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"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."1. Private consumption in August 2015 continually showed slowing signs as reflected by overall real VAT collection which contracted by -2.4 percent per year . The real VAT collection from domestic consumption base in August 2015 expanded with slower rate from last month by increasing 0.2 percent per year. Meanwhile, real VAT collection from imports contracted by -5.9 percent per year. Motorcycle sales decreased by -6.4 percent per year but expanded by 17.4 percent per month after seasonal adjustment. The motorcycle sales in Bangkok expanded by 1.8 percent per year, while the motorcycle sales in other regions contracted by -8.6 percent per year due to the decline in farmers' income. Meanwhile, passenger car sales contracted by -24.0 percent per year. Moreover, the imports of consumer goods in August 2015 expanded by 10.4 percent per year and expanded by 3.7 percent m-o-m SA.Consumer Confidence Index in August 2015 was down to 61.5 points. This was due to the anxiety of economic situation and the low level of agricultural prices. In addition, the drought worsened the agricultural products affecting people's purchasing power.
Private Consumption 2014 2014 2015 Indicators Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Real Value Added Tax Collection (%yoy) 0.4 -0.2 0.3 2.3 -0.9 1.0 1.8 -1.8 -2.4 0.5 %qoq_SA /%mom_SA -0.9 -1.4 0.4 1.1 0.7 -0.3 -3.1 -1.9 - Imports of Consumer Goods (%yoy) 1.5 -3.9 0.4 0.4 8.8 10.8 2.0 1.4 10.4 6.2 %qoq_SA / %mom_SA -3.3 4.4 -0.1 7.1 -0.6 -4.0 -4.3 3.7 - Passenger Car Sales (%yoy) -41.4 -55.3 -37.7 -38.3 -27.9 -12.5 -27.3 -25.1 -24.0 -21.2 %qoq_SA / %mom_SA -23.9 3.4 -8.6 -0.3 -6.9 -13.7 4.6 -1.5 - Motorcycle Sales (%yoy) -14.3 -20.8 -18.2 -8.1 -7.8 10.9 -2.9 -23.2 -6.4 -1.0 %qoq_SA / %mom_SA -9.9 0.5 4.9 -2.8 8.1 -11.6 -27.2 17.4 - Farmers' real incomes (calculated by FPO) -8.4 -2.6 -3.7 -6.9 -15.9 -10.1 13.9 -14.5 -13.0 -12.2 Consumer Confidence Index 65.0 59.9 61.2 69.3 69.6 68.4 64.9 62.6 61.5 65.5Private consumptions by regions in August 2015 as reflected by real VAT collection from expenditure base in Bangkok and vicinity contracted by -2.7 percent per year partially due to the Ratchaprasong bomb. Meanwhile, the real VAT collection in North East, South, and North expanded by 6.7, 7.8, and 9.9 percent per year, respectively. The real VAT collection in East and Central expanded with accelerating rate by increasing 14.4 and 8.7 percent per year, respectively. The real VAT collection in West contracted by -18.8 percent per year. Moreover, the consumption of durable goods as reflected by the number of new passenger car registration and new motorcycle registration showed the contracting signs. However, the number of new passenger car registration and new motorcycle registration in Bangkok and vicinity expanded by 1.7 and 0.7 percent per year, respectively. The expansion was due to Bangkok International Grand Motor Sale 2015 held during the beginning of August 2015. Meanwhile, the number of new passenger car registration and new motorcycle registration in other regions continued to contract due to the decline in farmers' income in regions which affected the private consumption.This was corresponding with Consumer Confidence Index (CCI), which stood at low level all regions as well.
2. Private investment in August 2015 still remained. The investment in construction sector as reflected by cement sales decreased by -0.6 percent per year but expanded by 0.1 percent per month after seasonal adjustment. Meanwhile, the Construction Materials Price Index (CMI) continued to contract by -5.6 percent per year due to the declining prices in steel and steel products caused by the decreasing in energy and material costs, and declining prices in world steel market. However, the real estate tax collection continued to increase by 8.4 percent per year. The investment in equipment and machinery sector as reflected by commercial car sales showed the first expansion after contracting for 27 months consecutively since May 2013 - July 2015 and expanded by 2.8 percent m-o-m SA. The imports of capital goods turned to increase by 17.9 percent per year and expanded by 6.3 percent m-o-m SA. After excluding special items like aircrafts, ships, and trains, the imports of capital goods expanded by 10.4 percent per year.
