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"Indicators in September and Q3/2014 indicated that Thai economy showed slightly improvement in domestic consumption particularly in private consumption. Meanwhile, the external demand through export showed a slowing pace despite the fact that export values in September 2014 showed positive expansion. For the supply-side indicators,agricultural sector showed contraction, while the number of inbound tourists increased compared to that of previous quarter."1.Private consumption in September and Q3/2014 showed slight improvement. This was reflected by real VAT collection at constant price in September 2014 which expanded by 4.1 percent per year, and after seasonal adjustment (m-o-m SA) expanded by 1.1 percent per month. Looking into details, the real VAT collection on import goods expanded by 2.8 percent, while the real VAT collection on domestic consumption expanded by 5.1 percent. Consequently, real VAT collection at constant price in Q3/2014 expanded by 2.3 percent per year. After seasonal adjustment (q-o-q SA), it expanded by 0.7 percent per quarter due to the expansion of real VAT collection on domestic consumption, which increased by 5.6 percent per year. Meanwhile, motorcycle sales in September 2014 contracted by -4.4 percent per year both in Bangkok and other regions. Consequently, motorcycle sales in Q3/2014 decreased by -8.1 percent per year from the previous quarter, but expanded by 7.4 percent per quarter after seasonal adjustment (q-o-q SA). Furthermore the passenger car sales in September 2014 contracted by -35.9 percent per year resulting in the contraction in Q3/2014 by -38.3 percent per year. Consumer Confidence Index in September 2014 was at 69.2 points decreasing from last month that was 70.1 points. This was the first decreasing in 5 months. The underlying reason was that the price of agricultural products slowed down. Moreover, there were an increase of living costs, and the economic volatilities of Thailand's trade partners that directly affected Thailand's exports. However, Consumer Confidence Index in Q3/2014 increased to 69.3 higher than that of Q2/2014, which were 61.2. This was due to consumers' confidence in Thai economy, improvement in political situation, and concrete government policies. In addition, imports of consumer goods in September 2014 expanded by 11.6 percent per year, and increased by 14.2 percent per month after seasonal adjustment (m-o-m SA) resulting in the expansion by 0.2 percent per year in Q3/2014.
Private Consumption Indicators 2013 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Aug Sep YTD Real Value Added Tax Collection (%yoy) -0.7 6.8 -0.3 -7.3 -1.1 -0.1 0.3 2.3 -0.9 4.1 0.8 %qoq_SA / %mom_SA -3.0 -2.0 -1.2 5.4 -2.4 -1.3 0.7 -1.0 1.1 - Imports of Consumer Goods (%yoy) 4.4 4.6 7.7 6.2 -0.2 -3.9 0.4 0.4 -7.0 11.6 -1.1 %qoq_SA / %mom_SA -4.0 -1.3 -0.7 6.1 -7.8 3.6 -0.7 -4.6 14.2 - Passenger Car Sales (%yoy) -6.1 97.2 -3.3 -24.8 -39.7 -55.3 -37.7 -38.3 -41.2 -35.9 -45.0 %qoq_SA / %mom_SA -3.3 -27.3 -2.8 -11.0 -25.7 1.7 -7.4 1.6 -0.8 - Motorcycle Sales (%yoy) -6.0 5.4 -6.2 -8.7 -14.9 -20.8 -18.2 -8.1 -11.4 -4.4 -16.0 %qoq_SA / %mom_SA -1.0 -5.1 -4.7 -4.8 -8.0 -2.3 7.4 -4.5 4.4 - Consumer Confidence Index 70.2 73.8 72.8 69.3 64.9 59.9 61.2 69.3 70.1 69.2 63.52.Private investment in September and Q3/2014 showed improving sign in machinery sector. This was reflected by imports of capital goods in September 2014, which expanded by 17.8 percent per year, and increased by 45.6 percent per month after seasonal adjustment (m-o-m SA). Consequently, imports of capital goods in the 3 rd quarter of 2014 expanded by 0.3 percent per year, and expanded by 7.9 percent per quarter after seasonal adjustment (q-o-q SA). However, commercial car sales in September 2014 contracted by -18.5 per year, but expanded by 4.0 percent per month after seasonal adjustment (m-o-m SA). As a result, commercial car sales in Q3/2014 declined by -1.2 percent per year. Meanwhile, private investment in construction still slowed down. This was reflected by cemen sales in September 2014, which decreased by -5.6 percent per year. As a result, commercial car sales in Q3/2014 declined by -2.9 percent per year, and contracted by -2.2 percent per quarter after seasonal adjustment.
