3 tidbits, but important and that cast a gloomy light on the global economy.
JAPAN
-Japan’s economy contracted last quarter, bringing the country to the brink of its first recession in six years, as exports fell and consumers spent less.
Gross domestic product shrank an annualized 2.4 percent in the three months ended June 30 after expanding a revised 3.2 percent in the first quarter, the Cabinet Office said today in Tokyo. (Bloomberg)
USA
-The United States federal budget deficit soared in July, pushed higher by economic stimulus payments and $US15 billion in outlays to protect depositors at failed banks.
The Treasury Department reported that the deficit for July totalled $US102.8 billion, nearly triple the $US36.4 billion deficit recorded in July 2007.
So far this year, the budget deficit totals $US371.4 billion, more than double last year’s deficit through the corresponding time period of $US157.4 billion. (AP)
EUROPE
Slowly but surely, all lights turn red for the Euro Zone… Spain, Italy… it’s a mess already. France is following.
German, French Economies Shrink as Spending, Investment Falter (during Q2) (Bloomberg).
And consider this news about the UK : U.K. unemployment rose the most in almost 16 years in July and wage growth slowed as the deepening economic slowdown drove companies to cut jobs and hold down pay. (Bloomberg)
What’s the link with Thailand ?
-If exports and consumption in Japan fell… then exports from Thailand to Japan are going to follow (Japan = 11 % of thai exports in june).
-the slowdown in Europe will also affect thai exports.
-As for the rebound of the USD, how could it be sustainable in such environement ? The financial and real estate crisis continues, with no pause, the budget deficit is expanding, the trade deficit remains super high (even though there is a slight improvement), the big “stimulus check” is now gone so the consumption is about to decline etc.
I mean to believe that Thailand could stay insulated is just a dream in the Thai Wonderland.
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