Hitting double whammy judicial coup, Thailand skid towards recession (Up-Date 4)

Perhaps “Spinning A Presentable Face” Thailand’s Central Bank governor, Prasarn, told the Bangkok Post yesterday, quote: “The Thai economy can withstand the prolonged domestic political uncertainties in the short run thanks to the country’s strong fundamentals.”

That political crisis, says Gwynne Dyer, a syndicated columnist in some 50 countries, on May 08, 2014, is about, quote: “If you are trying to get rid of your country’s legitimately elected government, it helps to have the constitutional court, the national anti-corruption commission and the election commission on your side. And Thailand’s constitutional court has come through for the opposition once again: It has just ousted Prime Minister Yingluck Shinawatra and nine of her cabinet ministers for improperly removing a civil servant from office.This is the latest move in an eight-year campaign by the old political establishment and its middle-class supporters in Bangkok to destroy a populist party — twice renamed and currently called Pheu Thai — that has won every election since 2001. The street protests by the People’s Democratic Reform Committee (PDRC) that have intermittently paralyzed Bangkok since last November get the headlines, but the courts remain an indispensable weapon too.”

(Up-Date 1) A grenade and gun attack on Suthep’s gathering, late at night, killed 3 and injured about 20. Total number of killed since Suthep went active is about 25, on all sides. Thailand’s army chief, Prayuth, after the USA says, will likely not stage a coup, has come out, to say, if the Thai crisis, continues to be violent, the army may use force (What-ever that means). Also, Thailand’s care taker Prime Minister, is trying to come to an agreement, with the well known, anti-democracy, Thai election unit to set an election date. Today, at one of the meeting between the two, Suthep protesters disrupted the meeting. The care taker prime minister, latest statement to Reuters, is that he doubt, the July 20th “Tentative General Election Date” is still possible (End).

(Up-Date 2) New York Times reports BANGKOK — Thailand’s economy shrank more than expected in the first quarter, data showed on Monday, as exports remained weak and months of political unrest threatened to tip the economy into recession. The state planning agency, which compiles data on gross domestic product, said there had been a 2.1 percent contraction in the January-March quarter, compared with the previous three months. The first quarter recorded a contraction of 0.6 percent from a year earlier. The agency, the National Economic and Social Development Board, lowered its 2014 G.D.P. growth forecast to between 1.5 percent and 2.5 percent from between 3 percent to 4 percent. The country has been governed since December by a caretaker administration with limited fiscal powers, and the crisis seems likely to continue as protest groups seek to install an unelected government. The outlook for the April-June quarter and beyond is grim, analysts say. “Chances are, we are going to see another technical recession in the economy, given that the second-quarter G.D.P. number is likely to be rather poor as well,” said Gundy Cahyadi, an economist with DBS Bank in Singapore (End).

(Up-Date 3) Reuters reports Thailand’s acting prime minister on Monday ruled out resigning as a way out of a protracted political crisis that is stunting economic growth, as anti-government protesters stepped up pressure to remove him and install a new administration. Commerce Minister Niwatthamrong Boonsongphaisan has replaced Yingluck as caretaker prime minister, but the anti-government protesters say he has no legal standing and they want a “neutral” government to push through reforms. Niwatthamrong met members of the Senate, which is trying to come up with a way out of the deadlock, but he told them he would not resign. “The current cabinet is legal in every way … it must stay until a new cabinet of ministers is elected in. We cannot install another prime minister while we have an acting one in place,” Niwatthamrong said in statement following the meeting. Thailand has not had a functioning lower house of parliament since Yingluck dissolved parliament in December. Bangkok is the scene of a tense stand-off between government supporters loyal to Yingluck and her brother, ousted former Prime Minister Thaksin Shinawatra, and opposition demonstrators drawn from Bangkok’s middle class and royalist establishment. The upper house Senate, the country’s only remaining legislative body, says it could select an interim prime minister but it wants the caretaker government to step down first. That has incensed protest leader Suthep Thaugsuban, who wants the caretaker government removed right away. “We will take democratic power and hand it back to the people,” Suthep, a former deputy prime minister in a government run by the pro-establishment Democrat Party, told supporters late on Sunday (End).

(Up-Date 4) The Thai army invoked Martial Law, in what it said is to restore law and order, hiowever, where Thailand goes from here is anyone’s guess, as fundamentally, the struggle in Thailand is still between dictatorship and democracy.

However, apart from Prasarn, other economists are more blunt, with KBank now saying, quote: “A technical recession is possible in the first half.” Recession means a contraction in GDP growth for two quarters in a row.

The managing director of Phatra Securities’ research group, Dr Supavud Saicheua, said new investment in Thailand would remain on hold until the country has a new government. As a result, the firm now expects gross domestic product to grow by only 1.1 per cent this year. And this is its best-case scenario, assuming export growth of 3.5 per cent.

Kasikorn Research Center said the political turmoil significantly affected economic activities in the first quarter this year compared with the last quarter of 2013. It projected a contraction of 1.8% quarter-on-quarter.

For instance, imported consumer products fell 8.3% in the first quarter year-on-year compared with a slight contraction of 0.9% in the fourth quarter last year, indicating consumers to cut down on inessential expenses. Crop prices also dipped during the quarter, especially rice and rubber, which hurt farmers and related consumers’ purchasing power.

The strong fundamentals Prasarn cited, includes strong foreign reserves and a capital and financial market that reacted with “Subdued Reaction” from the double whammy “Judicial Coup” to outs Yingluck, forcing various protest groups back on the street, making demands, that can result in a “Civil War.”

On fundamentals, Prasarn, also told the Bangkok Post, investments in Thailand is expected to slow because of the political crisis, but recover, when the political crisis is over. Currently, all major government spending, such as a US$60 billion on infrastructure and another US$20 billion spending on water works, have been blocked by the establishment. Against Prasarn optimism on investments, however, a local press, NTT, reports that Kasikorn Bank, research on investment found that Thai corporates have shifted their attention to other countries because of political unrest in Thailand.

KBank Executive Vice President Vasin Vanichvoranun has revealed its latest survey on investment sentiment, a result of survey analysed the investment sentiment of 17,000 firms in Thailand, saying 60 percent of the planned investment projects are to be launched overseas and the projected amount to be invested by the Thai firms will be as high as 1.5 trillion baht. Last year, only 35 percent of investment projects were targeted for overseas, he added. The project investing a total of Bt1.5 trillion this year, is up 19 per cent from last year’s projection of Bt1.3 trillion.

Some 36 per cent of the firms that participated in the survey were interested in investing in Myanmar, up from 8 per cent last year. Indonesia was attractive to 15 per cent of respondents, followed by Vietnam, Laos, Cambodia and Singapore. Investment in Thailand wise, only 10 per cent of the firms surveyed plan to maintain their investments outlined in their earlier business plans. Most are waiting to see how the current internal Thailand political crisis develops. Almost all said, however, that once the political situation returns to normalcy, they would implement their Thai investment plans, such as increasing production capacity and renovating plants.

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