World Bank2017-09-062017-09-062009https://hdl.handle.net/10986/28123A solid financial armor could not protect Thailand against the impact of the global financial crisis on its real economy. Despite a sound banking system and low external vulnerabilities, the Thai economy contracted 5.7 percent between October 2008 and March 2009, as the magnitude and speed of the contraction in foreign demand, and resulting shock to the real economy, has been greater than anticipated. There continues to be little impact of the global financial crisis on Thailand's banks: liquidity remained adequate as financial institutions did not face solvency concerns given their adequate capitalization and lack of exposure to 'toxic' assets or risky derivative contracts. The combination of a sound financial sector, low external roll-over and balance-of-payment financing requirements, and, more recently, large current account surpluses, has led to capital inflows, build-up in reserves and an appreciation of the Baht relative to other currencies in the region. However, the impact of the global crisis on the real sector was far more severe than expected. Export volumes contracted by 8.9 percent in the fourth quarter of 2008, compared to the World Bank's forecast in December of a 3.0 percent expansion. Exports contracted a further 16 percent in the first quarter of 2009. The aggravation of Thailand's political crisis, which had been dampening investor and consumer confidence since 2006, compounded the shock to the real economy. As a result, real gross domestic product (GDP) contracted in the fourth quarter of 2008 and first quarter of 2009 after 38 quarters of growth, and is expected to contract for 2009 as a whole, the first annual contraction since the Asian financial crisis of 1997-1998.en-USCC BY 3.0 IGOACCOUNTINGAGRICULTURAL COMMODITIESAGRICULTURAL COOPERATIVESAGRICULTUREASSET QUALITYBALANCE OF PAYMENTSBALANCE SHEETBANK OFFICEBANKING SECTORBANKING SYSTEMBANKRUPTCYBASIS POINTSBENEFICIARIESBILLS OF EXCHANGEBINDING CONSTRAINTSBONDBOND MARKETBUDGET DEFICITBUDGET DEFICITSCAPITAL ADEQUACYCAPITAL FLOWSCAPITAL INFLOWSCAPITAL MARKETCAPITAL MARKET DEVELOPMENTCAPITAL OUTLAYSCAPITALIZATIONCASH TRANSFERCDSCENTRAL BANKCLEARING HOUSECOMMERCIAL BANKSCOMMODITYCOMMODITY PRICESCOMMUNICATIONS TECHNOLOGYCOMPETITIVENESSCONSUMER GOODSCONSUMER PRICE INDEXCONSUMERSCONTINGENT LIABILITIESCONTINGENT LIABILITYCREDIT BUREAUCREDIT DEFAULTCREDIT DEFAULT SWAPCREDIT DEFAULT SWAPSCREDIT GROWTHCREDIT MARKETSCREDITORSCURRENCYCURRENT ACCOUNT SURPLUSCURRENT ACCOUNT SURPLUSESDEBTDEBT COMPOSITIONDEBT LEVELSDEBT RATIOSDEBT SECURITIESDEBT STOCKDEBTSDECLINE IN INVESTMENTDEFLATIONDEPOSITDERIVATIVEDERIVATIVE CONTRACTSDEVELOPING COUNTRIESDISBURSEMENTDISBURSEMENTSDIVIDENDSDOMESTIC BORROWINGDOMESTIC DEBTDOMESTIC ECONOMYDOMESTIC INTEREST RATESDOMESTIC MARKETSDURABLEDURABLE GOODSECONOMIC ACTIVITYECONOMIC COOPERATIONECONOMIC OUTLOOKECONOMIC PERFORMANCEELASTICITYELASTICITY OF DEMANDEMERGING ECONOMIESEMERGING MARKETEMERGING MARKETSEQUIPMENTEQUITY INVESTMENTEQUITY SECURITIESEXCHANGE COMMISSIONEXCHANGE RATEEXCHANGE RATESEXPANSIONARY FISCAL POLICYEXPENDITUREEXPENDITURESEXPORT GROWTHEXPORT PERFORMANCEEXPORT SECTOREXPORTERSEXPORTSEXPOSUREFINANCIAL CRISISFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SUPPORTFINANCIAL SYSTEMSFINANCING REQUIREMENTSFISCAL DEFICITSFISCAL POLICIESFISCAL POLICYFIXED CAPITALFIXED INVESTMENTFORECASTSFOREIGN DIRECT INVESTMENTSFOREIGN INVESTORSFREE TRADEFREE TRADE AGREEMENTSFUTURE LOANFUTURESFUTURES EXCHANGEGDPGLOBAL ECONOMIC PROSPECTSGLOBAL ECONOMYGLOBAL TRADEGOVERNMENT BONDSGOVERNMENT DEBTGOVERNMENT INTERVENTIONSGROSS DOMESTIC PRODUCTGROSS FIXED CAPITAL FORMATIONGROWTH RATEHOUSEHOLD INCOMESINCOMEINCOME GROWTHINCOME INEQUALITYINDEBTEDNESSINDUSTRIAL ECONOMICSINDUSTRIAL ECONOMIESINFLATIONINSURANCEINTEREST RATEINTEREST RATE VOLATILITYINTERNATIONAL SETTLEMENTINTERNATIONAL TRADEINVENTORIESINVENTORYINVESTMENT DECISIONSKNOWLEDGE ECONOMYLABOR MARKETLABOR MARKETSLEADING INDICATORSLIQUIDITYLOANLOCAL GOVERNMENTMARKET SHARESMATURE MARKETSMEDIUM TERM EXPENDITURE FRAMEWORKMIDDLE INCOME COUNTRIESMONETARY AUTHORITIESMONETARY POLICYMONEYLENDERSMULTIPLIER EFFECTMULTIPLIER EFFECTSMUTUAL FUNDNATIONAL CREDITNATIONAL INCOMENET EXPORTSNEW MARKETSNON-PERFORMING LOANSOIL PRICESPENSIONPOLITICAL RISKSPOLITICAL UNCERTAINTIESPOLITICAL UNCERTAINTYPOLITICAL UNRESTPORTFOLIOPORTFOLIO INVESTMENTSPRICE CHANGESPRINCIPAL REPAYMENTSPRIVATE INVESTMENTPRODUCTION COSTSPROPERTY VALUESPUBLIC DEBTPUBLIC DEBT MANAGEMENTPUBLIC DEBT STOCKSPUBLIC INVESTMENTPUBLIC INVESTMENTSPUBLIC SPENDINGPURCHASING POWERREAL GDPRECESSIONREGULATORY FRAMEWORKREMITTANCEREMITTANCESRESERVERESERVESRETURNRETURNSSAFETY NETSAFETY NETSSAVINGSSECURITIESSHARE OF ASSETSSHORT-TERM EXTERNAL DEBTSKILLS SHORTAGESSOCIAL DEVELOPMENTSOCIAL PROTECTIONSOCIAL SAFETY NETSSOLVENCYSTOCK EXCHANGESTOCK MARKETSTAXTRADE CREDITTRADE CREDITSTRADE FINANCETRADE NEGOTIATIONSTRADE REFORMSTRADE REGIMETRADINGTROUGHUNDERESTIMATESUNEMPLOYMENTUNEMPLOYMENT RATEUNFAIR COMPETITIONVALUATIONVARIABLE INTEREST RATEWAGESWEALTHWORKING CAPITALWORLD TRADEWORLD TRADE ORGANIZATIONWTOReportWorld Bank10.1596/28123