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"Thai economy in September showed slowing signs from previous period especially in private consumption and export. However, it still has supporting factors as tourism showed continual expansion and the economic stability remained robust"1. Private consumption in September and Q3/2013 showed slowing sign from both previous month and previous quarter. This was reflected by the real VAT collection in September 2013, which contracted by -19.4 percent where real VAT collection on domestic consumption contracted at an accelerated rate by -31.5 percent and real VAT collection on imported goods contracted by -2.7 percent. This resulted in a -7.3 percent year-on-year decrease in the third quarter of 2013. Meanwhile, imports of consumer goods in September 2013 showed an continual expansion of 4.2 percent per year. This yielded to 6.2 percent year-on-year increase in the third quarter of 2013. Furthermore, Consumer Confidence Index in September 2013 stood at 67.9 points, lowest rate in the past 12 months. This was due to consumer's concern about Thai economy slowdown in the second half of 2013 due to many negative factors which included the limited of government policies, flood situation, political risks, delay of the 2013 budget act, and potentially decreasing of income from global economic uncertainty, affecting our exports and tourisms.
Private Consumption Indicators 2012 2013 Q1 Q2 Q3 Aug Sep YTD Real Value Added Tax Collection (%yoy) 14.1 6.9 -0.1 -7.3 1.7 -19.4 -0.4 %qoq_SA / %mom_SA - -0.9 -3.1 -3.1 1.8 -3.5 - Imports of Consumer Goods (%yoy) -0.4 4.4 7.8 6.2 5.4 4.2 6.1 %qoq_SA / %mom_SA - -4.7 -1.2 -3.1 -5.6 -0.7 - Passenger Car Sales (%yoy) 86.6 97.2 -3.3 -24.8 -16.4 -30.7 10.3 %qoq_SA / %mom_SA - -3.0 -27.4 -3.5 12.3 -8.6 - Motorcycle Sales (%yoy) 5.8 5.4 -6.2 -8.7 -8.9 -11.1 -3.3 %qoq_SA / %mom_SA - -1.1 -4.8 -3.7 -6.7 -1.3 - Consumer Confidence Index 67.6 73.8 72.8 69.3 69.5 67.9 72.02. Private investment in September and Q3/2013 also showed slowing signs from both previous month and previous quarter, especially in machinery investment. For private investment indicators of machinery sector, import value of capital goods in September 2013 decreased at -12.7 percent per year. This resulted in a decrease of -7.9 percent in the third quarter. Private investment indicators of construction sector showed improving signs as cement sales in September and Q3/2013 expanded by 3.4 percent and 3.0 percent respectively. This is in tandem with an expansion in real estate tax collection in September and Q3/2013 which expanded by 12.6 percent and 22.0 percent respectively. This reflected that the real estate market has got back on track after its accelerating since the second half of 2012.
Private Investment Indicators 2012 2013 Q1 Q2 Q3 Aug Sep YTD Machinery Imports of Capital Goods (%yoy) 22.1 3.8 -1.5 -7.9 -7.7 -12.7 -2.0 %qoq_SA / %mom_SA - -12.3 0.5 -5.3 -3.9 -3.4 - Imports of Capital Goods exc. aircraft, 23.2 -0.7 -11.2 -10.0 -9.6 -12.6 -7.4 ships and trains (%yoy) %qoq_SA / %mom_SA -8.4 -5.4 -0.9 3.9 -2.4 - Commercial Car Sales (%yoy) 76.2 19.4 3.2 -26.2 -28.0 -26.0 -2.3 %qoq_SA / %mom_SA - -2.8 -8.8 -16.1 1.1 1.7 - Construction Real Estate tax Collection (%yoy) 21.4 35.2 11.0 22.0 25.2 12.6 21.6 %qoq_SA / %mom_SA - -1.4 -1.7 8.0 -1.0 -7.2 - Cement Sales (%yoy) 10.6 15.9 14.6 3.0 4.7 3.4 11.0 %qoq_SA / %mom_SA - -0.3 1.3 -1.8 3.1 -0.8 -3. Fiscal indicators in September and Q3/2013 showed that fiscal policy play a role in supporting the Thai economy due to a budget deficit of 17.0 billion baht in Q3/2013. In September 2013, the budget disbursement recorded at 234.3 billion baht, regarded as an expansion of 3.1 percent from a year earlier. This amount comprised of (1) current year expenditure of 218.8 billion baht, which expanded by 0.5 percent per year (including a current expenditure of 186.0 billion baht, or an increase of 7.4 percent year-on-year growth, and a capital expenditure of 32.8 billion baht or a decrease of -26.2 percent year-on-year) and (2) carry-over budget of 15.5 billion baht, which expanded by 59.9 percent from a year earlier. This resulted in a 548.9 billion baht budget disbursement in the third quarter of 2013 or an contraction of -3.0 percent per year. The net government revenue collection (net of local authorities' allocation) in September 2013 amounted to 193.4 billion baht or an increase of 9.8 percent from last year. This resulted in the third quarter's net revenue collection of 537.5 billion baht, contracted by -1.2 percent from a year earlier. As for fiscal position, budget balance in September 2013 showed a surplus of 2.2 billion baht. This resulted in a budget deficit of 17 billion baht in the third quarter of 2013.
