Thailand's export outlook bleak
By Jon Fernquest[Update: Thailand's auto industry is already facing reductions in work hours (read Bangkok Post article) a clear sign that the industry is expecting reduced exports from Thailand, due to reduced purchasing power from a global economic recession and reduced availability of auto loans from a global credit crunch]
In the face of a major global economic recession
the outlook for Thai exports next year does not look good. Worst case predictions range from zero to 0.2% growth.
Earlier this year commodity prices reached all-time highs worldwide.
Sharp declines in commodity demand and prices during the second half of the year have had a negative effect on Thai exports. Automobiles are an exception so far ( Read article).
outlook - how good
or bad things it seems things will be in the future ภาพรวม อนาคต
bleak - looks bad สิ้นหวัง
economic recession - a period of greatly reduced economic activity and income ภาวะเศรษฐกิจตกต่ำ
worst case - the worst that could possibly happen ที่เลวร้ายที่สุด
all-time highs - a record, the highest ever ที่สูงสุดเป็นประวัติการณ์
exception - something that does not follow the general rule ยกเว้น
so far - up to this point in time จนกระทั่งปัจจุบันนี้
bleak - looks bad สิ้นหวัง
economic recession - a period of greatly reduced economic activity and income ภาวะเศรษฐกิจตกต่ำ
worst case - the worst that could possibly happen ที่เลวร้ายที่สุด
all-time highs - a record, the highest ever ที่สูงสุดเป็นประวัติการณ์
exception - something that does not follow the general rule ยกเว้น
so far - up to this point in time จนกระทั่งปัจจุบันนี้
Farm exports have been hit bad. Earlier this year high prices for agricultural commodities such as rice, cassava, palm oil, and corn spurred overproduction. Record high price supports for rice, which actually amount to subsidies since they are far above market prices, could lead to sustained overproduction if subsidies continue to provide incentives for overproduction.
The idea of decoupling is basically that Asian economies become less dependent on exports to the US by diversifying their exports to other markets that have their own independent sources of wealth. The Middle East with its oil wealth was an obvious region of the world to place one's hopes on.
These hopes were dashed when oil prices collapsed along with commodity prices in general.
spur - cause
กระตุ้นให้ ทำให้เกิด
spurred overproduction - caused producers to produce too much ก่อให้เกิดการผลิตเกินกำลังความต้องการของตลาด
price supports - when the government purchases crops at harvest time to guarantee farmers a certain minimal price การพยุงราคาสินค้า
subsidies - when the government pays part of the cost of some activity to encourage it เงินช่วยเหลือจากรัฐ
sustained - continued over a long period of time ประคองไว้
sustained overproduction - producing too much for long periods of time การผลิิตสิ้นค้าล้นตลาดเป็นเวลานาน
provide incentives for - give rewards to encourage certain types of behaviour ให้ผลตอบแทนกับ
decoupling - the idea that "European and Asian economies, especially emerging ones, have broadened and deepened to the point that they no longer depend on the United States for growth, leaving them insulated from a severe slowdown there, even a fully fledged recession" (Read IHT article and Economist's View)
dependent on - need in order to survive or succeed ขึ้นอยู่กับ
diversifying - creating a mix of many different kinds of things, others will succeed even if some fail ความหลากหลาย
hopes were dashed - what they thought and wished would happen, didn't happen ความหวังเลือนหายไป
in general - what usually happens (not including exceptions) โดยทั่วไป
spurred overproduction - caused producers to produce too much ก่อให้เกิดการผลิตเกินกำลังความต้องการของตลาด
price supports - when the government purchases crops at harvest time to guarantee farmers a certain minimal price การพยุงราคาสินค้า
subsidies - when the government pays part of the cost of some activity to encourage it เงินช่วยเหลือจากรัฐ
sustained - continued over a long period of time ประคองไว้
sustained overproduction - producing too much for long periods of time การผลิิตสิ้นค้าล้นตลาดเป็นเวลานาน
provide incentives for - give rewards to encourage certain types of behaviour ให้ผลตอบแทนกับ
decoupling - the idea that "European and Asian economies, especially emerging ones, have broadened and deepened to the point that they no longer depend on the United States for growth, leaving them insulated from a severe slowdown there, even a fully fledged recession" (Read IHT article and Economist's View)
dependent on - need in order to survive or succeed ขึ้นอยู่กับ
diversifying - creating a mix of many different kinds of things, others will succeed even if some fail ความหลากหลาย
hopes were dashed - what they thought and wished would happen, didn't happen ความหวังเลือนหายไป
in general - what usually happens (not including exceptions) โดยทั่วไป
Keeping the exchange rate competitive at the Bank of Thailand.
