The BOT needs “more data” but sees an improvement of the confidence…

It’s only Christmas Day. Not April Fools’ Day. But we could wonder…

The economic sentiment and confidence in Thailand have begun to revive after the new government has been installed and is beginning to take action, according to the central bank.

Bank of Thailand (BoT) senior director for the domestic economy Amara Sripayak said the central bank continues to gather data on various segments of the economy to assess economic conditions in the fourth quarter of this year again because economic figures are so volatile.

However, many factors had begun to improve as could be witnessed by the lower interest rate, the oil price decline, and accelerated budget disbursements.

Given these factors, she said, domestic local economic performance might turn positive in the following period while the global economy would continue to slow.

Mrs. Amara viewed the budget disbursement would continue accelerating in a clearer manner.

Regarding export figures, the bank still needs more data from the Ministry of Commerce for consideration in due course.

She said the Fiscal Policy Office has projected that the economy in fourth quarter of this year would contract in comparison to the same quarter of 2007. (TNA)

They need “more data“. 😉 It’s really laughable.

And as usual, the wishful thinking… We have a new government (of very… high quality by the way), so it’s magic, confidence is back… It’s like a winning lottery ticket.

Sure oil could be soon cheaper than water… But many other indicators show that the thai’s economy is already suffering. And a contraction of GDP on Q4 seems already booked…

10 Responses to “The BOT needs “more data” but sees an improvement of the confidence…”


  1. 1 antipadshist 25 December 2008 at 6:37 pm

    yeah, right – confidence is back ! (NOT)

    need more data? Ok, here is some:

    Over 70% suffer from liquidity problems: poll
    http://nationmultimedia.com/2008/12/25/business/business_30091881.php

    “Commercial banks are also urged to ease credit approval measures and extend payment period for debtors”

    so, “Borrow more, spend more ASAP” scheme continues being pushed on…

    however apparently it doesn’t help much:

    SPENDING
    Festive spending grows only 3.5%
    http://nationmultimedia.com/2008/12/25/business/business_30091882.php

    Spending has increased at a lower rate, reflecting the fact that consumers are highly concerned about economic stagnation and their future income next year. Notably, the increase is attributable to the higher prices of goods and services, not demand.
    The survey showed that up to 50 per cent of respondents would reduce their purchases due to higher good prices

    so, after all, many people are not so stupid, huh ? 😉
    they understand that a lure of lower borrowing rates, easier credit approval and longer periods of paying back can’t change the simple fact: when prices are HIGH and grow even higher yet – DEBT will still remain a debt, and SPENDING MORE only increases it ! 🙂

    the HIGH prices reduce the VALUE of money – no matter how Korn and his buddies in banks are eager to lend more money to people and enthuse them to “spend more ASAP” .
    it is pretty much same everywhere in the world now.
    Thailand can’t possibly be any exception.

    but of course Korn doesn’t give up easily and would try hard to push on the “Spend more” doctrine (fake consumeristic economy), the very thing which screwed up US and the whole world with it:

    ECONOMY
    State banks must lend more to ease liquidity crunch
    http://nationmultimedia.com/2008/12/25/business/business_30091875.php

    “I believe that all state financial institutions are ready for loan extension. So far, their lending has been growing continually, exceeding 100 per cent of their deposits, against 95 per cent among commercial banks. If the loan extension continues, the economy would keep expanding. This is one of ad-hoc measures,”

    sure dude – keep them busy borrowing and spending !
    ala Bernanke / Paulson style.

    he is either totally moronic despite his Oxford education – or … shamelessly criminal. with full realization of WHAT actually vicious circle of borrowing / spending (= DEBT, hyperinflation) is gonna do to the country’s financial system and yet pushing on the idea of “more spending” – the only possible explanation I find is : Korn and those “on the top of pyramid” (food chain – big corporate bosses and puyais who hold the reigns of all the profitable businesses) are being helped to get richer.

    never mind that ordinary folks are being screwed up.

    in US it is said that this whole affair with bailouts and hyperinflation is a “controlled demolition” of the entire financial system one of results of which which (among many others) would be – destroying the middle class.

    then what similar tactic will do to Thailand, which economy isn’t so big as US ? won’t Thai middle class be similarly screwed? not to speak about poorer folks…

    Thailand as many other Asian countries has certain advantage of what is called “real economy” : producing actual goods and products. but instead of strengthening this advantageous side and investing into developing some local production and in such a way ensuring more jobs for people – Korn and Dems totally disregard it and try to act in very unscrupulous way of diminishing that advantage and bringing Thailand into same rut as all those Western economies !

    meanwhile the only sure thing about Thai Baht next year – is that nothing will be sure !

