Mr. Krisada Chinavicharana, Director-General of the Fiscal Policy Office, Spokesperson of the Ministry of Finance revealed that "The Thai economy in August 2016 expanded from exports of goods which turned to a positive growth. Private consumption expanded due to an increase in farmers' income resulting from higher growth of new motorcycle registrations. Government expenditures expanded as capital expenditures turned to a high expansion.
Meanwhile, tourism sector remained surged well as inbound foreign tourists traveled into Thailand continually. However, private investment showed slowing signs." The details were summarized as follows:
Private consumption in August 2016 expanded well particularly consumption of durable goods as reflected by passenger car sales which increased by 8.7 percent per year and new motorcycle registrations which highly increased by 21.0 percent per year in Bangkok Metropolitan Region and other regions, and increased in the fifth consecutive month as farmers' income improved reflected by farmers' real income which increased by 4.5 percent per year. Meanwhile, real VAT collection slightly contracted by -0.4 percent per year due to a contraction in real VAT collection from domestic consumption and import bases. However, people still had confidence in Thai economy as reflected by the Consumer Confidence Index (CCI) which moved up to 62.2 points, increased in the second consecutive month and counted as the highest in 5 months. This would result in the confidence of consumers' expenditures in the next period.
Private investment in August 2016 showed slowing signs. Investment in construction sector as cement domestic sales contracted by -5.5 percent per year despite real estate tax collection increased by 4.9 percent per year. Investment in equipment and machinery sector showed slowing signs as commercial car sales contracted by -0.9 percent per year and the imports of capital goods contracted by -5.6 percent per year, whereas after excluding special items (airplanes, ships, and trains) the imports of capital goods contracted by -1.2 percent per year.
For fiscal indicators in August 2016, government expenditures particularly capital expenditures turned to increase comparing to a contraction in last month. The annual budgetary expenditure was disbursed 149.2 billion baht, increasing by 7.4 percent per year where it composed of current expenditures which disbursed 118.8 billion baht, increasing by 1.8 percent per year and capital expenditures which disbursed 30.5 billion baht, increasing by 37.2 percent per year. Net government revenue collection (net of local authorities' allocation) was amounted at 208.6 billion baht, decreasing by -7.9 percent per year due to lower collection comparing to the estimation as indicated in the annual budget document by -13.0 percent as corporate income tax collection, income collection from other government services, and VAT collection were lower than the estimation. As a result, the budget balance showed a surplus of 27.5 billion baht.
Export values of goods in August 2016 turned to expand in 5 months and as the highest in 6 months since March 2016. Export values showed an expansion of 6.5 percent per year from exports of goods in manufacturing goods such as vehicles and parts, steel and steel products, air-conditioner, and semiconductor transistors and diodes such as solar panel. In addition, major export markets turned to expand as the first time in many months particularly exports to China, Japan, U.S.A., and ASEAN particularly CLMV (Cambodia, Lao LDR, Myanmar, and Vietnam).
Supply side indicators in August 2016 showed an improvement. The number of inbound foreign tourists (preliminary) was amounted at 2.87 million persons, expanding by 9.9 percent per year mainly due to tourists from China and CLMV. Agricultural Production Index (API) turned to decreased by -8.3 percent per year. Major crops such as paddy contracted due to the first month of harvest in wet season rice and a modification to plant in other crops as volume of water in irrigated agricultural areas declined. In addition, corn for animal feed and fruit also contracted due to the end of harvest season. Meanwhile, Agricultural Price Index continued to expand by 15.2 percent per year as demand of paddy, rubber, oil palm, and fruit expanded continually. Thai Industries Sentiment Index (TISI) in August 2016 declined for 3 months consecutively by decreasing to 83.3 points due to an anxiety in domestic purchasing power, volatility of exchange rate, and wage adjustment.
Economic stabilities remained robust. Headline inflation and core inflation were at a low level of 0.3 and 0.8 percent per year, respectively. Meanwhile, unemployment rate was also at a low level of 0.9 percent of total labor force or 360,000 persons. Public debt to GDP at the end of July 2016 stood at 42.9 percent of GDP, lower than the Fiscal Sustainability Framework of 60 percent of GDP. The international reserves at the end of August were high at 180.8 billion USD, or approximately 3.4 times of short-term external debt reflecting the resilient ability to risk from the volatilities in global economy.
Source: Fiscal Policy Office / www.fpo.go.th