29 January 2015
Mr. Krisada Chinavicharana, Director-General of the Fiscal Policy Office, Spokesperson of the Ministry of Finance announced that "Indicators in December and Q4/2014 showed improving signs from the previous period particularly in the demand side such as private and public expenditures, as well as exports. Also, indicators in the supply side such as manufacturing sector and tourism showed an improvement. However, agricultural sector continued to show slowing signs."
Private consumption in December and Q4/2014 showed improving signs from the previous. Even though the real VAT collection at constant price in December and Q4/2014 showed a contraction on year-over-year basis, the real VAT collection showed improving signs on month-over-month basis and quarter-overquarter basis by expanding 0.9 percent per month and 1.3 percent per quarter. Also, motorcycle sales in December and Q4/2014 showed a contraction on year-overyear basis. However, the motorcycle sales showed an improvement from the sales in other regions. Meanwhile, passenger car sales expanded by 10.3 percent per month, and expanded by 0.2 percent per quarter. This reflected that private consumption in durable goods showed improving sign. Consumer Confidence Index in December 2014 was 70.5 points increasing from last month. Therefore, Consumer Confidence Index in Q4/2014 was 69.6 points improving from last quarter, which was 69.3 points. This improvement was caused by the economic stimulus package from the government particularly the subsidy in agricultural sector, the investment in maintenances, which was a supporting factor for local employments, and a decrease in domestic oil prices.
Private investment in December 2014 showed improving signs particularly the investment in construction sector. This was reflected by real estate tax collection in December 2014, which was the second expansion in 2014 after the first expansion in September 2014. The real estate tax collection in December 2014 expanded by 12.0 percent per year, or expanded by 14.0 percent per month. Hence, in the fourth quarter of 2014, it expanded by 1.6 percent per year, or expanded by 5.5 percent per quarter. This expansion was due to the improvement in political situation. Furthermore, there were many new projects in the last quarter of 2014 and this resulted in the increasing amount of housing for sell. Meanwhile, cement sales in December 2014 showed the first expansion in 2014 by expanding 0.2 percent per year and increasing by 0.1 percent per month. However, the cement sales in Q4/2014 still contracted by -4.8 percent per year, or decreased by -1.8 percent per quarter. Investment in machinery sector showed improving signs in December 2014. This was reflected by the expansion in imports of capital goods in December 2014, which expanded by 2.9 percent per year, and increased by 8.2 percent per month. However, the imports of capital goods in Q4/2014 still contracted by -3.1 percent per year, or decreased by -1.4 percent per quarter. Meanwhile, commercial car sales in December 2014 still contracted by -16.1 percent per year but expanded by 3.9 percent per month. As a result, in the 4 th quarter of 2014, commercial car sales contracted by -15.8 percent per year but expanded by 0.5 percent per quarter.
Fiscal indicators in December and Q4/2014 (Q1/FY2015) reflected that fiscal policy played a role in supporting Thai economy through budget deficit. Budget balance in December 2014 showed a deficit of -83.6 billion baht.The net government revenue collection (net of local authorities' allocation) in December 2014 amounted at 170.4 billion baht. Meanwhile, the budget disbursement in December 2014 recorded at 270.7 billion baht. Hence, in the first quarter of FY2015, the disbursement rate was recorded at 29.8 percent of FY 2015 expenditure framework (2.575 trillion baht) and the budget balance showed a deficit of -344.6 billion baht.
External demand reflected by exports in December and Q4/2014 expanded by 1.9 percent per year, and by 1.6 percent per year, respectively . The export markets showing an expansion were ASEAN-9, U.S., and Australia. The expansion was caused by increasing exports in agro-industry products, vehicles, electrical appliances, and plastic pellets.
Ms. Kulaya Tantitemit, Executive Director of Macroeconomic Policy Bureau, further elaborated that supply-side indicators in manufacturing sector and tourism showed improving signs, while agricultural sector still showed slowing signs. Manufacturing sector reflected by Manufacturing Production Index (MPI, preliminary data) in December 2014 slightly contracted by -0.4 percent per year, but increased from last month by 3.6 percent per month. As a result, Manufacturing Production Index in Q4/2014 contracted by -2.4 percent per year, or increased from last quarter by 2.7 percent per quarter. Looking into details, the manufacturing sectors showing an expansion in Q4/2014 were radio and television, garment, and chemical products. For service sector, the number of inbound tourists in December 2014 was recorded at 2.84 million persons, which was the highest record, and this was the third consecutive month of expansion. The number of inbound tourists increased by 11.8 percent per year, or expanded by 4.6 percent per month. The tourists from China and Malaysia showed the highest share by expanding 66.4 percent per year and 33.2 percent per year, respectively. As a result, in Q4/2014 the number of inbound tourists was recorded at 7.45 million persons, or expanded by 7.0 percent per year, and by 13.9 percent per quarter. However, Agricultural sector 's performance as measured by Agricultural Production Index (API) in December 2014 still contracted by -4.8 percent per year due to a decrease in cereal products particularly in paddy, which was a result of droughts during the beginning of the year. In addition, corn products for animal feed, and pineapple products showed a contraction. As a result, Agricultural Production Index (API) in Q4/2014 contracted by -3.5 percent per year, and decreased by -0.8 percent per quarter.
Internal stabilities and external stabilities remained robust. These reflected the resilient ability to risk from the volatilities in global economy . In December 2014, headline inflation decreased to 0.6 percent per year. This was due to a reduction in crude oil price in world market, which showed a continued decrease and this affected the restructuring of retail gas prices, particularly the gasohol prices. The unemployment rate in December 2014 was low at 0.6 percent of total labor force or equivalent to 220,000 unemployed persons. Likewise, external economic stability remained robust, as indicated by high-level of international reserves at 157.1 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