Thailand economy

By Adithep Vanabriksha, Aberdeen New Thai Investment Trust

Thailand, the famed ‘Land of Smiles’, has been a lot less joyful during months of anti-government street protests in Bangkok.

Violent demonstrations, legal challenges, a botched election and the fallout from a misguided policy of rice subsidies that the government is struggling to honour have rocked the administration of Yingluck Shinawatra, the prime minister. Continue reading »

Has the Bank of Thailand blinked in the face of the country’s escalating protests? In a surprise move, the bank cut its policy interest rate on Wednesday by 25 basis points to 2.25 per cent a year, highlighting weaker than expected growth in the third quarter and the “ongoing political situation”.

Indeed, growth is expected to be weaker towards the end of 2013 and through 2014. But has the bank made the wrong call? Continue reading »

Thailand’s GDP figures were a bit of a disappointment on Monday, showing growth in Q3 of just 2.7 per cent.

The main culprit was domestic demand, which fell 1.2 per cent year on year. That’s a particular blow as local consumption has up to now been one of the most consistent drivers of growth: since 2007, domestic demand has fallen only in the exceptional circumstances of the global financial crisis of 2008-09 and Thailand’s huge floods of 2001. So what’s the problem now? Continue reading »

Thailand’s central bank held rates on Wednesday at 2.5 per cent, despite concerns over both the global economy and a slowdown in domestic activity.

Having dropped rates in four 25 basis points steps since late 2011, is that it for the cutting cycle? Continue reading »

It was one of those moments that investors and analysts in Thailand have been waiting for: insight into the government’s massive Bt2,000bn ($68bn) infrastructure spending plan.

But rather than a big press conference, it came in a little-publicised lunch talk by Chadchart Sittipunt, Thailand’s transport minister, to members of the Japan-Thailand Association last Friday. Continue reading »

By any comparison, 2012 was a bumper year for new issues on the Thai stock market. Companies and property funds listing on Thailand’s bourse raised $1.8bn – the most since 2002.

With stock prices strong, investors can expect a lot more in 2013 – the Stock Exchange of Thailand forecasts that the market capitalisation of new listings will climb from Bt116bn ($4.03bn) in 2012 to Bt120bn ($4.2bn) Continue reading »

The yen shock has sent shudders around Japan’s Asian exporter rivals, not least Thailand.

The baht has soared spreading consternation among exporters. But even in a country where exports are over 75 per cent of GDP, the picture isn’t as simple as it seems. First, currency isn’t the only determinant of export competitiveness in a world of complex trade flows. And second, there could be benefits to Thailand in the expected outflow of Japanese money seeking higher yields in emerging markets. Continue reading »

Where's my iPad?

A Thai government deal to supply 1.8m school children with tablet computers, the largest contract of its kind in the world, could tempt about 10 manufacturers to bid.

At just under $100 a tablet, the margins will be wafer-thin. But there will be considerable kudos for the winners. In a fiercely-competitive market that will do no harm. Continue reading »

What rebound? After the catastrophic floods of late 2011, Thailand should by now be hoping for something closer to normality in terms of trade.

Instead, it’s got the biggest trade deficit on record in January – a whopping 5.5bn, the largest since 1991. What’s going on? Continue reading »

Thailand has done it again – exceeding all expectations, even those of its own central bank. The government said on Monday that GDP grew 3.6 per cent in the fourth quarter of 2012, up 18.9 per cent on the same period in 2011 and bringing full-year growth to 6.6 per cent. The fourth quarter figure is the highest since records began in 1994 and was received as excellent news for the Kingdom – but has also fuelled concerns that a bubble is in the making. Continue reading »

Thailand’s appetite for construction and public debt appears far from sated, judging by a huge infrastructure spending bonanza now poised for approval by the government.

At a time when most capitals are scrambling to reduce national debt, the Thai government is finalising plans for a long-promised infrastructure building spree estimated at Bt2,000bn ($67bn) that some critics warn will tip public debt over 50 per cent of GDP, from its current 41 per cent level. Continue reading »

The hoardes of tourists flocking to Bangkok’s temples and bars and to island resorts beyond tell the story of Thailand’s remarkable comeback from the impact of devastating floods in 2011 and violent street clashes in 2010.

So, too, does the charmed performance of Thailand’s stock market, among the best performing markets in Asia last year, as well as record inward foreign investment, roaring bond market and robust economic growth after a miserable zero per cent growth in 2011. Continue reading »

Communist Laos has taken a further step from obscurity into a globalised world with plans for its first ever international bond issue.

The Bt1.5bn ($49.2m) issue will be in Thai baht – as a result of a key change in Thailand’s bond issuance regulations, which says more about Thailand’s ambition to be seen as a regional power than about Laos’s fledging pseudo-capitalist economy. Continue reading »

The Thai government, known for its string of populist policies including rice and fuel subsidies, is delighting working class voters (those with a job, anyway) with the introduction of a national minimum wage, which kicked in on January 1.

The policy has already triggered fierce criticism in business circles and reports of job losses, particularly in rural provinces. Yet, some experts argue that despite short term pain, a hefty national minimum wage increase will raise both living standards and productivity. Continue reading »

thai farmer plants riceAfter more than 30 years at the top, Thailand has lost its spot to India as the world’s number one rice exporter, slipping to third place last year due largely to a controversial government farm subsidy policy.

Now some critics say that as well as disrupting exports, the policy could undermine the food security because the government’s radical intervention could make supplies less stable in the future. Continue reading »