Emerging Markets: What Has Changed

(from my colleagues Dr. Win Thin and Ilan Solot)  1) The Brazilian central bank raised rates by 50 bps to 10.50%, but the addition of the qualifier “at this moment” likely signals a change of pace at the next meeting 2) Anti-government protests are blockading roads in Bangkok and have rejected a government offer to […]

Emerging Markets: What has Changed

This is what has changed in the EM space, in our view: 1) Thailand:  Officials are stepping up action and rhetoric against THB appreciation 2) India: We are becoming more optimistic that the INR will finally start to recover 3) Mexico: Banxico is sounding dovish again, but caution is needed in interpreting comments 4) Indonesia: […]

Thailand’s GDP Release: Bad English or Intentional Cover-Up?

The Thai government’s PR department released a sanguine report on Thailand’s Q2 GDP data yesterday, glossing over the economic impact of the violent protests that flared up in April and May:

Thailand’s gross domestic product (GDP) in the second quarter of this year has expanded by 9.1%, setting the highest record of half-year figure in 13 years, according to the National Economic and Social Development Board (NESDB).

Source: “Half-year GDP hits 13-yrs highest“, National News Bureau of Thailand

A look at the data reveals however that real GDP actually contracted in Q2 2010 by 5.6%, not seasonally adjusted. The 9.1% growth reported by the National News Bureau refers to year-over-year growth. By this metric, Thailand’s expansion is really nothing surprising considering GDP rose from a very low base formed after the deepest contraction since the 1997-98 financial crisis. When the bar is set low, it’s quite easy to jump the bar. What’s more striking is, Thailand failed to even meet that bar in some respects:

Thailand’s ‘Black May’: 1992 vs. 2010

Thailand has continued its struggle to expand democracy since the absolute monarchy was ousted in a 1932 coup—when Siam became Thailand. Most coups and protests in Thailand have been relatively bloodless compared to the Philippines, where election violence is the norm. But once in a while, the death toll stacks up to heights that terrify Thais. As of May 18, 37 people had died in two months of protests, the bloodiest since the “Black May” protests in May 17-20, 1992, which killed at least 52 according to the official count.

Thailand: Put on a Shirt!

A sea of red-clad bodies courses through the central business district of Bangkok. Seen from the Skytrain, it is a heaving mass that ebbs and flows. It is an impressive demonstration of political will and solidarity. But once on street level, the red mob reveals itself to be a rabble of street urchins and toughs. Similar to the Argentine piqueteros who instantaneously appear whenever the political caldron begins to simmer, the so-called Red Shirts are mostly hired hands trying to give political legitimacy to narrow economic interests.

Thailand’s Ex-PM Thaksin Traveling Too Close for Comfort?

The only Thailand Prime Minister to serve out a full term, Thaksin Shinawatra was ousted by the Thai military in 2006, and since then has been traveling the world as a man without a country.  Sentenced to two year prison term for corruption by Thai Supreme Court, Thaksin has eluded extradition deftly, but recently Thaksin’s increasing stopovers in Cambodia has brought a frown upon the “Land of Smiles.”

SEAsia: Turning a Corner or Turning Away?

In its latest Outlook, the Asia Development Bank (ADB) states that Asian economies will recover faster than expected – 3.9 percent this year and 6.4 percent in 2010 (estimates just six months ago were at 3.4 percent and 6.0 percent, respectively). This growth, led by China, of course, was a result of “firm action by […]