Thailand International Political Economy

The Thailand economy continues to see deflationary pressure on consumer prices as the Thai CPI dropped 3.3 percent in May according to Bloomberg.

The fall in consumer prices make it the fifth consecutive decline since January and accounts for the longest contraction in the Thai economy in the last nine years.

Despite the deflationary Thai economic news, the Thailand government still expects to maintain their target of 0.5 percent inflation for the whole of 2009.

The Thailand economy continues to suffer as Thai GDP in Q1 declined as much as 7.1 percent from a year earlier according to Bloomberg.

The key driver of the Thai GDP decline is a continued drop in Thai exports as demand from developed countries dwindles considering the impact of the global recession.

As a result, companies such as General Motors and Seagate Technology continue to cut production and reduce their Thai workforce only propelling the Thai economy into further decline.

The Thailand government has announced it will further help the Thai economy with a second stimulus package according to AFP.

The details of the second stimulus on the Thailand economy involve a $22 billion loan in order to deliver a 1.4 trillion baht stimulus package over the next three years as part of the “Strong Thailand 2012″ scheme.

The move by the Thai government is inline with other Asian governments as the global recession continues to take hold. [Read more →]

The Ford and Mazda Motor Company investment in Thailand is still on track despite the global recession according to Dow Jones.

At an estimated $500 million, the Thailand investment will raise capacity out of the Rayong AutoAlliance facility to 275,000 units.

The Thai government is likely pleased with the positive Thailand investment news as the Thai economy continues to struggle not just with the global recession but with the impact of it own political turmoil. [Read more →]

The Thai government estimates that the most recent riots by ‘Red Shirt’ protestors has cost the Thailand economy as much as $2.9 billion in lost tourism revenue according to AFP.

The loss to the Thai economy comes as the Thai government expects that Thailand will see 3.2 million less visitors to Kingdom as tourists spend their holiday money in countries without such political turmoil.

Nonetheless the number is half the estimated $8.5 billion revenue loss to the Thailand economy as a result of the ‘Yellow Shirt’ protests that closed down both Bangkok airports last November.

See: Airport Protest Cost Thai Economy $8.5 Billion [Read more →]

The Thailand government plans to sign an extradition treaty with the United Arab Emirates (UAE) in order to bring former Thai PM Thaksin Shinawatra back to Thailand according to Xinhua.

It is reported that Thaksin has been operating out of the UAE to organize ‘Red Shirt’ protest against the current Thai government with the most recent being the cancellation of the ASEAN summit.

The Thailand government and the Thai Foreign Ministry have already revoked Thaksin’s passport. [Read more →]

The Bank of Thailand has lowered its Thai economic growth forecast for 2009 from 0 to 2 percent GDP growth to now negative 1.5 to negative 3.5 percent GDP growth according to Xinhua.

In addition the Bank of Thailand lowered its Thai economic growth forecast for 2010 from it initial 2 to 4 percent GDP growth to 1.5 to 3.5 percent GDP growth.

Clearly the affects of the Thai government’s political crisis in conjunction with the current global recession have contributed to the revised forecast for the Thai economy. [Read more →]

Fitch Ratings service announced it has cut Thailand’s sovereign credit ratings from BBB+ to BBB and will likely negatively impact Thailand investment according to AP.

The ratings downgrade is clearly in reaction to the continued political turmoil that has caused the current Thai government to declare a state of emergency in the capital of Bangkok earlier this month.

The impact on Thailand investment may result in higher borrowing cost by Thai companies and a demand for higher interest payments by investors of Thai government bonds. [Read more →]

Thailand exports dropped in February for the fourth month in a row to 11.3 percent according to AP.

The poor Thailand trade news comes as demand for electronic, cars and other products made in Thailand continue to decline in the wake of the global economic crisis.

Meanwhile Thailand imports also declined by 40.3 percent widening the Thailand trade surplus to $3.5 billion up from $1.38 in January. [Read more →]

The Thailand government opposition party, the Puea Thai party, has threatened an impeachment motion against Thai Prime Minister Abhisit Vejjajiva according to AFP.

The Thailand government news comes months protestors stormed both Bangkok airport in order to oust the previous ruling party.

