Archive for the 'GDP' Category

Chart, businesses creations and dissolutions for january : a pause

New company registrations increased last month by 40.5 per cent year on year to 4,644 firms, the highest figure in almost a century, thanks to the government’s stimulus measures and clearer signs of an economic recovery.

Moreover, the number of companies shutting down operations dropped by 5.35 per cent to just 1,238 firms, the lowest in nine years. (Nation)

Difficult to be dumber than Nation. It’s amazing. How they can write such a mountain of crap ?

The fact :
– a century ? In march 2006, a total of 4945 businesses were created. Is it a “century” ?
– nine years ? in august 2008 a total of 1012 businesses were dissolved. Nine years ?

Dumb as dumbass. And those guys are paid. It’s amazing. They’re even unable to go to see the figures published on the website of the Business Development Department.

Here are the charts.

As you can see, the damages were so high in 2009… that a little pause is perfectly normal. It can not be a sign of a change of the trend.

“The rising number of new firms and the drop in collapsed businesses shows the country’s economy is on the rise. More new firms should be seen in the next period, and that will help promote strong economic growth,” Banyong Limprayoonwong, director-general of the Business Development Department, said yesterday.

He forgets that the dissolution of a company can be… a long process. Therefore, we are going to continue to see corpses… Assuming that there won’t be a double-dip recession that would add to the massacre.

Green Shoots Soup: number of bankruptcies explodes in may (+113 %)

The Green Shoots Saga continues, unabated.

Number of “dissolved companies” (AKA = dissolved and bankrupt : LTD companies + LTD partnerships + Ordinary Partnerships) has exploded by 113 % in may, compared to may 2008 !

10 251 companies disappeared from the radar screens in may versus 4 811 the previous year (and 3 125 in may 2007).

It’s unprecedented

And don’t forget : this is a very lagging indicator (dissolution of a company can take… months… even years to be completed…)… So it’s clearly not a good news.

But no one (even among clowns) should be surprised : businesses face very tough environment… therefore, it’s perfectly normal… many companies are closing. And it could even get worse.


As for the creation, we had -7 % in may year on year.


(Source Department of Business Development)

Anyway. Be cool. The clowns gang, Abhisit, the Bank Of Thailand… they all repeat that the thai economy has bottomed out… and the “recovery” is under way 😉

Sleep well. 😉

Chart, GDP Q1 : recession is worsening and no bottom

The GDP report for Q1 has been published by the NESDB (here).

The main information is : the thai economy shrank 7,1 %, compared to the first quarter 2008. In Q4 2008, the drop was 4,2 %.

Therefore, we are in recession (classic definition is 2 quarters with negative growth).

The official analysis is that the thai economy has bottomed out, AKA it can only get better the following quarters.

This is wrong.

I wrote on my previous report :

On Q1 2009, deflator will be the same than on Q4 (more or less)… While the contraction of the economy is worsening… therefore the comparison quarter-on-quarter between Q1 2009 and Q4 2008 is going to be really bad (like in so many other countries).

Therefore, the annualized GDP growth rate is going to be really bad on Q1…

I was spot on : deflator on Q1 was 2,2 % (2 % on Q4)… So if we calculate the annualized GDP rate (difference between Q4 and Q1, times 4), we get a striking -13 % !

Now, let’s have a look on 3 components of the GDP (real GDP = inflation removed) :


We are diving. Even the private consumption is now in negative territory (-2,6 % compared to Q1 2008).

The NESDB writes :

the first reduction in 10 years since 1Q 1999 owing to a fall of real sector in line with world economic slowdown. This dampened consumer’s confidence and purchasing power, which resulted in a decrease in expenditure on durable, semi-durable, and non-durable goods, particularly on passenger car, and motorcycle.

As for the Gross Fixed Capital Formation (investments) the fall is even worse : -15,8 %.

Here are the values (in millions THB, nominal GDP = at current prices), for each components so you can juge their relative importance.


