Post by Fletchsmile on May 16, 2015 17:37:20 GMT 7
Looks like Thailand continues to get squeezed as to where it's positioned for competiveness
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Consumption remains weak, while Thailand's export competitiveness is in secular decline.
"Among Asean members, Thailand's prospects appear the dimmest," the report said.
The cost of production is higher in Thailand than in neighbouring countries, with a lack of innovation and tight regulations stifling investment in the once-bustling electronics sector.
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Moody's paints bleak picture
Published: 16/05/2015 at 06:17 AM
Bangkok Post
Newspaper section: Business
The economy likely grew by 3.9% year-on-year in the first quarter, avoiding a quarter-on-quarter contraction, says Moody's Analytics Inc.
The quarterly growth largely reflects base effects from last year's first-quarter contraction, with the underlying picture of the economy still subdued, Moody's said in a report.
Consumption remains weak, while Thailand's export competitiveness is in secular decline.
"Among Asean members, Thailand's prospects appear the dimmest," the report said.
GDP expanded by 2.6% in the October-December quarter.
The National Economic and Social Development Board is due to release first-quarter GDP figures on Monday.
The Bank of Thailand recently said it saw a possibility of a quarter-on-quarter contraction in the first quarter, while Deputy Prime Minister MR Pridiyathorn Devakula has fuelled concern by saying year-on-year growth should be 3% in the first three months — quarter-on-quarter figures would slip into contraction if that were the case.
Thailand's woes are also cyclical, stemming from falling commodity prices, which have suppressed farm incomes and agricultural production, while consumer spending continues to fall on a year-ago basis, Moody's said.
Weak regional demand has compounded the issue, weighing on other export-oriented industries.
Electronics and hard-disk drive production continues to fall, while the automobile sector is facing stiff regional competition due to the relatively strong baht.
Japanese manufacturers are also increasingly shifting car production to neighbouring Indonesia, where improving governance is making doing business more attractive.
The cost of production is higher in Thailand than in neighbouring countries, with a lack of innovation and tight regulations stifling investment in the once-bustling electronics sector.
The central bank's 50-basis-point rate cuts so far this year are aimed at kick-starting a domestic recovery, but a consumption-led pickup appears some way off, as household debt has climbed to more than 85% of GDP, Moody's said.
Although lower rates should weaken the currency and improve export competitiveness, structural issues must be addressed to encourage foreign investment.
In the meantime, HSBC agrees Thailand managed to avoid a quarter-on-quarter contraction in the first three months of this year.
"However, we believe the economy has narrowly escaped a sequential contraction," said Nalin Chutchotitham, HSBC's economist for Thailand.
www.bangkokpost.com/business/news/562971/moody-paints-bleak-picture
--------------------------------------
Consumption remains weak, while Thailand's export competitiveness is in secular decline.
"Among Asean members, Thailand's prospects appear the dimmest," the report said.
The cost of production is higher in Thailand than in neighbouring countries, with a lack of innovation and tight regulations stifling investment in the once-bustling electronics sector.
---------------------
Moody's paints bleak picture
Published: 16/05/2015 at 06:17 AM
Bangkok Post
Newspaper section: Business
The economy likely grew by 3.9% year-on-year in the first quarter, avoiding a quarter-on-quarter contraction, says Moody's Analytics Inc.
The quarterly growth largely reflects base effects from last year's first-quarter contraction, with the underlying picture of the economy still subdued, Moody's said in a report.
Consumption remains weak, while Thailand's export competitiveness is in secular decline.
"Among Asean members, Thailand's prospects appear the dimmest," the report said.
GDP expanded by 2.6% in the October-December quarter.
The National Economic and Social Development Board is due to release first-quarter GDP figures on Monday.
The Bank of Thailand recently said it saw a possibility of a quarter-on-quarter contraction in the first quarter, while Deputy Prime Minister MR Pridiyathorn Devakula has fuelled concern by saying year-on-year growth should be 3% in the first three months — quarter-on-quarter figures would slip into contraction if that were the case.
Thailand's woes are also cyclical, stemming from falling commodity prices, which have suppressed farm incomes and agricultural production, while consumer spending continues to fall on a year-ago basis, Moody's said.
Weak regional demand has compounded the issue, weighing on other export-oriented industries.
Electronics and hard-disk drive production continues to fall, while the automobile sector is facing stiff regional competition due to the relatively strong baht.
Japanese manufacturers are also increasingly shifting car production to neighbouring Indonesia, where improving governance is making doing business more attractive.
The cost of production is higher in Thailand than in neighbouring countries, with a lack of innovation and tight regulations stifling investment in the once-bustling electronics sector.
The central bank's 50-basis-point rate cuts so far this year are aimed at kick-starting a domestic recovery, but a consumption-led pickup appears some way off, as household debt has climbed to more than 85% of GDP, Moody's said.
Although lower rates should weaken the currency and improve export competitiveness, structural issues must be addressed to encourage foreign investment.
In the meantime, HSBC agrees Thailand managed to avoid a quarter-on-quarter contraction in the first three months of this year.
"However, we believe the economy has narrowly escaped a sequential contraction," said Nalin Chutchotitham, HSBC's economist for Thailand.
www.bangkokpost.com/business/news/562971/moody-paints-bleak-picture
