“Thai economy in May 2013 showed slowing signs with slowdown from both supply-side in manufacturing sector and demand-side in exports due to global economic slowdown. Domestic spending also showed slight contraction. However, tourism showed expansion and economic stability remained robust”
Mr. Somchai Sujjapongse, Director-General of the Fiscal Policy Office, revealed that “Thai economy in May 2013 showed slowing signs with slowdown from supply-side in manufacturing, as reflected by Manufacturing Production Index (MPI) in May 2013 decreased by -7.5 percent from a year earlier. Looking into detail, the manufacturing sectors which showed contraction were hard disk drive industry and electronic appliances, due to accelerated production in 2012 and the beginning of 2013. Meanwhile, agricultural sector’s performance as measured by Agricultural Production Index (API) in May 2013 slightly expanded by 0.5 percent from last year. Moreover, tourism indicators in May 2013 showed continued expansion. The number of inbound tourists was recorded at 1.85 million persons in May 2013, or increased 19.4 percent from last year. This expansion was owing to inbound tourists from China, Malaysia and Russia”
Ms. Kulaya Tantitemit, Senior Expert on Macroeconomic policy, acting Executive Director of Macroeconomic Policy Bureau further elaborated that “Not only supply-side indicators showed slowdown in manufacturing, but also domestic spending and exports contracted from previous month. This was reflected by the real VAT collection in May 2013, which decreased by -1.7 percent per year. This was due to decrease of VAT on import products of -15.6 percent, especially from import of fuel. Likewise, durable goods consumption also showed a steady growth, as reflected by passenger car sales in May 2013 that decreased -5.8 percent per year. This was mainly due to an increase in cars delivery which was supported by First Car policy. Meanwhile, motorcycle sales in May 2013 decreased -11.4 percent from a year earlier. This was partly due to decrease in household income with decrease in price of agricultural products. Private investment in May 2013 also showed contraction in machinery investment. This was reflected by commercial car sales in May 2013 contracted by -1.4 percent per year. Private investment in construction showed expansion but at slower pace as reflected by cement sales in May 2013 grew by 16.8 percent from a year earlier, decelerating from previous month’s expansion of 17.7 percent per year. The real estate tax collection in May 2013 expanded 14.0 percent per year, decelerating from the previous month’s growth of 40.6 percent year-on-year. This was in tandem with demand in real estate and decrease in credits from commercial banks in Bangkok and vicinities. Exports in May 2013 contracted by -5.2 percent from a year earlier due to global slowdown. Export products that showed contraction were electronics and fuels. Export destinations which showed contraction were China, Singapore and Europe.
The Director of Macroeconomic Policy Bureau of the Fiscal Policy Office concluded that “Thai economic indicators in May 2013 showed slowdown which could affect Thai economy in the 2nd quarter 2013 to grow at slower pace. Moreover, global uncertainty of new QE measures from the United States and slowdown of Chinese economy could affect Thai economy in the 2nd half of 2013. Therefore, Thailand’s economic condition needs to be further monitored by FPO.”
Source: Fiscal Policy Office / www.fpo.go.th