Private consumption = almost half of GDP (1 195 billions). The Government spending is a tiny part (270 billions).

Exports and imports… Now this is something that people have often some problem to understand… For the GDP calculation, imports are deducted from exports (because you obviously don’t produce what you import).

So what is important is the difference (exports – imports).

On Q1, imports dropped at a furious rate (-30 % !), much more than exports… Therefore, the trade balance is positive, therefore the contribution for GDP is positive (5,2 %).


And what about the change in inventories ? A big drop (-7,5), that depresses the GDP growth rate.

2 explanations :

-companies have cleared their stock. Normal reaction during a recession.
-and gold. The NESDB writes :

In addition, export of gold increased significantly due to higher price in the world market. This caused the stock of gold declined nearly Baht 100,000 million.

Indeed, my readers already know this anomaly (that showed up in the february exports figures, read here).

Inventories changes accounted for -156 billions… and gold is responsible for two thirds…

So let’s try to recap and to make a reasonable forecast for Q2. It means not a forecast to please people but a forecast that takes the reality into account.

-exports : no change. We are still 25 % down. Confirmed in april (first month of Q2, with a crash of 26 % read here). There is absolutly no reason to believe that exports could increase (a lot) on may and june. Furthermore, don’t forget the base effect… The Peak Exports was july 2008… It means year on year comparisons are going to get uglier and uglier !

Furthermore, we can see that oil prices are going up again… That could increase imports… and therefore, reduce the trade balance… and therefore reduce the positive contribution for GDP growth…

-investments : no change. The situation is even worsening. Very simple to understand : the longer the crisis lasts, with a depressed global demand, the more businesses are going to postpone their investments projects. It’s just insane for a business manager to try to increase (today) his production capacities !
It makes no sense. Furthermore, the psychology is starting to crack, and this is precisely why the authorities are stepping up their idiotic PR campaign about “Green Shoots” and “Recovery”. It shows their desperation.
The longer the crisis lasts, the more the fools who believe that it would be short timed, change their minds… And they join the recession club (cut of investments, cut of spendings, etc.). Not good to fuel a recovery.

-government spendings. Ah ! The best part for the Lalalanders… They believe that gvt can buy its way out from the crisis. Sorry folks, the government is broke, and I really don’t believe Thailand can act like USA (= to borrow like there is no tomorrow).

-Private consumption : worsening. Let’s ask the clowns how they think Mister and Miss Somchai, who started to reduce their expenses on Q1, are going to change totally their behavior and will spend like crazy on Q2 ?

Allo ? What ? I can’t hear the clowns anymore. Oh yes, I’ve just had an idea : let say that the 66 millions of thais are going to win lottery next week. Give them 1 billion THB each, case closed, problem solved. 😉

It’s of course just a fantasy. And why it could even get worse ? Well, again, the longer the crisis lasts, the more companies will close, downsize, the more people will lose their jobs… the more they will be afraid of the future etc. It’s of course a basic negative loop. But the clowns can’t understand this very simple idea.

So, with such depressed conditions, GDP on Q2 will be as bad as Q1. Simple as crystal clear.

Now, what are the positive items that could curb and change this reality, a little bit and on temporary basis ? There are some.

-government spendings : a little boost (like the 20 billions national bribe given by Abhisit in april) could soften the negative trend. But it would be a blip on the radar. Absolutly not a sign of recovery. Abhisit is just unable to launch and manage really the mega projects. Even though he would sign all the contracts and would get all the financing tomorrow, the money would not be injected into the system before several months.

-inventories : I think some companies have cut their production… too fast and too deep… They will have to produce again, even at lower levels. And the gold mania is probably over (unless prices explode, that would convince many thais to sell their gold).

Voila. And all my comments at the end of my report about GDP Q4 remain valid.

The longer this crisis lasts, the more the negative effects will increase : compound effect, negative loop, you name it.

The system (with many shock absorbers) can’t sustain a long crisis.

