Attachment
Indicators in May 2014 indicated that Thai economy on expenditure side showed improving signs, while public spending and private confidence increased due to improving political situation. External demand showed slowing signs from exports of goods and services. Moreover, internal stability remained robust with slight pressure on inflation while external stability remained strong. May 2014 was the month of transition of Thai economic recovery since NCPO came to restore normal administration. FPO expects that the engines of growth particularly private consumption and investment and public spending would support Thai economy starting June 2014.
1. Private consumption in May 2014 showed improving sign from last month. This was reflected by real VAT collection which expanded by 2.3 percent per year, increasing by 0.8 percent from last month after seasonal adjustment (m-o-m SA). Looking into details, the real VAT collection on import goods expanded by 5.0 percent per year, while the real VAT collection on domestic consumption increased by 0.1 percent per year. The motorcycle sales contracted by -17.8 percent from a year earlier. The motorcycle sales in Bangkok and others regions showed contraction of -5.6 and -21.0 percent from last year respectively. This was due to decreasing household income especially farmer income by contraction in agricultural price such as rice, rubber and palm oil. Moreover, passenger car sales in May 2014 also showed continued contraction of -44.4 percent per year. Likewise, imports of consumer goods in May 2014 showed a contraction of -4.5 percent per year, decreasing by -7.7 percent from last month after seasonal adjustment (m-o-m SA). Further, Consumer Confidence Index in May 2014 stood at 60.7 points, the first expansion in past 14 months and the highest level in 4 months since February 2014. This was due to consumers' confidence about Thai economy and improvement in political situation.
Private Consumption Indicators 2013 2013 2014 Q1 Q2 Q3 Q4 Q1 Apr May YTD Real Value Added Tax Collection (%yoy) -0.7 6.8 -0.3 -7.3 -1.0 -0.2 -1.2 2.3 0.1 %qoq_SA / %mom_SA - -2.0 -3.2 -0.9 5.5 -1.1 1.0 0.8 - Imports of Consumer Goods (%yoy) 4.4 4.6 7.7 6.2 -0.2 -3.9 5.0 -4.5 -2.3 %qoq_SA / %mom_SA - -3.7 -1.6 -1.2 6.3 -6.3 6.8 -7.7 - Passenger Car Sales (%yoy) -6.1 97.2 -3.3 -24.8 -39.7 -55.3 -34.4 -44.4 -50.1 %qoq_SA / %mom_SA - -3.3 -27.3 -2.8 -11.0 -27.5 13.7 -17.3 - Motorcycle Sales (%yoy) -6.0 5.4 -6.2 -8.7 -14.9 -20.8 -21.5 -17.8 -20.3 %qoq_SA / %mom_SA - -2.0 -4.9 -3.7 -4.9 -8.2 0.2 -2.0 - Consumer Confidence Index 70.2 73.8 72.8 69.3 64.9 59.9 57.7 60.7 59.62. Private investment in May 2014 also showed slowing signs from last year, but slight improving signs from last month for investment in construction sector. This was reflected by cement sale in May 2014 which contracted by -1.8 percent per year, but increasing by 1.0 percent from last month after seasonal adjustment (m-o-m SA). Moreover, the real estate tax collection also declined by -1.0 percent per year, but increasing by 2.0 percent from last month after seasonal adjustment (m-o-m SA). Private investment indicators of machinery sector also showed slowing signs as reflected by continued decrease in commercial car sales by -31.7 percent per year. The import of capital goods in May 2014 declined by -15.4 percent per year.
