Attachment
"The Thai economy in October 2015 showed positive signs from improving economic confidence which is a result from supportive government policies in domestic consumption and investment including fiscal policy through expansionary capital expenditures. As a result, the Thai economy in Q4/2015 is expected to continue expansion."1. Private consumption in October 2015 had positive factor from Consumer Confidence Index (CCI) which showed the first improvement by stood at 62.2 points. This improvement was due to short-term economic stimulus package and declining domestic retail oil prices. Meanwhile, real VAT collection from domestic consumption expanded by 4.8 percent per year. However, overall real VAT collection in October 2015 contracted by -4.1 percent per year due to the contraction in real VAT collection from imports of consumer goods which continued to decrease by -15.3 percent per year. Motorcycle sales decreased by -6.5 percent per year due to the contraction in regional sales which continued to decrease by -8.5 percent per year. The contraction of motorcycle sale in regions was due to declining agricultural prices which was affected by crude oil prices and the slowdown of global demand. Consequently, people's purchasing power was slow down. Moreover, the imports of consumer goods contracted by -7.4 percent per year.
Private Consumption 2014 2015 Indicators Q1 Q2 Q3 Aug Sep Oct YTD Real Value Added Tax Collection (%yoy) 0.4 1.0 1.7 -0.7 -2.4 2.1 -4.1 0.2 %qoq_SA /%mom_SA 0.7 -0.5 -1.6 -1.8 4.0 -4.5 Imports of Consumer Goods (%yoy) 1.5 10.8 2.0 1.5 10.4 -5.8 -7.4 3.3 %qoq_SA / %mom_SA -0.7 -3.9 0.1 3.5 -2.4 -2.3 Passenger Car Sales (%yoy) -41.4 -12.5 -27.3 -24.9 -24.0 -25.5 n.a. -21.6 %qoq_SA / %mom_SA -7.0 -13.7 -7.2 -1.5 -1.8 - Motorcycle Sales (%yoy) -14.3 10.9 -2.9 -10.6 -6.4 -0.7 -6.5 -1.5 %qoq_SA / %mom_SA 8.5 -12.1 -3.6 18.6 7.4 -5.7 Farmers' real incomes (calculated by FPO) -9.0 -10.2 14.1 -25.5 -13.2 -9.7 -10.1 -11.0 Consumer Confidence Index 65.0 68.4 64.9 61.8 61.5 61.2 62.2 64.82. Private investment in October 2015 still remained. The investment in construction sector as reflected by real estate tax collection contracted by -4.6 percent per year but expanded by 0.2 percent per month after seasonal adjustment. Meanwhile, cement sales contracted by -0.3 percent per year. The Construction Materials Price Index (CMI) continued to contract by -6.5 percent per year. The investment in equipment and machinery sector as reflected by imports of capital goods expanded by 5.4 percent per year, however, after excluding special items (aircrafts, ships, and trains), the imports of capital goods contracted by -2.7 percent per year.
