webfact Posted October 20, 2020 Share Posted October 20, 2020 Thai economy faces severe shocks, slow recovery - central bank chief FILE PHOTO: Thailand's central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva/File Photo BANGKOK (Reuters) - Thailand's economy faces severe shocks from the coronavirus pandemic and a recovery is expected to take at least two years to get back to pre-pandemic levels, the country's new central bank governor said on Tuesday. Economic problems can be solved but it will take time as there are "no magic bullets", Bank of Thailand Governor Sethaput Suthiwartnarueput told a briefing. The country had a strong external position to withstand any shocks, said Sethaput, who took office this month. Southeast Asia's second-largest economy could contract a record 7.8% this year, with the important tourism sector badly hit, the central bank has predicted. (Reporting by Orathai Sriring, Kitphong Thaichareon and Satawasin Staporncharnchai,; Editing by Ed Davies) -- © Copyright Reuters 2020-10-20 - Whatever you're going through, the Samaritans are here for you - Follow Thaivisa on LINE for breaking COVID-19 updates 1 Link to comment Share on other sites More sharing options...
Popular Post Maverell Posted October 20, 2020 Popular Post Share Posted October 20, 2020 What I cannot understand is why the 'stimulus' packages are so measly, especially as they say they have huge foreign currency reserves? 12 1 Link to comment Share on other sites More sharing options...
bkk6060 Posted October 20, 2020 Share Posted October 20, 2020 Wow, I had no idea Mr. Sethaput thank you. Good luck in your new position. 2 Link to comment Share on other sites More sharing options...
Popular Post scubascuba3 Posted October 20, 2020 Popular Post Share Posted October 20, 2020 I thought tourism wasn't important? where are those people that kept saying that 3 5 Link to comment Share on other sites More sharing options...
Popular Post PatOngo Posted October 20, 2020 Popular Post Share Posted October 20, 2020 20 minutes ago, webfact said: Thailand's economy faces severe shocks Well that's shocking news! Will the rich hiso's be affected????? 3 2 Link to comment Share on other sites More sharing options...
Popular Post Misterwhisper Posted October 20, 2020 Popular Post Share Posted October 20, 2020 And that, ladies and gentlemen, is why we NEED highly paid experts! Nobody but they would be capable of coming up with such earth-shattering revelations. I mean, who else could possibly have observed that Thailand's economy is in severe shock and that its recovery is going to be painfully slow. But who knows, perhaps those 41 messiahs that are supposedly arriving today will be turning things around in an instant and save the nation from certain doom.. ve 8 2 Link to comment Share on other sites More sharing options...
Popular Post Walker88 Posted October 20, 2020 Popular Post Share Posted October 20, 2020 (edited) I suspect the decline is going to significantly exceed -7.8%. Just the announced falls in int'l tourism and exports suggest at least a 10% decline. As export contracts mature, what is the likelihood they will be renewed when business everywhere is down and many nations are looking to 're-shore' production? Particularly concerning are NPLs, which were low but the debt-servicing amnesty masked the true extent, and the ongoing collapse of many businesses says the situation is not improving. Another concern is that Thai corporates have been averaging 14% yearly increases in debt (bond issuance) over the last 10 years, when GDP growth has been barely positive. That's inefficient. Household debt is now at a record, and that doesn't count 'private borrowings' aka loan sharks. As for FX Reserves, that is a confusing concept, because it isn't as if those reserves are just sitting in a box somewhere. They're fungible and already placed somewhere at work. Most are funding the federal budget. They are not just available to be tossed at newly arisen problems. Covid-19's impact has been underestimated worldwide ever since it began. "Solutions" have all been to issue more debt, in a world awash in debt to the tune of $270,000,000,000,000. Obviously most debt will never be repaid, but the system depends on the illusion that servicing the debt is possible. With worldwide GDP falling as debt is skyrocketing, that illusion of servicing the debt might evaporate, as there will be insufficient cash flow to do it. Edited October 20, 2020 by Walker88 17 1 Link to comment Share on other sites More sharing options...
Matzzon Posted October 20, 2020 Share Posted October 20, 2020 37 minutes ago, PatOngo said: Well that's shocking news! Will the rich hiso's be affected????? Yes, they will be affected. First they will see less buying power from the people, that leads to lesser profit and income. Many are also working with international affairs, and they will also feel the effect of the global pandemic and closings of many businesses world wide. However, they are of course in a better position. Just take the CP-guy as an example. even as he distributed masks and gave away he invested in the right places and actually gained ground this year. So, it is like always. Where ever you are in the world, the ones that are or has been successful will have money. The ones that have money will have a better position to withstand a negative trend than the ones with no money. Nothing specific about Thailand. This is something that will be seen in a global perspective. 2 Link to comment Share on other sites More sharing options...
