus?

What will be the overall effect to the business climate on a international basis?

Sorry guys I'm not a sharp a the rest of you so I only have questions, not answers.

Interestingly enough for the first time in my life I really have enouhg money that I could invest, but I certainly don't have money to throw away. Thailand has been very good to me but not one baht of the money I have, was earned in Thailand.

Budget surplus? What are you on about? The current gov't has approved the annual budget that would run in deficit since last year. And it's the right policy for the economy that's slowing down. It's a basic macro-economy principle (I only needed to take one macro econ class to know this.) In fact the gov't has been trying to expedite the spending for quite a while now. (The budget spending was a bit sluggish earlier this year because the annual budget was passed later than schduled, due to the coup. FYI, gov't budget calendar runs from one year's September to the next.) The spending's needed to boost the economy. And I have to say again that it's a very very basic macro economy principle. Perhaps you were talking about the trade surplus? That's another matter entirely. (Budget surplus, what? )

so so true. good post

[jumnien]

Stock Exchange of Thailand is up yet another 1% and more today! If this is a crisis, let's hope it's contagious!

[midas]

Stock Exchange of Thailand is up yet another 1% and more today! If this is a crisis, let's hope it's contagious!

mdeland surely you are not suggesting you can use the performance of the SET

to jugde whether there is an economic crisis or not !!

[midas]

I was at Paragon yesterday to see the beautiful orchid show along with hordes of other shoppers. Thailand seems to be doing just fine, but this thread seems to be in crisis! I think Sonthi and Thaksin would have kinder words for each other than the regular posters on this deal. Can't we all get along?

I am not sure how hoards of shoppers going to look at orchids means the economy is fine.

[Edonista]

Oh No! The sky is falling!! I'm so happy the Thai economy is collapsing and everyone in Thailand will finally be living paycheck to paycheck and be as miserable, sad and bitter as me! (If that is not really the reality, then I'll just keep banging on it in an internet forum so that at least I can feel a bit better about my sad and pathetic life.)

It never comes up to your mind that such description fits you perfectly ?

[Edonista]

Oh No! The sky is falling. And no way am I gonna invest in this country because it's in a crisis and under a junta blah blah blah. (not because I'm practically bitterly and miserably broke and actually living here paycheck to paycheck and can't even afford to live comfortably in my home country, let a lone making an investment in another.)

I have relevant assets in securities that allow me to live without working (and reinvesting 80% of the revenues). I have $ denominated Brazil bonds , brazilian reais bonds, turkish lira bonds and Thai stocks. All of them gave me excellent returns, except one that gave me a 0% return in 3 years. Do you need a hint on which asset class might be ?

[wintermute]

Oh No! The sky is falling!! I'm so happy the Thai economy is collapsing and everyone in Thailand will finally be living paycheck to paycheck and be as miserable, sad and bitter as me! (If that is not really the reality, then I'll just keep banging on it in an internet forum so that at least I can feel a bit better about my sad and pathetic life.)

It never comes up to your mind that such description fits you perfectly ?

He's possibly the most insecure person i've ever witnessed on an internet forum. I've never seen anyone so blindly defend every aspect of their ethnicity, culture, or nation. It's just a vast inferiority complex and i've seen the same thing in other Thais.

[Edonista]

Stock Exchange of Thailand is up yet another 1% and more today! If this is a crisis, let's hope it's contagious!

My 400,000 MK stocks share your hope. Unfortunately it seems it is just foreign buying of big caps like BBL , and those are already overvalued to my opinion.

[cclub75]

Stock Exchange of Thailand is up yet another 1% and more today! If this is a crisis, let's hope it's contagious!

Indeed. It could be contagious... Like a disease...

S&P worries about slowdown in Thailand

Standard & Poors, the world's foremost provider of independent credit ratings, has expressed concerns over a slowdown in investment and consumption in Thailand, according to the Fiscal Policy Office’s Director-General Pannee Sathavarodom.

She said an S&P representative had met with her as scheduled to enquire about Thailand’s economic conditions in the first half of this year so that it could use it for a credit rating of the country at the end of the year.

http://www.bangkokpost.com/topstories/tops...s.php?id=118914

See you tomorrow of the BOT move regarding interest rates. Among a surge in oil prices. It's going to be a tough call.

