Post-Coup Thailand Sees Economic Slump Putting Pressure on Junta

[CrazyExpat]

Thailand’s government is under increasing pressure to overhaul the cabinet and bolster the economy as falling exports, eroding consumer confidence and a slump in manufacturing portend one of the region’s slowest expansions.

The finance ministry this week cut its forecasts for exports and gross domestic product growth for a third time this year. Prime Minister Prayuth Chan-Ocha, who seized power in a military coup in May 2014, has said he may reshuffle the cabinet, half comprising military personnel with little experience in their portfolios.

“With the economy in such bad shape, the government is under pressure to do something,” said Kampon Adireksombat, an economist at Tisco Securities Co. in Bangkok. “The government should reshuffle the cabinet to boost confidence and come up at least with short-term measures to boost the economy.”

For a country that was once a manufacturing powerhouse, the decline is telling. The factory output index has fallen every month but one since March 2013, while exports have declined every month this year and are forecast to contract for a record third year. Meanwhile, the junta hasn’t yet finalized a new constitution that it says is needed before an election is held, with critics saying the draft risks deepening a political divide.

Thailand’s financial markets offer little respite. It is the only major equity market in Asia that has posted outflows this year, while corporate debt sales look set to miss last year’s record. The baht has weakened more than 6 percent against the dollar in the past six months, the worst performer among major currencies in Asia.

 

http://www.bloomberg.com/news/articles/2015-07-29/post-coup-thailand-sees-economic-slump-putting-pressure-on-junta