Fiscal Sector Indicators FY2012 FY2013 Q1/ Q2/ Q3/ Q4/ Sep YTD FY56 FY56 FY56 FY56 Net Government Revenue (net of 1,975.6 508.5 469.6 641.9 537.5 193.4 2,157.5 local authorities' allocation) (%y-o-y) 4.4 27.6 13.7 3.4 -1.2 9.8 9.2 Expenditure 2,295.3 785.9 585.7 482.0 548.9 234.3 2,402.5 (%y-o-y) 5.4 60.5 -24.9 4.8 -3.0 3.1 4.7 Budget Balance -314.7 -283.9 -109.1 165.1 -17.0 2.2 -244.94. Exports in September and Q3/2013 showed slowing signs. Export value in September 2013 stood at 19.3 billion USD, equivalent to a contraction of -7.1 percent from last year. The slowdown items included electrical appliances and jewellery which contracted by -1.9 and -51.8 percent respectively. Exports to major markets slowdown such as Australia, Japan, and Singapore which contracted by -30.7, -13.6 and -20.4 percent respectively. This resulted in a -1.7 percent per year decrease in the third quarter. However, it is considered an expansion of 1.5 percent seasonally adjusted from previous quarter (q-o-q SA). Looking into details, export products that began to expand in the 3 rd quarter 2013 were electronics and mining and fuels that expanded by 2.9 and 8.4 percent respectively. This was due to the recovery of global demand where export market in the 3rd quarter 2013 such as ASEAN-9 and EU began to expand by 10.8 and 8.5 percent respectively. Meanwhile, import value in September 2013 amounted to 18.8 billion USD, or decreased -5.2 percent from a year earlier. This resulted in the import value in Q3/2013 contracted by -2.0 percent from a year earlier. As such, the smaller import value compared to that of exports resulted in a small trade surplus of 0.5 billion USD in September 2013. However, for the 3rd quarter of 2013, international trade marked a deficit of -1.9 billion USD.
Major Exports Market 2013 (Exports Share) 2012 Q1 Q2 Q3 Aug Sep YTD Total Exports Value (%yoy) 3.1 4.3 -2.2 -1.7 3.9 -7.1 0.05 %qoq_SA / %mom_SA - -0.9 -3.1 1.5 -2.7 -6.3 - 1. China (11.7%) 2.5 7.3 -13.4 -0.3 3.1 1.2 -2.5 2.Japan (10.2%) -1.6 1.5 -6.2 -10.1 -6.0 -13.6 -5.1 3. US (9.9%) 4.6 2.6 -3.5 0.7 3.6 -0.7 -0.1 4. Europe (8.5%) -9.2 8.7 -5.2 8.5 13.4 -2.7 2.1 5. Hong Kong (5.7%) 9.6 11.2 7.8 -1.4 4.3 -1.3 5.2 6.Malaysia (5.4%) 0.2 -0.8 5.9 12.4 7.6 20.5 5.7 7. Singapore (4.7%) -5.1 10.6 -10.6 23.0 57.6 -20.4 6.8 8. Middle East (5.0%) 6.6 4.4 -5.6 3.4 6.8 21.0 0.7 9. Australia (4.9%) 22.1 30.4 14.5 4.9 4.9 -30.7 11.0 PS. ASEAN-9 (24.3%) 5.0 5.9 2.5 10.8 17.3 6.6 6.35. Supply-side indicators in September and Q3/2013 showed continued expansion as inbound tourists accelerated. However, agricultural and manufacturing sectors still showed slowing signs. Service sector indicators as reflected by tourism indicators in June 2013 showed a continued expansion. The number of inbound tourists was recorded at 2.06 million persons in September 2013, or increased 27.6 percent from last year. This expansion was owing to inbound tourists from China, Malaysia and Russia, which showed high growths of 102.8 percent, 15.3 percent and 32.2 percent respectively. This marked the number of inbound tourists in the third quarter 2013 stood at 6.75 million persons, with an expansion of 26.1 percent from a year earlier. For the manufacturing sector, Manufacturing