Private Investment Indicators 2014 2015 Q1 Q2 Q3 Aug Sep Oct YTD Construction sector Real estate tax collection (%yoy) -2.2 7.3 2.9 -0.5 8.4 -12.6 -4.6 2.3 %qoq_SA / %mom_SA -4.8 -4.8 3.3 -1.1 -3.8 0.2 Cement sales (%yoy) -3.2 -2.5 -0.2 -0.7 -0.6 0.4 -0.3 -1.1 %qoq_SA / %mom_SA 0.8 1.7 -1.7 0.2 -0.9 -0.7 Construction Materials Price Index (CMI) 0.7 -3.7 -4.4 -5.7 -5.6 -6.1 -6.5 -4.8 Machinery sector Commercial car sales (%yoy) -26.8 -11.3 -17.3 -0.3 0.9 1.2 n.a. -9.8 %qoq_SA / %mom_SA -7.2 -7.0 14.2 2.8 2.4 - Imports of capital goods (%yoy) -7.6 0.9 2.1 -10.8 17.9 -20.6 5.4 -2.1 %qoq_SA / %mom_SA 0.5 -0.1 -6.2 6.8 -0.2 6.5 Imports of capital goods (exclude aircraft, -4.8 0.1 -3.5 -2.3 10.4 -8.9 -2.7 -2.0 ship, and train) (%yoy) %qoq_SA / %mom_SA -1.0 -1.9 0.4 7.2 1.5 -2.63. Fiscal indicators in October 2015 reflected that fiscal policies supported the Thai economy; particularly, the government investment highly expanded and budget balance showed deficit. Total budget disbursement of government in October 2015 was amounted at 374.2 billion baht or expanded by 1.8 percent per year. The budgetary expenditure of current fiscal year was recorded at 359.6 billion baht or increased by 4.3 percent per year. This amounts comprised of (1) current expenditure of 336.1 billion baht increasing by 1.8 percent per year and (2) capital expenditure of 23.5 billion baht increasing by 58.7 percent per year. The net government revenue collection (net of local authorities' allocation) in October 2015 amounted at 165.3 billion baht or decreased by -4.8 percent per year. As a result, in October 2015 the budget balance showed the deficit of -218.1 billion baht which reflected that fiscal policies supported the Thai economy.
Fiscal Sector Indicators FY2015 FY 2016 (Billion Baht) FY2015 Q1/ Q2/ Q3/ Q4/ Budget Oct YTD FY15 FY15 FY15 FY15 framework Net Government Revenue (net of local authorities' 2,207.5 507.5 469.9 652.5 577.5 2,330..0 165.3 165.3 allocation) (%y-o-y) 6.4 0.8 7.5 7.2 9.9 0.2 -4.8 -4.8 Total government expenditure 2,601.4 844.1 617.6 569.6 570.1 2,956.5 374.2 374.2 (%y-o-y) 5.7 1.6 11.7 10.7 1.6 1.0 1.8 1.8 Annual budgetary expenditure 2,378.1 766.4 557.7 529.4 524.6 2,720.0 359.6 359.6 (%y-o-y) 5.9 0.7 15.6 11.1 -0.3 5.6 4.3 4.3 Current expenditure 2,106.6 725.1 481.0 452.3 448.1 2,181.8 336.1 336.1 (%y-o-y) 7.4 12.5 7.3 8.1 -0.7 -1.1 1.8 1.8 Capital expenditure 271.6 41.3 76.7 77.1 76.4 538.2 23.5 23.5 (%y-o-y) -4.4 -64.6 123.2 32.4 2.1 46.1 58.7 58.7 Budget Balance -402.3 -347.3 -138.9 89.4 -5.5 -390.0 -218.1 218.14.Exports in October 2015 continued to contract. The export values in October 2015 was amounted at 18.6 billion USD or contracted by -8.1 percent per year due to economic slowdown of Thailand's major trade partners, continually declining crude oil prices in the world market, and the volatility of exchange rate. The exports showed contraction in all destinations except Hong Kong, Vietnam, Philippines, and South Korea which still expanded. The exporting commodities showing contraction comprised of agricultural products, agro-industry products due to continually declining agricultural prices in the world market, and industrial products. However, the exports of vehicle and parts still expanded by 0.2 percent per year. The import values were amounted at 16.5 billion USD or decreased by -18.2 percent per year. As such, the greater export values compared to that of imports resulted in a trade balance in October 2015 to be surplus of 2.1 billion USD.
