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As we have discussed at length on this channel for a number of months now and it most poignantly was put into my mind when we saw information that was published in the Bangkok Post where the tourism sector which made up 20% of Thailand's GDP going back to 2020, quarter one of 2020 and before, tourism which made up 20% of the overall GDP had dropped by like 90% since this all started; I believe we were talking about that in January of this year, quoted an article talking about that. So yeah obviously tourism has been heavily impacted and then on top of it the entire economy has been shut down for a prolonged period of time and the question posed by this video is, obviously this is going to have a negative impact on the Thai Baht and it will weaken the Thai Baht but could that weakening actually be something of a good thing for Thailand? 

I got to thinking about this reading a recent article in the Thai Examiner, that is thaiexaminer.com, the article is titled: Thai planners prepare to let the Baht 'swing' in a move to boost growth via tourism and exports at this time. Quoting directly: "Top University boss predicts that, technically, Thailand has already entered into a period of 1970s stagflation as he lowered the economic growth projection for the country to between 2% and 3% for the year with inflation running at 5%. At the same time, a lower Baht was heralded by Minister of Finance, Arkhom Termpittayapaisithm, this week, as he predicted that the Kingdom will ease entry criteria to boost foreign tourism while achieving export growth of between 5% and 6% in 2022." Quoting further: "Thailand's economic team in Government is adopting a wait and see approach to the current crisis caused by the war between Russia and Ukraine," (We have done other videos on this channel. The economics of this, especially on the tourism sector, we were dealing with this before the Russian- Ukraine thing. I am not saying I stand one way or the other regarding the Russian-Ukraine thing but let's just be clear, economic ramifications of the past few years were going to happen whether or not the Russian-Ukraine thing happened. The Russian-Ukraine thing I don't think helps anything anybody especially the impact it is likely to have on the global supply chains but I have seen this again and again, this is at least implied or it is explicitly stated that the Russian-Ukraine issue is the reason for the issues in the global economy, not just here in Thailand for that matter. I just find that argument very specious. I mean we were going to be dealing with this no matter what. We shut down our economy for 2 years. What do you think is going to happen?) Quoting further: "suggesting on Monday that economic growth at this point which takes precedence over curbing inflation is a signal to the Central Bank. This leaves the route open to a weakening Baht which may boost export competitiveness and tourism receipts in the short term while the Government estimates that the threat of inflation will recede over the course of the year particularly if the war in Ukraine is brought to a close." So again it is interesting what is going on here. 

I am kind of a hobbyist with economics; I read a lot of economics; I like to think I am up to date on a lot of economic news. I am definitely not any kind of expert so take my opinion for what it is. The US has been exporting inflation for years going back to after the financial crisis in 2008. This has had a tremendous impact on many different countries. I really liked the analysis of a guy named Jim Rickards when he was talking about Thailand in one of his books, I think it was Currency Wars, he talked about how Thailand was kind of in the oddest position of any country because in '97 Thailand was doing everything in its power to get foreign exchange in to prop up the Baht and keep it convert-able on the international market. By 2007, that pendulum had begun to swing and by 2017 and earlier in fact, Thailand was doing everything in its power to weaken the Baht. I remember, I believe it was 2011 when the currency went upside down as I call it where it went down to 28 and change against the US dollar, that had a tremendously negative impact on the overall economy here in Thailand, not only tourism but the export markets. We had problems here at the firm. We bill in Baht and people were not overly thrilled about being billed in Baht that was 20% stronger than it had been just a couple months before. So the weakening of the Baht in the sense that could it have a good impact on the overall economy? Possibly, I have seen it happen before. I definitely think it will be good for the export sector but more than anything in the tourism side of things, I think the biggest issue is getting the country re-opened; getting rid of the substantial restrictions and the substantial requirements and the hoops everyone has to jump through in order to get into Thailand. Until that is put away, until that is done away with, I think we are going to have real problems seeing tourism numbers come up by any appreciable amount until that is put behind us.