In this recent Thai political melee, 158 Puea Thai lawmakers have accused the current Thai government PM of corruption and mismanagement. [Read more →]

The top selling beer in Thailand, Chang Beer, has seen record growth in the US despite poor Thailand trade numbers overall according to PRWeb.

Thailand trade of Chang saw a 140 percent increase in volume for 2008 in the US as demand for the beer spreads across the county.

The positive Thailand trade news is welcome considering US imports are plummeting as the global economic crisis continues to hurt demand. [Read more →]

The Thai central bank lowered interest rates to 1.5 percent in an effort to spur the Thailand economy according to MarketWatch.

In addition to the reduction in rates, the Thailand government also revised its 2009 Thai economic outlook to between a 1% contraction and 0% growth.

In addition, Thai government officials have forecast another 100,000 in job loses as the global economic crisis continues to impact the Thai economy. [Read more →]

The Thailand economy shrank 4.3 percent in Q4 from a year earlier according to MarketWatch.

The Thailand economic decline is worse than expected as analysts initial forecast factored a decline of 2.8 percent.

Key drivers of the decline in the Thai economy are the recent political turmoil that blocked Bangkok airports and tourist from visiting the nation along with a significant decline in Thai exports due to lack of demand as the current global economic crisis takes hold. [Read more →]

Thailand exports declined 26.5 percent in January to account for its biggest decline in 12 years according to The International Herald Tribune.

The negative Thailand trade news comes as the global economic crisis starts to severely impact emerging markets that rely heavily on export revenues from the developed world.

All of Thailand’s leading sectors impacted the Thailand export decline with electronics falling 40 percent, automotive falling 35 percent and electrical appliances falling 29 percent.

In an effort to prop the Thai economy as Thailand trade continues to suffer, the Thai government approved $3.3 billion stimulus package last week in an attempt to create jobs and drive domestic demand. [Read more →]

The Thailand economy, Southeast Asia’s second largest, declined for the first time in ten years according to Bloomberg.

Estimates indicate that the Thai economy contracted as much as 2.8 percent in 2008 which is the first decline since Q1 of 1999.

Key drivers of the decline of the Thailand economy include shrinking exports and lack of tourism as a result of the current global economic crisis. [Read more →]

Microsoft, the world largest software producer, has announced it will continue to invest in Thailand according to the Bangkok Post.

The Thailand investment news comes at a time when many companies are either downsizing their Thailand operations or looking at other emerging economies to expand operations.

While no actual dollar figure was disclosed regarding the Thailand investment, the company specifically stated it would invest in its Thai research and development capabilities. [Read more →]

Thailand trade of rice fell over 37 percent from a year earlier according to Xinhua.

Thailand’s trade of rice hit as much as 1 million tons in 2007 but only 628k tons in 2008.

Despite the decline, Thailand’s Commerce Ministry is confident that Thailand exports of rice will hit 2009 targets as rice prices have come down significantly compared to the a surge in rice prices in 2008. [Read more →]

The Thailand government has announced it will cap its budget deficit to 4% of GDP in fiscal 2010 in an effort to stabilize the Thai economy according to The Nation.

The Thai economic move is a reaction to a sharp decline in key revenue streams such as Thai exports and tourism.

The Finance Ministry expects less than 1.58 trillion baht in revenue collection as a result of the current global economic crisis. [Read more →]

Nizam Idris, Singapore-based currency strategist at UBS, has indicted that the Thailand economy may see the Thai Baht fall as much as 5.6 percent by the end of 2009 according to Bloomberg.

Recent Thai political problems combined with a slowing Thailand economy has resulted in a 15 percent decline of the Thai baht last year and the baht is one of the worst performing Asian currencies against the US dollar.

While the global economy may start to recover by year end, it is unlikely that capital inflows will pure into the Thai economy considering the country’s fragile state. [Read more →]

Former Thai Government and ousted PM, Thaksin Shinawatra, vows to comeback to Thai politics and clear his name of corruption and other charges according to AFP.

The statement by exiled Mr. Shinawatra came via a phone call to his supporters in the poor and rural northeast, known as the “Red Shirts, who consider Thaksin’s populist policies important to the success of any Thailand government.

Many including Deputy Prime Minister Suthep Thaugsuban have accused Thaksin Shinawatra of stirring up trouble for the current Thai government at a time that is critical for the health of the Thai economy and of the nation as a whole. [Read more →]

Thai Central Bank, the Bank of Thailand, is expected to continue its policy of easing monetary policy in order to spur the Thailand economy.

