Archive for October, 2007

King’s health : an important detail ?

The King assigned Her Royal Highness Princess Maha Chakri Sirindhorn to work at his command.

This sentence closes the article of TNA (thai official news agency), reporting the 19th official statement about the King’s health, issued by the Bureau of the Royal Household.

The medical statement in itself is a repetition of the previous (“The King had been able to move around more as he wished. He could walk longer with the support of a walker and enjoyed a good appetite“).

However, the sentence about the Princess is new.

FDI : “down from 8 to 5 billions USD”

My article on Foreign Direct Investments was right on the spot. 😉

Today, “the central bank chief revealed the foreign direct investment in the first eight months of this year totaled US$5 billion, down from $8 billion in the same period last year, since no commercial banks had raised their capital in that period.” (Bangkok Post)

I will update my chart with the figures of Q3 (not available yet).

But apparently, it seems that the third quarter won’t be really good…

BOT : “a secondary inflationary blow could hit next year”

South Africa = 7,2 %, China = 6,2 % in september, Vietnam = 8,8 %… What I’m talking about ? Inflation of course.

Emerging countries are suffering from inflation.

And what about western countries ? Same. “The inflation rate in the 13-nation euro area rose to 2.6 percent from 2.1 percent in September, the European Union’s statistics office in Luxembourg said today” (Bloomberg).

The trend is global.

But apparently, Thailand thought it could avoid this plague… Like France was thinking in 1986 that the radioactive cloud from the Chernobyl’s accident would stop… at the border with Germany…

The situation is changing. Fast.

And the BOT starts to show at last some common sense.

Thailand is bracing for inflationary pressure next year following hikes in global oil prices, which are pushing up the cost of products and wages, the Bank of Thailand warned yesterday.

Central bank senior director Amara Sriphayak said the BOT feared a secondary inflationary blow would hit the Kingdom next year. The first-round is expected to occur after product manufacturers raise their prices due to an increase in oil-related production costs. After domestic demand improves and pushes up the economic-growth rate, manufacturers tend to hike wages, which would create a second impact. ” (Nation)

However, I disagree with the cause of the second impact… Improvement of demand, higher growth, and then hike of wages ? I think the BOT is reading too many classic economy books.

Where is the growth ? Where is the improving domestic demand ? !

It’s very likely that the BOT misunderstands the situation : we are heading toward a stagflation.

Weak growth and inflation.

King’s health : 18th update

18th official statement, since october 13 (when the King was hospitalized).

The team of Royal Physicians reported that the follow-up blood tests of His Majesty the King showed that the inflammation of his large intestine has now returned to normal and the blood chemistry is within normal limits.

The monarch’s general condition is good, said the statement. ” (TNA)

I think this statement is the first one saying that -seemingly- the 2 medical problems are solved.

The first one was a cerebral ischemia (solved after one week), the second an intestinal infection (last week antibiotics treatements were stopped, and today blood analysis are normal).

And furthermore, the general condition is good.

So… we could, we should have soon a good news : when the King will be able to leave the hospital.

Luxury hotels : occupancy rate down… and looming glut in the market

A new warning for the luxury hotel business (after this one), a new proof of a nasty “cisor effect” for 2008.

We expect that overall occupancy rates for Bangkok’s four- and five-star hotels will only be 70 per cent in 2007 compared to 75 per cent in 2006,” said Navaphol Viriyakunkit, head of research at CB Richard Ellis Thailand.”

Hotel prospects for 2008 looked worse because of a looming glut in the market.

The property consultant projected that more than 2,000 new four- and five-star hotel rooms would be completed in Bangkok in 2008, raising the supply by 24 per cent from 2007.

Thailand’s tourist arrivals in 2007 have been disappointing. During the first eight months of this year, 9.59 million tourists visited the kingdom, up 2.3 per cent from the same period in 2006 but well below the more than 10-per-cent increase registered in 2006. ” (Bangkok Post)

NPL are up on Q3, and forecast for GDP growth to be revised

The banking system’s non-performing loans increased in the third quarter in line with the economic slowdown, according to the Bank of Thailand. The NPLs, after provisions, totalled 260.4 billion baht, or 4.43% of total loans in the third quarter, slightly up from 254.2 billion baht, or 4.40%, in the second quarter.” (Bangkok Post)

Meanwhile, the principle of reality is hurting. The Fiscal Policy Office announces that Thailand’s economic forecast will be revised on November 23, when the recent oil price hikes as well as global economic conditions will be taken into account“.

He said that “Thailand’s gross domestic product will be slashed 0.2 percentage point for every US$1 increase in the Dubai crude oil price. Meanwhile, the $1 increase will also push up inflation by 0.3 percentage point.” (Nation)

Last week, on october 19, the Bank Of Thailand has actually INCREASED its GDP forecast (Bangkok Post) , from 4 /5 % to 4,3 / 4,8 % !
It’s funny how things can change in one week… 😉

To the credit of BOT (sometimes I’m too harsh with them), they said that “the new forecast was based on an assumption that Dubai oil prices would average $68 per barrel in the fourth quarter and $64.6 per barrel for 2007.

Which might be actually totally… irrealist, as people start to understand… Oil is expensive today. It will remain expensive on whole Q4 (it’s the winter in US and Europe).

Today the average Dubai crude is at… 83 USD per barrel… (look here for the different price per month of delivery).

So long BOT…

Plot against PPP : the Junta angry about the “leak”

The scandal of the plot against PPP (read here) continues to reverberate…

And create for the Junta a ridicule situation.

The chairman of CNS said today :

Those who leaked what are claimed to be classified official documents of a state agency and released them to the public are “guilty according to law”

-but “related agencies are checking the authenticity of the documents” (they were authentitfied by the Prime minister himself already…)

-and he denies :”CNS does not hope to suppress an old power clique” (a huge lie, because it’s exactly the content of those documents)

-and for him, well, a new coup is still possible ! “When asked if there is going to be another coup if PPP wins the upcoming election, ACM Chalit said it is “unlikely” but refused to rule it out.” (Bangkok Post)
Another democracy lover in uniform shows is true face.

Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.