    Baht Faces Volatility Next Year
    http://nationmultimedia.com/2008/12/25/business/business_30091883.php

    It is unpredictable which direction the baht will head in next year, but exporters, importers and debtors have no doubt that it will be a phase of high volatility.

    well, that’s pretty assuring and gives investors a lot of confidence, huh ? 😀

    but wait ! perhaps this is “assuring ” :

    However, Usara Wilaipich, a senior economist at Standard Chartered Bank (Thai), predicted that a combination of external and domestic factors would lead to the baht’s depreciation, particularly in the first half of next year.

    The country’s widening current account deficit and capital outflows to correct the US financial crisis will weaken Asian currencies including the baht, she said.

    “We will hardly see any foreign direct investment next year. And we could scarcely see portfolio investment in the first half but there is a slight hope in the second half,” said the economist.

    The Kingdom’s current account deficit in 2009 is likely to be a result of sluggish exports and decline in tourism.

    Falling foreign demand from trading partners has already worsened export income and will continue for some time. And drop in foreign tourists due to the decline in their disposable income is eroding tourism revenue.

    Usara forecast that exports would contract next year and tourism income would drop by more than 50 per cent, largely due to the global economic downturn. This would widen the current account deficit, resulting in a weaker baht.

    Plummeting sales of the dollar due to lower foreign exchange incomes will lead to the baht’s depreciation. The pressure on the baht will be even more if import growth remains high or is higher than export growth.

    In the first 10 months of this year, the country has already posted a current account deficit of US$1.9 billion (Bt65.8 billion). The results are starkly in contrast with the BOT’s latest projection of a $1.4billion surplus for the entire year.

    The BOT will revise the forecast for the new year in January from the current estimated surplus of upto $3 billion.

    Atchana said political instability and the economic slowdown can eliminate foreign capital inflows and augment foreign outflows, leading to depreciation of the baht…

    “Foreigners acknowledge that the baht is overvalued, which will worsen the current account deficit rapidly and increasingly than expected. This would bring about speedy weakness of the baht,”

    volatility of the baht in 2009 will be much higher than in 2008, Atchana said.

    so, yeah – keep lending, make them borrow and spend more !
    also import more to increase the deficit. screw up Baht, which doesn’t even need to be screwed – US dollar (toxic waste) will do the job. destroy whatever remains of Thai economy and financial system!

    bravo, Korn ! -/

  2. 2 chinesethai 26 December 2008 at 3:44 am

    Korn has not even started his job. How could he as an opposition MP for 8 years have weakened Thailand’s advantage in agricultural production?

    In fact, throughout the last 8 years, it was Thaksinomics that had encouraged highly leveraged investment, debt creation, and consumerism. Thaksin himself once said openly that you won’t get rich unless you borrow. State-run banks like Krungthai and Government Savings Bank echoed his call by running non-stop TV ads, persuading people to borrow more. Never before had the countryside and a large number of city middleclass and poor been addicted to imported cellphones and electrical appliances. Never before had Thailand seen exponential growth of easy credits, both in number of lenders, mostly foreign companies, and in volume of household debts. Aeon, Easy Buy, GE, Citi have sprung up everywhere to become part of Thai consumer life. Never before had Thai consumers been able to cash out money by pledging their car ownership…express! (Car4Cash). The more the legal personal credit, the larger the number of loan sharks. Radio talk shows have become hotlines, “Suzy Orman” style, for people drowning in debts and their 10-20 credit cards maxed out.

    Domestic consumers are the economic cushion of last resort but their capacity has been destroyed. Let’s face the truth.

  3. 3 Bedwyr 26 December 2008 at 4:07 am

    “Given these factors, she said, domestic local economic performance might turn positive in the following period while the global economy would continue to slow.”

    Did you spot the magic word in there? Outstanding.

    I was interested as well is the statement that new government “has been installed and is beginning to take action”

    All I have noticed is that the new government has been installed and has done quite a lot of talking, not all of it very smart.

    I would have thought that ‘industry’ in Thailand would have noticed the political storm clouds continuing to gather. I doubt that Thaksin is finished just yet, but the stakes got quite a lot higher with the Palace encouraging nay insisting (see BP) on the formation of a Democrat government. “just a bit more pressure Jim, the tank can take it!” – until it can’t.

