“Uncertainty of European economy affected Thai export which was shown by a decrease of export to European markets resulting in total export contracted by -4.5 percent. However, economic indicators in July 2012 showed improving signs in domestic spending, both in private consumption and investment. Moreover, economic stability remained robust and resilient to the risk from volatilities in the global economy”
Mr. Boonchai Charassangsomboon, Executive Director of Macroeconomic Policy Bureau, revealed that “Economic indicators in July 2012 suggested that uncertainty of European economy affected Thai export which was shown by a decrease of export to European markets by -21.4 percent, also resulting total export contracted by -4.5 percent from a year earlier. However, economic expansion is supported by domestic spending from both private consumption and investment. This was reflected by real VAT collection in July 2012 that expanded 18.8 percent per year, accelerating from the previous month’s rise of 10.1. Consistently, passenger car sales in July 2012 showed an expansion of 6.1 percent from last year, resulting from a contraction of -4.2 percent from previous month. Private investment also demonstrated a solid expansion, especially in machinery and equipment, as indicated by an increase of 34.1 percent per year in the volume of capital goods imports, following the previous month’s growth of 8.8 percent from last year. Likewise, commercial car sales in July 2012 showed a strong expansion of 65.5 percent per year.”
Ms. Kulaya Tantitemit, Senior Expert on Macroeconomic policy further elaborated that “The public debt crisis in the Eurozone started to impact Thai manufacturing production, as indicated by the Manufacturing Production Index (MPI) in July 2012 that contracted -5.8 percent per year, at which the major contracted manufacturing sectors were electronics, textile, and petroleum. However, the economic indicators in agricultural and service sectors still display positive signs. This was in tandem with Agricultural Product Index (API) in July 2012 which showed an expansion of 15.3 percent from last year. Meanwhile, the number of inbound tourists in July 2012 increased 4.6 percent from last year.”
The Executive Director of Macroeconomic Policy Bureau concluded that “Going forward, 2 economic issues demand our close attention as follows: (1) public debt crisis in the Eurozone, which started to manifest onto the real sector. This resulted in a contraction of -0.4 percent year-on-year in Q2 2012 (primary estimated) (2) a slowdown in Chinese economy - this was reflected by export value of China in July 2012, equivalent to an expansion of only 1.0 percent, lower than the previous month’s growth of 11.3 percent. This is mainly due to a financial crisis in Eurozone which lessen external demand of China’s trading partners. However, the Thai government policies to support the economy and robust macroeconomic stability will enable Thai economy in 2012 to be resilient and expand further. Lastly, the Fiscal Policy Office will revise and announce Thailand’s economic projections of 2012 and 2013 in September 2012.”
Source: Fiscal Policy Office / www.fpo.go.th