No recovery in sight (read what I wrote in december).
VAT collection dropped 6,91 % in december, compared to december 2007 at 36,86 billions THB (in november, it was -6,56 % y-o-y).
A negative % of change year on year… 2 months in a row (november and december) is unprecedented. Like many other data.
And now a view per quarter.
Overall the situation is not catastrophic. Yet. We are back at the levels of end 2007…
But it’s bad reasoning… because inflation. With higher prices, the VAT should increase. Mechanically. If it doesn’t, then you have a problem.
In any case, it’s going to be long.
You have to figure the long process at work here : a company looses its exports customers... the company is going to cut its costs first, then it will use its cash on hand, its bank will probably cut its support… still no new customers… the company chokes, then it starts to downsize… employees lose their job… those people can’t find new jobs (because the situation is deteriorating around too), therefore they cut their expenses, consume less (VAT collections are going down), invest less (no new house, car) … the State loses money… etc.
It’s the vicious circle of a recession.
Ask yourself : do you see any probability of an improvement in the world, in the next 6 months ? One year ? No you don’t. Of course you don’t.
Even if you’re watching CNBC all the day… you start to doubt…
The poison of doubt, supported by more and more data from the ground, is getting into your brain.
Nothing is going to stop the vicious circle, the vicious negative loop that fuels itself.
Look at the details for december…
Everything is going down : total collections for Revenue Department, down by 9,65 % y-o-y. Personal income tax, corporate tax (don’t forget, it’s a lagging indicator… taxes paid now are the mirror of… last year results)… etc.