Major Exports Market 2014 2015 (Exports Share 2013>>>2014) Q1 Q2 Q3 Aug Sep Oct YTD Exports to the world (%yoy) -0.4 -4.7 -5.0 -5.3 -6.7 -5.5 -8.1 -5.3 %qoq_SA / %mom_SA -6.3 -1.1 -1.1 -4.1 3.7 -0.4 1.China (11.9%>>>11.0%) -7.9 -14.4 1.2 -1.0 0.4 -1.7 -3.6 -4.9 2.USA (10.0%>>>10.5%) 4.1 5.6 2.6 0.2 -1.9 1.1 -1.4 2.3 3.Japan (9.7%>>>9.6%) -1.9 -9.2 -3.8 -7.9 -7.1 -6.9 -13.9 -7.7 4.Eurozone (8.8%>>>9.2%) 4.7 -3.9 -8.4 -4.4 -2.3 -9.5 -12.3 -6.3 5.Malaysia (5.7%>>>5.6%) -1.9 -14.6 -18.3 -18.7 -20.2 -19.1 -17.0 -17.2 6.Hong Kong (5.8%>>>5.5%) -4.4 -11.5 -9.0 -2.0 -7.2 1.2 2.4 -6.6 PS.ASEAN-9 (26.0%>>>26.1%) 0.2 -2.4 -5.9 -10.6 -14.9 -11.8 -11.4 -7.0 PS.ASEAN-5 (17.6%>>>17.0%) -3.9 -9.4 -11.8 -19.5 -24.4 -20.1 -18.2 -14.2 PS. Indochina -4 (8.3%>>>9.1%) 9.0 10.6 5.5 7.2 5.5 4.7 1.0 7.05. For the supply-side indicators, Thai Industries Sentiment Index (TISI) in October 2015 improved for 2 months consecutively by standing at 84.7 points. The improvement was due to increasing purchasing orders in the end of year which was the period of sale promotion of entrepreneurs for stimulating domestic purchasing power, and the positive effect from trade with neighboring countries. The tourism sector as reflected by the number of inbound tourists slightly expanded by 1.0 percent per year or expanded by 1.9 percent per month after seasonal adjustment which was the first expansion in 2 months when compared to previous month. This expansion reflected that the negative effect of the Ratchaprasong bombing in August 2015 declined. Chinese tourists were major foreign tourist traveling into Thailand and showed the expansion of 13.1 percent per year. Meanwhile, Agricultural sector as reflected by Agricultural Production Index (API)in October 2015 contracted by -4.8 percent per year but expanded by 5.4 percent per month after seasonal adjustment due to the expansion in cassava and corn including the well expansion in livestock sector. However, the main agricultural products such as paddy continued to decrease due to drought and, in addition, rubber and oil palm contracted.
Supply Side Indicators 2014 2015 Q1 Q2 Q3 Aug Sep Oct YTD Agricultural Production Index (%yoy) -0.4 -3.9 -9.9 -9.3 -13.2 -7.6 -4.8 -6.2 %qoq_SA / %mom_SA 3.1 -10.1 -1.4 -1.6 1.0 5.4 - Manufacturing Production Index (%yoy) -4.6 0.1 -7.5 -6.1 -8.3 -3.6 n.a. -4.4 (Preliminary) %qoq_SA / %mom_SA -1.5 -7.9 1.8 0.3 3.4 - Thai Industries Sentiment Index (TISI)(percent) 87.4 89.6 85.2 82.7 82.4 82.8 84.7 85.6 Number of Inbound Tourists (%yoy) -6.5 23.1 37.6 24.3 24.7 8.7 1.0 24.7 %qoq_SA / %mom_SA 4.4 7.7 -1.8 -6.3 -8.8 1.9 -6. Internal stability remained desirable and external stability remained robust. Headline inflation in October 2015 stood at -0.8 percent per year due to the contraction of energy, electrical, and meat prices. Meanwhile, core inflation stood at 1.0 percent per year remaining continually from previous month. Unemployment rate was 0.9 percent of total labor force, or equivalent to 380,000 unemployed persons. Public debt GDP ratio at the end of September 2015 stood at 43.3 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 highlevel of international reserves at the end of October 2015 at 158.3 billion USD, or approximately 2.8 times of short-term external debt .
