webfact Posted November 26, 2013 Share Posted November 26, 2013 Prolonged crisis could hit exports, lead to deflation, Commerce warnsPetchanet PratruangkraiThe NationGDP growth could be dragged down to 3 per cent, FPO saysBANGKOK: -- Thai exports could shrink this year and face further difficulty next year, while inflation could come in lower than expected - or even tip over into deflation - if the political turbulence eats away at the confidence of foreign traders and domestic consumers, the Commerce Ministry said yesterday.Meanwhile an economist and a top banker said the escalating tension could pull down this year's economic growth to just 3 per cent or even less, from 3.7 per cent forecast just recently.To raise overseas traders' confidence, the ministry has instructed its trade counsellors to explain to them as a matter of urgency that the current political problems will not affect the trading and manufacturing sectors.The government also plans to explain the political situation to ministers from countries around the globe during the upcoming World Trade Organisation summit from December 3-6 in Bali. Commerce Minister Niwatthumrong Boonsongpaisan will represent the government at the summit.Srirat Rastapana, director-general of the Commerce Ministry, said exports this year could contract - compared with the previous projection of 1-per-cent growth - because of both internal and external problems."Traders could lose the confidence to order goods from Thailand if the political mess is prolonged. So far, some overseas traders have started to ask about the situation in Thailand and questioned whether exporters will face shipment problems," she said. In the first nine months of the year, exports grew by just 0.05 per cent. The ministry will today announce the export figures for October and the first 10 months.Besides instructing trade counsellors to reassure major overseas traders, she said it was hoped that Thailand would find a solution to the political conflict soon so that the impact of the crisis could be minimised.However, Srirat expressed concern that if the situation were to be prolonged, it would affect Thai shipments next year, which are currently targeted to expand by 5 per cent.The ministry's projection is based on assumptions about key factors such as the exchange rate, global growth and oil prices, as well as internal political stability.Another potential effect of an extended crisis, she warned, was that the Consumer Price Index could soon fall, or even enter a period of deflation, as the public would lose the confidence to spend amid the turbulence. In the first 10 months of the year, inflation came in at 2.27 per cent, within the ministry's projected range of 2.1-2.6 per cent.However, in October alone, year-on-year inflation was just 1.46 per cent.Meanwhile, foreign-exchange traders said that after anti-government mobs occupied official buildings on Monday and Prime Minister Yingluck Shinawatra broadened the Internal Security Act to cover much of Greater Bangkok, the baht had weakened to exceed 32 against the US dollar, as investors became more concerned that political unrest would be prolonged. The baht had already depreciated for six days.Foreign investors yesterday sold Bt5.23 billion worth of bonds, as well as Bt1.45 billion worth of stocks. Such moves have also had an impact on the baht. The Thai currency opened yesterday at 32.05-32.07 before weakening to Bt32.10. By 4.30pm, it had appreciated slightly to 31.99-32.00. Traders on the Stock Exchange of Thailand, meanwhile, seemed unfazed by the latest political developments. The SET Index rose 0.43 per cent to close at 1,358.69.Impact on budgeted expendituresHowever, Ekniti Nitithanprapas, deputy director-general of the Finance Ministry's Fiscal Policy Office (FPO), said that if the occupation of key state agencies' buildings were to last more than a couple of weeks, it could hurt the economy, especially in the current quarter. The occupation could have some impact on budgeted state expenditures.For the current fourth quarter of the calendar year, the FPO set a target of disbursing at least 27-28 per cent of the government's total budget for the 2014 fiscal year. So far 15 per cent of the budget has been spent. If the government fails to reach the target, the economy in this quarter is unlikely to expand much from the third quarter. If so, gross domestic product might end the year with growth of only 3 per cent, down from 3.7 per cent recently forecast by the FPO.The office will revise its GDP growth forecast again next month by taking into account the political instability, the upcoming October export data, and some tourism data.Ekniti made the remarks yesterday at the seventh ThaiPublica Forum on the topic "The Thai Economy and Long Sustainable Growth …?" Korbsak Phutrakul, executive vice president of Bangkok Bank, said at the same forum that the political situation had already severely affected the economy. If it drags on much longer, GDP growth might be lower than 3 per cent this year and less than 4 per cent next year. In the past, similar political turmoil lowered growth by 1-1.5 percentage points, he said.-- The Nation 2013-11-27 Link to comment Share on other sites More sharing options...
ChrisY1 Posted November 27, 2013 Share Posted November 27, 2013 This all sounds totally confusing........have to wonder if any of them know what they're talking about....pure spin and fantasy.... I doubt they have any concrete figures to work with!....Bookkeeping PT style.....make it up as we go! Link to comment Share on other sites More sharing options...