Private Investment Indicators 2013 2013 2014 Q1 Q2 Q3 Q4 Q1 Apr May YTD Construction Real Estate tax Collection (%yoy) 17.9 35.2 11.0 22.0 9.1 -6.6 -7.7 -1.0 -5.6 %qoq_SA / %mom_SA - -1.5 -1.4 8.2 4.0 -14.2 6.1 2.0 - Cement Sales (%yoy) 8.3 15.9 14.6 3.0 0.3 -2.4 -3.1 -1.8 -2.4 %qoq_SA / %mom_SA - -0.6 1.3 -1.3 1.0 -2.4 1.4 1.0 - Machinery Commercial Car Sales (%yoy) -8.4 19.4 3.2 -26.2 -24.1 -36.6 -32.3 -31.7 -34.9 %qoq_SA / %mom_SA - -3.1 -7.6 -14.2 -0.9 -18.5 11.0 -6.1 - Import of capital goods (%yoy) -5.9 3.7 -1.5 -7.9 -16.6 -14.1 -16.9 -15.4 -15.0 %qoq_SA / %mom_SA - -11.8 0.1 -5.1 -0.5 -7.7 -0.8 -0.5 - Import of capital goods exc. aircraft, ship and train (%yoy) -10.2 -0.7 -11.2 -10.0 -18.0 -11.4 -3.8 -6.0 -8.8 %qoq_SA / %mom_SA - -8.5 -5.3 -1.0 -4.5 -1.6 6.1 -2.6 -3. Fiscal indicators in May 2014 showed deficit. The budget disbursement recorded at 154.3 billion baht, an expansion of 14.1 percent per year. This amount comprised of (1) current year expenditure of 142.5 billion baht, which expanded by 13.3 percent per year (including a current expenditure of 125.9 billion baht, or an increase of 15.5 percent year-on-year growth, and a capital expenditure of 16.6 billion baht or a decrease of -0.6 percent year-on-year). For the first 8 months of FY2014, the budget disbursement recorded at 1,565.6 billion baht, the disbursement rate stood at 62.0 percent of budget framework FY2014 by 2,525.0 billion baht. In May 2014, the net government revenue collection (net of local authorities' allocation) amounted to 282.6 billion baht or a decrease of -14.2 percent from last year. Looking into detail, 1) income tax contracted by -11.0 percent from a year earlier from a contraction of personal income tax at -2.4 percent and a contraction of corporate income tax at -12.9 percent due to slowdown in Thai economy and 2) consumption tax (value added tax) expanded by 4.7 percent per year, VAT on domestic spending increased by 4.7 percent per year while VAT on import goods increased by 7.5 percent per year. For the first 8 months of FY2014, the net government revenue collection (net of local authorities' allocation) amounted to 1,360.0 billion baht, lower than expected -93.3 billion baht or -6.4 percent per year. As for fiscal position, budget balance in May 2014 showed a surplus of 9.2 billion baht. For the first 8 months of FY2014, budget balance showed a deficit of -500.6 billion baht.
Fiscal Sector Indicators FY2013 FY2013 FY2014 Q1/ Q2/ Q3/ Q4/ Q1/ Q2/ Apr May YTD FY13 FY13 FY13 FY13 FY14 FY14 Net Government 2,161.3 508.5 469.6 641.9 537.5 503.4 437.7 136.3 282.6 1,360.0 Revenue (net of local authorities’ allocation) (%y-o-y) 9.4 27.6 13.7 3.4 -1.2 -1.0 -6.8 5.5 -14.2 -5.3 Expenditure 2,402.5 785.9 585.7 482.0 548.9 831.1 553.0 195.8 154.3 1,734.2 (%y-o-y) 4.7 60.5 -24.9 4.8 -3.0 5.7 -5.6 8.6 14.1 2.8 Budget Balance -239.0 -283.6 -109.1 165.1 -11.4 -334.7 -115.5 -59.7 9.2 -500.64. Exports of goods in May 2014 showed improving signs from previous month. Export value in May 2014 stood at 19.4 billion USD, equivalent to a decrease of -2.1 percent from last year, decreasing by -2.6 percent from last month after seasonal adjustment (m-o-m SA). Exports to China, Japan, ASEAN-5 and Australia contracted the most. This was resulted from contraction in agricultural products, vehicles and electrical appliances. Import value amounted to 20.2 billion USD in May 2014, decreased by -9.3 percent from a year earlier. As such, this resulted in a trade deficit of -0.8 billion USD in May 2014.
