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“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 demand-side, especially manufacturing sector contracted for the third consecutive month. However, tourism and fiscal sectors still played important role to support continually Thai economy.”
1. Private consumption in June and Q2/2013 showed slowing sign. 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, which decreased from the second quarter’s escalation of 6.9 percent year-on-year. Meanwhile, imports of consumer goods in June 2013 showed an expansion of 5.2 percent per year, decelerating from the previous month’s expansion of 6.1 percent per year. This yielded to 7.8 percent year-on-year increase in the second quarter of 2013, accelerating from the previous quarter’s expansion of 4.4 percent from a year earlier. Likewise, durable goods consumption as reflected by passenger car sales in June 2013 decreased -17.7 percent per year, as compared to the previous month’s contraction of -5.8 percent per year. This resulted in a -3.3 percent year-on-year contraction, decelerating from the previous quarter’s proliferation of 97.2 percent per year. This was mainly due to an increase in cars delivery which was supported by Second Car policy in late 2012 and in the beginning of 2013, in tandem with promotion campaign which supported their sales in the beginning of the year. Meanwhile, motorcycle sales in June 2013 decreased -10.8 percent from a year earlier, decreasing the previous month’s contraction of -11.4 percent per year. Looking into details, motorcycle sales in Bangkok and other regions showed contraction of -3.0 and -12.7, respectively. This was partly due to decrease in household income resulted from contraction in agricultural products price such as rubber and palm oil. This resulted in a -6.2 percent year-on-year decrease in the second quarter of 2013. Furthermore, Consumer Confidence Index in June 2013 stood at 71.8 points, lower than previous month’s level of 72.8 points. This showed the third consecutive contraction, due to consumer’s concern about Thai economy slowdown in the second half of 2013 since government policies have been limited, especially First Car Policy in tandem with the global economic uncertainty, affecting our exports.
Private Consumption Indicators 2012 2013 Q1 Q2 May Jun YTD Real Value Added Tax Collection (%yoy) 14.1 6.9 -0.2 -1.7 -2.6 3.3 %qoq_SA / %mom_SA - -0.1 -3.1 -1.4 -3.3 - Imports of Consumer Goods (%yoy) -0.4 5.1 7.8 6.1 5.2 6.1 %qoq_SA / %mom_SA - -4.0 -1.0 -0.3 5.6 - Passenger Car Sales (%yoy) 86.6 101.3 -3.3 -5.8 -17.7 36.7 %qoq_SA / %mom_SA - 1.1 -29.1 -7.0 -7.7 - Motorcycle Sales (%yoy) 5.8 5.4 -6.2 -11.4 -10.8 -0.7 %qoq_SA / %mom_SA - -0.4 -4.9 -7.0 -9.9 - Consumer Confidence Index 67.6 73.8 72.8 72.8 71.8 73.32. Private investment in June and Q2/2013 also showed slowing signs, especially in machinery and construction investment. For private investment indicators of machinery sector, as reflected by import value of capital goods in June 2013 decreasing at -5.1 percent per year, following previous month’s contraction of -1.8 percent per year. This resulted in a decrease of -1.5 percent in the second quarter, decelerating from the previous quarter’s expansion of 3.8 percent per year. Meanwhile, commercial car sales in June 2013 showed contraction of -10.7 percent per year, as compared to the previous month’s decrease of -1.4 percent from last year. This was due to one-ton pickup sale which contracted by -14.5 percent from a year earlier, decelerating from previous month’s contraction of -4.8 percent. This resulted in a 3.2 percent growth in the second quarter, decelerating from the previous quarter’s growth of 19.4 percent per year. This was due to accelerated car delivery from the First Car Policy in previous quarter. For private investment indicators of construction sector, as measured by cement sales in June 2013 which continued to contract by 9.9 percent from a year earlier. This resulted in the 2nd quarter’s expansion of 14.6 percent per year. 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. This was reflected by decrease in consumer demand for housing from lending measures by commercial banks in tandem with real estate entrepreneurs have to delay the launch of new projects.
