Mr. Krisada Chinavicharana, Director-General of the Fiscal Policy Office, Spokesperson of the Ministry of Finance, revealed that "Thai economy in August 2015 was affected by global economic slowdown resulting in continued contraction in exports. The expenditure in private consumption was slow down; meanwhile private investment still remained. However, Thai economy was supported by government investment and tourism sector. Moreover, Thailand's economic fundamentals remained robust as reflected by low unemployment and inflation rate as well was the high-level of international reserve."
Private consumption in August 2015 showed slowing signs. Overall real VAT collection in August 2015 contracted by -2.4 percent per year. Real VAT collection from imports continued to contract by -5.9 percent per year; meanwhile real VAT collection from domestic consumption expanded slowly by 0.2 percent per year. Also, consumption of durable goods as reflected by the motorcycle sales still contracted by -6.4 percent per year but expanded by 17.4 percent per month after seasonal adjustment due to the expansion in Bangkok which increased by 1.8 percent per year. Meanwhile, the motorcycle sales in region contracted by -8.6 percent per year due to the contraction in farmers' income which decreased by -13.0 percent per year. The passenger car sales still contracted by -24.0 percent per year. However, imports of consumer goods expanded by 10.4 percent per year. In addition, Consumer Confidence Index was down to 61.5 points. This decline was caused by the anxiety of economic situation and the low level of agricultural prices. Moreover, the drought affected agricultural products and this resulted in the declining in people's purchasing power.
Private investment in August 2015 showed remaining signs. Private investment in construction sector as reflected by the real estate tax collection in August 2015 continued to increase by 8.4 percent per year. Meanwhile, cement sales contracted slowly by -0.6 percent per year but slightly increased by 0.1 percent per month after seasonal adjustment. For investment in equipment and machinery sector,the commercial car sales showed the first expansion in 27 months since May 2013 and after seasonal adjustment, it expanded by 2.8 percent per month due to the Bangkok International Grand (BIG) Motor Sale during 1-9 August 2015. Moreover, the automobile excise tax reform which will be effective on 1 st January 2016 accelerated the commercial cars' purchasing.
The imports of capital goods turned to expand by 17.9 percent per year. In addition, the imports of capital goods excluding airplane, ship, and train expanded by 10.4 percent per year.
Fiscal indicators in August 2015 showed that government expenditures supported economic expansion. Total budget disbursement in August 2015 was 148.2 billion baht or expanded by 12.2 percent per year. The budget disbursement of current fiscal year was disbursed at 138.9 billion baht or increased by 11.4 percent per year. This amounts comprised of (1) current year expenditure of 116.7 billion baht increasing by 8.9 percent per year and (2) capital expenditure of 22.2 billion baht expanding by 27.2 percent per year. Meanwhile,The net government revenue collection (net of local authorities' allocation) in August 2015 amounted at 226.8 billion baht or increased by 10.6 percent per year due to the additional revenues from SOEs. As a result, the budget balance in August 2015 showed the surplus of 26.4 billion baht.
External demand as reflected by exports in August 2015 showed the continued contraction by -6.7 percent per year due to the global economic slowdown and the economic slowdown of Thailand's trading partners which affected the global purchasing power. This was the eighth consecutive month of contraction . However, the exports to CLMV and China still expanded by 5.5 and 0.4 percent per year, respectively. The export goods showing an expansion comprised of gem and jewelry which expanded highly by 132.3 percent per year. Moreover, the export in vehicle expanded for two months consecutively by expanding 3.6 percent per year.
Supply-side economy was supported by expansion of tourism sector as reflected by the number of inbound foreign tourists in August 2015 expanding by 25.1 percent per year. Most foreign tourists were from East Asia and ASEAN. Regarding to the Ratchaprasong bomb on 17 August 2015, foreign tourists travelling through Suvarnabhumi airport, which accounted for 53.5 percent of immigration checkpoints, still expanded by 32.9 percent per year (recorded during 1-17 August 2015). However, after the bomb situation, the number of foreign tourists declined by -7.7 percent per year. Meanwhile, Agricultural Production Index (API) in August 2015 continued to contract by -11.1 percent per year due to the contraction in agricultural products such as paddy, cassava, corn and oil palm which were affected by drought. Moreover, Agricultural price index contracted by 3.3 percent per year resulting in the contraction in farmers' income by -13.0 percent per year. Thai Industries Sentiment Index (TISI) in August 2015 was down to 82.4 pointss due to the anxiety of economic slowdown caused by the contraction in domestic consumption. Particularly, the decline in agricultural prices caused people to spend carefully and the global economy still expanded slowly.
Internal economic stability remained favorable. The unemployment rate in August 2015 was low at 1.0 percent of total labor force or equivalent to 377,000 unemployed persons . Meanwhile, the headline inflation contracted by -1.2 percent per year. This was due to the low level of energy prices, the adjustment of fuel tariff (FT) rate for electricity charges and the declining prices of meats compared to that of last year. The core inflation stood at 0.9 percent per year. Public debt to GDP at the end of July 2015 stood at 42.9 percent of GDP below the Fiscal Sustainability Framework. External economic stability remained robust reflected the resilient ability to risk from the volatilities in global economy. The international reserves were high at 155.8 billion USD, or approximately 2.9 times of short-term external debt. These
Source: Fiscal Policy Office / www.fpo.go.th