Thailand's economy grew at the fastest pace in seven quarters towards the end of last year as exports of rice, automobiles and computer chips all steadily rose. Southeast Asia's second-biggest economy expanded 5.7 percent in the fourth quarter, accelerating from a revised 4.8 percent in the third quarter, the government said today in Bangkok.
Exports grew by 24 percent, almost double the pace of the third quarter, even as the baht's rise to a decade-high made them more expensive. Exports, which account for about 60 percent of the economy, accelerated from a 12.6 percent year on year rate of increase in the third quarter, according to central bank data. Exports reached a record $14.6 billion in November as demand from China and eastern Europe offset waning orders from the U.S. and Japan.
Quarter on quarter gross domestic product expanded by 1.8 percent in the fourth quarter, up from a 1.5 percent, seasonally adjusted, rate in the previous quarter.
The baht held at 32.29 per dollar as of 10:50 a.m. in Bangkok, its highest level since August 1997. The SET Index rose as much as 1.3 percent to 837.59, extending its gain over the past year to 22 percent.
It is not clear at this point how resilient Thai exports will be to any further slowdown in the US. Goldman Sachs recently cut their 2008 forecast for Thailand's expansion to 4 percent from an earlier estimate of 4.5 percent citing the possibility of a U.S. recession, while the Bank of Thailand continue to hold to 6 a percent growth forecast.
The U.S. bought 12.6 percent of Thailand's exports in 2007, followed by Japan's 11.9 percent and China's 9.7 percent.
Consumer spending rose 1.6 percent from a year earlier in the fourth quarter, slowing from 1.8 percent in the previous three months, today's report showed.
Total investment in the fourth quarter rose 4 percent, accelerating from a 2.6 percent gain in the previous quarter, today's report showed.
Manufacturing gained 8.1 percent following a 5.7 percent expansion in the previous three months. Private construction contracted 8.5 percent from growth of 0.7 percent a year earlier.
Government spending increased 16 percent, compared with the third quarter's 9.5 percent pace.
The Bank of Thailand lowered its benchmark interest rate five times last year in the longest string of rate cuts since May 2000. It reviews borrowing costs again this week. Most analysts expect the Bank of Thailand to keep its benchmark interest rate unchanged at the meeting on Feb. 27 due to accelerating inflation. Consumer prices rose 4.3 percent from a year earlier in January, the fastest inflation in 18 months, as fuel and food costs increased. There is, however, pressure on the political front, and the government has signaled it may pressure the central bank to lower interest rates. Prime Minister Samak said on Feb. 18 the government will use monetary policy to support economic growth.
Monday, February 25, 2008
Tuesday, December 25, 2007
Merry Xmas and A Happy New Year
Well, a Merry Xmas and a Happy New Year to all my readers. Thank you for taking the time and trouble to pass-by. This blog will now - failing major and surprising new developments in the global economy - be offline till the end of the first week in January, or till after the festival of Los Reyes Magos in Spain (for those of you who know what this is all about). Come to think of it, maybe this is just what our ever hopeful central bankers are in need of even as I write - some surprise presents from the three wise men - but I fear that this year if these worthy gentlemen do somehow show at the next G7 meet, the star in the east which draws them will not be the one described in the traditional texts, but in all likelihood the rising star of India.
Credit crunch, did someone use the expression credit crunch?
Credit crunch, did someone use the expression credit crunch?
Monday, December 24, 2007
A return to democracy? Thailand holds its first post-2006 coup election
Guest post by Manuel Alvarez-Rivera, Puerto Rico, Election Resources on the Internet
Voters in the Kingdom of Thailand went to the polls on Sunday, December 23, 2007 in the first parliamentary election held since the September 2006 military coup that overthrew the elected but increasingly authoritarian and allegedly corrupt government of Prime Minister Thaksin Shinawatra.
Thailand's legislature, the National Assembly is composed of the Senate and the House of Representatives; the latter has 480 members, of which 400 are elected in 157 two- or three-seat constituencies, while the remaining eighty seats are filled in eight electoral regions by party-list proportional representation.
Since a 1932 revolution brought an end to eight hundred years of absolute monarchy, Thailand has suffered numerous coups, and the country has alternated between intervals of at least nominal democratic governance and periods of military rule.
The democratic interludes were often characterized by fractious multi-party politics, weak coalition governments, and the participation of high-profile military figures in prominent leadership roles. However, in the 2001 general election the new Thai Rak Thai (TRT; Thais Love Thais) party of Thaksin Shinawatra, a billionaire telecommunications tycoon, emerged as the dominant political force, displacing the traditional parties on a populist platform of development money for rural villages, debt moratoriums for farmers and low-cost health care. Despite accusations of nepotism and cronyism, Thaksin remained highly popular among the rural poor, particularly in the northern and northeastern parts of the country. As a result, TRT won a large parliamentary majority in the 2005 general election, and Thaksin was able to form the first single-party government in the history of Thailand.
However, Thaksin's triumph proved to be short-lived. His government became even more intolerant of opposition criticism, and a snap legislative election called the following year in the wake of mass protests demanding Thaksin's resignation was boycotted by the opposition parties. The vote was subsequently invalidated by Thailand's Constitutional Court, and a fresh election was slated for October 2006, but the military staged a coup prior to the election and overthrew Thaksin, who was at the time in New York City. Corruption was cited as the reason for the coup, although widespread discontent about Thaksin's heavy-handed suppression of an armed insurgency in Thailand's predominantly Muslim south (the rest of the country is overwhelmingly Buddhist) appears to have been a major contributing factor as well.