Private Investment Indicators 2014 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Construction sector Real estate tax collection (%yoy) -2.2 -5.6 -5.9 -2.1 3.9 7.3 2.9 7.2 8.4 5.7 %qoq_SA / %mom_SA -8.5 -1.2 7.7 6.2 -4.7 -5.2 1.6 -0.8 - Cement sales (%yoy) -3.2 -2.4 -3.0 -2.9 -4.8 -2.5 -0.2 -2.0 -0.6 -1.3 %qoq_SA / %mom_SA -1.9 0.0 -1.8 -1.2 0.8 2.1 -2.8 0.1 - Construction Materials Price Index (CMI) 0.7 1.1 1.4 1.2 -0.8 -3.7 -4.4 -5.3 -5.6 -4.4 Machinery sector Commercial car sales (%yoy) -26.8 -36.6 -30.6 -20.4 -15.8 -11.3 -17.3 -3.1 0.9 -11.1 %qoq_SA / %mom_SA -13.7 -1.4 -0.7 -1.6 -7.0 -9.2 2.5 2.8 - Imports of capital goods (%yoy) -7.6 -14.1 -12.6 0.0 -2.9 0.9 2.1 -22.1 17.9 -0.3 %qoq_SA / %mom_SA -4.6 0.2 6.8 -5.4 0.2 0.6 -14.3 6.3 - Imports of capital goods (exclude -4.8 -11.4 -4.4 -4.0 1.3 0.1 -3.5 -6.7 10.4 -1.0 aircraft, ship, and train) (%yoy) %qoq_SA / %mom_SA -0.2 1.7 -0.2 -0.2 -1.1 -2.0 -6.7 6.4 -Private investment by regions in August 2015 showed improving signs. The capital value of new manufacturing factories turned to expand by 50.6 percent per year and the expansion occurred in all regions except East. Most capital invested in renewable energy.
3. Fiscal indicators in August 2015 reflected that government expenditures supported the expansion of economy.The budget disbursement in August 2015 was amounted at 148.2 billion baht or expanded by 12.2 percent per year. The 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 increasing highly by 27.2 percent per year. This expansion was from the expenditure of the Department of Highways, the Department of rural roads, Royal Irrigation Department, and SOE subsidies. The net government revenue collection (net of local authorities' allocation) amounted at 226.8 billion baht or increased by 10.6 percent per year due to the revenues from SOEs comprising of Electricity Generating Authority of Thailand, Government Housing Bank, and Port Authority of Thailand's revenues carrying over from July 2015. The net government revenue collection comprised of (1) Tax collection from income base increased by 9.7 percent per year and (2) tax collection from consumption base (VAT) which decreased by -4.1 percent per year. As a result, in August 2015 the budget balance showed the surplus of 26.4 billion baht.
Fiscal Sector Indicators FY2014 FY2015 (Billion Baht) FY2014 Q1/ Q2/ Q3/ Q4/ Q1/ Q2/ Q3/ Jul Aug YTD FY14 FY14 FY14 FY14 FY15 FY15 FY15 Net Government Revenue (net of local authorities' 2,074.7 503.5 437.2 608.5 525.5 507.5 469.9 652.5 142.6 226.8 1,999.3 allocation) (%y-o-y) -4.0 -1.0 -6.9 -5.2 -3.0 0.8 7.5 7.5 10.1 10.6 6.1 Expenditure 2,460.0 831.1 553.0 514.7 561.2 844.1 617.6 569.6 221.9 148.2 2,401.5 (%y-o-y) 2.4 5.7 -5.6 6.8 2.2 1.6 11.7 10.7 10.8 12.2 7.6 Budget Balance -384.3 -334.7 -115.9 105.6 -39.4 -347.3 -138.9 89.4 -81.7 26.4 -451.14.Exports in August 2015 continued to contract. The export values in August 2015 was amounted at 17.7 billion USD or contracted by -6.7 percent per year and this was the eighth consecutive month of contraction and contracted by -4.1 percent m-o-m SA due to global economic slowdown and the unrecovered economy of Thailand's trade partners which affected global purchasing power. The export markets showing contraction comprised of ASEAN-5, Singapore, Malaysia, and Africa which contracted by -24.4, -35.8, -20.2 and -24.9 percent per year, respectively. The export goods showing an expansion comprised of gem and jewelry increasing by 132.3 percent per year and vehicle increasing for two months consecutively by increasing 3.6 percent per year. The import values were amounted at 16.9 billion USD or decreased by -4.9 percent per year. As such, the greater export values compared to that of imports resulted in a trade balance in August 2015 to be surplus of 0.8 billion USD.
