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"Thai economy in March and the 1st quarter of 2014 showed continued slowing signs due to political uncertainty which affected both consumer and producer confidence. 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."1. Private consumption in March and Q1/2014 showed continued contraction from the previous periods. This was reflected by the contraction of real VAT collection in March 2014 by -1.2 percent where real VAT collection on imported goods contracted by -10.0 percent but real VAT collection on domestic consumption expanded by 6.9 percent. This resulted in a -0.2 percent year-onyear decrease in the first quarter of 2014. Motorcycle sales in March 2014 and Q1/2014 contracted by -18.1 percent and -20.8 percent respectively. Looking into detail in March 2014, motorcycle sales in Bangkok showed contraction of -11.2 percent from last year and motorcycle sales in others regions also decreased by -20.2 percent per year. This was due to a decrease household income and farmer income in all over the country. Import of consumer goods in March 2014 picked up by 3.3 percent which resulted in a contraction of -3.9 percent in Q1/2014. Furthermore, Consumer Confidence Index in March 2014 stood at 58.7 points, lowest rate in the past 12 years, or average at 59.9 points in Q1/2014. This was due to many negative factors which included political risks, the limited measures of government policies, high cost of living, low agricultural product price and global economic uncertainty, affecting our exports and tourisms.
Private Consumption Indicators 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Jan Feb Mar Real Value Added Tax Collection (%yoy) -0.7 6.8 -0.3 -7.3 -1.0 -0.2 2.7 -2.4 -1.2 %qoq_SA / %mom_SA -2.0 -3.2 -0.9 5.5 -1.1 3.5 -5.2 -2.5 Imports of Consumer Goods (%yoy) 4.4 4.6 7.7 6.2 -0.2 -3.9 -5.3 -9.8 3.3 %qoq_SA / %mom_SA -2.7 -1.3 -0.5 4.2 -6.3 3.7 -10.4 5.0 Motorcycle Sales (%yoy) -6.0 5.4 -6.2 -8.7 -14.9 -20.8 -30.3 -14.0 -18.1 %qoq_SA / %mom_SA -2.0 -4.9 -3.7 -4.9 -8.2 -14.4 15.1 -6.2 Consumer Confidence Index 70.2 73.8 72.8 69.3 64.9 59.9 61.4 59.7 58.72. Private investment in March and Q1/2014 also showed slowing signs, especially in machinery investment. For private investment indicators of machinery sector, import of capital goods in March 2014 and Q1/2014 continued to decrease -15.2 percent and -14.1 percent respectively. Private investment indicators of construction sector also showed slowing signs as cement sales in March contracted by -3.5 percent per year or 0.0 percent from previous month after seasonal adjustment. This yielded to a contraction of -2.4 percent in the first quarter. Besides, the real estate tax collection in March and Q1/2014 also continued to contract by -9.4 percent and -6.6 percent respectively.
Private Investment Indicators 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Jan Feb Mar Construction Real Estate tax Collection (%yoy) 17.9 35.2 11.0 22.0 9.1 -6.6 -5.5 -3.8 -9.4 %qoq_SA / %mom_SA -1.5 -1.4 8.2 4.0 -14.2 -4.3 -4.5 -4.9 Cement Sales (%yoy) 8.3 15.9 14.6 3.0 0.3 -2.4 -1.4 -2.1 -3.5 %qoq_SA / %mom_SA -0.6 1.3 -1.3 1.0 -2.4 8.1 -1.6 0.0 Machinery Import of capital goods (%yoy)-5.9 3.7 -1.5 -7.9 -16.6 -14.1 -19.3 -6.6 -15.2 %qoq_SA / %mom_SA -10.5 -0.4 -4.7 -1.9 -7.7 -2.7 -2.7 -3.6 Import of capital goods exc. aircraft, -10.2 -0.7 -11.2 -10.0 -18.0 -11.4 -12.3 -15.0 -6.9 ship and train (%yoy) %qoq_SA / %mom_SA -8.8 -5.0 -1.0 -4.3 -1.6 5.3 -6.5 -2.63. Fiscal indicators in March and Q1/2014 showed a budget deficit.In March 2014, the budget disbursement recorded at 165.5 billion baht, regarded as a contraction of -26.6 percent from a year earlier. This amount comprised of (1) current year expenditure of 142.0 billion baht, which contracted by -29.4 percent per year (including a current expenditure of 128.7 billion baht, or an increase of 2.2 percent year-on-year growth, and a capital expenditure of 13.3 billion baht or an decrease of -82.3 percent year-on-year). This resulted in a 553 billion baht budget disbursement in the first quarter of 2014 or the second quarter of fiscal year 2014. Furthermore, the net government revenue collection (net of local authorities' allocation) in March 2014 amounted to 129.4 billion baht or a decrease of -13.8 percent from last year. This was mainly due to a decrease in personal income tax and car tax at -15.9 percent and -36.6 percent respectively. This resulted in the first quarter's (second quarter of fiscal year 2014) net revenue collection of 432.5 billion baht or contracted by -7.9 percent from a year earlier. As for fiscal position, budget balance in March 2014 showed a deficit of -31.4 billion baht. This resulted in a budget deficit of -125.6 billion baht in the first quarter of 2014 (second quarter of fiscal year 2014).
