Optimism on Thailand‘s economy will rebound in the second half of the year have diminished. Several Thai press reports, Thailand Finance Minister, Kittirat, have said that 2013 GDP, will likely dip below 4%, based on the Constitutional Court, accepting the case on the Thai government budget, if it is legal or not, delaying government spending and investment. The Constitutional Court move, comes on top of the Administrative Court, making a ruling that delay the government’s anti flood building program, also hurting investments and slowing the economy, apart from putting Thailand at risk of severe flood. For months, one after another economic think tank in Thailand, had been lowering their Thailand GDP forecast, most of that to below 4% and even below 3%. However, the government and the Central Bank, held back their re-vision, looking for clear sign from Thailand’s export situation. The latest export figure confirm earlier report by the Wall Street Journal that Thailand’s export fall, was tapering off, with the latest figure, export is up by about 4% year on year. Thailand’s top economic thinkers, however, are divided, with some saying that the economy is still moderately strong, with regional Thailand growth still expanding, but other economist say, consumption across Thailand has slowed. Most neutral observer, says tourism continues to be a bright spot for Thailand and the trade deficit, has tapered off drastically and Thailand’s foreign reserve, with all the turmoil on global level going on and hitting Thailand, has remained mostly resilient, dropping only a littler.
(Up-Date 1) The Finance Ministry has lowered Thailand’s GDP estimate for this year to under 4%, with many saying export is un-likely to pick up much, with a consensus of export growth at about 3% to 4% for 2013. Industrial production has also slowed. There is talk about measures to reduce Thailand’s gold imports, to help the balance sheets.
(Up-Date 2) Un-confirmed, but some Thai press says the Central Bank may lower Thailand’s interest rate to increase economic activity, if Thailand slowed significantly in the second half of the year. Also un-confirmed, but there has been a rumor, spread by Reuters first, then picked up by Thai press, such as the Bangkok Post, that Moody’s and Standard & Poor are watching Thailand populous policy, particularly agricultural related like a hawk, if it will spin out of control, with the press saying a credit rating reduction is in the cards, However, Fitch just said yesterday, Thailand’s credit rating is stable for the next 2 to 3 years, with some risk, that could become weakness, but that Thailand’s strong fundamentals offer substantial buffer.
(Up-Date 3) Un-confirmed, but the latest rumor being spread by the press is that Thailand’s finance minister, will try to meet both Moodys and Standard and Poor, in about two weeks at the World Bank meeting, to give them an up-date on the latest with the populous policy spending.
(Up-Date 4) Wall Street Journal reports Thailand’s current account, that went into deficit, has returned to surplus. Bangkok Post reports a possible snap election, because of the crisis between the constitutional court and Parliament, that if proved to occur, Yingluck will likely win again, but she will likely be under the thump of the elite establishment, which the elite establishment says, when it is out of power, that populous, infrastructure, anti flood spending and Yingluck’s government budget are mostly “Evil Incarnated” that must be stopped, so even if Yingluck wins the election, she will have little power to do anything, meaning Thailand will likely go into a tail spin of both economic and political crisis.
(Up-Date 5) Thailand’s Central Bank chief, Prasarn, have in the past few days, gone quiet, giving little indicator, of what the the central bank will do next, but most neutral observer, expects the bank to lower its Thai GDP growth estimate. The current flooding is causing some concern, apart from Thais suffering, that consumption may be hit.
(Up-Date 6) Local press reports the Thai constitutional court is showing some sign of reason, but the risk of Thailand deteriorating into both, a political crisis and economic crisis, is still real. However yesterday, the Thai stock market went up 25 points, based mostly on long-term, sophisticated institutional investors. Also there has been a shak-up at the finance ministry, removing a big shot civil servant close to Abhisit, and perhaps that is the origin of all the rumors that have hit Thailand for the past few years.
(Up-Date 7) Local press says the constitutional court will rule on the budget on Friday, where most neural observer says they hope Thailand can at least put their differences aside on this issue and get Thailand rolling again. ADB reduced Thai GDP a little, confirming what most expected, but the reason, some Thai press reports, is all the blockade to spending the establishment having been throwing at Yingluck. The good news is, sophisticated long-term institutional investors is buying on dip, and if the market gets some good news, foreigners and brokers may step into the game, and maybe, the market will rally a bit. But democracy vs anti democracy elite establishment wise, Mae Luke Chan at Thai Rath, Thailand’s most powerful columnist, basically said the constitutional court, just simply can not go crazy and block the amendment to the military constitution, because Thailand will sink into a deep political crisis.
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