    The Govt PRD is going to be working overtime and their little spinning wheels are going to be laying rubber, hence the recent threat to the national TV channel about programs that do not ‘foster national unity’ (ie toe the government line).

    I am so lad Thailand can demonstrate its democratic credentials by pointing to the free Thai media…

    Bedwyr

  4. 4 Bedwyr 26 December 2008 at 4:18 am

    A little off-topic, perhaps a new thread examining what Abhisit said?

    When the time was right power would be returned to the people, he said. People needed to be realistic. There were several factors to consider and several pressing matters, including political reform. (As reported in today’s Bangkok Post)

    Two things in this that nobody has blogged about, perhaps because it was buried in the festive season.

    Firstly, Abhisit is clearly saying that power has been removed from the people with the establishment of the Democrat-led government. Stolen through the back door might be a better expression.

    Secondly he is saying that before power can be returned to the people, political reform must take place.

    So. What Abhisit is really saying is this:

    “Yes we stole power from the people. But we will return it – honest, and Newin won’t really mind facing an election at all. But first, what we need to do is a little political reform so we can make sure the dice is properly loaded according to the Palace formula before returning power to those stupid and uneducated peasants who didn’t go to Eton and Oxford, and who don’t really understand democracy like wot I do, even if I did steal power from the people.

    How very jolly.

    Bedwyr

  5. 5 antipadshist 26 December 2008 at 3:57 pm

    good point made by Bedwyr !

    I think that’s precisely what is the plan, and in fact has been since … Jan 2006 – when PAD and its masters has started their whole campaign. all events which followed are parts of the plan, which army and Dems follow pretty consistently.

    so, now I also feel that this is the next level – push forward the “New politics” or something like that while Dems are in power to make it look like everything what is planned to be accomplished is done in accordance to democratic process.

  6. 6 antipadshist 26 December 2008 at 7:16 pm

    looks like Baht will depreciate after all. because devaluation is a common thing nowadays and for many days to come.

    The Spectre of Competitive Devaluations
    http://www.asiasentinel.com/index.php?option=com_content&task=view&id=1628&Itemid=590

    ADB :Countries needed “to avoid unnecessary and excessive interventions in the currency markets, especially to depreciate domestic currencies”…

    smaller Asian economies could well decide to follow whatever currency path China takes. Malaysia, Taiwan, Thailand and Singapore all in practice give much weight to China as they attempt flexible management of their floating currencies, with varying degrees of success.

    In theory the huge volume of intra-regional trade derived from multi-country manufacturing systems should act both as a barrier to protectionism and reason to avoid competitive devaluations. But given the depth of the demand collapse, pressures for short-term national measures to prop up employment and overstretched companies could easily overwhelm long term interests in free trade and regional integration.

  7. 7 KV 27 December 2008 at 8:21 pm

    Sure, debt leverage does give you well, lever to make money. But ofcourse only if it is not used for consumer goods but for investments, small and large. Anyhow, I am truly amazed by the number of credit cards Thais seem to have. Really reminds me of what I have learned about American consumers. Amazing. Back home in North Europe people have maybe one or two credit cards and you have to really have stable job and etc. to be able to get one and even tben the credit limit is mazimum of your net income most times. Ohhh and at same time I was watching NBC Nightly news podcast where they had made decision to drive down “unfair interest rates” on credit cards, affecting only in 1 year or so though. But they were interwieving some small business owner who had expanded on debt (good thing of course to loan money to expand business) but the amazing thing was, he had done it on his credit card! I was like “WTF!!!” any normal person I know, in my personal background in North Europe, would walk to the bank, show the business plan and apply for loan, at much much lower interest rate than with friggin’ credit card. Anyhow, had a dinner with a Thai woman…Asked her about credit cards. She got 7 of them. Oh boy……

  8. 8 antipadshist 28 December 2008 at 9:24 pm

    check it out – I think this is a VERY smart move !
    and perhaps the only reasonable.

    China makes yuan an international currency
    http://timesofindia.indiatimes.com/Business/India_Business/China_makes_yuan_an_international_currency/rssarticleshow/3892788.cms

    so, sooner or later China is gonna dump dollars. after all enough is enough. and once dollar is in a “free fall” … 😉
    guess what will happen to Baht – unless BoT makes certain decisions.

