“Thai economy in June and the 2nd quarter of 2013 showed slowing signs from previous period both in internal and external demands. Economic indicators in supply-side, especially manufacturing sector contracted for the third consecutive month. However, tourism and fiscal sectors still played important role to support continually Thai economy.”
Mr. Ekniti Nitithanprapas, Deputy Director-General of the Fiscal Policy Office, revealed that, “Economic indicators June and the 2nd quarter of 2013 showed slowing signs from both demand and supply sides. Economic indicator in manufacturing sector as reflected by MPI in June 2013 contracted by -3.5 percent from a year, this resulted in a -5.2 percent per year decrease in the second quarter of 2013, especially electronics, air condition, radio, television and food. This was in tandem with exports in June 2013 which decreased by -3.4 from a year earlier, this resulted in a -2.2 percent per year decrease in the second quarter. Exports to major markets continued to slowdown such as China, Japan and Europe. However, tourism sector showed strong expansion as reflected by the number of inbound tourists which increased 25.0 percent from last year. This marked the number of inbound tourists in the second quarter 2013 stood at 5.9 million persons, with an expansion of 21.3 percent from a year earlier. This growth was owing to inbound tourists from China, Malaysia and Russia. Moreover, government spending showed continued growth and budget disbursement was above target rate. In July 2013, the budget disbursement recorded showed expansion of 5.7 percent and budget disbursement rate in the first nine months of fiscal year 2013 was at 69.3 percent higher than the target rate at 69.0 percent.”
Ms. Kulaya Tantitemit, Senior Expert on Macroeconomic policy, acting Executive Director of Macroeconomic Policy Bureau further elaborated that “Thai economic indicators in demand-side as measured by private consumption and investment also showed slowing signs. This was reflected by the real VAT collection in June 2013, which contracted by -2.6 percent from last year. This resulted in a -0.2 percent year-on-year decrease in the second quarter of 2013. Likewise, durable goods consumption as reflected by passenger car sales in June 2013 decreased -17.7 percent per year, this resulted in a -3.3 percent year-on-year contraction. This was mainly due to an increase in cars delivery which was supported by Second Car policy in late 2012 and early of 2013. Moreover, motorcycle sales in June 2013 decreased - 10.8 percent from a year earlier. This resulted in a -6.2 percent year-on-year decrease in the second quarter of 2013. This was partly due to decrease in household income resulted from contraction in agricultural products price. For private investment indicators of machinery sector, as reflected by commercial car sales in June 2013 showed contraction of -10.7 percent per year and this resulted in a 3.2 percent growth in the second quarter. For private investment indicators of construction sector as represented by the real estate tax collection in June 2013 contracted by -11.0 percent per year, dropping from the previous month’s growth of 22.3 percent year-on-year. This resulted in a 11.0 percent per year increase in the second quarter.”
The Deputy Director-General of the Fiscal Policy Office concluded that “Thai economic in June and Q2/2013 showed slowing signs from the first quarter of 2013. FPO estimated that remaining of 2013 Thai economy may face risk of global economic uncertainty, especially new measures (Quantitative Easing: QE) in the United States and slowdown in Chinese economy. Moreover, domestic spending also showed slowing signs. Therefore, fiscal policy will play an important role in supporting economic growth and building confidence for the investors in the future.”
Source: Fiscal Policy Office / www.fpo.go.th