Private Investment Indicators 2013 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Aug Sep YTD Construction Cement Sales (%yoy) 8.3 15.9 14.6 3.0 0.3 -2.4 -3.0 -2.9 -2.7 -5.6 -2.7 %qoq_SA / %mom_SA 0.6 1.2 -2.0 0.7 -2.0 0.5 -2.2 -0.2 -2.5 - Machinery Commercial Car Sales (%yoy) -8.4 19.4 3.2 -26.2 -24.1 -36.6 -30.6 -20.4 -21.2 -18.5 -30.1 %qoq_SA / %mom_SA -3.1 -7.6 -14.2 -0.9 -15.2 -2.8 -1.2 0.6 4.0 - Import of capital goods (%yoy) -5.9 3.7 -1.5 -7.9 -16.6 -14.1 -12.6 0.0 -21.5 17.8 -9.0 %qoq_SA / %mom_SA -9.8 -0.3 -6.0 -1.6 -6.9 1.4 7.9 -27.7 45.6 - Import of capital goods exc. -9.8 -0.1 -11.0 -9.7 -17.4 -11.0 -3.8 -3.6 -12.9 10.3 -6.2 aircraft, ship and train (%yoy) %qoq_SA / %mom_SA -8.2 -5.7 -0.6 -4.7 -0.9 1.7 0.2 -8.5 24.6 -3.Fiscal indicators in Q3/2014 (or FY4/2014) showed that fiscal policy played a role in supporting the Thai economy through a budget deficit of 525.0 billion baht or decreased by -5.6 percent per year. This amount comprised of (1) a declining in income tax revenues by -3.1 percent per year due to a contraction by -6.0 percent per year of corporation income tax revenues and a decreasing by -4.3 percent per year of personal income tax revenues responding to a reduction of income tax rates (2) an increasing in consumption tax (value added tax) by 4.2 percent per year, which was due to an increasing in value added tax from consumption by 7.6 percent per year and an slight increasing in value added tax from imports by 0.09 percent per year. Overall, the net government revenue collection (net of local authorities' allocation) in FY2014 amounted at 2,073.9 billion baht or decreased by -4.1 percent per year. In Q3/2014 (or Q4/FY2014), the budget disbursement was recorded at 561.2 billion baht or expanded by 2.2 percent per year. For current FY, the budget disbursement was amounted at 526.3 billion baht, which expanded by 3.7 percent per year. This amount comprised of (1) current year expenditure of 451.4 billion baht, which expanded by 4.9 percent per year and (2) capital expenditure of 74.9 billion baht, which contracted by -3.2 percent per year. This resulted in a 2,246.3 billion baht budget disbursement in FY2014 or 89.0 percent of FY2014 expenditure framework (2,525.0 billion baht). As of fiscal position, budget balance in FY2014 showed a deficit of -390.0 billion baht.