Major trading partners 2013 2014 (Export share 2012=>2013) 2013 Q1 Q2 Q3 Q4 Q1 Apr May YTD Total Exports Value (%yoy) -0.3 3.9 -2.2 -1.7 -1.0 -1.0 -0.9 -2.1 -1.2 %qoq_SA / %mom_SA - -0.5 -3.5 0.6 2.6 -0.7 1.8 -2.6 - 1. China (11.7%>>>11.9%) 1.4 7.3 -13.4 -0.3 12.9 -4.4 -9.5 -5.7 -5.6 2. US (9.9%>>>10%) 0.8 0.8 -3.5 0.7 5.2 0.6 0.6 2.8 1.1 3. Japan (10.2%>>>9.7%) -5.2 1.5 -6.3 -10.1 -5.5 2.0 -4.5 -9.9 -1.7 4. Europe (8.5%>>>8.8%) 2.7 7.0 -5.3 3.3 6.3 4.8 5.4 11.9 6.4 5. Hong Kong (5.7%>>>5.8%) 0.7 11.2 7.7 -1.4 -12.0 -1.8 -7.5 4.4 -1.7 6. Malaysia (5.4%>>>5.7%) 4.7 -0.8 5.8 12.4 2.0 -0.1 10.3 -9.8 -0.5 PS. ASEAN-9 (24.6%>>>26.0%) 5.0 5.9 2.4 10.8 1.2 -5.4 -1.9 0.1 -3.5 PS. ASEAN-5 (17.2%>>>17.6%) 2.0 5.4 -0.7 11.2 -7.1 -11.0 -8.3 -3.3 -8.8 PS. ASEAN-4 (7.4%>>>8.3%) 11.8 7.0 9.9 10.0 20.3 7.1 11.5 7.5 8.05. Supply-side indicators in May 2014 suggested slight slowdown especially in manufacturing and tourism. Manufacturing Production Index (MPI) in May 2014 continued to decrease by -4.1 percent from a year earlier, but decreasing by -1.3 percent from last month after seasonal adjustment (m-o-m SA). This was due to contraction in vehicles, jewelry and food. However, items that showed expansion were radio and television, electronics, petroleum and textiles. Consistently, Thai Industrial Sentiment Index (TISI) in May 2014 stood at 85.1 points, the first expansion in 7 months, since the political situation was better and the farmers get paid from rice pledging scheme. Service sector showed slowing signs from last month as reflected by the number of inbound tourists in May 2014 was 1.7 million persons or decreased by -10.7 percent per year, decreasing by -5.1 percent from last month after seasonal adjustment (m-o-m SA). The number of tourists from China, Malaysia and Singapore contracted the most. But the tourists from Laos, England and Vietnam expanded. However, Agricultural Production Index (API) in May 2014 increased by 6.9 percent per year. This was due to increasing crop production such as corn and first rice, while production rubber and tapioca decreased. The production of livestock also expanded especially pork and chicken from increasing demand.
Supply Side Indicators 2013 2013 2014 Q1 Q2 Q3 Q4 Q1 Apr May YTD Manufacturing Production Index (%yoy) -3.2 2.9 -4.9 -3.5 -7.1 -7.1 -4.1 -4.1 -5.9 %qoq_SA / %mom_SA -2.9 -5.7 -1.4 3.3 -7.1 2.7 -1.3 - Number of In-Bound Tourists (%yoy) 19.6 22.1 21.3 26.1 10.7 -5.8 -1.7 -10.7 -5.9 %qoq_SA / %mom_SA - 1.1 6.8 5.8 -2.6 -10.2 7.3 -5.1 - Agricultural Production Index (%yoy) 0.6 1.1 -0.4 -2.9 3.0 3.9 5.3 6.9 4.8 %qoq_SA / %mom_SA -1.6 -0.4 -1.2 6.0 1.1 0.7 1.0 -6. Internal stability remained robust with slight pressure on inflation while external stability remained strong. Headline inflation in May 2014 was at 2.6 percent from last year, due to increasing price in vegetable and livestock from the drought and increasing price of instant foods from increasing LPG. Core inflation stood at 1.8 percent. Unemployment rate in May 2014 was at 0.9 percent of total labor force or equivalent to 362,000 unemployed persons. Public debt to GDP ratio at the end of April 2014 stood at 46.6 percent, well 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 May 2014 at 167.5 billion USD, or approximately 2.76 times of short-term external debt.
Macroeconomic Stability Indicators 2013 2013 2014 Q1 Q2 Q3 Q4 Q1 Apr May YTD Internal Stability Headline Inflation (%yoy) 2.2 3.1 2.3 1.7 1.7 2.0 2.5 2.6 2.2 Core Inflation (%yoy) 1.0 1.5 1.0 0.5 0.8 1.2 1.7 1.8 1.4 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 46.5 46.6 n.a. 46.6 External Stability Current Account Balance (Billion USD) -2.8 0.7 -7.2 -0.9 5.2 8.2 -0.6 n.a. 7.6 International Reserves (Billion USD) 167.2 177.8 170.8 172.3 167.2 167.4 168.9 167.5 167.5 Forward (Billion USD) 23.0 23.7 23.7 21.2 23.0 23.6 23.2 23.2 23.2Moreover, Director-General of the Fiscal Policy Office concluded that May 2014 was the month of transition of Thai economic recovery since NCPO came to restore normal administration. FPO expects that the engines of growth particularly private consumption and investment and public spending would support Thai economy starting June 2014.
Source: Fiscal Policy Office / www.fpo.go.th