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Thai economy in February 2013 showed continued expansion with slight slowdown from previous month. Domestic spending especially in consumption of durable goods expanded well. Exports contracted due to high base from acceleration in exports after flood crisis last year. Supply-side sectors showed slowing signs in manufacturing and agriculture, however service sectors, reflected by number of tourists, showed strong expansion.
1. Private consumption in February 2013 continued to grow at slower pace. This was reflected by the real VAT collection in February 2013, which grew by 3.2 percent from last year, decelerating from the previous month’s expansion of 16.9 percent per year with a decrease of -0.1 percent from previous month after seasonal adjustment (m-o-m SA). Meanwhile, imports of consumer goods in February 2013 showed a contraction of -5.4 percent per year, decelerating from the previous month’s expansion of 22.7 percent per year, contracting by -14.0 percent from previous month after seasonal adjustment (m-o-m SA). Likewise, durable goods consumption also showed a steady growth, as reflected by passenger car sales in February 2013 that increased 92.1 percent per year, as compared to the previous month’s expansion of 108.6 percent per year with a decrease of -0.3 percent from previous month after seasonal adjustment (m-o-m SA). This was mainly due to an increase in cars delivery which was supported by First Car policy. Also, an expansion in private consumption due to a recovery of global economy. Moreover, the vehicle industry has launched their new products with promotion campaign to support their sales. Meanwhile, motorcycle sales in February 2013 decreased -0.9 percent from a year earlier, decelerating from the previous month’s expansion of 19.7 percent per year, with -1.5 percent from previous month after seasonal adjustment (m-o-m SA). Looking into details, motorcycle sales in Bangkok and in other regions showed deceleration of -3.2 and -0.2 percent per year, falling from previous month’s growth of 18.1 and 20.1 percent respectively. This was due to a recovery from low base of previous year from flood crisis. Furthermore, Consumer Confidence Index in February 2013 stood at 74.3 points, higher than previous month’s level of 72.1 points and continued to grow for 5th consecutive month, due to positive factors from an expansion of consumption, investment, exports and tourism sector and from a global economy with continued public spending and an increasing in minimum wages in others 70 provinces to raise their purchasing power.
Private Consumption Indicators 2012 2012 2013 Q1 Q2 Q3 Q4 Jan Feb YTD Real Value Added Tax Collection (%yoy) 14.0 12.0 6.2 20.1 18.0 16.9 3.2 10.0 %qoq_SA / %mom_SA - 10.3 2.3 4.9 -0.3 9.2 -0.1 Imports of Consumer Goods (%yoy) -0.4 2.9 -4.7 -8.5 8.8 22.7 -5.4 8.5 %qoq_SA / %mom_SA - 1.5 -5.4 -2.0 17.3 16.6 -14.0 Passenger Car Sales (%yoy) 86.6 -5.4 77.0 78.6 268.7 108.6 92.1 99.8 %qoq_SA / %mom_SA - 85.3 38.7 32.6 9.3 0.4 0.3 Motorcycle Sales (%yoy) 5.8 -0.6 4.4 -0.4 24.8 19.7 -0.9 8.5 %qoq_SA / %mom_SA - 19.0 6.5 -2.0 0.9 8.4 -1.5 Consumer Confidence Index 67.6 65.3 67.7 68.4 69.4 72.1 74.3 73.22. Private investment in February 2013 also showed a steady expansion, both in machinery and construction investment. This was reflected commercial car sales in February 2013 showed a continued expansion of 14.0 percent per year, as compared to the previous month’s increase of 36.6 percent from last year, with a contraction of -9.0 percent from previous month after seasonal adjustment (m-o-m SA). This was due to a slowdown in one-ton pickup which grew 6.3 percent from a year earlier, decelerating from previous month’s expansion of 29.9 percent. For private investment indicators of construction sector, as measured by real estate tax collection in February 2013 expanded 25.9 percent per year, decelerating from the previous month’s growth of 65.2 percent year-on-year with -5.7 percent from previous month after seasonal adjustment (m-o-m SA). This was in tandem with an increase in supply of real estate which was revealed by number of new housing in major cities. Meanwhile, cement sales in February 2013 grew by 14.3 percent from a year earlier, decelerating from the previous month’s expansion of 16.9 percent from last year with -2.1 percent from previous month after seasonal adjustment (m-o-m SA).
