28 December 2015
Monthly Economic Report (November 2015)
"The Thai economy in November 2015 showed improving signs in private expenditures as confidence index improved in the previous month. In addition, government expenditures continued to support the Thai economy; meanwhile, export sector showed contracting signs due to weak demand from Thailand's trade partners."Mr. Krisada Chinavicharana, Director-General of the Fiscal Policy Office, Spokesperson of the Ministry of Finance, revealed that "The Thai economy in November 2015 showed improving signs in private expenditures as confidence index improved in the previous month. In addition, government expenditures continued to support the Thai economy; meanwhile, export sector showed contracting signs due to weak demand from Thailand's trade partners." The detail were summarized as follows:
1. Private consumption in November 2015 showed improving signs as reflected by real VAT collection which expanded by 3.5 percent per year and expanded by 4.0 percent per month after seasonal adjustment and this expansion was due to an increase in real VAT collection from domestic consumption which increased by 7.0 percent per year. Meanwhile, the passenger car sales contracted with slower rate by decreasing -12.0 percent per year but expanded by 3.9 percent per month after seasonal adjustment. Likewise, the motorcycle sales turned to increase by 6.9 percent per year and expanded 6.6 percent per month after seasonal adjustment due to the expansion in other regions and Bangkok including vicinities. In addition, Consumer Confidence Index improved for 2 months consecutively by increasing up to 63.4 points. The improvement in Consumer Confidence Index was due to the confidence in current economic situation which was improved by the expansion in tourism sector and economic stimulus package of the government. In addition, the Fiscal Policy Office expected that tax measures launched in the end of 2015 by allowing tax deduction on selected purchases of goods and services in personal income tax calculation for tax year 2015 worth a maximum 15,000 baht based on actual expenses would support domestic expenditure at the end of December 2015.
2. Private investment in November 2015 showed improving signs from the previous month. The investment in construction sector as reflected by real estate tax collection showed accelerating expansion by increasing 20.3 percent per year or 17.6 percent per month after seasonal adjustment due to temporary reduction of real estate transfer and mortgage registration fees effective 29 October 2015. Meanwhile, the cement sale expanded by 2.6 percent per year or 0.6 percent per month after seasonal adjustment. For investment in equipment and machinery sector,the commercial car sales expanded for 4 months consecutively by increasing 15.7 percent per year or 16.2 percent per month after seasonal adjustment.
3.Fiscal indicators in November 2015 showed that fiscal policies continued to support the Thai economy as reflected by the expansion in government investment and the deficit budget. Total budget disbursement was 232.9 billion baht or expanded by 13.2 percent per year. The budget expenditure of current fiscal year was recorded at 209.0 billion baht or increased by 15.7 percent per year. This amounts comprised of (1) current year expenditure of 197.5 billion baht increasing by 14.9 percent per year and (2) capital expenditure of 11.5 billion baht expanding by 31.0 percent per year. Meanwhile,the net government revenue collection (net of local authorities' allocation) amounted at 179.4 billion baht or increased by 11.0 percent per year. As a result, the budget balance showed the deficit of -54.2 billion baht and this reflected the role of fiscal policies in supporting the Thai economy.
4. External demand as reflected by exports in November 2015 showed that export values in U.S. dollars (USD) continued to decrease -7.4 percent per year. Meanwhile, export sector contracted due to weak demand of Thailand's trade partners. As a result, for the first 11 months of 2015 export values contracted by -5.5 percent per year. Meanwhile, import values in USD in November 2015 contracted by -9.5 percent per year and as a result, for the first 11 months of 2015 import values contracted by -11.2 percent per year. As a consequence, trade balance in November 2015 showed a surplus of 0.3 billion USD.
5. For the supply-side economy, Thai Industries Sentiment Index (TISI) in November 2015 improved for 3 months consecutively by stood at 85.8 points. Meanwhile, the tourism sector as reflected by the number of inbound foreign tourists expanded by 5.1 percent per year and most inbound foreign tourists were from China, Malaysia, and U.S.A. For the agricultural sector , the Agricultural Production Index (API) contracted by -26.2 percent per year and this was an accelerating contraction from last month which decreased by -4.8 percent per year. This contraction was due to the contraction of products in main agricultural products particularly paddy which continued to decrease as it was adversely affected by drought and, in addition, rubber and oil palm still declined.
6. Internal economic stability remained favorable. The unemployment rate in November 2015 was low at 0.9 percent of total labor force or equivalent to 350,000 unemployed persons . Meanwhile, the headline inflation contracted by -1.0 percent per year due to decreasing prices in energy, electrical, and meat. The core inflation stood at 0.9 percent per year. Public debt to GDP at the end of October 2015 stood at 43.8 percent of GDP below the Fiscal Sustainability Framework of 60 percent of GDP. External economic stability remained robust reflecting the resilient ability to risk from the volatilities in global economy as the international reserves at the end of November 2015 were high at 155.7 billion USD, or approximately 2.8 times of short-term external debt.
Source: Fiscal Policy Office / www.fpo.go.th