Attachment
“Thai economy in September and Q3/2012 showed improving signs in domestic spending, both in private consumption and investment, while exports and export-oriented manufacturing sector continued to contract due to Euro debt crisis and uncertainty in global economy.”
1. Private consumption in September and Q3/2012 continued to expand steadily. This was reflected by the real VAT collection in September 2012, which grew by 32.6 percent from last year, accelerating from the previous month’s expansion of 9.5 percent per year. This resulted in a 20.2 percent year-on-year expansion in the third quarter of 2012, which increase from the second quarter’s escalation of 6.3 percent year-on-year. Meanwhile, imports of consumer goods in September 2012 showed a positive growth of 0.9 percent per year, rising from the previous month’s contraction of -1.3 percent per year. This yielded to a 3.3 percent year-on-year increase in the third quarter, following the previous quarter’s expansion of 7.5 percent from a year earlier. Likewise, durable goods consumption also showed a steady growth, as reflected by passenger car sales in September 2012 that increased 67.8 percent per year, as compared to the previous month’s expansion of 71.7 percent per year. This resulted in a 78.6 percent year-on-year increase in the third quarter of 2012, accelerating from the previous quarter’s proliferation of 77.0 percent per year. This was mainly due to an increased in production of various carmakers to meet greater demand for cars which continues to grow at an accelerated rate. Meanwhile, motorcycle sales in September 2012 declined by -1.3 percent from a year earlier, following the previous month’s contraction of -5.7 percent per year. This resulted in a 0.4 percent year-on-year slightly increase in the third quarter of 2012; reduce speed of growth from the second quarter’s expansion of 4.4 percent per year. Furthermore, Consumer Confidence Index in September 2012 stood at 67.5 points, lower than previous month’s level of 68.4 points. The main reasons are not only due to a tendency of worsen Thai economic situations resulted from uncertainty in world economic recession, but also an anxiety of flood crisis, since Thailand was hit by numerous monsoons recently. Moreover, this was also due to inclination towards higher cost of living standard.
Private Consumption Indicators 2012 Q1 Q2 Q3 Aug Sep YTD Real Value Added Tax Collection (%yoy) 12.0 6.3 20.2 9.5 32.6 12.7 Imports of Consumer Goods (%yoy) 14.1 7.5 3.3 -1.3 0.9 8.2 Passenger Car Sales (%yoy) -5.4 77.0 78.6 71.7 67.8 48.6 Motorcycle Sales (%yoy) -0.6 4.4 0.4 -5.7 -1.3 1.2 Consumer Confidence Index 65.3 67.7 68.4 68.4 67.5 67.02. Private investment in September and Q3/2012 also showed a steady expansion, especially in private machinery investment. This was reflected by import value of capital goods in September 2012 increasing at 24.5 percent per year, following previous month’s expansion of 0.9 percent per year, resulting in an increase of 18.3 percent in the third quarter, which continually maintains a positive growth from the previous quarter’s expansion of 22.0 percent per year. Meanwhile, commercial car sales in September 2012 showed a continued expansion of 39.4 percent per year, as compared to the previous month’s increase of 57.4 percent from last year. This resulted in a 53.3 percent growth in the third quarter, following the previous quarter’s positive growth of 62.3 percent per year owing to higher demand, a return to normal pace of automotive production capacity, and accelerated production to delivery to customers. For private investment indicators of construction sector, as measured by real estate tax collection in September 2012 expanded 6.6 percent per year, slightly drop from the previous month’s growth of 7.3 percent year-on-year. This resulted in a 7.2 percent per year increase in the third quarter, as compared to the second quarter expansion of 26.3 percent from last year, due to a tendency of higher demand for housing. This was in tandem with an increase in supply of real estate which was revealed by number of new housing in Bangkok and its vicinities, especially condominium. Meanwhile, cement sales in September 2012 grew 11.4 percent from a year earlier, a bit decline from the previous month’s expansion of 11.9 percent from last year, resulting in the third quarter’s expansion of 12.1 percent per year, decelerating from the previous quarter which increase 5.2 percent from last year.