Thai at Heart Posted November 27, 2013 Share Posted November 27, 2013 (edited) Deflation? What are these idiots going on about. Are they trying to crash the baht? Edited November 27, 2013 by Thai at Heart Link to comment Share on other sites More sharing options...
waza Posted November 27, 2013 Share Posted November 27, 2013 Prolonged crisis could hit exports, lead to deflation, Commerce warns Why is this bad, one would have thought that a decrease in the cost of living would benefit the Thai population? "Meanwhile an economist and a top banker said the escalating tension could pull down this year's economic growth to just 3 per cent or even less, from 3.7 per cent forecast just recently." Too late the Thai GDP is already forecast to drop to 3% or worse without any impact from the protests, due to irresponsible fiscal management by the PTP government....... Nov. 26 --The Asian Development Bank (ADB) is expected to cut its GDP growth forecast for the Thai economy this year to around 3%, says Luxmon Attapich, senior country economist for ADB Thailand. http://www.hispanicbusiness.com/2013/11/25/adb_to_lower_gdp_view_to.htm Gross domestic product grew 2.7 percent year-on-year, down from the revised 2.9 percent expansion logged a quarter ago. The rate was forecast to improve to 3 percent from the second quarter's originally estimated 2.8 percent. http://www.rttnews.com/2225522/thai-gdp-growth-slows-unexpectedly-in-q3.aspx Moreover........... "the baht had weakened to exceed 32 against the US dollar, as investors became more concerned that political unrest would be prolonged. The baht had already depreciated for six days." This is good isn't it as export will be cheaper stimulating demand? So is this just more PTP spin or are they really concerned about something? They give us a hint.......... "Foreign investors yesterday sold Bt5.23 billion worth of bonds, as well as Bt1.45 billion worth of stocks. Such moves have also had an impact on the baht. The Thai currency opened yesterday at 32.05-32.07 before weakening to Bt32.10." Ah I think I am getting the picture now, a devalued baht will make debt more expensive, not very good when you are trying to borrow 2.2 trillion baht for infrastructure, 350 billion baht for water management and 77 billion baht to shore up the rice scam. On top of that if foreign investors are deserting Thai bonds and stocks then who will buy the bonds that the Public Debt Management Office will issue for the Bt75 billion BAAC bailout and the rest of the Thai banks will issue to fund these loans? 1 Link to comment Share on other sites More sharing options...
PaullyW Posted November 27, 2013 Share Posted November 27, 2013 Hmmmmmm. So, yet again, we have foreign traders and money AND tourism at the forefront of the concern. So much for that nationalism that Thailand needs no foreigners or foreign money. Link to comment Share on other sites More sharing options...
PeterSmiles Posted November 27, 2013 Share Posted November 27, 2013 I bet next they gonna blame the protests for the huge stocks of rice they can't sell. Link to comment Share on other sites More sharing options...
tingtongteesood Posted November 27, 2013 Share Posted November 27, 2013 A bit of deflation would be good, the prices of some things have risen over 50% over the last 3 years. Problem is, if costs go down you can guarantee the prices charges will not follow. Link to comment Share on other sites More sharing options...
tingtongteesood Posted November 27, 2013 Share Posted November 27, 2013 Trying to blame the collapsing economy on the protests instead of facing the truth that bad management by the government and corruption especially the rice scam is dragging the whole country down the crapper ! Link to comment Share on other sites More sharing options...
rubl Posted November 27, 2013 Share Posted November 27, 2013 "Prolonged crisis could hit exports, lead to deflation, Commerce warns" Well with figures like below it would seem even without a prolonged crisis things are not as they should: Exports for October were down 0.67% on last October, with a value of US$19.39 billion, the Ministry of Commerce reported on Wednesday.Imports also dropped 5.37%, with a total worth of $21.16 billion, for a trade deficit of $1.77 billion, the ministry said.Exports over the first 10 months of the year totalled $191.53 billion, down 0.02% on the same period last year. Imports over the period rose 1.40% to stand at $210.97 billion, leaving a total trade deficit of $97.44 billion, it said. Link to comment Share on other sites More sharing options...
tezzainoz Posted November 27, 2013 Share Posted November 27, 2013 Those of us who have lived in Thailand for a long time know when things not sell, Thai always believe they must be selling to cheap so people think they are no good so solution is to raise the price Then people thing they are of a better quality and buy Link to comment Share on other sites More sharing options...
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