Fiscal Sector Indicators FY2013 FY2013 FY2014 Q1/ Q2/ Q3/ Q4/ Q1/ Q2/ Q3/ Q4/ Sep YTD FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14 Net Government 2,161.6 508.5 469.6 641.9 537.5 503.5 437.2 608.3 525.0 192.1 2,073.9 Revenue (net of local authorities’ allocation) (%y-o-y) 9.4 27.6 13.7 3.4 -1.2 -1.0 -6.9 -5.2 -3.1 -1.6 -4.1 Expenditure 2,402.5 785.9 585.7 482.0 548.9 831.1 553.0 514.7 561.2 228.9 2,460.0 (%y-o-y) 10.3 60.5 -24.9 4.8 -3.0 5.7 -5.6 6.8 2.2 -2.3 2.4 Budget Balance -239.0 -283.6 -109.1 165.1 -11.4 -334.7 -115.9 105.5 -44.9 26.5 -390.04.Exports in September and Q3/2015 showed slowing signs despite the fact that exports in September 2014 was amounted at 19.9 billion USD or expanded by 3.2 percent per year. In addition, after seasonal adjustment, exports expanded by 2.5 percent per month. However, in Q3/2014, exports still contracted by -1.8 percent per year decreasing from the previous quarter, which expanded by 0.3 percent. Major exporting markets, which still had the expansion in September 2014 comprised of U.S., Japan, EU, Australia, ASEAN-9, and CLMV. Looking into details, export products that expanded in September were electrical appliances, agro-industry, and mineral and fuel. Major exporting markets in Q3/2014 were U.S., EU, CLMV, Africa, Philippines, South Korea, and Taiwan. Major exporting products in Q3/2014 were electronics and agro-industry. Import values in September 2014 was amounted at 21.7 billion USD, which expanded by 14.4 percent per year. As a result, import values USD in Q3/2014 contracted by -1.3 percent per year slower than that of the previous quarter, which contracted by -12.6 percent. As such, the smaller export value compared to that of imports resulted in a trade deficit of -1.8 billion USD in September 2014. Moreover, in Q3/2014, a trade deficit was amounted at -1.8 billion USD.
Major Exports Market 2013 2013 2014 (Exports Share 2012>>>2013) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Aug Sep YTD Total Exports Value (%yoy) -0.3 3.9 -2.2 -1.7 -1.0 -1.0 0.3 -1.8 -7.4 3.2 -0.8 %qoq_SA / %mom_SA - -1.3 -2.8 1.7 1.7 -1.3 -0.8 -1.1 -2.3 2.5 - 1. China (11.7%>>>11.9%) 1.4 7.3 -13.4 -0.3 12.9 -4.4 -4.2 -6.3 -14.4 -1.7 -5.0 2. US (9.9%>>>10%) 0.8 0.8 -3.5 0.7 5.2 0.6 4.9 3.4 -0.3 6.2 3.0 3. Japan (10.2%>>>9.7%) -5.2 1.5 -6.3 -10.1 -5.5 2.0 -4.9 -1.0 -7.6 1.4 -1.3 4. Europe (8.5%>>>8.8%) 2.7 7.0 -5.3 3.3 6.3 4.8 11.0 2.0 -5.4 4.5 5.8 5. Hong Kong (5.7%>>>5.8%) 0.7 11.2 7.7 -1.4 -12.0 -1.8 1.7 -13.5 -21.9 -6.8 -5.1 6. Malaysia (5.4%>>>5.7%) 4.7 -0.8 5.8 12.4 2.0 -0.1 -0.1 -5.0 -3.7 -11.2 -1.8 PS. ASEAN-9 (24.6%>>>26.0%) 5.0 5.9 2.4 10.8 1.2 -5.4 0.2 1.1 0.0 8.8 -1.3 PS. ASEAN-5 (17.2%>>>17.6%) 2.0 5.4 -0.7 11.2 -7.1 -11.0 -3.7 -4.2 -5.0 4.3 -6.2 PS. ASEAN-4 (7.4%>>>8.3%) 11.8 7.0 9.9 10.0 20.3 7.1 8.8 13.6 12.6 19.0 9.85. Supply-side indicators in September and Q3/2014 showed slowing signs in agricultural sector, whereas service sector indicated improving signs. Agricultural Production Index (API) in September 2014 continued decreasing by -3.4 percent per year. This was due to a decline in rice production, which was caused by droughts during the beginning of the year. In addition, farmers reduced there was a reduction in the second-round planting of outof-season rice, as well as a contraction in corn product and rubber due to the previous harvest. According to heavy rain in the south, this was the obstacle for rubber tapping. As a result, Agricultural Production Index (API) in Q3/2014 declined by -0.5 percent per year due to a reduction in rice and corn products. However, production of livestock grew well particularly poultry due to an increasing demand and no epidemic of any disease. Meanwhile, the service sector reflected by the number of inbound tourists was recorded at 1.86 million persons in September 2014 or decreased by -0.7 percent per year. After seasonal adjustment, the number of inbound tourists increased by 4.8 percent per month. This expansion was owing to inbound tourists from south Asia, and South Africa. However, the number of inbound tourists from northeast Asia, ASEAN, and Europe decreased. Consequently, the total number of inbound tourists was recorded at 5.85 million persons, or decreased by -10.1 percent per year. However, after seasonal adjustment it increased by 3.9 percent per quarter, which was due to the confidence of foreign tourists in domestic situations.For manufacturing sector , Thai Industrial Sentiment Index (TISI) in September 2014 stood at 86.1 slightly decreasing from previous month. The reason was that entrepreneurs were not motivated to expand investment. Also, the entrepreneurs were concerned about the slowdown in domestic demand and economy including liquidity problem, and the risk form global economy's resilience. Nonetheless, Thai Industrial Sentiment Index (TISI) in the 3 rd quarter increased to 88.2 points higher than that of previous quarter, which was 85.8 points. This was owing to the confidence in the improvement of political situation.