[highdiver]

oh I see the "dooms day" brigade has an early start to day.

so to get them flaming even harder here are some hard facts

Thai Hot Stocks-Property, Construction firms, Banks up

Tue May 22, 2007 3:34 AM ET

BANGKOK, May 22 (Reuters) - Thailand's benchmark stock index <.SETI> was up 6.48 points, or 0.89 percent, at 734.70

points at the midday break on Tuesday.

Stocks and factors to watch:

- Banks <.SETB> were up 1.5 percent ahead of a central bank interest rate decision on Wednesday, with an expected 50 basis point cut seen boosting loan demand.

Bangkok Bank, Thailand's largest, rose 1.77 percent to 116 baht, number two Krung Thai Bank <KTB.BK> rose 1.85 percent to 11 baht and third-ranked Siam Commercial Bank <SCB.BK> was up 0.8 percent at 67.50 baht.

- Property stocks <.SETPR> were 0.35 percent higher after newspapers said the Finance Ministry would offer allowances on

mortgage-interest payments of up to 100,000 baht from 50,000 baht to spark homebuying and the property sector.

Shares in Land & Houses <LH.BK>, the leading housing firm, rose 0.71 percent to 7 baht and Sansiri <SIRI.BK> was up 0.7

percent to 3.02 baht.

Thai Hana sees '07 sales up 20 pct in dollar termsTue May 22, 2007 4:39 AM ETBANGKOK, May 22

(Reuters) - Thailand's Hana Microelectronics PCL <HANA.BK> said on Tuesday it expected a 20 percent rise in sales in dollar terms this year from $394 million last year.It did not expect net profit to grow this year due to the stronger baht and planned to spend $30 million, up from $20-25 million last year, on new machinery and working capital for its two Thai plants, a company executive told reporters.

- Construction firms <.SETCO> were also higher, led by a

1.7 percent rise in top industrial conglomerate Siam Cement

<SCC.BK> to 238 baht. Top builder Italian-Thai development

<ITD.BK> rose 1.7 percent to 6.20 baht and CH Karnchank <CK.BK>

climbed 0.6 percent to 8.10 baht.

As for S&P showing concerns

try ans search the above phraze and see how many concerns S&P publish on daily basis on virtually every country and every business.

there is a huge bubble around all the world and they should be concerned.

but lets look at Thailand

At the end of 2006, gross external debt was 29.6% of gross domestic product, with gross external assets rising 37.2% over the year to $93.9 billion at the end of December. The country's net external creditor position was 16% of GDP and 20.5% of current external receipts at the end of the year, with net public external debt rising to 33.9% of current external receipts.

these ratios are better than the BBB peer group

Thailand's fiscal position was also higher than other BBB-rated countries, with the government deficit down to 0.3% of GDP in 2006 from 1.8% the year before. General government debt was 28.7% of GDP at the end of fiscal 2006.

from the same article today in the post.

Mrs Pannee assured the agency that the Thai economic fundamental remains strong and FPO still believed the economy would continue to grow 4-4.5 per cent this year.

However, FPO would need to review factors to the economic expansion late this month before making a revision of the economic growth estimate.

She said private investment appeared to begin to recover as could be witnessed by an increased number of applications for investment promotions with the Board of Investment.

so in plain terms

Thailand is doing great with a line up of serious invesotrs wishing to invest in Thailand for medium to long term investments.

Speculators and short term greedy invstors looking to make a quick buck are weeping and bitching.

[bingobongo]

Stock Exchange of Thailand is up yet another 1% and more today! If this is a crisis, let's hope it's contagious!

Indeed. It could be contagious... Like a disease...

S&P worries about slowdown in Thailand

Standard & Poors, the world's foremost provider of independent credit ratings, has expressed concerns over a slowdown in investment and consumption in Thailand, according to the Fiscal Policy Office's Director-General Pannee Sathavarodom.

She said an S&P representative had met with her as scheduled to enquire about Thailand's economic conditions in the first half of this year so that it could use it for a credit rating of the country at the end of the year.

http://www.bangkokpost.com/topstories/tops...s.php?id=118914

See you tomorrow of the BOT move regarding interest rates. Among a surge in oil prices. It's going to be a tough call.

cclub75 you beat me to this article

when BOT lowers rates, it will be interesting to see how much worse inflation gets, pretty soon folks will have to decide between the newest cell phone and filling up their gas tanks

highdiver, it is not the "doomsday brigade" it is the defenders of the realm (aka lollipops and rainbows brigade) vs. the realists

[jumnien]