Private Investment Indicators 2012 2012 2013 Q1 Q2 Q3 Q4 Jan Feb YTD Machinery Import of capital goods (%yoy) 23.6 11.8 21.7 18.7 44.7 36.4 -2.3 15.8 %qoq_SA / %mom_SA - 21.1 6.7 2.2 10.4 3.3 -17.0 Commercial Car Sales (%yoy) 76.2 33.5 62.3 53.5 231.9 36.6 14.0 24.2 %qoq_SA / %mom_SA - 183.9 6.0 13.4 -1.4 17.9 -9.0 Construction Real Estate tax Collection (%yoy) 21.3 4.2 26.3 7.2 48.1 65.2 25.9 42.8 %qoq_SA / %mom_SA - 2.9 21.4 -2.4 19.4 11.1 -5.7 Cement Sales (%yoy) 10.6 5.4 5.2 12.1 20.6 16.9 14.3 15.6 %qoq_SA / %mom_SA - 2.0 2.9 10.8 4.0 8.2 -2.13. Fiscal indicators in February 2013 showed higher government revenue. In February 2013, the net government revenue collection (net of local authorities’ allocation) amounted to 158.9 billion baht or an increase of 15.0 percent from last year, decreasing from the previous month’s expansion of 21.4 percent per year. The budget disbursement recorded at 152.1 billion baht, a contraction of -41.3 percent per year, decelerating from the previous month’s growth of 38.3 percent year-on-year. This amount comprised of (1) current year expenditure of 130.4 billion baht, which decreased -46.6 percent per year (including a current expenditure of 122.6 billion baht, or a contraction of -47.9 percent year-on-year, and a capital expenditure of 7.4 billion baht or an increase of 75.4 percent year-on-year) and (2) carry-over budget of 7.9 billion Baht, which contracted -11.3 percent from a year earlier. As for fiscal position, budget balance in February 2013 showed a deficit of -17.0 billion baht.
Fiscal Sector Indicators FY2012 FY2013 Q1/FY13 Dec Jan Feb YTD Net Government Revenue 1,975.6 507.9 187.0 163.4 158.9 830.2 (net of local authorities’ allocation) (%y-o-y) 4.4 27.5 45.0 21.4 15.0 23.7 Expenditure 2,295.3 785.9 173.9 208.1 152.1 1,146.1 (%y-o-y) 5.4 60.5 0.8 38.3 -41.3 27.4 Budget Balance -314.7 -283.0 12.0 -38.2 17.0 338.24. Exports in February 2013 showed the first slowdown in six months since August 2012 due to high base from acceleration in exports after flood crisis last year. Export value in February 2013 stood at 17.9 billion USD, equivalent to a contraction of -5.8 percent from last year, decelerating from the previous month’s expansion of 16.1 percent with a decrease of -6.7 percent from previous month after seasonal adjustment (m-o-m SA). Moreover, a slowdown in exports was due to an appreciation of baht. Looking into details, export products that showed a contraction are gold, jewellery and agriculture products decreased -88.0, -65.3 and -15.0 percent respectively from a year earlier. Export destinations which showed a contraction of -27.8, -16.3 and -7.3 percent from a year earlier were Hong Kong, Malaysia and Middle-East respectively. Import value amounted to 19.2 billion USD in February 2013, increasing 5.3 percent from a year earlier, decreased from the previous month’s growth of 40.9 percent. As such, the smaller export value compared to that of import resulted in a trade deficit of -1.6 billion USD in February 2013.