Private Investment Indicators 2012 Q1 Q2 Q3 Aug Sep YTD Machinery sector Imports of Capital Goods(%yoy) 11.0 22.0 18.3 0.9 24.5 17.1 Commercial Car Sales (%yoy) 33.5 62.3 53.5 57.4 39.4 48.9 Construction sector Real Estate tax Collection (%yoy) 4.2 26.3 7.2 7.3 6.6 12.6 Cement Sales (%yoy) 5.3 5.2 12.1 11.9 11.4 7.53. Fiscal indicators in September and Q3/2012 showed higher government spending stimulate economic activities. In September 2012, the budget disbursement recorded at 227.3 billion baht, regarded as an increment of 17.5 percent from a year earlier and followed a last month’s expansion of 11.1 percent per year. This amount comprised of (1) current year expenditure of 217.6 billion baht, which increased 17.9 percent per year (including a current expenditure of 173.3 billion baht, or a 13.9 percent year-on-year escalation, and a capital expenditure of 44.4 billion baht or an increase of 36.2 percent year-on-year) and (2) carry-over budget of 9.7 billion Baht, which expanded by 10.7 percent from a year earlier. This resulted in a 566.1 billion baht budget disbursement in the third quarter of 2012 or 17.9 percent per year expansion. Meanwhile, net government revenue collection (net of local authorities’ allocation) in September 2012 amounted to 122.8 billion baht or an increase of 18.5 percent from last year, increasing from the previous month’s contraction of -1.5 percent per year. This resulted in the third quarter’s net revenue collection of 545.7 billion baht, expanding 8.0 percent from a year earlier, which reflected a positive sign of Thai economic expansion. As for fiscal position, budget balance in September 2012 showed a surplus of 28.6 billion baht. This resulted in a budget deficit of -26.9 billion baht in the third quarter of 2012, implied that fiscal policies are able to motivate Thai economy distinctively.
Fiscal Sector Indicators 2012 Q1/FY12 Q2/FY12 Q3/FY12 Q4/FY12 Aug Sep YTD Net Government Revenue 398.4 412.8 620.5 545.7 295.9 122.8 1,977.5 (net of local authorities’ allocation) (%y-o-y) 0.7 4.8 3.9 8.0 -1.5 18.5 4.5 Expenditure 489.8 779.5 459.9 566.1 159.5 227.3 2,295.3 (%y-o-y) -18.1 39.0 -14.6 17.9 11.1 17.5 5.4 Budget Balance -84.7 -372.3 169.4 -26.9 -3.6 28.6 -314.74. Exports in September and Q3/2012 showed a slower pace following trading partners’economic slowdown. Export value in September 2012 stood at 20.8 billion USD, equivalent to an expansion of 0.2 percent from last year, accelerating from the previous month’s contraction of -6.9 percent. This was mainly owing to an expansion of exports to emerging markets, especially Australia, Africa, India and Hong Kong. Looking into details, export products that showed an expansion are manufacturing goods, especially (1) vehicles that increased 9.5 percent, (2) construction materials that rose 48.8 percent and (3) jewelries that grew by 161.1 percent. Nevertheless, exports to major markets, such as China and Eurozone continued to show a contraction. This was mainly due to the debt crisis in the Eurozone that dampened the confidence in production and distribution of goods in several countries, hence slower imports of Thai products, combined with the high base of exports to China. Altogether, exports in the 3rd quarter of 2012 totalled 60.1 billion USD, equivalent to a contraction of -3.8 percent. This is lower than the growth of 2.0 percent in the previous quarter. Meanwhile, import value in September 2012 amounted to 19.6 billion USD, or contracted -7.7 percent from a year earlier, steadily from the previous month’s decline of -8.8 percent. In particular, imports of raw materials and intermediate goods decreased -36.3 percent, chemicals fell by -10.6 percent, integrated circuit dropped -20.5, and gold contracted by -87.8 percent. This resulted in the import value in Q3/2012 of 61.7 billion USD, declined -1.7 percent from a year earlier, lower than the previous quarter’s expansion of 9.5 percent. As such, the smaller import value compared to that of exports resulted in a trade surplus of 1.2 billion USD in September 2012. However, for the third quarter of 2012, international trade marked a deficit of -1.6 billion USD.