Fiscal Sector Indicators FY2012 FY2013 FY2014 Q1/ Q2/ Q3/ Q4/ Q1/ Q2/ Feb Mar FYYTD FY13 FY13 FY13 FY13 FY14 FY14 Net Government Revenue 2,161.3 508.5 469.6 641.9 537.5 503.4 432.5 147.0 129.4 935.9 (net of local authorities' allocation) (%y-o-y) 9.4 27.6 13.7 3.4 -1.2 -1.0 -7.9 -5.8 -13.8 -4.3 Expenditure 2,402.5 785.9 585.7 482.0 548.9 831.1 553.0 174.4 165.5 1,384.1 (%y-o-y) 4.7 60.5 -24.9 4.8 -3.0 5.7 -5.6 14.7 -26.6 0.9 Budget Balance -239.0 -283.6 -109.1 165.1 -11.4 -334.7 -125.6 -48.4 -31.4 -460.34. Exports in March 2014 and Q1/2014 showed slowing signs. Export value in March 2014 stood at 19.9 billion USD, equivalent to a decrease of -3.1 percent from last year. This was resulted from contraction in agroindustrial, agricultural sectors, and mining and fuel by -7.7, -6.0, and -20.8 percent respectively. Exports to major trading partners such as Australia, Singapore, and ASEAN-5 decreased by -23.3, -36.0, and -16.3 percent respectively. Therefore, export value in in Q1/2014 amounted to 56.2 billion USD which contracted by -1.0 percent from the year earlier. However, export in electronic goods, electrical appliances, and automobile still expanded well due to economic recovery in many of our trading partners, such as Europe, Japan, and CLMV. Import value amounted to 18.5 billion USD in March 2014, decreased by -14.2 percent from a year earlier, and resulted in import value of 55.5 billion USD in Q1/2014, decreased by -15.4 percent. As such, the smaller import value compared to that of exports resulted in a trade surplus of 1.5 billion USD in March 2014. Moreover, for the 1st quarter of 2014, international trade marked a surplus of 0.7 billion USD.