Private Investment Indicators 2012 2013 Q1 Q2 May Jun YTD Machinery Imports of Capital Goods (%yoy) 22.1 3.8 -1.5 -1.8 -5.1 1.0 %qoq_SA / %mom_SA - -12.5 0.6 3.1 -13.1 - Imports of Capital Goods exc. 23.2 -0.7 -11.2 -11.5 -13.5 -6.1 aircraft, ships and trains (%yoy) %qoq_SA / %mom_SA - -8.5 -5.8 -1.8 -6.4 - Commercial Car Sales (%yoy) 76.2 19.4 3.2 -1.4 -10.7 11.4 %qoq_SA / %mom_SA - -2.8 -6.2 -7.5 -9.4 - Construction Real Estate tax Collection (%yoy) 21.4 32.5 11.0 22.3 -11.0 21.5 %qoq_SA / %mom_SA - -9.4 7.7 -5.8 -10.3 - Cement Sales (%yoy) 10.6 15.9 14.6 16.8 9.9 15.3 %qoq_SA / %mom_SA - -0.7 1.2 0.2 -1.7 -3. Fiscal indicators in June and Q2/2013 showed higher government revenues. Net government revenue collection (net of local authorities’ allocation) in June 2013 amounted to 181.4 billion baht or an increase of 4.1 percent from last year, following from the previous month’s expansion of 7.1 percent per year. This resulted in the second quarter’s net revenue collection of 638.6 billion baht, expanded by 2.9 percent from a year earlier. In June 2013, the budget disbursement recorded at 166.4 billion baht, regarded as an expansion of 5.7 percent from a year earlier and accelerating from last month’s decrease of -6.7 percent per year. This amount comprised of (1) current year expenditure of 155.3 billion baht, which expanded by 3.3 percent per year (including a current expenditure of 135.4 billion baht, or an increase of 6.0 percent year-on-year growth, and a capital expenditure of 19.8 billion baht or a decrease of -12.2 percent year-on-year) and (2) carry-over budget of 11.1 billion baht, which expanded by 58.2 percent from a year earlier. This resulted in a 482.0 billion baht budget disbursement in the second quarter of 2013 or an expansion of 4.8 percent per year. The 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. As for fiscal position, budget balance in June 2013 showed a surplus of 171.3 billion baht. This resulted in a budget surplus of 152.8 billion baht in the second quarter of 2013.
Fiscal Sector Indicators FY2012 FY2013 Q1/FY13 Q2/FY13 Q3/FY13 Jun YTD Net Government Revenue 1,975.6 508.1 469.7 638.6 181.4 1,616.7 (net of local authorities’ allocation) (%y-o-y) 4.4 27.6 13.8 2.9 4.1 12.9 Expenditure 2,295.3 785.9 585.7 482.0 166.4 1,853.6 (%y-o-y) 5.4 60.5 -24.9 4.8 5.7 7.2 Budget Balance -314.7 -281.9 -108.9 152.8 171.3 -238.04. Exports in June and Q2/2013 decreased due to global economic slowdown. Export value in June 2013 stood at 19.1 billion USD, equivalent to a contraction of -3.4 percent from last year, decreasing from last month’s contraction of -5.2 percent from a year earlier. This resulted in a -2.2 percent per year decrease in the second quarter, decelerating from the first quarter’s expansion of 4.3 percent from last year. This was due to decrease in exports to our trading partners along with global slowdown, especially with slowdown from China. Looking into details, export products that showed contraction in the 2nd quarter 2013 are electronics that decreased -10.6 percent, agricultural products that contracted by -12.8 percent and electrical appliances that decreased by -20.3 percent. Likewise, exports to major markets continued to slowdown such as China, Japan, Europe and the U.S. which contracted by -13.4, -6.2, -5.2 and -3.5 percent respectively. Meanwhile, import value in June 2013 amounted to 21.0 billion USD, or increased 3.0 percent from a year earlier, accelerating from the previous month’s contraction of -3.5 percent. This resulted in the import value in Q2/2013 expanded by 2.0 percent from a year earlier, decelerating from previous quarter’s growth of 6.7 percent per year. As such, the smaller import value compared to that of exports resulted in a trade deficit of -1.9 billion USD in June 2013. However, for the 2nd quarter of 2013, international trade marked a deficit of -8.4 billion USD.
