Mr. Krisada Chinavicharana, Director-General of the Fiscal Policy Office, Spokesperson of the Ministry of Finance revealed that "The Thai economy in April 2016 reflected an improving signs from consumption and private investment particularly investment in construction. Meanwhile, government expenditure supported Thai economy as it expanded by 16.8 percent per year. However, export sector turned to contract in major exporting markets and goods. On the supply side, tourism sector showed an expansion and agricultural prices improved resulting in a positive expansion in farmers' real income." The details were summarized as follows:
Private consumption in April 2016 improved from previous month, as real VAT collection in April 2016 turned increase by 2.5 percent per year as real VAT collection from domestic consumption base expanded by 6.2 percent per year but real VAT collection from import contracted by -3.6 percent per year. Motorcycle sales showed an expansion of 2.9 percent per year due to sale promotion in April. In addition, agricultural prices improved particularly rubber price and as a result, farmers' real income turned to expand for the first time in 4 months by increasing 2.7 percent per year. However, Consumer Confidence Index was down to 61.5 points as consumers were anxious about purchasing power which was affected by drought and volatility in global economy.
Private investment in April 2016 showed improving signs particularly in construction sector as reflected by real estate tax collection which showed an accelerating expansion of 58.8 percent per year increasing from last month which was 15.7 percent per year. In addition, cement sales expanded by 0.1 percent per year. Meanwhile, investment in equipment and machinery sector was slow down as reflected by the imports of capital goods which contracted by -13.4 percent per year and the imports of capital goods excluding special items (airplanes, ships, trains) contracted by -7.2 percent per year.
Fiscal indicators in April 2016 showed that fiscal policies continued to support the Thai economy particularly government expenditures in accelerating investments which showed high expansion. Total government expenditure was disbursed 223.6 billion baht or expanded by 16.8 percent per year. The annual budgetary expenditure was disbursed 211.5 billion baht or expanded by 18.2 percent per year from (1) current expenditure of 186.3 billion baht increasing by 19.3 percent per year, and (2) capital expenditure of 25.2 billion baht expanding by 10.6 percent per year. Net government revenue collection (net of local authorities' allocation) was amounted at 170.3 billion baht or contracted by -0.5 percent per year. As a result, the budget balance showed the deficit of -56.4 billion baht.
External demand as reflected by exports turned to contract in April 2016. Export values in terms of U.S. dollars (USD) contracted by -8.0 percent per year due to a contraction in exporting goods in almost all categories except exporting goods in agricultural sector which showed a positive expansion. Exports to major trade partners such as U.S.A., China, Japan, EU and ASEAN-9 showed contraction except that exporting markets such as Philippines, Indonesia, and Vietnam expanded. However, comparison of Thai exports to that of other countries in region showed that exports of others contracted as well. In the first 4 months of 2016, Thai export values contracted by -1.2 percent per year which was less than that of other countries in region.
Supply side indicators showed an expansion as tourism sector continued to increase. The number of inbound foreign tourists in April 2016 continued to increase by 9.8 percent per year as tourists from China, Russia, Korea, and neighboring countries such as Myanmar, Cambodia, and Lao showed well expansion. Meanwhile,the Agricultural Production Index (API) showed a contraction of -1.6 percent per year due to a contraction in paddy and oil palm. However, after seasonal adjustment API showed an expansion of 2.4 percent per month due to an expansion in rubber, cassava, and corn. In addition, livestock expanded well. Thai Industries Sentiment Index (TISI) was at 85.0 points decreasing from last month as entrepreneurs were anxious of baht appreciation which affected competitiveness in exports and drought which affected materials in agricultural processing industry and prices to increase.
Internal stabilities remained favourable and external stabilities remained robust. Headline inflation and core inflation were down at 0.1 and 0.8 percent per year, respectively. Meanwhile, unemployment rate in April 2016 was 1.0 percent of total labor force or equivalent to 396,000 unemployed persons. Public debt to GDP at the end of March 2016 stood at 44.0 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 April 2016 were high at 178.6 billion USD, or approximately 3.2 times of short-term external debt.
Source: Fiscal Policy Office / www.fpo.go.th