Major Exports Market 2014 2014 2015 (Exports Share 2013>>>2014) Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Exports to the world (%yoy) -0.4 -1.4 0.0 -1.8 1.6 -4.7 -5.0 -3.6 -6.7 -4.9 %qoq_SA / %mom_SA -0.3 -0.7 -0.7 3.3 -6.3 -1.1 2.0 -4.1 - 1.China (11.9%>>>11.0%) -7.9 -4.5 -4.2 -6.3 -15.3 -14.4 1.2 -1.6 0.4 -5.4 2.USA (10.0%>>>10.5%) 4.1 0.6 4.9 3.4 7.2 5.6 2.6 1.4 -1.9 2.9 3.Japan (9.7%>>>9.6%) -1.9 0.7 -6.4 -1.0 -0.6 -9.2 -3.8 -9.7 -7.1 -7.0 4.Eurozone (8.8%>>>9.2%) 4.7 4.8 10.9 2.0 1.7 -3.9 -8.4 -1.1 -2.3 -5.1 5.Malaysia (5.7%>>>5.6%) -1.9 -0.1 -1.4 -5.0 -1.0 -14.6 -18.3 -16.8 -20.2 -17.0 6.Hong Kong (5.8%>>>5.5%) -4.4 -1.8 1.7 -13.5 -1.8 -11.5 -9.0 -1.5 -7.2 -9.0 PS.ASEAN-9 (26.0%>>>26.1%) 0.2 -5.4 -0.1 1.1 5.2 -2.4 -5.9 -4.5 -14.9 -5.7 PS.ASEAN-5 (17.6%>>>17.0%) -3.9 -11.0 -4.1 -4.2 4.3 -9.4 -11.8 -13.1 -24.4 -12.9 PS. Indochina -4 (8.3%>>>9.1%) 9.0 7.0 8.8 13.6 6.8 10.6 5.5 11.6 5.5 8.15. Supply-side indicators showed that the tourism sector expanded continually. Though the tourism expanded with slower rate from the previous month, it was the supporting factor for the Thai economy expansion. The number of inbound tourists in August 2015 was recorded at 2.61 million persons, which expanded by 25.1 percent per year but decreased by-6.0 percent m-o-m SA due to the Ratchaprasong bomb on 17 August 2015. During 1-17 August 2015, the number of foreign tourists travelling through Suvarnabhumi airport which was accounted for 53.5 percent of immigration checkpoint showed an expansion of 32.9 percent per year. Moreover, after the bomb situation, the growth decreased by -7.7 percent per year. Meanwhile, Agricultural sector as reflected by Agricultural Production Index (API) in August 2015 contracted by -11.1 percent per year due to the contraction of agricultural products such as paddy, cassava, corn, and oil palm, which was caused by the drought. However, the production in livestock and fishery still expanded since there was no epidemic situation. Meanwhile, Agricultural Price Index contracted by -3.3 percent per year but expanded by 2.3 percent m-o-m SA. Agricultural prices contracted from the rubber price since the demand from the rubber importer like China decreased. In addition the crude oil's price declined and the prices in livestock and fishery contracted due to the continued expansion in production. Thai Industries Sentiment Index (TISI) in August 2015 was down to 82.4 points due to the anxiety of Thai economy and domestic consumption particularly the declining prices of agricultural products causing people to spend carefully. Moreover, global economy expanded slightly.
Supply Side Indicators 2014 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Agricultural Production Index (%yoy) 0.2 1.5 7.2 3.4 -6.3 -3.7 -9.8 -9.8 -11.1 -7.4 %qoq_SA / %mom_SA 1.5 -3.9 -2.4 -1.0 3.1 -7.8 -1.0 -0.8 - Manufacturing Production Index (%yoy) -4.6 -7.0 -4.8 -3.9 -2.3 0.1 -7.5 -5.3 n.a. -3.9 (Preliminary) %qoq_SA / %mom_SA -3.8 -1.5 -3.7 2.6 -1.3 -8.1 1.9 - - Thai Industries Sentiment Index (TISI) 87.4 85.8 85.8 88.2 90.0 89.6 85.2 83.0 82.4 86.1 (percent) Number of Inbound Tourists (%yoy) -6.7 -9.0 -15.9 -10.1 7.0 23.1 37.6 39.4 25.1 30.1 %qoq_SA / %mom_SA -10.1 -2.2 7.1 13.2 4.2 8.8 6.1 -6.0 - *Preliminary6. Internal stability remained desirable and external stability remained robust. Headline inflation in August 2015 stood at -1.2 percent per year due to the low-level prices of energy, the reduction of fuel tariff (FT) rate for electricity charges, and the declining prices in meat compared to the same period of last year. Meanwhile, Core inflation stood at 0.9 percent per year. Unemployment rate in August 2015 was 1.0 percent of total labor force, or equivalent to 377,000 unemployed persons. Public debt GDP ratio at the end of July 2015 stood at 42.9 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 August 2015 at 155.8 billion USD, or approximately 2.9 times of short-term external debt.
Macroeconomic Stability 2014 2014 2015 Indicators Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Internal Stability Headline Inflation (%yoy) 1.9 2.0 2.2 2.0 1.1 -0.5 -1.1 -1.1 -1.2 -0.9 Core Inflation (%yoy) 1.6 1.2 1.7 1.8 1.7 1.5 1.0 0.9 0.9 1.1 Unemployment rate (% of 0.8 0.9 1.0 0.8 0.6 1.0 0.9 1.0 1.0 0.9 total labor force) Public debt (% of GDP) 42.8 42.9 43.4 43.5 42.8 43.3 42.4 42.9 n.a. 42.9 External Stability Current Account Balance 15.4 5.8 -0.2 -0.5 10.3 8.3 6.2 2.2 2.6 19.3 (Billion USD) International Reserves 157.1 167.5 168.2 161.6 157.1 156.3 160.3 156.9 155.8 155.8 (Billion USD) Net Forward (Billion USD) 23.1 23.6 23.7 24.7 23.1 19.7 18.4 17.6 13.8 13.8 International reserves to 2.7 2.8 2.7 2.7 2.7 2.9 2.9 2.9 n.a. 2.9 short term external debt (times)Source: Fiscal Policy Office / www.fpo.go.th