The baht has been depreciating recently. There have been calls from the export sector for an even weaker baht to counteract reduced demand due to the global economic recession.The baht is now near 35 to the US dollar and has fallen by 3% to 4% this year as a result of steady capital outflows.Capital flows are currently stable, capital inflows, new investments in the banking sector, have balanced the outflow of funds from the stock market that have caught most peoples' attention.
To ensure Thailand's exchange rate and exports remains competitive with other Asian countries the Bank of Thailand has stated that it will:
* Ensure that the baht moves in line with
other regional units to minimise the impact on export competitiveness.
* Monitor exchange rate movements to ensure that the baht remains competitive versus other regional currencies.
* Monitor exchange rate movements to ensure that the baht remains competitive versus other regional currencies.
depreciating - when
a currency loses its value and becomes cheaper (this makes the
countries exports cheaper) การลดลงของค่าเงิน
weaker baht - (same as depreciating) เงินบาทอ่อนตัว
counteract - work against, work in the opposite direction of ลดผลกระทบ
capital outflows - investment money flowing out of the country การไหลออกของเงินตราต่างประเทศ
X moves in line with Y - X follows Y, X moves in a way determined by Y ที่เกิดตามมา
export competitiveness - how attractive a country's exports are compared to those from other countries (the exchange rate helps determine the competitiveness of export prices that can be offered) ความน่าลงทุนของประเทศในสายตานักลงทุนต่างชาติ
monitor exchange rate movements - follow exchange rate movements (to make sure there is no problem) จับตาดูการเลื่อนขึ้นหรือลงของอัตราแลกเปลี่ยนเงินตราระหว่างประเทศ
weaker baht - (same as depreciating) เงินบาทอ่อนตัว
counteract - work against, work in the opposite direction of ลดผลกระทบ
capital outflows - investment money flowing out of the country การไหลออกของเงินตราต่างประเทศ
X moves in line with Y - X follows Y, X moves in a way determined by Y ที่เกิดตามมา
export competitiveness - how attractive a country's exports are compared to those from other countries (the exchange rate helps determine the competitiveness of export prices that can be offered) ความน่าลงทุนของประเทศในสายตานักลงทุนต่างชาติ
monitor exchange rate movements - follow exchange rate movements (to make sure there is no problem) จับตาดูการเลื่อนขึ้นหรือลงของอัตราแลกเปลี่ยนเงินตราระหว่างประเทศ
The baht has not been much weaker or stronger than other currencies. The baht has been weaker than the strongest Asian currencies, the Chinese yuan, Japanese yen and Singapore dollar. The baht has been stronger than the weakest Asian currencies: the Korean won, Indonesian rupiah and Philippine peso.
The real effective exchange rate weighs the baht against the currencies of major trading partners after inflation.According to the REER the baht has lost some competitiveness in recent months. The REER stood at 89.78 in September, compared with 89.14 in August and 94.90 in May.
Real Effective Exchange Rate (REER) - the value of the currency relative to currencies of countries it trades with:
"The
weighted average of a country's currency relative to an index or basket
of other major currencies adjusted for the effects of
inflation. The
weights are determined by comparing the relative trade balances, in
terms of one country's currency, with each other country within the
index.
This exchange rate is used to determine an individual country's currency value relative to the other major currencies in the index, as adjusted for the effects of inflation. All currencies within the said index are the major currencies being traded today: U.S. dollar, Japanese yen, euro, etc.
This is also the value that an individual consumer will pay for an imported good at the consumer level. This price will include any tariffs and transactions costs associated with importing the good. (Source: Investopedia glossary; see also BOT paper in Thai, statistical series at BOT, BOT short description and a primer by economist Menzie Chinn).
This exchange rate is used to determine an individual country's currency value relative to the other major currencies in the index, as adjusted for the effects of inflation. All currencies within the said index are the major currencies being traded today: U.S. dollar, Japanese yen, euro, etc.
This is also the value that an individual consumer will pay for an imported good at the consumer level. This price will include any tariffs and transactions costs associated with importing the good. (Source: Investopedia glossary; see also BOT paper in Thai, statistical series at BOT, BOT short description and a primer by economist Menzie Chinn).
(Source #1: Bangkok Post, business, Zero export growth possible next year, PHUSADEE ARUNMAS, 14-11-08, link)
(Source #2: Bangkok Post, business, BOT: Baht must remain competitive, PARISTA YUTHAMANOP, 14-11-08, link)