Major Exports Market 2013 (Exports Share) 2012 Q1 Q2 May Jun YTD Total Exports Value (%yoy) 3.1 4.3 -2.2 -5.2 -3.4 1.0 %qoq_SA / %mom_SA -0.9 -3.4 -1.8 -2.9 - 1. China (11.7%) 2.5 7.3 -13.4 -16.3 -16.7 -3.3 2. Japan (10.2%) -1.6 1.5 -6.2 -7.6 -11.9 -2.3 3. US (9.9%) 4.6 2.6 -3.5 -6.9 -9.4 -0.1 4. Europe (8.5%) -9.2 8.7 -5.2 -12.1 -2.4 1.6 5. Hong Kong (5.7%) 9.6 11.2 7.8 1.1 9.7 10.7 6. Malaysia (5.4%) 0.2 -0.8 5.9 11.3 9.5 2.1 7. Singapore (4.7%) -5.1 10.6 -10.6 -25.5 1.0 -0.9 8. Middle East (5.0%) 6.6 4.4 -5.6 -15.8 -2.9 -0.6 9. Australia (4.9%) 22.1 30.4 14.5 16.7 6.1 22.2 PS. ASEAN-9 (24.3%) 5.0 5.9 2.5 -1.2 5.5 3.95. Supply-side indicators in June and Q2/2013 showed continued slowing sign. Manufacturing Production Index (MPI) decreased in the third consecutive month, in June 2013 MPI contracted by -3.5 percent from a year earlier, decelerating from the previous month’s decrease of -7.8 percent per year. The manufacturing sector which contracted in the June 2013 was Petroleum, hard disk drives, food and jewelry industries. This resulted in a -5.2 percent per year decrease in the second quarter of 2013, decelerating from the previous quarter’s expansion of 3.0 percent from last year. This was due to electronics, petroleum, leather and automotive industries have accelerated their production in late 2012 and early 2013, including the global economy showed slowing signs. Capacity utilization in June 2013 at 64.1, falling from last month’s level at 65.8. Consistently, Thai Industrial Sentiment Index (TISI) in June 2013 stood at 93.1 points, decreasing from 94.3 points in the previous month. This was due to producers concern about decreasing orders in tandem with domestic consumption. The key reasons are producers concern about global economic uncertainty affecting external demand, including labour shortage and increasing production cost. Meanwhile, agricultural sector’s performance as measured by Agricultural Production Index (API) in June 2013 accelerated. API in June 2013 increased 8.5 percent from last year, accelerating from the previous month’s expansion of 0.5 percent. This was mainly due to rise of crops especially rubber and palm oil, along with increased harvest area in the Northeast and in the East and proper climate while production of livestock grew by 1.4 percent from a year earlier from higher production of swine. This yielded Q2 2013 to expand 1.3 percent year-on-year, decreasing from previous quarter’s expansion of 2.2 percent. In addition, service sector indicators as reflected by tourism indicators in June 2013 showed a continued expansion. The number of inbound tourists was recorded at 2.0 million persons in June 2013, or increased 25.0 percent from last year, following from previous month’s expansion of 19.4 percent. This expansion was owing to inbound tourists from China, Malaysia and Russia, which showed a growth of 106.3 percent, 34.4 percent and 58.3 percent respectively. 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, accelerating from previous month’s expansion of 18.9 percent per year.
Supply Side Indicators 2012 2013 Q1 Q2 May Jun YTD Manufacturing Production Index (%yoy) 2.5 3.0 -3.5 -7.8 -3.5 -0.9 %qoq_SA / %mom_SA - -3.1 -5.9 0.1 -3.5 - Agricultural Production Index (%yoy) 2.6 2.2 1.3 0.0 8.5 1.7 %qoq_SA / %mom_SA - -1.5 0.8 -1.8 6.6 - Number of In-Bound Tourists (%yoy) 16.2 18.9 21.3 19.4 25.0 20.0 %qoq_SA / %mom_SA - 1.1 8.1 2.0 6.1 -6. Economic stability remained robust both on internal and external sides. Headline inflation in June 2013 was at 2.3 percent from last year, stable from previous month’s rate. This was mainly due to increase in agricultural products such as vegetable and fruit. Meanwhile, core inflation rate was at 0.9 percent, also stable from last month’s rate. As such, headline and core inflations in Q2 2013 registered at 2.3 and 1.0 percent from a year earlier, respectively. Unemployment rate in May 2013 stood at 0.8 percent of total labor force, or equivalent to 300,000 unemployed persons. Public debt to GDP ratio at the end of March 2013 stood at 44.2 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 June 2013 at 170.8 billion USD, or approximately 2.8 times of short-term external debt.
Macroeconomic Stability Indicators 2012 2013 Q1 Q2 May Jun YTD Internal Stability Headline Inflation (%yoy) 3.0 3.1 2.3 2.3 2.3 2.7 Core Inflation (%yoy) 2.1 1.5 1.0 0.9 0.9 1.2 Unemployment rate (% of total labor force) 0.7 0.7 n.a. 0.8 n.a. 0.8 Public debt (%GDP) 44.0 44.3 44.2* n.a. n.a. 44.2 External Stability Current Account Balance (Billion USD) 2.7 1.3 n.a. -1.1 n.a. -3.2 International Reserves (Billion USD) 181.6 177.8 170.8 175.3 170.8 170.8 Forward (Billion USD) 24.1 23.7 23.7 23.5 23.7 23.7Source: Fiscal Policy Office / www.fpo.go.th