Popular Post robblok Posted October 20, 2020 Popular Post Share Posted October 20, 2020 50 minutes ago, scubascuba3 said: I thought tourism wasn't important? where are those people that kept saying that Obviously its not that important as its only a 7.8% decline while tourism is almost dead. So it has less influence then what the moaners said it would have. Nobody sees tourism as not important, just how important and how much impact it has is debateable. Just like those people thinking that expats are keeping Thailand afloat ???? 2 2 Link to comment Share on other sites More sharing options...
Maverell Posted October 20, 2020 Share Posted October 20, 2020 37 minutes ago, Walker88 said: As for FX Reserves, that is a confusing concept, because it isn't as if those reserves are just sitting in a box somewhere. They're fungible and already placed somewhere at work. Most are funding the federal budget. They are not just available to be tossed at newly arisen problems. So in other words they are not reserves? 1 Link to comment Share on other sites More sharing options...
scubascuba3 Posted October 20, 2020 Share Posted October 20, 2020 14 minutes ago, robblok said: Just like those people thinking that expats are keeping Thailand afloat ???? I don't think anyone thinks that but still people keep repeating it 2 Link to comment Share on other sites More sharing options...
Popular Post Walker88 Posted October 20, 2020 Popular Post Share Posted October 20, 2020 13 minutes ago, Maverell said: So in other words they are not reserves? It's a definition, just one that can be confusing to non-economics types, because the term suggests a pile of unused, readily available funds, which they are not. 3 Link to comment Share on other sites More sharing options...
sammieuk1 Posted October 20, 2020 Share Posted October 20, 2020 There is one magic bullet all resign and have free and fair elections after bringing the money back ???? 1 1 Link to comment Share on other sites More sharing options...
Popular Post Justgrazing Posted October 20, 2020 Popular Post Share Posted October 20, 2020 (edited) 2 hours ago, webfact said: Economic problems can be solved but it will take time as there are "no magic bullets", fair to say it's pretty shot up and will need a box full of magicians to pull out of the hat , not the current clowns tugging the strings .. Edited October 20, 2020 by Justgrazing Sp 4 1 Link to comment Share on other sites More sharing options...
Popular Post yellowboat Posted October 20, 2020 Popular Post Share Posted October 20, 2020 2 hours ago, webfact said: "no magic bullets" Not when there is protectionism and special interest. The needs of the 1% are holding back the Thai economy. Just ask any 20 year old who has been teargassed. 3 1 Link to comment Share on other sites More sharing options...
Popular Post klauskunkel Posted October 20, 2020 Popular Post Share Posted October 20, 2020 3 hours ago, webfact said: Economic problems can be solved but it will take time as there are "no magic bullets" Yes, there are magic bullets. They are loaded into magazines on average every 10 years by an army chief who feels the need to solve his economic problems. 5 Link to comment Share on other sites More sharing options...
anchadian Posted October 20, 2020 Share Posted October 20, 2020 We've heard it all before. Link to comment Share on other sites More sharing options...
Popular Post JusticeGB Posted October 20, 2020 Popular Post Share Posted October 20, 2020 Meanwhile the Minister of Tourism and Sports has been explaining that the current student protests will have no effect on whether or not tourists decide to come to Thailand. 3 Link to comment Share on other sites More sharing options...
worgeordie Posted October 20, 2020 Share Posted October 20, 2020 Don't expect it to affect the THB......nothing does...???? regards worgeordie Link to comment Share on other sites More sharing options...
Cake Monster Posted October 20, 2020 Share Posted October 20, 2020 (edited) 4 hours ago, Maverell said: What I cannot understand is why the 'stimulus' packages are so measly, especially as they say they have huge foreign currency reserves? The " Stimulus Packages " are small because Money will be needed for the payments required on the Contracts for all the War Toys the Government have ordered. Edited October 20, 2020 by Cake Monster 2 Link to comment Share on other sites More sharing options...
hotchilli Posted October 20, 2020 Share Posted October 20, 2020 5 hours ago, webfact said: Thailand's economy faces severe shocks from the coronavirus pandemic and a recovery is expected to take at least two years to get back to pre-pandemic levels, To get back to pre-pandemic levels which was on the slide, how long to get back to what was once considered normal? 1 Link to comment Share on other sites More sharing options...