The stance of the Thai Central Bank is concerning to Thai commercial banks as they are disinclined to lend despite the fact lower rates are designed to boost the Thailand economy.

Thus far the Thai economy has seen benchmark interest rates fall as much as 1.75 percentage points since December. [Read more →]

The Thailand government has announced it will ban the Economist magazine according to Reuters.

The ban by the Thai government comes after the current affairs magazine ran a story on the Thai royal family that angered the Thai King.

In a similar event, novel writer Harry Nicolaides has been sentenced in a Thai court for three years under the lese-majeste law which restricts anyone from insulting the Thai monarchy. [Read more →]

The Thailand government has approved a $3.3 billion Thailand economic stimulus package according to AFP.

The injection of funds into the Thailand economy are in-line with other international governments as the global economic slowdown continues to impact economies around the world.

While the news announcement did not go into detail, the new Thai government Prime Minister Abhisit Vejjajiva indicated that the Thailand economic stimulus would go directly in the hands of Thai citizens. [Read more →]

The Thailand Central Bank has announced that the Bangkok airport closers in late November due to political protest cost the Thailand economy as much as $8.5 billion according to VOANews.

The Bank of Thailand went on to state that the loss the to Thai economy was larger than losses incurred by the 2004 India Ocean tsunami and the 2003 outbreak of Severe Acute Respiratory Syndrome (SARS).

Despite the negative impact on the Thai economy, Thai tourism authorities plan to launch a new tourism campaign in 2009 to promote Thailand is a safe tourist destination. [Read more →]

The Bank of Thailand estimates that the Thailand economy will witness a four year low in the tourism market according to Reuters.

The decline stems from the on the siege of the Suvarnabhumi and Don Muang airports in late November by anti-government protesters in addition to the global economic slowdown as Europeans continue to tighten their spending. [Read more →]

The new Thailand government has approved and extend Thai economic stimulus package of $2.8 billion according to AP.

The move comes as the Thailand economy continues to struggle in the wake of the current global economic slowdown and as the Thailand central bank expects the Thai economy to slow to 0.5-2.5 percent growth for 2009.

The Thailand economy stimulus extends an existing stimulus package that is set to expire on January 31 of this year. [Read more →]

Thailand, the Detroit of South East Asia, expects automobile output to decline significantly in 2009 leaving the Thai economy yet another challenge to overcome as cut backs impact employment according to Reuters.

The Automotive Institute of Thailand predicts auto output to fall by 1.2 million units in 2009 as global demand shrinks in the wake of the current global economic crisis. [Read more →]

Abhisit Vejjajiva, the Democrat Party leader, has been elected as the Thai government’s new prime minister after years of political turmoil since Thaksin Shinawatra 2006 coup according to the International Herald Tribune.

Vejjajiva, 44 and Oxford educated, faces one of Thailand’s biggest challenges as he attempts heal the Thailand economy and maintain the political peace.

For more on Abhisit Vejjajiva see: Who is Abhisit Vejjajiva? [Read more →]

In a reaction to the recent Thai political turmoil rather than the current global economic crisis, the Bank of Thailand cut interest rates a full basis point in an effort to spur the Thailand economy according to Reuters.

The move by the Bank of Thailand was a surprise to the markets and marks the biggest marginal rate cut in eight years.

The Thai baht has fallen to 35.72 against the US dollar over the past few weeks. [Read more →]

The Thailand government’s Prime Minister Somchai Wongsawat has stepped down after a ruling by a top Thai court that the brother-in-law of Thaksin Shinawatra is guilty of election fraud according to the BBC.

The news comes as anti Thai government protestors who support the People’s Alliance for Democracy (PAD) continue to take control of Bangkok’s two airports Suvarnabhumi international and Don Mueang.

With Thailand’s tourist season well into high gear, the anti Thai government protestors have forced the Thai government and the Thai military in a position to choose either a peaceful resolution by having the PM step down or violence.

The Thailand tourist industry continues to loose millions as its airports strand foreign tourist and restrict them from there destinations. With Somchai Wongsawat’s removal, protestors will likely let the airports resume operations. [Read more →]