Bangkok Post
November 18, 2008
NAREERAT WIRIYAPONG and REUTERS
Japan slid into its first recession in seven years in the third quarter as exports crumbled, but Deputy Prime Minister Olarn Chaipravat played down the significance of Japan's woes on Thailand.
"Thai exports to Japan are mainly food and consumer products. Thus, I expect those items would feel minimal impacts from the slowdown in the Japanese economy," Mr Olarn, in charge of economic affairs, told the meeting of the Japan-Thailand Joint Trade and Economic Committee yesterday.
Most Japanese operations in Thailand are in high-tech industries and consequently, the recession in Japan was unlikely to lead to lay-offs, he added.
Japan is the second-largest export destination for Thailand after the United States. Last year, Thai shipments destined to Japan were valued at 625 billion baht. Japan also tops the list of foreign investors in the kingdom.The 0.1% contraction in the July-September gross domestic product (GDP) in Japan barely captured the impact of the financial firestorm that began in mid-September, wrecking Wall Street banks, triggering a stock market crash in Tokyo and a yen rally that may hit exporters even harder.
The euro zone is also in recession and the US is expected to follow, having shrunk in the third quarter.
Some economists said Japan, the world's second-largest economy, could be headed for a record four quarters of shrinking output while Economy Minister Kaoru Yosano warned of increasingly tough times ahead.
"The downtrend in the economy will continue for the time being as global growth slows," Mr Yosano told a news conference.
"We need to bear in mind that economic conditions could worsen further as the US and European financial crisis deepens, worries of economic downturn heighten and stock and foreign exchange markets make big swings."
The third-quarter GDP figure translated into an annualised contraction of 0.4%, compared with a consensus market forecast for a 0.3% expansion, government data showed.
Japan's second-quarter economic contraction was revised in yesterday's data release to a steeper 0.9% slide, the biggest drop in seven years.
Bank of Japan deputy governor Kiyohiko Nishimura warned that the market turmoil might not be over.
"Due to strong awareness of counterparty risks in the dollar markets, the function of these markets is declining and Japan's financial market is also becoming unstable," Mr Nishimura said at a seminar on financial markets.
Some economists said Japan's GDP could slide for a full year.
"The risk of Japan posting a third or fourth straight quarterly contraction is growing, given the fact that we can no longer rely on exports as overseas economies are slowing down," said Takeshi Minami, chief economist at Norinchukin Research Institute.
In a sign of how the global economic slump was hitting Japanese companies, capital expenditure fell 1.7% in July-September.
Corporate spending and exports were the main drivers of Japan's longest economic expansion since World War II, which appears to have ended after defaults on US mortgages triggered a global credit squeeze last year.
Mr Olarn said closer economic ties between Thailand, the Association of Southeast Asian Nations (Asean) and Japan were needed to fight economic uncertainties.
The two countries have signed the Japan-Thailand Economic Partnership Agreement. Asean, of which Thailand is a member, has a free trade agreement with Japan.
"The two agreements will play effective role in facilitating initiatives by Thailand, Japan and our dialogue partners to boost regional economic stability and accelerate regional integration," said Mr Olarn.
http://www.bangkokpost.com/181108_News/18Nov2008_news01.php
November 18, 2008
NAREERAT WIRIYAPONG and REUTERS
Japan slid into its first recession in seven years in the third quarter as exports crumbled, but Deputy Prime Minister Olarn Chaipravat played down the significance of Japan's woes on Thailand.
"Thai exports to Japan are mainly food and consumer products. Thus, I expect those items would feel minimal impacts from the slowdown in the Japanese economy," Mr Olarn, in charge of economic affairs, told the meeting of the Japan-Thailand Joint Trade and Economic Committee yesterday.
Most Japanese operations in Thailand are in high-tech industries and consequently, the recession in Japan was unlikely to lead to lay-offs, he added.
Japan is the second-largest export destination for Thailand after the United States. Last year, Thai shipments destined to Japan were valued at 625 billion baht. Japan also tops the list of foreign investors in the kingdom.The 0.1% contraction in the July-September gross domestic product (GDP) in Japan barely captured the impact of the financial firestorm that began in mid-September, wrecking Wall Street banks, triggering a stock market crash in Tokyo and a yen rally that may hit exporters even harder.
The euro zone is also in recession and the US is expected to follow, having shrunk in the third quarter.
Some economists said Japan, the world's second-largest economy, could be headed for a record four quarters of shrinking output while Economy Minister Kaoru Yosano warned of increasingly tough times ahead.
"The downtrend in the economy will continue for the time being as global growth slows," Mr Yosano told a news conference.
"We need to bear in mind that economic conditions could worsen further as the US and European financial crisis deepens, worries of economic downturn heighten and stock and foreign exchange markets make big swings."
The third-quarter GDP figure translated into an annualised contraction of 0.4%, compared with a consensus market forecast for a 0.3% expansion, government data showed.
Japan's second-quarter economic contraction was revised in yesterday's data release to a steeper 0.9% slide, the biggest drop in seven years.
Bank of Japan deputy governor Kiyohiko Nishimura warned that the market turmoil might not be over.
"Due to strong awareness of counterparty risks in the dollar markets, the function of these markets is declining and Japan's financial market is also becoming unstable," Mr Nishimura said at a seminar on financial markets.
Some economists said Japan's GDP could slide for a full year.
"The risk of Japan posting a third or fourth straight quarterly contraction is growing, given the fact that we can no longer rely on exports as overseas economies are slowing down," said Takeshi Minami, chief economist at Norinchukin Research Institute.
In a sign of how the global economic slump was hitting Japanese companies, capital expenditure fell 1.7% in July-September.
Corporate spending and exports were the main drivers of Japan's longest economic expansion since World War II, which appears to have ended after defaults on US mortgages triggered a global credit squeeze last year.
Mr Olarn said closer economic ties between Thailand, the Association of Southeast Asian Nations (Asean) and Japan were needed to fight economic uncertainties.
The two countries have signed the Japan-Thailand Economic Partnership Agreement. Asean, of which Thailand is a member, has a free trade agreement with Japan.
"The two agreements will play effective role in facilitating initiatives by Thailand, Japan and our dialogue partners to boost regional economic stability and accelerate regional integration," said Mr Olarn.
http://www.bangkokpost.com/181108_News/18Nov2008_news01.php