The election is being held under a new constitution approved by voters last August - the country's sixteenth since 1932; however, martial law remains in force in 31 of Thailand's 76 provinces. TRT was dissolved after the 2006 coup and party leader Thaksin has remained in exile (for good measure, he was banned from taking part in politics for five years, along with more than a hundred prominent party figures), but a pro-Thaksin party - the People's Power Party (PPP) - has emerged as a major contender in the election. In fact, PPP leader Samak Sundaravej - an old hand in Thai politics - has made no attempt to conceal that 1) he's Thaksin's surrogate; and 2) that he wants to bring Thaksin back. In fact, Thaksin - who faces corruption charges in Thailand - has indicated he will return early next year. Meanwhile, the Democratic Party (PP), the main opposition party during Thaksin's tenure in power, is likely to emerge as the PPP's main challenger under the leadership of Western-educated, 43 year-old Abhisit Vejjajiva.
However, neither party may secure an absolute parliamentary majority, and several smaller parties may hold the balance of power, chiefly among them Chart Thai, led by former Prime Minister Banharn Silpa-Archa (another old-school politician). It's no secret that the military does not wish to see PPP in power, although they have insisted that the outcome of the election will be respected regardless of who wins. Nonetheless, it is anticipated that if no party secures an overall majority, the armed forces will exert pressure over the smaller parties to reach a coalition agreement with the Democrats.
What's less clear is what would happen if PPP wins an absolute majority. There have been rumblings about alleged PPP vote buying - in truth, an endemic problem in Thai electoral politics - and it's quite possible that the vote could be at the very least partially annulled (or PPP forcibly disbanded) on the grounds of electoral irregularities. A further military intervention cannot be ruled out, but if it takes place it may well generate far less public sympathy than the 2006 coup, particularly since the interim government put in place by the armed forces after the coup has proved to be inept, and Thailand's economic growth is now the slowest in the region. Nonetheless, the return road to democracy may turn out to be a rocky one.
Voters in the Kingdom of Thailand went to the polls on Sunday, December 23, 2007 in the first parliamentary election held since the September 2006 military coup that overthrew the elected but increasingly authoritarian and allegedly corrupt government of Prime Minister Thaksin Shinawatra.
Thailand's legislature, the National Assembly is composed of the Senate and the House of Representatives; the latter has 480 members, of which 400 are elected in 157 two- or three-seat constituencies, while the remaining eighty seats are filled in eight electoral regions by party-list proportional representation.
Since a 1932 revolution brought an end to eight hundred years of absolute monarchy, Thailand has suffered numerous coups, and the country has alternated between intervals of at least nominal democratic governance and periods of military rule.
The democratic interludes were often characterized by fractious multi-party politics, weak coalition governments, and the participation of high-profile military figures in prominent leadership roles. However, in the 2001 general election the new Thai Rak Thai (TRT; Thais Love Thais) party of Thaksin Shinawatra, a billionaire telecommunications tycoon, emerged as the dominant political force, displacing the traditional parties on a populist platform of development money for rural villages, debt moratoriums for farmers and low-cost health care. Despite accusations of nepotism and cronyism, Thaksin remained highly popular among the rural poor, particularly in the northern and northeastern parts of the country. As a result, TRT won a large parliamentary majority in the 2005 general election, and Thaksin was able to form the first single-party government in the history of Thailand.
However, Thaksin's triumph proved to be short-lived. His government became even more intolerant of opposition criticism, and a snap legislative election called the following year in the wake of mass protests demanding Thaksin's resignation was boycotted by the opposition parties. The vote was subsequently invalidated by Thailand's Constitutional Court, and a fresh election was slated for October 2006, but the military staged a coup prior to the election and overthrew Thaksin, who was at the time in New York City. Corruption was cited as the reason for the coup, although widespread discontent about Thaksin's heavy-handed suppression of an armed insurgency in Thailand's predominantly Muslim south (the rest of the country is overwhelmingly Buddhist) appears to have been a major contributing factor as well.
The election is being held under a new constitution approved by voters last August - the country's sixteenth since 1932; however, martial law remains in force in 31 of Thailand's 76 provinces. TRT was dissolved after the 2006 coup and party leader Thaksin has remained in exile (for good measure, he was banned from taking part in politics for five years, along with more than a hundred prominent party figures), but a pro-Thaksin party - the People's Power Party (PPP) - has emerged as a major contender in the election. In fact, PPP leader Samak Sundaravej - an old hand in Thai politics - has made no attempt to conceal that 1) he's Thaksin's surrogate; and 2) that he wants to bring Thaksin back. In fact, Thaksin - who faces corruption charges in Thailand - has indicated he will return early next year. Meanwhile, the Democratic Party (PP), the main opposition party during Thaksin's tenure in power, is likely to emerge as the PPP's main challenger under the leadership of Western-educated, 43 year-old Abhisit Vejjajiva.
However, neither party may secure an absolute parliamentary majority, and several smaller parties may hold the balance of power, chiefly among them Chart Thai, led by former Prime Minister Banharn Silpa-Archa (another old-school politician). It's no secret that the military does not wish to see PPP in power, although they have insisted that the outcome of the election will be respected regardless of who wins. Nonetheless, it is anticipated that if no party secures an overall majority, the armed forces will exert pressure over the smaller parties to reach a coalition agreement with the Democrats.
What's less clear is what would happen if PPP wins an absolute majority. There have been rumblings about alleged PPP vote buying - in truth, an endemic problem in Thai electoral politics - and it's quite possible that the vote could be at the very least partially annulled (or PPP forcibly disbanded) on the grounds of electoral irregularities. A further military intervention cannot be ruled out, but if it takes place it may well generate far less public sympathy than the 2006 coup, particularly since the interim government put in place by the armed forces after the coup has proved to be inept, and Thailand's economic growth is now the slowest in the region. Nonetheless, the return road to democracy may turn out to be a rocky one.
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