Production Index (MPI) in September 2013 contracted by -2.9 percent. The manufacturing sector which contracted in the September 2013 included 1) food industry where EMS diseases cut back supply of shrimp, volatility in tuna price raised concerns in tuna canned products, and excise tax restructuring resulted in acceleration in beer production in previous period and 2) automotive industry where First Car policy resulted in acceleration in cars production in previous period. However, some industries are growing such as petroleum from increasing fuels production for export, and air-conditions from expansion in property market. This resulted in a -3.6 percent per year decrease in the third quarter of 2013 while capacity utilization rate in September 2013 increased to 64 percent. Consistently, Thai Industrial Sentiment Index (TISI) in September 2013 stood at 90.4 points, continual decreasing for 15 consecutive months and the lowest points in the past 23 months. This was due to producers' concerns about flooding, slowdown in domestic and foreign economies, and increasing of competition along with costs. Meanwhile, agricultural sector's performance as measured by Agricultural Production Index (API) in September 2013 decelerated.API in September 2013 decreased -4.3 percent. This was mainly due to rice from drought and shrimp from EMS disease. This yielded Q3 2013 to contract -3.4 percent.
Supply Side Indicators 2012 2013 Q1 Q2 Q3 Aug Sep YTD Manufacturing Production Index (%yoy) 2.5 2.9 -4.9 -3.6 -2.8 -2.9 -1.9 %qoq_SA / %mom_SA - -2.9 -5.7 -2.1 2.7 -3.3 - Agricultural Production Index (%yoy) 3.9 -0.2 0.5 -3.4 -3.4 -4.3 -1.0 %qoq_SA / %mom_SA - -1.5 1.1 -3.1 1.2 -2.8 - Number of In-Bound 18.9 21.3 26.1 28.1 27.6 22.0 16.2 Tourists (%yoy) %qoq_SA / %mom_SA - 2.1 8.3 6.6 7.2 -1.8 -6. Economic stability remained robust on both internal and external sides. Headline inflation in September 2013 was at 1.4 percent, decreasing from previous month's rate. This was mainly due to harvesting season and proper climate affecting an increase of agricultural products such as vegetable and fruit, in tandem with decreasing in global oil price. Meanwhile, core inflation rate was at 0.6 percent. As such, headline and core inflations in Q3 2013 registered at 1.7 and 0.5 percent from a year earlier, respectively. Unemployment rate in August 2013 stood at 0.8 percent of total labor force, or equivalent to 317,000 unemployed persons. Public debt to GDP ratio at the end of August 2013 stood at 44.6 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 September 2013 at 172.3 billion USD, or approximately 2.8 times of short-term external debt.
Macroeconomic Stability Indicators 2012 2013 Q1 Q2 Q3 Aug Sep YTD Internal Stability Headline Inflation(%yoy) 3.0 3.1 2.3 1.7 1.6 1.4 2.4 Core Inflation(%yoy) 2.1 1.5 1.0 0.5 0.8 0.6 1.1 Unemployment rate(% of total labor force) 0.7 0.7 0.7 n.a. 0.8 n.a. 0.8 Public debt (%GDP) 44.0 44.2 44.5 n.a. 44.6 n.a. 44.6 External Stability Current Account Balance (Billion USD) -1.5 1.5 -6.7 n.a. 1.3 n.a. -5.5 International Reserves (Billion USD) 181.6 177.8 170.8 172.3 168.8 172.3 172.3 Forward (Billion USD) 24.1 23.7 23.7 21.2 22.7 21.2 21.2Source: Fiscal Policy Office / www.fpo.go.th