BOT : “Thai economy could contract 5% if global economy worsens” ?

At last, the Bank Of Thailand shows some guts… And starts to talk about the worst case scenario… Far away from the rosy projections of the government (economic growth between 0 and 2,5 % in 2009).

BoT assistant governor Duangmanee Vongpradhip said the latest projection for the Thai economy, which already includes the government’s latest economic stimulus and economic package to assist the poor showed that the Thai economy could contract approximately 5 per cent in the worst-case scenario if world economy performs even more poorly than earlier forecast.

Thailand’s economy will show signs of recovery in 2010 in line with high expectation that the global economy would improve, said Miss Duangmanee, adding that the country’s gross domestic product would grow between 2-4 per cent.

She said Thailand’s exports would contract between 5.5 – 8.5 per cent if global economy and Thailand’s trading partners suffer contraction of 1 per cent and the United States by 3.1 per cent. If world economy worsens, Thai exports could contract by more than 8.5 per cent. (TNA)

I would like to add something : “if global economy and Thailand’s trading partners suffer contraction of 1 per cent and the United States by 3.1 per cent”… The point is : it’s already happening.

Same with the thai exports… The contraction throughout 2009 is almost a certainty (base effect, read here).

Take the latest data from UK (published friday) :

The U.K. economy shrank more than economists forecast during the fourth quarter in the biggest contraction since 1980 as the financial crisis crippled the banking industry and mired Britain deeper in the recession.

Gross domestic product fell 1.5 percent from the previous quarter, the Office for National Statistics said in London today. Economists had predicted a 1.2 percent drop, according to a Bloomberg News survey. The economy has now shrunk in two quarters, the conventional definition of a recession. (Bloomberg)

All Europe is in recession. USA are in recession. Japan too. And many other countries.

The black swan is coming. So a negative growth for Thailand should not be unthinkable…. Anymore.


Don’t ask my why… but TNA has removed this article from its website… And I can assure you : I didn’t write it myself. 😉

So what happened ? To have fun, have a look at the report from Nation of the same press conference
Sounds totally different, right ? 😉

Eventhough we find some identical figures (minus 5,5 to 8,5 for exports)… Nation does not speak about the “contraction of 5 %” as the worst case scenario… And TNA gives more details (“if trading partners suffer contraction of 1 %”)… Strange, isn’t it ?

And even funnier : today, TNA put on line another version of the article

So, the reporter from TNA was on heavy drugs ? What Duangmanee really said ? Or is it a little cover up ?

I love this country. 😉

4 Responses to “BOT : “Thai economy could contract 5% if global economy worsens” ?”

  1. 1 Halfaboy 24 January 2009 at 4:58 am

    Some people in Thailand are not so pessimistic. See article: ‘Executives of listed firms believe economy to grow 0-2%’ (

    The article states that most executives of Thailand’s listed companies believe the country’s gross domestic product (GDP) will grow 0-2 per cent this year. This would be according to a survey by the Stock Exchange of Thailand (SET) Research Institute for the Capital Market

    Thailand …. never a dull moment !

  2. 2 ray 24 January 2009 at 6:11 am

    the thai gdp will be lucky if it contracts by 1-2%.. this is suppose to be the high season for tourist season. most hotels have occupancy of 25-30%( in 2008 hotel rooms inventory has risen dramatically in thailand). peopel from europe/usa will be cutting back on travelling. business/coperate clients will be travelling less and less. most hotels have taken big loans and when the coocupancy in off season oges down to 10-20% they will default. small businesses depending on tourism will also have cash flow problems.
    we must not forget that alot of thai business have overdrafts that they use to play stock markets and well as real estate looking to make a quick buck.
    exports as we know are already down heavily. lay offs are happening daily. by mid year we will see the effect of glowbal meltdown. it will be ugly because the thai govt and peopel incharge of the economy is making the exact same mistakes that the west are doing.
    also by end of 2nd quarter people will realise that the pad/udd problem is so tiny compared to the global recession that has entered thailand.

  3. 3 ThaiCrisis 24 January 2009 at 6:22 am

    I agree 100 % with your scenario.
    They just don’t get it. They don’t want to get it, because it’s too frightening, too uncomfortable.

    And they surely react in the same wrong way than the west.

    However, as the crisis unfolds, I start to share some views with the rozy brigade, AKA “Thailand will resist better to a recession than the west”.
    Thanks to the structure of its economy, structure of labor force (agriculture), its social structure (family etc.).

    But the West… Europe and USA… it’s going to be really painful… We are totally unprepared…

  4. 4 antipadshist 25 January 2009 at 8:20 am

    regarding UK …

    Jim Rogers VS Gordon Brown,
    leave UK for Asia and drop the pound!

    “Go to China, learn Chinese…”
    (Jim Rogers to Brits)

    The British pound plunged to a 23-year low

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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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