Isaan sailor Posted October 20, 2020 Share Posted October 20, 2020 Pretty simple formula: get the Baht down ASAP, or your economy tanks ASAP. 1 1 Link to comment Share on other sites More sharing options...
Popular Post ExpatOilWorker Posted October 20, 2020 Popular Post Share Posted October 20, 2020 8 hours ago, Walker88 said: As for FX Reserves, that is a confusing concept, because it isn't as if those reserves are just sitting in a box somewhere. They're fungible and already placed somewhere at work. Most are funding the federal budget. They are not just available to be tossed at newly arisen problems. The BOT is holding $254 billion in foreign reserves, but it was accumulated over the past 20 years and each time they added to the pile they have issued baht increasing Thailand's M2 money supply. So yes, in a way BOT have already spent or at least given credit for their foreign reserves holdings. They could of course sell foreign currency and buy baht, but that would make the baht crazy strong, the opposite of what is needed at the moment. 2 1 Link to comment Share on other sites More sharing options...
Susco Posted October 20, 2020 Share Posted October 20, 2020 2 minutes ago, ExpatOilWorker said: The BOT is holding $254 billion in foreign reserves, but it was accumulated over the past 20 years and each time they added to the pile they have issued baht increasing Thailand's M2 money supply. So yes, in a way BOT have already spent or at least given credit for their foreign reserves holdings. They could of course sell foreign currency and buy baht, but that would make the baht crazy strong, the opposite of what is needed at the moment. But with now 8 months of no foreign tourists, exports declining at a fast pace, and the military spending billions on foreign purchased toys, those foreign reserves must have significantly declined Link to comment Share on other sites More sharing options...
ExpatOilWorker Posted October 20, 2020 Share Posted October 20, 2020 10 minutes ago, Susco said: But with now 8 months of no foreign tourists, exports declining at a fast pace, and the military spending billions on foreign purchased toys, those foreign reserves must have significantly declined Nope, Thailand added $18 billion to its foreign reserves during the first 8 months of the year. $4 billion alone in August. 1 Link to comment Share on other sites More sharing options...
Chelseafan Posted October 20, 2020 Share Posted October 20, 2020 13 hours ago, Misterwhisper said: But who knows, perhaps those 41 messiahs that are supposedly arriving today will be turning things around in an instant and save the nation from certain doom. Sorry to be the bearer of bad news but its 39.... 2 Link to comment Share on other sites More sharing options...
onebir Posted October 20, 2020 Share Posted October 20, 2020 14 hours ago, Maverell said: What I cannot understand is why the 'stimulus' packages are so measly, especially as they say they have huge foreign currency reserves? The FX reserves are in foreign currency; to stimulate the domestic economy, they need to spend THB. If they used the FX reserves, they'd have to buy (and put upward pressure on the) THB. The central bank can just create THB deposits & buy bonds anyway . That gives commercial banks/govt treasury liquidity to go out and lend/spend. Link to comment Share on other sites More sharing options...
onebir Posted October 20, 2020 Share Posted October 20, 2020 14 hours ago, Walker88 said: As export contracts mature, what is the likelihood they will be renewed when business everywhere is down and many nations are looking to 're-shore' production? Some companies/countries explicitly want to re-shore production, but some may mainly want to eliminate China from their supply chains; Thailand could actually be a beneficiary of the latter. 1 Link to comment Share on other sites More sharing options...
WashingUpagain Posted October 21, 2020 Share Posted October 21, 2020 When the BoT prints money, it's actually a loan. The BoT is a private enterprise of wealthy individuals and banking cartels. The printed money is just a loan that needs to be paid back. The FX 'cash' they hold is being sold down for baht, hence the current strength of the baht. The strong baht is very much enjoyed by the Thai elite...the 0.1% 1 Link to comment Share on other sites More sharing options...
Grumpy John Posted October 21, 2020 Share Posted October 21, 2020 I looked up what makes up the FX reserves and it's a real mixture of products. Gold, bonds and cash not just cash. It should be possible to draw down some of the money to help the needy, but they don't want to help the needy which is pretty obvious. So millions of Thais will have to suffer because of the greed of a few at the top. 1 Link to comment Share on other sites More sharing options...
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