No. 64/2010
The economy in November continued to expand after a temporary slowdown in the previous month from the widespread flooding. Expansions are observed in both domestic and external demand, as well as manufacturing production.
Overall stability remained sound. Inflation rate remained unchanged from last month. The current account was in a surplus, and international reserves stood at a high level.
Domestic demand ameliorated after a moderation in the prior month from the flooding in various areas. Private Consumption Index (PCI) grew by 4.1 percent year-on-year (yoy) or 3.5 percent from last month. This was due to an increase in spending on both durable and non-durable goods, in tandem with a pickup of consumer confidence in the regions where the flood situation had subsided. However, household electricity usage decreased slightly from last month in response to a lower temperature from the previous month and the same period last year. Concurrently, private investment also improved. Private Investment Index (PII) rose by 15.5 percent (yoy) or 0.3 percent from the previous month, following expansions in most private investment indicators, namely imports of capital goods, domestic sales of commercial cars and cements. This was also in line with improving investors’ confidence.
With respect to external demand, export value remained at a high level in response to economic growth of the trading partner countries. November’s export value amounted to 17,584 million US dollars, increasing by 28.7 percent (yoy) from both quantity and price by 19.6 and 7.5 percent (yoy), respectively. Furthermore, export also improved across all product categories and in almost all export markets. Meanwhile, tourism sector continued to expand satisfactorily. The number of foreign tourist arrivals in Thailand recorded at 1.5 million people, rising by 10.2 percent (yoy) particularly due to the rising number of tourists from ASEAN countries, East and South Asia. Correspondingly, the hotel occupancy rate rose to 55.1 percent from 49.0 percent in October, improving in every region except that in the southern region which was still adversely affected from flooding.
Supply side also expanded in line with both domestic and external demand. Manufacturing Production Index (MPI) rose by 5.6 percent (yoy) or 0.7 percent from the prior month. In particular, car production continued to expand well in order to accommodate rising demand from both domestic and external markets. Besides, production of air conditioners and plastic pallets also increased from external and domestic demand, respectively. For agricultural sector, drought in the previous period, flooding and pest outbreak further damaged agricultural products, especially rice, oil palm, sugar cane and cassava. Crop production, therefore, shrank by 7.2 percent (yoy), but improving from a contraction of 12.1 percent (yoy) in the previous month. Nevertheless, crop price continued to grow favorably by 28.1 percent (yoy), causing farm income to edge up by 18.9 percent (yoy).
Import value, totaling 17,094 million US dollars, expanded by 35.0 percent (yoy), accelerating across all import categories and up from 14.4 percent (yoy) of last month. This was in line with strengthening domestic and external demand.
Depository corporations’ deposits (including bill of exchange) grew by 10.5 percent (yoy), a slight decline from 11.2 percent (yoy) last month. However, deposits still stood at a high level. Meanwhile, depository corporations’ private credits continued to expand by 12.2 percent (yoy). This was mainly due to an increase in household credit, whereas corporate credit remained at a satisfactory level.
With regard to internal stability, both headline and core inflation rates remained stable at the previous month’s rates. For external stability, the trade balance and the current account continued to register surpluses, whereas international reserves stood at a high level.
Contact: Macroeconomics Team
Tel: +66 (0)-2283-5647, +66 (0)-2283-5648
e-mail: [email protected]
Source: Bank of Thailand