Macroeconomic Stability 2014 2015 Indicators Q1 Q2 Q3 Aug Sep Oct YTD Internal Stability Headline Inflation (%yoy) 1.9 -0.5 -1.1 -1.1 -1.2 -1.1 -0.8 -0.9 Core Inflation (%yoy) 1.6 1.5 1.0 0.9 0.9 1.0 1.0 1.1 Unemployment rate (% of total 0.8 1.0 0.9 0.9 1.0 0.8 0.9 0.9 labor force) Public debt (% of GDP) 42.8 43.3 42.8 43.3 43.0 43.3 n.a. 43.3 External Stability Current Account Balance (Billion USD) 15.4 8.4 6.2 6.4 2.6 1.6 n.a. 20.9 International Reserves (Billion USD) 157.1 156.3 160.3 155.5 155.8 155.5 158.3 158.3 Net Forward (Billion USD) 23.1 19.7 18.4 13.3 13.7 13.3 12.1 12.1 International reserves to short term 2.8 3.0 2.9 2.8 2.8 2.8 n.a. 2.8 external debt (times)Financial and fiscal measures that the Ministry of Finance carried forward due to the government policy and launched in September 2015 onwards would help support economic growth of Thailand during the remainder of 2015 and 2016. The progress of measures as of 23 November 2015 are as follows:
1. Measures to improve the well-being of low-income people and the measures to stimulate small public-sector projects. The goals of these measures are to distribute the investment, increase employment and economic activities in provinces and push forward the local and regional development, which will stimulate people's spending, mitigate any impact on low-income people and accelerate public investments. The measures comprise of
1.1 Measures to improve the well-being at the village level (Soft loan via the village funds with the interest rate of 0 percent and the credit line of 60,000 million Baht). As of 23 November 2015, the Government Savings Bank had approved 22,450 million baht in loans to 22,492 Village Funds, and the Village Funds gave loans to 1,288,022 low-income people amounted 19,158 million Baht. In addition, Bank for Agriculture and Agricultural Co-operatives (BAAC) had approved 20,226 million baht in loans to 20,739 Village Funds and the Village Funds gave loans to 1,264,124 low-income people amounted 20,226 million Baht.1.2 Measures to improve the well-being at the Tambon (sub-district) level (5 Million Baht per Sub-District with the budget framework of 37,913 Million Baht). Bureau of the Budget considered the approval of each project including the disbursement of allocated budget of 100,958 projects with the budget of 30,893 million Baht (or 81.5 percent of total budget).
1.3 Measures to accelerate budget disbursements for existing and new small government projects below 1 million Baht with budget of 24,000 million Baht (Central fund for contingency reserves of Fiscal Year 2015). The cabinet approved budget framework totaled 23,343.4 million. This amount was allocated to 55,233 projects worth 22,731 million Baht of which disbursed 1,035 million Baht or 4.6 percent of allocated budget.
2.Short-term financial and fiscal measures to encourage SMEs competitiveness enhancement .
2.1 Soft loan for working capital for SMEs (Soft Loan SMEs with the interest rate of 4 percent for 7 years with the budget of 100,000 million Baht). As of 23 November 2015, the Government Savings Bank approved 68,665 million Baht in loan to 8,036 SMEs.
2.2 Project of loan guarantee for PGS-5 (revised) (A 100-billion-baht credit guarantee covering 30 percent of the TCG (Thai Credit Guarantee Corporation)'s guarantee scheme. As of 23 November 2015 , the TCG guaranteed loans of 21,243 million Baht to 5,360 SMEs entrepreneurs.
3. Financial and fiscal measures to stimulate real estate sector. The goal is to boost real estate sector and to help low-income earners buy houses and be homeowner. For the loan measure for low-and medium-income earners, the Government Housing Bank has received the applications since 19 October 2015 and as of 23 November 2015 there were 11,552 loan applicants with the total amount of 15,298 million Baht. The Government Housing Bank approved loan for 903 applicants worth 1,070 million Baht.
Source: Fiscal Policy Office / www.fpo.go.th