As I've said many times before, we all, well at least most of us, deeply hope there will be an economic crisis in Thailand in the near future. We all appreciate the quality of life improvements that developed out of the last crisis in 1997 - cleaner air, less traffic, skytrain, first 3 years of Thaksin, improved roads and bridges, new airport, profitable investment atmosphere, industrial growth. The problem is that while the doom and gloomers have promised a crisis for some time it never comes. The opportunities such as a massive exit of farang, cheap property, cheap rents, no traffic, never really seem to manifest. For many farangs, the "crisis" is that things are going to well for Thailand and they are being priced out of the market. They develop massive resentments and seek refuge in the Phillipines, Venezuela, Brazil, Cambodia and other typical cheap sexpat havens. For those of us who stay and the hordes that are moving here, we just try to pick up assets as they crop up at good values. CPN has bought more than one vehicle for me over the last 3 years. Yes, a crisis would improve the investment climate, of course, but in the meantime there are still profits to be made. Buy farmland now within 30 kilometers of tourist areas - the next 3 years will see a massive appreciation. Don't take financial journalism seriously. It's written by folks who have never had luck investing and are stuck writing in a cubicle for low wages under a deadline. Of course they are pessimistic!

[Edonista]

Buy farmland now within 30 kilometers of tourist areas - the next 3 years will see a massive appreciation.

Farang cannot buy land.

And I don't think putting it in wife's name would be a good idea either.

Edited May 24, 2007 by Maestro
Quoted text reduced. Unnecessary to quote the entire post.

[cclub75]

Some fresh bit of data, regarding real estate.

In the first two months of the year, 10,150 residential units were transferred in Bangkok and its suburbs. This was an increase of only 2.2 per cent from 9,926 homes transferred in the first two months of last year. However, in terms of value, the residential units transferred in the first two months were collectively worth only Bt23.34 billion - a fall of 25 per cent from a collective value of Bt31.36 billion in the corresponding period last year.

http://www.nationmultimedia.com/2007/05/23...ss_30034920.php

Interesting because BOT don't give the figures for february 2007 for "New Housing in Bangkok Metropolis and Vicinity" (datas available here )

A fall of 25 % in value is just another proof of the... cracks or unbalances in real estate market... Non ?

And it should allow us -definitely- to stop using the (very bad) word "booming".

Anyway, I give credit to our dear contradictors : let's just wait a bit more. A few more month to have a better and broader picture.

That will probably be... worse. Bet ?

Edited May 22, 2007 by cclub75

[bingobongo]

desperation is at hand, business need more cuts, but alas all this will do is drive up oil and be inflationary

somthing wicked this way comes........

CENTRAL BANK

Rate likely to fall by 50 basis points

But business calls for bigger decrease

The market's expectations became clear as businessmen urged a deeper cut of at least 75 basis points.

Meanwhile, crude oil and domestic oil prices have risen continuously beyond estimates. While the central bank forecast that the crude oil price would be US$56.5 (Bt1,995) a barrel on average this year and $60 a barrel in this quarter, the actual price is already $66.15 a barrel.

http://www.nationmultimedia.com/2007/05/23/business/

[bingobongo]

hmmm......lower tax revenue, less spending by the populous and businesses perhaps? sorry "rainbows and lollipops brigade" reality is coming........

GOVT SPENDING

Fiscal year budget to be revised

Lower tax yield set to increase deficit

The government may be forced to run a larger fiscal deficit next year than previously estimated, due to lower tax revenues arising from the bleak economic climate.

http://www.nationmultimedia.com/2007/05/23...ss_30034932.php

[endure]

I've deleted some off-topic personal insults. I will tell you one last time - any more personal insults in this thread will close it and will earn the poster a 10 day holiday. There will be no more warnings.

[ThaiGoon]

Gov't spending:

http://www.bangkokpost.com/News/23May2007_news02.php

MASS TRANSIT BANG SUE-TALING CHAN RAILWAY

Go-ahead given for B13bn city train line

PRADIT RUANGDIT

The cabinet yesterday gave the green light for the State Railway of Thailand (SRT) to call tenders for the construction of the 13-billion-baht Bang Sue-Taling Chan electric train route, expected to be completed in three years. Transport Minister Theera Haocharoen said the calling of bids for the 15km-long rail line would most likely take place at the end of next month or in early July.

If all goes according to plan, a contractor should be hired officially by next January.

The project's construction should start in February and be completed in August 2010, he said.