Major trading partners 2013 2014 (Export share 2012=>2013) 2012 Q1 Q2 Q3 Q4 Q1 Jan Feb Mar Total Exports Value (%yoy) -0.3 3.9 -2.2 -1.7 -1.0 -1.0 -2.0 2.4 -3.1 %qoq_SA / %mom_SA - -1.3 -2.8 1.7 1.7 -0.7 -1.0 -1.3 -4.1 1. China (11.7%>>>11.9%) 1.4 7.3 -13.4 -0.3 12.9 -4.4 -0.8 -0.8 -11.2 2. US (9.9%>>>10%) 0.8 0.8 -3.5 0.7 5.2 0.6 0.4 -2.3 3.6 3. Japan (10.2%>>>9.7%) -5.2 1.5 -6.3 -10.1 -5.5 2.0 1.8 2.7 1.6 4. Europe (8.5%>>>8.8%) 2.7 7.0 -5.3 3.3 6.3 4.8 4.6 7.0 2.9 5. Hong Kong (5.7%>>>5.8%) 0.7 11.2 7.7 -1.4 -12.0 -1.8 -14.0 8.7 0.1 PS. ASEAN-5 (17.2%>>>17.6%) 2.0 5.4 -0.7 11.2 -7.1 -11.0 -10.8 -4.9 -16.3 PS. ASEAN-4 (7.4%>>>8.3%) 11.8 7.0 9.9 10.0 20.3 7.1 7.9 14.1 0.75. Supply-side indicators in March and Q1/2014 showed that service sector has been affected by political unrest. 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 inbound tourists in the first quarter 2014 stood at 6.6 million persons, with a contraction of -5.85 percent from a year earlier. This contraction was owing to inbound tourists from China, Malaysia Japan and Hong Kong, which showed a decrease of -17.8 percent, -15.8 percent -22.6 and -56.4 percent per year respectively. For the manufacturing sector, Manufacturing Production Index (MPI) in March 2014 continued to contract by -10.4 percent. The manufacturing sector which contracted in the March 2014 included vehicles, hard disk, petroleum, electrical appliances, and canned and frozen food. This marked the first quarter of 2014 contracted by -7.0 percent. However, manufacturing that showed expansion were sugar, air-conditioned, electronic component, and garment. Capacity utilization rate stood at 64.3 percent and 61.8 percent in March 2014 and Q1/2014 respectively. Consistently, Thai Industrial Sentiment Index (TISI) in March 2014 stood at 84.7 points, the lowest points in the past 57 months. This was due to producers' concerns about political unrest which affected domestic consumption. For agricultural production, however, Agricultural Production Index in March 2014 expanded by 1.6 percent y-o-y, resulting in the 4th quarter of 2014 expansion by 2.9 percent y-o-y. However, it was decelerated from the previous month due to a decrease of paddy and rubber from drought. Therefore, corn, a more drought tolerant crop, picked up at an accelerating rate. Moreover, livestock still expanded well since there was an increase in pork demand and no epidemic of any disease.
Supply Side Indicators 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Jan Feb Mar Manufacturing Production Index (%yoy) -7.0 -3.2 2.9 -4.9 -3.5 -7.1 -5.6 -4.7 10.4 %qoq_SA / %mom_SA -2.9 -5.4 -1.4 3.4 -7.1 -2.6 0.1 -6.6 Number of In-Bound Tourists (%yoy) 18.8 22.1 24.3 21.4 9.3 -5.85 0.1 -8.1 -9.4 %qoq_SA / %mom_SA - 4.4 6.4 1.0 -2.2 -10.2 -4.8 -5.0 -1.1 Agricultural Production Index (%yoy) -1.0 2.1 -5.0 -4.3 1.5 2.9 3.9 3.9 1.6 %qoq_SA / %mom_SA -0.4 -3.2 -0.2 5.4 0.8 -0.4 -1.9 -2.56. Economic stability remained robust on both internal and external sides. Headline inflation in March 2014 was at 2.1 percent, due to increasing in raw foods caused by drought and a price increase in LPG. Meanwhile, core inflation rate was at 1.3 percent. As such, headline and core inflations in Q1 2014 registered at 2.0 and 1.2 percent from a year earlier, respectively. Unemployment rate in March 2014 stood at 0.9 percent of total labor force, or equivalent to 341,000 unemployed persons. Public debt to GDP ratio at the end of February 2014 stood at 46.1 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 March 2014 at 167.4 billion USD, or approximately 2.8 times of short-term external debt.
Macroeconomic Stability Indicators 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Jan Feb Mar Internal Stability Headline Inflation (%yoy) 2.2 3.1 2.3 1.7 1.7 2.0 1.9 2.0 2.1 Core Inflation (%yoy) 1.0 1.5 1.0 0.5 0.8 1.2 1.0 1.2 1.3 Unemployment rate (% of total labor force)0.7 0.7 0.7 0.8 0.6 0.9 0.9 0.9 0.9 Public debt (%GDP) 45.7 44.2 44.5 45.5 45.7 46.1* 45.8 46.1 n.a. External Stability Current Account Balance (Billion USD) -2.8 0.5 -6.7 0.4 3.0 5.4* 0.3 5.1 n.a. International Reserves (Billion USD) 167.2 177.8 170.8 172.3 167.2 167.4 166.7 168.1 167.4 Forward (Billion USD) 23.0 23.7 23.7 21.2 23.0 23.6 22.2 23.2 23.6Source: Fiscal Policy Office / www.fpo.go.th