Thunderstorm : GDP shrank 7,1 % during Q1

It was supposed to be the Abhisit’s Day, AKA The Slap In The Face Day (read here). Well… “mission accomplished” !


GDP in 1Q 09 drastically contracted by 7.1%, compared with a decrease of 4.2% in 4Q08, due to world economic crisis which severely affected goods and services exports, a main contributor of Thai economy.

Export value of goods in dollar terms decreased by 19.9%, whereas import value reduced dramatically by 38.3%. Moreover, investment shrank by 15.8%, along with household consumption expenditure which reduced by 2.6%.

However, government expenditure expanded slightly by 2.8%. (NESDB)

It’s a striking fall. But it’s absolutely not a surprise… Only fools, AKA the whole government and all the bureaucrats, could be surprised. The same people told us that the “recovery” was on its way (read here).

Central bank began to witness signs of recovery in the first quarter.

When did they say that ? January 16 !

There is a word for this kind of simple minded people and liars : clowns.

Anyway, you’ll find all the figures (statistical tables) and the official report here.

I will update the charts as soon as possible. Meanwhile you can still read my report about GDP Q4 2008.

It’s so predictable : the same clowns who were wrong and/or who lied 3 months ago, started the new tune today : “bottom out… Q2 will be better”.

It’s funny because when we look at the indicators for april (the first month of Q2)… well… we see the exact same patterns than the previous months : exports down (25 %), sales of cars down, investments dropping, VAT collections falling, etc…

Anyway. I will give more details on my report (just need a little bit of time to write it). 😉

Lalaland : “Overall, economic fundamentals were satisfactory on Q1”

Another breach in the space- continuum ! Higher and stronger than Alice in Wonderland with a rocket up in her arse…

Mid january, it was the Bank of Thailand… the BOT saw “signs of economic recovery” … A real performance and a big laugh..

Today, it’s the Finance Ministry’s turn, with this highly funny summary about the thai economy during Q1 : “Overall, the economic fundamentals were in the satisfactory level, with low inflation and stable foreign reserves, despite risks in rising unemployment.” 😉

Thailand’s tourist arrivals stood at 3.7 million in the first quarter of this year, down 14.7 per cent from the same period last year due to global economic crisis and political problems, according to the Finance Ministry’s economic report.

Released yesterday, the report showed that while quarterly private investment and consumption slid, supporting the economy was the government’s spending. In the quarter, Bt567.4 billion of government budget was disbursed, up 41.1 per cent on year, due to the economic stimulus schemes. In March, about Bt16.2 billion from the Cheque Chuay Chart scheme was disbursed and Bt14 billion of the free-education scheme was disbursed.

The economic stimulus measures played a more important role in bolstering the economy, especially when domestic demand and private investment shrank largely. Though overall exports dropped due to the global economic conditions, some items showed an improvement particularly those in the agro-industrial and electrical and electronic products thanks to the demand recovery in the Middle East, China and Africa,” said Ekniti Nitithanprapas, the ministry’s spokesman.

“Overall, the economic fundamentals were in the satisfactory level, with low inflation and stable foreign reserves, despite risks in rising unemployment.” (Nation)

I’m laughing, but actually it’s not very funny. It could even be scary. Those brainless bureaucrats think that the national bribe of 2000 THB for 9 millions people and other government’s spendings are enough to make the economy, to give the impulse, to shape the economy.

It’s of course totally wrong. The 20 billions THB burned of the national bribe are nothing but a fart on GDP figures.

Furthermore, government’s spendings are… borrowed money. The government is penny less (read here) and can’t create jobs per se. It takes on the left to give on the right (or it borrows). This is what the government is doing. And anyway, the bullets fired on Q1 won’t be available on Q2… The gun is empty… and cold.

The Soviet Union is long gone… but those stupid socialists and keneysians fanatics still believe in the magic stick, in alchemy applied to economy.

