Saturday, 8 March 2014

What is the current situation of Thailand ?

What we have experienced from the crisis ?
From this crisis, Thai people learnt the big lessons such as the dangers of the high leverage ratio, the lack of good governance and the weakening of financial institution policy. 
Nowadays, Thai economic system is developed, especially the financial discipline 
- The banking system is much more stable and transparent
The economy of Thailand is flexible. The inflation is low and the balance of trade overbalances every year. The foreign debt decreases continually.
- Thai government focuses on monetary policy. (the exchange rate, the interest rate and the cash inflow-outflow of country)
- Thai people change their mind set to be more conservative. They restructure their own organizations. (i.e. hold more cash)
The below video is talking about what Thai people have learnt from the Asian Financial Crisis.

However, there are some arguments that people act too conservative for the environment of Thailand which is booming (Li, 2013)

What is the current financial situation ?
Recently, Thai financial system is not stable due to the politics
The first reason is that this current government announced that the minimum of the labour cost is 300 baht ($10). Hence, the employers face the high expenses and they try to move their factories to the country that has low wages or increase the price of commodity. Thus, it can result in the inflation and the mild recession
The another reason is that there is a prolonged series of political protest in Bangkok. Following this, the investors avoid to invest in Thailand due to this stress situation. It impacted on the devaluation of Thai Baht.

However, we have to keep an eye on Asean Economic Community (AEC) that is a gathering of 16 countries for instance Thailand, Singapore, China, and Japan. They became a single market and then it could increase competition with other regions. The economy and financial system are likely to be more improvable. 

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