Mr. Somchai Sujjapongse, Director-General of the Fiscal Policy Office, revealed that, "Economic indicators in March and the 1 st quarter of 2014 showed slowing signs due to continued political unrest which affected both consumer and producer confidence and tourism. These caused contraction in private consumption and investment, together with tourism. Besides, industrial production also declined in tandem with slowdown in domestic spending and export.
The private consumption continued to weaken due to prolonged political situation. Real VAT collection in March 2014 contracted by -1.2 which resulted in a -0.2 percent year-on-year decrease in the first quarter of 2014 where real VAT collection on imported goods contracted by -7.4 percent while real VAT collection on domestic consumption expanded by 6.0 percent. Motorcycle sales in March 2014 and Q1/2014 contracted by -18.1 percent and -20.8 percent from a year earlier respectively where motorcycle sales in Bangkok contracted by -19.4 percent and motorcycle sales in other regions contracted by -20.8 percent in Q1/2014. Furthermore, Consumer Confidence Index in March 2014 stood at 58.7 points or average at 59.9 in Q1/2014, lowest rate in the past 12 years. Investment indicators also showed slowing signs in both machinery and construction. Real estate tax collection in March 2014 continued to decline by -9.4 percent which resulted in a decrease of -6.6 percent in Q1/2014. This was in tandem with a decrease in cement sales of -3.5 and -2.4 percent in March and Q1/2014 respectively. Investment in machinery also showed slowing sign as import value of capital goods in March 2014 and Q1/2014 decreased by -15.2 percent and -14.1 percent respectively.
External demand is weak as export contracted by -3.1 percent and -1.0 percent in March 2014 and Q1/2014 respectively. While fuel, agroindustry, and agriculture contracted, electronics, electrical appliances, and automobile grew well due to trading partners' economic recovery, such as Europe, Japan, and CLMV countries. Supply-side indicators also showed slowing sign, as reflected by Manufacturing Production Index (MPI) in March 2014 and Q1/2014 which contracted by -10.4 percent and -7.0 percent respectively. The manufacturing sector which massively contracted included automobile, hard disk, petroleum, electrical appliances, and canned and frozen seafood. Consistently, Thai Industrial Sentiment Index (TISI) in March 2014 stood at 84.7 points, the lowest points in the past 56 months due to producers' concerns about political unrest. Moreover, the number of inbound tourists was recorded at 2.1 million persons in March 2014 or decreased -9.4 percent from last year. This marked the number of inbounded tourists in the 1 st quarter of 2014 contracted by -5.85 percent. This contraction was owing to inbound tourists from Northeast Asia and ASEAN, while tourists from Europe still expanded well. Meanwhile, agricultural sector's performance as measured by Agricultural Production Index (API) grew at 1.6 percent and 2.9 percent in March 2014 and Q1/2014 respectively. This was mainly from increasing harvest area in rubber and corn. Additionally, livestock also expanded since there was an increase in pork demand and no epidemic of any disease.
Nonetheless, Economic stability remained robust on both internal and external sides. Headline inflation in March 2014 was at 2.0 percent. Unemployment rate in March 2014 stood at 0.9 percent of total labor force. 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 March 2014 at 164.4 billion USD, or approximately 2.8 times of short-term external debt."
Source: Fiscal Policy Office / www.fpo.go.th