Major Exports Market 2012 (Exports Share) Q1 Q2 Q3 Aug Sep YTD Total Exports Value (%yoy) -1.4 2.0 -3.8 -6.9 0.2 -1.1 1. China (11.8%) 1.4 13.7 -11.8 -12.9 -14.7 0.2 2. Japan (10.7%) -6.3 -1.2 -6.3 -12.0 -3.1 -4.6 3. US (9.8%) 2.1 4.6 -1.2 -4.8 -1.0 1.8 4. Euro Area (9.7%) -16.9 -7.5 -19.2 -23.1 -12.9 -14.7 5. Singapore (5.0%) 2.7 1.0 -25.4 -37.4 -11.1 -8.9 6. Australia (4.2%) -6.6 21.9 21.1 18.4 48.0 12.1 7. ASEAN-5 (17.4%) 4.8 6.8 -14.8 -16.8 -15.6 -1.95. Supply-side indicators in September and Q3/2012 suggested a recovery in agricultural and service sectors, whereas manufacturing sector indicators continued to signify a reduce speed of growth. Manufacturing Production Index (MPI) in September 2012 declined -13.7 percent from a year earlier, regarded as a slowdown for the fourth consecutive month (continued to decline further from previous month’s contraction of -11.2 per cent per year). This was mainly due to fewer export orders, which negatively impacted export-dependent industries especially electronics and hard disk drive products Another reason is that these industries have not yet recovered from a flooding crisis in the last quarter of 2011. Meanwhile, electronics and air-condition industries were severely affected by a slowdown in orders from both domestic and international markets, resulted in a contraction of -10.2 per cent from a year earlier in Q3 2012, decelerating from the previous quarter which declines -1.5 percent from last year. Consistently, Thai Industrial Sentiment Index (TISI) in September 2012 stood at 94.1 points, falling from 98.5 points in the previous month, and the Index stood below 100.0 points for the third consecutive month and regarded as the lowest in nine months. The key reasons are world economic recession, which depressingly affected Thai export, together with higher cost of production, which originated from higher cost of energy price, raw materials price and wage; also lack of labour force in some type of manufacturing industries. Meanwhile, agricultural sector’s performance as measured by Agricultural Production Index (API) in September 2012 showed a steady expansion of 8.9 percent from last year, slowing down from the previous month’s expansion of 18.9 percent. This was mainly due to a declinein crops and livestock productivities, especially rice production in late summer harvest. In addition, production of livestock grew at a slower pace mainly from lower production of chicken increased 2.8 percent from last year, decreasing from previous month’s expansion of 10.4 per cent per year. This yielded Q3 2012 to expand 14.3 per cent year-on-year, increase from previous quarter’s expansion of 3.4 per cent. In addition, service sector indicators as reflected by tourism indicators in September 2012 still showed a positive sign. The number of inbound tourists was recorded at 1.6 million persons in September 2012, or increased 7.9 percent from last year. This marked the number of inbound tourist in Q3 2012 at 5.3 million persons, or increasing 8.4 percent from a year earlier. This expansion was mainly owing to inbound tourists from northeast Asia, particularly from China which increased by 47.8 per cent from a year earlier.
Supply Side Indicators 2012 Q1 Q2 Q3 Aug Sep YTD Manufacturing Production Index (%yoy) -6.8 -1.5 -10.2 -11.2 -13.7 -6.3 Agricultural Production Index (%yoy) 3.6 3.4 14.2 18.9 8.9 6.8 Number of In-Bound Tourists(%yoy) 7.1 8.2 8.4 11.5 7.9 8.76. Economic stability remained robust. Headline inflation in September 2012 was at 3.4 percent from last year, increased from previous month’s rate at 2.7 percent, mainly due to a low base last year, an increase in FT charge in electricity cost, and a rise in excise on liquor and cigarettes. Meanwhile, core inflation rate was at 1.9 percent, slightly higher than last month’s rate at 1.8 percent. As such, headline and core inflations in Q3 2012 registered at 2.9 and 1.8 percent from a year earlier,respectively. Unemployment rate in August 2012 stood at 0.6 percent of total labor force, or equivalent to 220,000 unemployed persons. Public debt to GDP ratio at the end of August 2012 stood at 44.9 percent, still below the 60 percent level under the Fiscal Sustainability Framework. Likewise, external economic stability remained robust and resilient to the risk from volatilities in the global economy, as indicated by the high-level of international reserves at the end of September 2012 at 183.6 billion USD, or approximately 3.0 times of short-term external debt.
Macroeconomic Stability Indicators 2012 Q1 Q2 Q3 Aug Sep YTD Internal Stability Headline Inflation (%yoy) 3.4 2.5 2.9 2.7 3.4 2.9 Core Inflation (%yoy) 2.7 2.0 1.8 1.8 1.9 2.2 Unemployment rate (% of total labor force) 0.7 0.9 n.a. 0.6 n.a. 0.7 External Stability Current Account Balance (Billion USD) 0.6 -0.9 n.a. 0.9 n.a. 0.01 International Reserves(Billion USD) 179.2 174.7 183.6 179.2 183.6 183.6Source: Fiscal Policy Office / www.fpo.go.th