Supply Side Indicators 2013 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Aug Sep YTD Number of In-Bound Tourists (%yoy) 18.8 22.1 24.3 21.4 9.3 -7.8 -13.3 -10.1 -11.9 -7.0 -10.3 %qoq_SA / %mom_SA - 4.6 6.6 -0.3 -1.4 -11.7 -0.7 3.9 2.2 4.8 - Agricultural Production Index (%yoy) -2.4 -2.8 -3.6 -8.6 2.5 1.6 4.2 -0.5 -0.2 -3.4 2.6 %qoq_SA / %mom_SA -0.4 -3.2 -0.2 5.4 4.4 -0.6 -5.5 -1.6 -6.4 -6. Internal and external stabilities remained robust. Headline inflation in September 2014 increased by 1.8 percent per year lower than that of last month, which was 2.1 percent. This was mainly due to a decline in crude oil price in world market, which showed a continually decreasing signs. This affected the restructuring of retail gas prices particularly gasohol price. Additionally, there was a decreasing demand in meat and animal products during the vegetarian festival. Furthermore, core inflation stood at 1.7 percent. As a result, headline inflation and core inflation stood at 2.0 percent per year and 1.8 percent per year, respectively. Unemployment rate in September 2014 was 0.8 percent of total labor force, or equivalent to 310,000 unemployed persons. Consequently, unemployment rate in Q3/2014 was 0.8 percent, or equivalent to 352,000 unemployed persons. Public debt GDP ratio at August 2014 stood at 46.5 percent, still below the Fiscal Sustainability Framework, which was targeted at 60.0 percent. 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 2014 at 161.9 billion USD, or approximately 2.7 times of short-term external debt.
Macroeconomic Stability 2013 2013 2014 Indicators Q1 Q2 Q3 Q4 Q1 Q2 Q3 Aug Sep YTD Internal Stability Headline Inflation (%yoy) 2.2 3.1 2.3 1.7 1.7 2.0 2.5 2.0 2.1 1.8 2.2 Core Inflation (%yoy) 1.0 1.5 1.0 0.5 0.8 1.2 1.5 1.8 1.8 1.7 1.6 Unemployment rate (% of total labor force)0.7 0.7 0.7 0.8 0.6 0.9 1.0 0.8 0.7 0.8 0.9 Public debt (%GDP) 45.7 44.2 44.5 45.5 45.7 46.5 47.1 46.5* 46.5 n.a. 46.5 External Stability Current Account Balance (Billion USD) -2.8 0.5 -6.7 0.8 2.9 8.2 0.5 -0.6** 0.2 n.a. 8.1 International Reserves (Billion USD) 167.2 177.8 170.8 172.3 167.2 167.5 168.2 161.9 169.4 161.9 161.9 Forward (Billion USD) 23.0 23.7 23.7 21.2 23.0 23.6 23.7 24.7 22.6 24.7 24.7Source: Fiscal Policy Office / www.fpo.go.th