A bidding contest to find a contractor for the longer route (Bang Sue-Rangsit) is likely to be called in January, and the contractor should be known by August next year.

Its construction should be completed in August 2012.

In addition, the Transport Ministry is preparing details of the Purple Line from Bang Sue to Bang Yai.

The project should reach the cabinet in July.

Yesterday, the cabinet also agreed to increase the budget for the construction of the second railway line to the Eastern Seaboard.

The SRT sought an increase in the budget from 5.23 billion baht to 5.85 billion baht for the 74km-long Chachoengsao-Si Racha-Laem Chabang line.

Acting SRT governor Bancha Khongnakhon said an increased budget was needed so that additional structures and fences could be erected along the route, which is expected to be completed in 2010

[TokyoT]

Gov't spending:

http://www.bangkokpost.com/News/23May2007_news02.php

MASS TRANSIT BANG SUE-TALING CHAN RAILWAY

Go-ahead given for B13bn city train line

PRADIT RUANGDIT

I am not so sure what expansion of the mass transit system has to due with proving the economy in Thailand is in crisis or not?

It is fairly common for countries to try and spend their way out of difficult times by ratcheting up government spending programs. And on the flip side a solid economy leaves plenty of money for government programs.

I am glad to see that the expansion should happen though.

[Steely Dan]

As I've said many times before, we all, well at least most of us, deeply hope there will be an economic crisis in Thailand in the near future.

Ah, now we're getting to the nub of it. Yes of course it would be good to go back to the days of 25 baht to the dollar and an end to the constant changes to visa and work permit regulations, and yes the Philipines was also an option; the girls are also cute and can usually muster more than a 'Hello, Welcome'. You also rightly point out other reasons for our sublimated desire for a crisis - Yes owning Condo's is one thing, owning land and running a business are infinitely more attractive, besides which you have to deal with state protectionism and profiteering customs officers to run many businesses I would otherwise be attracted to. So yes, bring it on! Let's have a crisis and in the aftermath who knows? Maybe democracy, WTO membership, the right to buy land and 25 baht to the $.

Edited May 24, 2007 by Maestro
Quoted text reduced. Unnecessary to quote the entire post.

[cclub75]

Done. -50 points.

Thailand's Central Bank Cut Key Rate for Fourth Time This Year

http://www.bloomberg.com/apps/news?pid=206...&refer=home

The perfect non-event so far on the currencies front.... THB doesn't move.

As for the effects on the economy, I like these comments :

``So far, neither the rate cuts nor the promise of added fiscal spending have been able to stop declines in consumer and business confidence,'' said Aathira Prasad, an economist at DBS Group Holdings Ltd in Singapore. Confidence will continue to slide ``until political uncertainty is cleared up.''

The central bank's ``done enough damage to the investment environment and consumer sentiment that it will take more than the interest rate cut to really turn it around,'' said Sean Callow a senior currency strategist at Westpac Banking Corp. in Singapore.

Confidence is not driven -only- by interest rates. Confidence is highly political. There is no stability in Thailand right now. Therefore, it's unlikely to see a recover on short and mid term.

[Jai Dee]

Thai Chamber of Commerce confident that BoT's reduction of interest rate will help stimulate the economy

President of the Thai Chamber of Commerce, Pramont Sutheewong (ประมนต์ สุธีวงศ์) is confident that a 0.5% reduction of interest rate declared by the Bank of Thailand (BoT) would help stimulate the country's economy and people's purchasing power.

Mr. Pramot says the lowering of interest rate would attract entrepreneurs to expand their businesses, leading to a brighter economy.

The President of the Thai Chamber of Commerce views that the government’s measures will revive the national economy.

Mr. Pramot informs that the private sector will have in-depth discussion concerning the direction of economy next week.

Source: Thai National News Bureau Public Relations Department - 23 May 2007

[cclub75]

President of the Thai Chamber of Commerce, Pramont Sutheewong (ประมนต์ สุธีวงศ์) is confident that a 0.5% reduction of interest rate declared by the Bank of Thailand (BoT) would help stimulate the country's economy and people's purchasing power.

Mr. Pramot says the lowering of interest rate would attract entrepreneurs to expand their businesses, leading to a brighter economy.

Source: Thai National News Bureau Public Relations Department - 23 May 2007

Mister Pramot is a funny fellow...

Yesterday, the Thai Chamber of Commerce was asking for a cut of 75 basis point, or even 1 %.

