Chart, GDP : economy slows sharply in Q3, bad omen for Q4

GDP grew 4 % in Q3 (compared to Q3 2007), after 5,3 % in Q2 and 6 % in Q1.

(Source NESDB)

Here is the chart with 3 components of GDP.


Private consumption ? A slight increase, thanks probably to the various “stimulus” plans from the gvt. Artificial.

Government expenses ? Crunched. And “Gross fixed capital formation” (= investments) going down non stop, that’s a worrying point.

Let’s go deeper now… with the contribution of each components to the GDP growth (to the 4 % we have).


(source the NESDB report)

-we see that the net exports (exports-imports) is going down and even reached 0 on Q3. That shows the imbalances… the trade and services balance is decreasing.
What was the main engine for the growth in Thailand… has stalled !

I mean… women and children first… this reading stinks. And the point is : Q4 is going to be worse, with lower exports (it has started, look at october data).

-on the other side, we see that inventories contributed to the growth by… 2,7 points ! Put in another way : two third of the GDP growth we had in Q3… were caused by… “change in inventories” !

There is no discussion : the GDP report for Q3 is not good. But like one of my readers said : at least, we have a positive…. growth ! πŸ˜‰ Many other countries are already in recession.

It’s true, albeit it shouldn’t be a source of real comfort.

Q4 is going to be worse because we won’t have much more government spendings (the gvt is frozen by the political crisis)… I doubt private consumption is going to explode (on the contrary)… and there is no doubt that investments will go down again… and exports start to feel the fallout of the crisis.

Therefore, it’s a certainty, Q4 is going to be worse than Q3.

Furthermore, with such readings, and if we look at the global environment and at the political situation in Thailand… you can already book it : 2009 is going to be a zombie year, as far as GDP growth is concerned.

By the way, the NESDB has revised down (you bet !) its forecast of economic growth for next year : 3-4 % from a surreal 4-5 %. πŸ˜‰
But it’s still a long way to reality. 3 to 4 % would be miraculous.

[reminder to the distracted readers : when we calculate the “growth” of GDP year-on-year, it’s always on the basis of the “real GDP” (= at constant prices) not the “nominal GDP (= at current prices)].

4 Responses to “Chart, GDP : economy slows sharply in Q3, bad omen for Q4”

  1. 1 MSB 25 November 2008 at 4:46 am

    What you say is true but it needs to be put in context. 09 is a “zombie” year as you put it, but not just for THailand and in fact may be worse for other countries. Thailand may even not enter recession.

    Zero net exports shows how bad the rest of the world is, not how bad Thailand is; import growth is still accelerating.

    The contraction of growth is perhaps milder than expected and private companies continued investment (up 5.4%). This probably explains the increase in inventories.

    The real damage to the economy is from the PAD and anti-gov protests. Gov consumption fell 2.9% in Q3 continuing a trend all year. While most gov’s in the world are working on stimlus packages, the Thai cabinet can not even sit down in the same room cos the chairs are occupied buy the yellow shirts…

  2. 2 thaichris 25 November 2008 at 9:07 am


    Aux contraire. The PAD adds to the GDP. Approx. 5’000 gather every evening for more than 180 days (my wife spends about 1’000 Bath per day (highway toll, diesel, food, fancy souvenir’s, etc.). Let’s assume average spending is 500 Bath. This makes 2.5 mio per day or 450 mio over the last 6 month. Thats not too bad. Street vendors around government house report 4 time the revenue of normal days. PAD is definitivaly a positive economical factor.

    On the other hand, the government focus on ammendent of the constitution instead of solving the economy. I think, this is the major reason why the governemnt spending went down.
    And yes, I forgot: Due to the 6 month free electric, free water, free bus, benzin with no tax there is no money in the governments coffins. Maybee Mr.T. and his ex.wife pay the taxes for the selling of AIS and for the ‘presents’. This would realy help.
    One more reason for missing ‘mega projects’ might be, that the global companies don’t pay any ‘tea money’ in these days due to SOX and other new regulations and laws (have a look at the SIEMENS cases in Germany).

    And one more thing: The hard working middle class in Thailand is no longer willing to accept the ‘monopolizing’ of business by the TRT-PPP clique. That is why they join PAD to fight against this government.

  3. 3 MSB 26 November 2008 at 3:57 am

    lol… “hard working middle class”

    dream on…..

  1. 1 q3 in the shitter and the PAD needs to go at The FARANG Speaks 2 Much Trackback on 26 November 2008 at 4:25 am

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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.

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