Mr. Somchai Sujjapongse, Director-General of the Fiscal Policy Office , revealed that Thai economy in January 2014 showed slowing signs both on expenditure side and production side, especially tourism which has affected by the current political situation. Though overall export turned slightly negative in January 2014, export to major trading partners still expanded.
Private consumption indicators continued to show contraction. Passenger car sales in January 2014 showed a contraction of -55.9 percent. Motorcycle sales in both metropolitan and provincial area also show decline in total of -30.3 percent. Moreover, consumer confidence index in January 2014 decreased to 61.4 points, the lowest level in the past 26 months. This was due to consumers' concerns about political situation and slowdown in Thai economy. However, real VAT collection still expanded by 2.7 percent partly due to low inflation.
Private investment indicators show slowing signs both in construction and machinery sectors. In machinery sector, import of capital goods declined by -19.3 percent, together with decrease in commercial car sales of -36.2 percent. In construction sector, real estate tax collection declined by -5.5 percent, decelerating from the previous month's contraction of -9.1 percent. This reflected that real estate market in Thailand started to show slowing signs
Export in January 2014 contracted by -2.0 percent due to contraction in regional markets, e.g. Australia, Indonesia, Singapore, and Hong Kong by -24.2, -20.2, -18.4, and -14.0 percent respectively. This was partly due to Chinese New year celebration in January this year instead of February last year. However, export to major trading partners, especially Eurozone, Japan, USA expanded by 4.6, 1.8, and 0.4 percent respectively. This resulted in export expansion of electronic goods and electrical appliances by 6.5, and 7.8 percent respectively.
Supply-side indicators also showed slowing sign, as reflected by Manufacturing Production Index (MPI) in January 2014 which contracted by -7.4 percent. This was due to contraction in furniture and decorations, automobile, and food by -26.5, -35.7, and -9.0 percent respectively. However, items that showed expansion were electronics, and radio and television by 3.8, and 1.6 percent respectively. Consistently, Thai Industrial Sentiment Index (TISI) in January 2014 stood at 86.9 points, the lowest points in the past 55 months, due to producers' concerns about political situation. The number of inbound tourists in January 2014 was 2.3 million persons, slightly expanding by 0.1 percent. Moreover, due to political dispute, the number of tourist arrivals at Suvarnabhumi airport from 1 st - 24 th February 2014 shrunken by -19.6 percent. There are 48 countries (or about 92 percent of inbound tourists) raised their travel warning to Thailand. Meanwhile, Agricultural Production Index (API) in January 2014 continued to increase by 3.2 percent mainly due to expansion in major crops, such as para rubber of which cultivated and harvest area were increased in eastern and northeastern region of Thailand.
Nonetheless, economic stability remained robust on both internal and external sides. Headline inflation in January 2014 was as low as 1.9 percent. Unemployment rate in December 2013 stood at 0.6 percent of total labor force. Likewise, external economic stability remained robust and resilient to risks from volatilities in global economy, as indicated by high-level of international reserves at the end of December 2013 at 166.7 billion USD, or approximately 2.8 times of short-term external debt.
Source: Fiscal Policy Office / www.fpo.go.th