29 December 2014
"Indicators in November 2014 showed slowing signs in exports and private investment. However, private consumption showed remaining signs reflected by real VAT collection at constant price, while tourism sector showed continued expansion from last month."Mr. Krisada Chinavicharana, Director-General of the Fiscal Policy Office, acting Spokesperson of the Fiscal Policy Office revealed that "Indicators in November 2014 showed slowing signs in exports and private investment. However, private consumption showed remaining signs reflected by real VAT collection at constant price, while tourism sector showed continued expansion from last month."
Private consumption in November 2014 showed remaining signs. This was reflected by real VAT collection at constant price in November 2014, which expanded by 0.6 percent per year increasing from that of last month, which was -1.7 percent per year. Looking into details, the real VAT collection on domestic goods continually expanded by 4.5 percent per year, while the real VAT collection on imports contracted by -4.3 percent per year. Motorcycle sales in November 2014 continually contracted by -12.0 percent per year decreasing from that of last month, which was -7.6 percent per year. A reduction in motorcycle sales in Bangkok and other regions was caused by a continued contraction in agricultural prices, a decrease in real farm income, and also a continued decline in private consumption particularly in durable goods consumption. This was reflected by a contraction in passenger car sales, which continually declined by -27.7 percent per year. Consumer Confidence Index in November 2014 was 68.8 points decreasing from last month when it was 69.6 points. Consumer Confidence Index declined because consumers worried about economic recovery, which was not fully recovered. In addition, agricultural prices remaining at the low level caused a decrease in consumers' expenditure particularly consumers in rural area.
Private investment in November 2014 showed slowing signs particularly in construction sector. This was reflected by real estate tax collection in November 2014, which contracted by -12.6 percent per year decreasing from that of last month, which was -2.9 percent per year. Likewise, cement sales in November 2014 contracted by -8.8 percent year-on-year decreasing from last month, which was -5.7 percent per year. The reason was that demand in housing and condominiums remained stable. Investment in machinery sector reflected by imports of capital goods in November 2014 declined by -8.5 percent per year highly declining from last month, which was 8.0 percent per year. In addition, commercial car sales in November 2014 continually contracted by -17.4 percent per year decreasing from last month, which was -13.6 percent per year.
Fiscal indicators in November 2014 reflected that fiscal policy played a role in supporting Thai economy through a budget deficit. The budget balance in November 2014 showed a deficit of -69.7 billion baht.The net government revenue collection (net of local authorities' allocation) in November 2014 amounted at 162.3 billion baht. Meanwhile, the budget disbursement in November 2014 recorded at 205.8 billion baht. This resulted in the budget disbursement for the first two months of FY2015 was recorded at 20.4 percent of FY 2015 expenditure framework (2.575 trillion baht) and the total budget balance showed a deficit of -261 billion baht.
External demand reflected by exports in November 2014 showed a contraction at -1.0 percent per year from last month, which was 4.0 percent per year. The export contraction was caused by a decreasing export in agricultural sector such as rubber. In addition, there was a highly decline in petroleum products due to a continued decrease in crude oil price in world market.
Ms. Kulaya Tantitemit, Executive Director of Macroeconomic Policy Bureau, further elaborated that supply-side indicators in manufacturing and agricultural sectors showed continually slowing signs, while the service sector showed an improvement from last month. Manufacturing sector reflected by Manufacturing Production Index (MPI, preliminary data) in November 2014 contracted by -3.5 percent per year continually decreasing from last month, which was -3.0 percent per year. Looking into details, the manufacturing sectors which showed contraction were jewelry, automobile, petroleum and electronics. Agricultural sector 's performance as measured by Agricultural Production Index (API) in November 2014 contracted by -13.9 percent per year, while that of last month was -14.7 percent per year. This was due to droughts during the beginning of the year. In addition, the rubber products decreased due to the heavy rain in the south. However, service sector reflected by the number of inbound tourists in November 2014 expanded by 2.5 percent per year. After showing the contraction from the beginning of the year, the expansion of the number of inbound tourists in November 2014 was the second consecutive month of expansion since October 2014, which was 6.1 percent per year. The expansion in tourism sector was caused by the number of tourists from short-distance countries particularly the tourists from China, which highly expanded by 58.9 percent per year. Meanwhile, the tourists from Europe particularly the number of tourists from Russia still contracted due to the slowdown economy.
Internal stabilities still showed good signs, while external stabilities remained robust reflecting the resilient ability to risk from the volatilities in global economy . In November 2014, headline inflation increased by 1.3 percent per year lower than that of previous month, which was 1.5 percent. This was due to a reduction in crude oil price in world market, which showed a continued decrease. This affected the restructuring of retail gas prices. The unemployment rate in November 2014 was low at 0.5 percent of total labor force or equivalent to 210,000 unemployed persons. Likewise, external economic stability remained robust, as indicated by high-level of international reserves at 158.5 billion USD, or approximately 2.7 times of short-term external debt showing the resilient ability to risk from the volatilities.
Source: Fiscal Policy Office / www.fpo.go.th