    Yuan may become one of the alternative currencies pretty soon!
    some specialists made comparison that Yuan now is alike beach-ball kept underwater – sooner or later it’s gonna pop-up and jump up.

    especially check it out this one article :

    China won’t devalue yuan to boost exports-minister
    http://www.guardian.co.uk/business/feedarticle/8167982

    “With shrinking demand in overseas markets, the role of the exchange rate in stimulating exports will be limited — it is a measure not worth taking
    Currencies of China’s Asian neighbours are falling, but Chen said China would keep the yuan stable.
    “Recently, currencies of some countries have depreciated significantly, but their exports continued to slide,” Chen said. “China will not rely on yuan depreciation to boost exports,” Chen said.

    it is true. latest news from US are that despite all sorts of discounts and aggressive promotions campaign, extra spending on adds for holidays sale-out, retailers report a huge losses. although some (mostly MSM) rationalize that by consumers being cautious – there are some more sober and realistic analysts who explain it differently: that basically, most of consumers are simply broke and have no money.

    consumer-economy fails terribly. therefore China wisely decides AGAINST sacrificing the value of its currency (yuan) merely for the sake of attempting to lure spoiled american consumers into buying some goods. especially since they simply can’t afford to buy most of things anymore.

    “Welcome to the desert of reality” ! 🙂
    (Morphius to Neo in Matrix I)

    so, sooner or later I guess other Asian countries will understand this too, or at least will follow China’s obviously rational and reasonable move !

    if Thailand (Korn & Abhisit) though will continue to copy-cat US’ Bernanke & Paulso scheme (or rather scam?) and focus on consumer-economy (Spending, lending/ borrowing, more spending) and influence BoT to devalue Baht in lame attempt to somehow boost exports – it is gonna lose big time!

    in US something is finally stirring up – people wake up from “american dream” (to believe which one has to be asleep 😀 ). on the contrary current government in Thailand it seems are over-eager to fall asleep and to invent their own “Thai dream”: “unity, prosperity, reconciliation, blah blah…”

    so, perhaps Thai government must consider the wise example of their big neighbor. unless of course Dems are only trying to “make rich richer” and don’t give a rat’s ass about the country.

  9. 9 antipadshist 29 December 2008 at 6:13 pm

    another article about Yuan today :

    Less Than Meets the Eye to Yuan Liberalization
    http://asiasentinel.com/index.php?option=com_content&task=view&id=1636&Itemid=422

    meanwhile “Hanky-panky’s” efforts are spoiled with Obama’s hard-line stance (“scream at banker”), despite the need to borrow more from China:

    http://www.bloomberg.com/apps/news?pid=20601068&sid=ai3pbN.JY7tY&refer=economy

    in this article among other things it is mentioned that

    “The value of China’s currency, the yuan, rose 21 percent versus the dollar from 2005…
    economic crisis has prompted China to turn back to “export-oriented policies that could lead to an increase in the trade imbalance” and new tensions with the U.S …
    the yuan’s steady rise against the dollar stalled in July, and the currency has barely budged since…”

  10. 10 antipadshist 30 December 2008 at 2:32 pm

    read Saxo Bank’s “10 Outrageous Claims 2009”

    well, there are several things there related to USD, Euro, AUSD, Yen and Yuan too.

    I think in #10 they’ve made a mistake: it should be “Chinese Yuan”, not yen. otherwise I don’t think it is such an outrageous prophesy. well, of course Yuan will not become an alternative to USD or replace it, but it is very possible that SE and NE Asian countries will use Yuan a lot, and also will measure their own currencies by it, if not peg to it.

    other related stuff:
    Bloomberg

    China’s Yuan Advances Most in 12 Weeks, “the biggest advance since Oct. 7. The currency has climbed 6.9 percent this year. “

    China Currency Reserves to Fall by June 30

    “China’s foreign-exchange reserves, the world’s largest, may decline in the first half of next year as a pause in the yuan’s appreciation prompts speculators to pull money out of the country…
    the government doesn’t want to appreciate the yuan any more… Other speculators will gradually move out next year after losing confidence.” “

    Reuters

    China to see slight yuan rise in 2009
    “China’s yuan will appreciate slightly against the U.S. dollar as well as a trade-weighted basket of currencies next year…
    Overall, the yuan will remain a strong currency…
    That maintenance of strength is needed to make the yuan a settlement currency for China and its trading partners and also to avoid large capital outflow…”

    and finally I think here is useful read, since most if not all of the things mentioned are related to Thailand too:
    9 Reasons This Recession Will Be Good
    especially: More saving, Smarter spending (now – THAT’S what I’m talking about! although with Kron and Abhisit will probably see rather reckless spending) and perhaps Great buying opportunities.


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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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