Give the authority to the government to spend 89797787567856 trillions of THB (borrowed of course), pay people to dig holes and other people to fill holes, and chop chop, miracle, Jesus is back, my casas es tu casa, the GDP will grow.

Anyway, I’m getting angry, it’s bad for my heart. But all those clowns will lose face on may 20, when GDP figures (first estimation) for Q1 will be published by the NESDB.

(meanwhile, you can still read my report about GDP Q4 2008)

Public debt rises to 3,59 trillions THB in february

Thailand’s public debt at the end of February stood at 39.93 per cent of gross domestic product (GDP), not far from the statutory ceiling of 50 per cent of GDP as required by law, a senior Ministry of Finance official said on Monday.

Pongpanu Svetarundra, director-general of the Public Debt Management Office, said Thailand’s national debt at end of February was approximately Bt3.59 trillion.

Of the total amount, about Bt2.29 trillion was in direct government borrowings, Bt1.01 trillion from state enterprises which are not financial institutions, Bt182 billion were debts incurred by government-run financial institutions, Bt110 billion in debts of the Financial Institution and Development Fund and Bt3.68 billion by other government agencies, he said. […]

Compared to January 2009, Thailand’s public debt in February increased by Bt73.78 billion, Pongpanu said. (TNA)

The percentage of GDP is idiotic. For one very good reason : GDP is falling. Right now. While you’re reading this.

So the percentage will increase. Mechanically.

In 2008, total GDP was 9 102 billions (at current prices). Let’s assume a drop of 5 % for the whole year, that would make 8 647 billions… So a ratio debt to GDP of 42 %.

But we forget another factor… during the year the total debt will continue to go up ! 😉

The government is penny less… And despite (shy) calls for budget cuts… the debt will increase. Abhisit has no choice.

So the ratio debt to GDP will follow. Up. No escape.

[Rendez-vous may 20, the NESDB will publish the GDP report for Q1 2009]

GDP forecast : from -2,5 to – 5 % for the year

Korn, the alleged Finances Minister, is the man who revises GPD forecast faster than his own shadow.

End of march, he said that the economy would contract by 2 to 3 %. Tuesday, he said that it could be worse. And now…

The Thai economy could contract by as much as 5 percent in the aftermath of the recent political upheaval, Finance Minister Korn Chatikavanij said Wednesday.

Mr. Korn said the turmoil had shaken investor confidence significantly, as well as inflicting a major blow on the tourism sector. As a result, academics are now forecasting that the Thai economy will contract in the range of 4.5 to 5 per cent, from the pre-riot forecast of a 3 per cent contraction.

Two million people facing the prospect of job loss and shrinking revenue collections prospect on part of the government are also looming. (TNA)

Now, this is a proof (albeit a late one) of realism… And rationality. 😉

For that matter, Korn is walking his Way of The Cross… It must be painful. But admission is the first step toward wisdom…

However, to claim that the riots are the cause of such revision is of course totally stupid. It’s probably fair game on a political level, but not from an economic point of view.

Anyway. Let’s see now what the government intends to do to fight such (severe) contraction.

Mr. Korn said one possible solution is for the government to speed up the dispersal of some Bt1.5 trillion in economic stimulus measures.

That’s the beauty of it : don’t change a team of losers with losers ideas ! 😉

Korn is powerless and tool-less… The 1,5 trillion THB is speaking about (why not 3 ? 6 ? 10 ?) are totally virtual. This money exists only inside the brain of people foolish enough to believe it exists.

Something I don’t understand : the genius Abhisit’s idea of the special allowance of 2000 THB given to 9 millions people was supposed to “boost ” the economy ? Not anymore ? What happened ? That’s really too bad. ;–)

And Abhisit told us that his government was committed “to spur economy and to lift the quality of life of all the Thais

Yes it was mid january… A century ago…

Anyway : let’s not change anything. Too dangerous and too hard for the neurons. Hope fueled fantasy will do the trick.

And mai pen rai…

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.