Written on Nov 12, 2012
The Thai market is expected to slope downward following regional bourses after Japan’s economy shrank at the fastest pace since last year’s earthquake, adding to signs that slowing global growth and tensions with China are poking the world’s third-largest economy into recession. Many gurus thus predict the BOJ could leave policy unchanged at a review next week, but some expect the central bank to spur stimulus again at a Dec 19-20 meeting, shortly after the US Federal Reserve is due to meet. However, what concerns me is not the way things in Japan are, but rather the way it could happen in Thailand. As you may know, Japan’s economy outperformed most of its Group of Seven peers in the first half of this year on healthy private consumption and spending for reconstruction from last year’s catastrophe. But growth has stalled since then as the effect of rebuilding has faded. The Japanese government last week acknowledged that its index of leading indicators gauge fell to a level indicating the onset of a recession. So what’s about Thailand? I personally think we are quite in the same situation as the country faced major floods in Q4 last year, and the effect of reconstruction is gradually fading as well. Nonetheless, I’m not saying Thailand will encounter a recession but possibly meet an economic slowdown next year.
Politics: The anti-government Pitak Siam group has confirmed it will hold its second mass rally on Nov 24 at the Royal Plaza and insisted the gathering will not be protracted. Moreover, according to an Abac Poll, it showed 61.7% of surveyed people were more interested in the rally than the debate and subsequent no-confidence vote. Finger crossed.
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