The Thai Chamber of Commerce asked the Monetary Policy Committee for cutting an interest rate for 75 basis points to 1 percentage points today in order to stimulating domestic slumping consumption and stem the baht's continued strength.

http://nationmultimedia.com/breakingnews/r...newsid=30034876

I guess, after a good night of sleep and the move of the BOT today, he changed his mind.

Anyway, -50 or -75 or even more... The effects will be limited. Even with cheap money, not many people are ready to borrow to invest with such political uncertainty. Plus the problem of solvability that is real.

You know the word... "You can lead a horse to water but you can't make it drink"

[bingobongo]

more reality.......even the locals are net sellers.......Thailand will be a place to invest, just not right now......

23-05-2007: Buy Malaysia, Indonesia, avoid Thailand, says CLSA

Investors should steer clear of Thailand and Taiwan, which are riddled with political uncertainty, Christopher Wood told Reuters. He has a "zero" weighting on Thailand for his relative return portfolio, even though the index is at a five-month high.

"I'll get more bullish on Thailand if I see more local investors buying the market. Right now, all you see are locals selling," he said. "But if local confidence comes back, then there'll be a huge buying opportunity."

http://www.theedgedaily.com/cms/content.js...e70400-f91929f9

Edited May 23, 2007 by bingobongo

[LaoPo]

The Thai Economy Is In Crisis......Yes or No..?

22 pages down the road with more than 300 replies so far.

What surprises me is that most posts are Thailand-inwardly looking as if Thailand could survive on it's own.

What's worrying me more is the situation in China and especially the stock-market situation. Every day millions and millions of ordinary people bet their money on the stockmarket which basically consists of "A" and "B" shares and to a lesser extend the "H" and "N" shares*

The situation is absolutely crazy at the moment and is becoming very........VERY dangerous for the entire World-economy and the Asian region in particular.

People are betting all of their life-savings... (some) people sold their houses, their businesses and just play -with ALL of their money- at the stockmarket. (I know this first hand).

One of the main problems is the enormous dfference in prices between the "A" and "B" shares, the other is the sky-rocketing prices in "B" shares. Everyone is following the other (friends, collegues and family who ALSO buy and put their savings into the stockmarket).

In the past months a lot of people made a lot of profit and it became like an influenza virus...it's spreading and spreading and if you don't play, you're a fool...

I saw the same in 1999/2000 when this virus hit the Western world and we all know what happened.

What's MORE worrying is, that once the Bubble bursts the shock will be felt throughout the entire (financial, business and private) world and also Thailand in particular.

Important financial institutions are already warning that the bubble will burst and it's not IF but WHEN this will happen

2 of the most influential people warned also; have a look:

China stockmarket worries Li Ka-shing (Asia's richest man/investor):

http://www.iht.com/articles/2007/05/17/business/yuan.php

Greenspan sees dramatic drop in Chinese stocks

http://today.reuters.com/news/articlenews....C1-ArticlePage2

* What Exactly Are Chinese A & B Shares

http://www.learnmoney.co.uk/advice/advice-43.html

My advise?

Watch your back; watch your money, stocks and investments on a daily basis; especially also in Thailand and look further than -just- the Thai borders.....

LaoPo

[Steely Dan]

What's worrying me more is the situation in China and especially the stock-market situation.

Yep, China is in the grip of an undoubted mania. Last year some middle eastern bourses crashed 50% in a mattter of weeks. This will happen in China in the very near future and you need to be Judy Garland if you don't think Thailand will get caught up in the meltdown.

Edited May 24, 2007 by Maestro
Quoted text reduced. Unnecessary to quote full post.

[Naam]

Yep, China is in the grip of an undoubted mania. Last year some middle eastern bourses crashed 50% in a mattter of weeks.

comparing some flysh*t sized middle eastern stock markets where a handfull of stocks make and break the market with the SSE is quite farfetched. of course i agree that a market that more than doubled in a year and quadrupled within two years is something quite unhealthy.

[Steely Dan]

Yep, China is in the grip of an undoubted mania. Last year some middle eastern bourses crashed 50% in a mattter of weeks.

comparing some flysh*t sized middle eastern stock markets where a handfull of stocks make and break the market with the SSE is quite farfetched. of course i agree that a market that more than doubled in a year and quadrupled within two years is something quite unhealthy.

The Nasdaq was above 6000 in the year 2000 and lost over 70% of it's value. When a bubble exists size is no protection, indeed the bigger they are the harder they fall.