Looking at the Economic Future for Expats.
by Steve Wade
At time of writing the economic outlook for Thailand, and therefore the expats living here, is still gloomy. The surprise benchmark interest rate cut announced recently by the Bank of Thailand at least lets us know that someone is paying attention, although it’s effect so far has been minimal. The pound has steadied slightly and currently stands at around 37.3 baht after dropping below 37 recently, but along with the other major sufferer, the Australian dollar, which stands at 20.7 as I write, this will be no consolation whatsoever for people retired in Thailand on a fixed income who were enjoying rates of near 55 baht to the pound just before the brexit vote.
It would be easy to blame those who voted to leave the EU for the current situation. But I doubt anybody could have foreseen the mind numbing incompetence displayed by the British parliament which has led to the mess they currently find themselves in. The UK has been in the European union for over 40 years, 28 countries are members, the free movement of millions of people and trade that goes into hundreds of billions of pounds are at stake and what do we have? Politicians jockeying for position and trying to advance the agenda for their own parties rather than abiding by the will of the people and working towards a reasonable solution.
Have a second referendum if you like. The remainders win and it’s 1-1. What next? best out of three? Rock paper scissors? Not to mention the implications for democracy in the country. You couldn’t make it up. If the politicians had started out on a solution to the problem the day after the referendum result was announced then we wouldn’t be in this position. Don’t get me wrong, my personal opinion is that an orderly exit will take years to get right. Parliament offered it to the people, who then voted for it. It’s a shame that they weren’t expecting the result and had made no provisions whatsoever for the possibility of it happening.
As far as Thailand is concerned, it’s being affected most of all by the US – China trade war. The latest round of tariffs has recently been announced and that has hit the markets and the confidence of the whole region, although as I write President Trump has said that further talks to alleviate the situation are being planned. He also said that he wants to buy Greenland so don’t hold your breath. Thai exports and tourism have slumped, with several senior figures in the tourism industry finally admitting that things are not good. None of this is good news I’m afraid, we can only hope that a brexit conclusion is reached and the US and China come to some agreement and help to steady the ship. I think some horror stories about the pound dropping to as low as 30 are exaggerated, but it’s going to get worse before it gets better.
One last point for any holidaymakers reading this. I know you’re only here for a few weeks and every other post on Facebook is about the exchange rate, but there are retired people who have worked their whole lives to spend time here, and their fixed pensions are being torn apart. So let’s show some sympathy!