Major Exports Market 2012 2013 (Exports Share) 2012 Q1 Q2 Q3 Q4 Jan Feb YTD Total Exports Value (%yoy) 3.1 -1.4 2.0 -3.8 18.5 16.1 -5.8 4.1 %qoq_SA / %mom_SA 13.6 2.3 1.3 0.7 4.9 -6.7 1. China (11.7%) 2.5 1.4 13.7 -11.8 9.9 19.4 3.7 10.9 2. Japan (10.2%) -1.6 -6.3 -1.3 -6.3 9.0 7.3 -1.1 2.9 3. US (9.9%) 4.6 2.1 4.6 -1.2 14.3 16.7 -0.9 7.2 4. Europe (8.5%) -9.2 -16.9 -7.5 -19.2 13.4 24.5 -0.8 10.7 5. Hong Kong (5.7%) 9.6 -6.5 -8.4 9.8 59.2 74.1 -27.8 3.6 6. Malaysia (5.4%) 0.2 4.7 0.8 -18.5 19.7 14.1 -10.3 -2.7 7. Middle-East (5.0%) 6.6 0.2 1.2 -2.2 35.5 9.1 -7.3 -0.1 8. Australia (4.9%) 22.1 -6.6 21.9 21.1 62.7 44.4 10.9 26.0 9. ASEAN-9 (24.7%) 5.0 9.2 7.2 -9.0 15.2 18.0 -7.2 4.25. Supply-side indicators in February 2013 suggested a slowdown from last month. Manufacturing Production Index (MPI) in February 2013 decreased -1.2 percent from a year earlier, decelerating from the previous month’s expansion of 10.2 percent, with a contraction of -0.4 percent from previous month after seasonal adjustment (m-o-m SA). This was due to petroleum industry which was forced to stop officially producing benzene 91 by the Ministry of Energy and apparel industry suffer from a relocation of production base to others low cost countries. Also there was a decrease in capacity of industrial production in electronics and food. However, some industries expanded in production such as vehicle, electric appliances, textile and jewelry. Consistently, Thai Industrial Sentiment Index (TISI) in February 2013 stood at 95.5 points, falling from 97.3 points in the previous month. This was mainly due to uncertainty of producer’s confidence while this month has less days and also Chinese New Year’s period which causes temporary half of operation. They were also concerned with an increase in labor cost, energy prices and raw material prices. Meanwhile, agricultural sector’s performance as measured by Agricultural Production Index (API) in February 2013 slightly contracted by -0.2 percent from last year, decelerating from the previous month’s expansion of 0.7 percent. This was mainly due to a decline of crops especially rice and corn partly due to the end of harvest season. However, production of tapioca and sugar cane expanded by 4.6 percent and 1.1 percent respectively from a year earlier due to proper climate. Service sector indicators as reflected by tourism indicators in February 2013 still showed a positive sign. The number of inbound tourists was recorded at 2.3 million persons in February 2013, or increased 25.6 percent from last year, accelerating from the previous month’s expansion of 12.5 percent with an expansion of 6.0 percent from previous month after seasonal adjustment (m-o-m SA). This expansion was owing to inbound tourists from China, Malaysia and Russia which showed a growth by 162.8 percent, 28.3 percent and 31.9 percent respectively.
Supply Side Indicators 2012 2012 2013 Q1 Q2 Q3 Q4 Jan Feb YTD Manufacturing Production Index (%yoy) 2.5 -6.8 -1.5 -11.0 43.9 10.2 -1.2 4.3 %qoq_SA / %mom_SA - 39.8 2.8 -4.9 7.4 -1.1 1.2 Agricultural Production Index (%yoy) 5.3 4.0 4.6 13.0 2.3 0.7 -0.2 0.3 %qoq_SA / %mom_SA - 0.3 1.4 0.9 0.4 -4.6 0.7 Number of In-Bound Tourists (%yoy) 16.0 8.1 9.8 8.6 39.3 12.5 25.6 18.8 %qoq_SA / %mom_SA - 15.4 10.0 3.1 6.5 -3.1 6.06. Economic stability remained robust. Headline inflation in February 2013 was at 3.2 percent from last year, and slightly decreased by last month’s growth at 3.4 percent, mainly due to a decrease in vegetables and fruit prices regarding to a proper climate. Meanwhile, core inflation rate was at 1.6 percent, lower than last month’s rate at 1.6 percent. Unemployment rate in January 2013 stood at 0.8 percent of total labor force, or equivalent to 320,000 unemployed persons. Public debt to GDP ratio at the end of January 2013 stood at 44.1 percent, well 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 February 2013 at 179.3 billion USD, or approximately 3.1 times of short-term external debt.
Macroeconomic Stability Indicators 2012 2012 2013 Q1 Q2 Q3 Q4 Jan Feb YTD Internal Stability Headline Inflation (%yoy) 3.0 3.4 2.5 2.9 3.2 3.4 3.2 3.3 Core Inflation (%yoy) 2.1 2.7 2.0 1.8 2.1 1.6 1.6 1.6 Unemployment rate (% of total labor force) 0.7 0.7 0.9 0.6 0.5 0.8 n.a. 0.8 Public debt (%GDP) 44.0 41.5 43.5 43.9 44.0 44.1 n.a. 44.1 External Stability Current Account Balance (Billion USD) 2.7 1.4 -2.3 2.7 0.9 -2.2 n.a. -2.2 International Reserves (Billion USD) 181.6 179.2 174.7 183.6 181.6 181.7 179.3 179.3 Forward (Billion USD) 24.1 29.2 30.7 24.8 24.1 23.6 23.1 23.1Source: Fiscal Policy Office / www.fpo.go.th