Attachment
"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."
1. Private consumption improved as registration of new motorcycles in August 2016 continued to increase for 5 months consecutively by expanding to 21.0 percent per year and expanded by 20.8 percent per month after seasonal adjustment. The motorcycle registration in Bangkok Metropolitan Region showed an expansion of 23.2 percent per year and in other regions showed expansion of 20.3 percent per year as farmers' income increased due to an ease of drought. Similarly, passenger car sales in August 2016 expanded by 8.7 percent per year. Meanwhile, farmers' real income in August 2016 increased with slower pace at 4.5 percent per year. Real VAT collection in August 2016 slightly decreased by -0.4 percent per year, real VAT collection from domestic consumption base decreased by -0.4 percent per year and real VAT from import base decreased by -0.6 percent per year. In addition, imports of consumer goods expanded by 5.3 percent per year and increased by 4.2 percent per month after seasonal adjustment. However, private consumptions had a positive factor from Consumer Confidence Index which increased to 62.2 points, the second consecutive month of improvement and highest in 5 months as the drought eased and agricultural prices and products improved continually resulting in an increase in farmers' income.
Private Consumption 2015 2016 Indicators 2015 Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Real Value Added Tax Collection (%yoy) 1.0 1.0 1.7 -0.7 2.1 0.1 3.7 0.8 -0.4 1.5 %qoq_SA /%mom_SA 1.1 -0.6 -1.1 2.6 -0.7 3.1 -7.8 -2.0 Imports of Consumer Goods (%yoy) 2.2 10.8 2.0 1.5 -4.4 3.6 3.4 3.0 5.3 3.7 %qoq_SA / %mom_SA 0.0 -3.8 0.0 -1.1 7.8 -3.1 -2.7 4.2 Passenger Car Sales (%yoy) -19.1 -12.5 -27.3 -24.9 -11.7 -26.6 4.9 9.6 8.7 -7.1 %qoq_SA / %mom_SA -0.4 -16.0 -4.4 9.3 -15.7 19.2 -2.0 -2.2 Registration of new motorcycles (%yoy) -0.2 10.9 -2.9 -10.6 2.3 -3.3 7.9 7.4 21.0 4.8 %qoq_SA / %mom_SA 9.2 -10.4 -3.2 8.0 3.1 0.6 -14.7 20.8 Farmers' real incomes (calculated by FPO) -9.2 -4.2 -15.3 -13.8 -6.6 -11.2 1.4 16.1 4.5 -2.6 Consumer Confidence Index 64.7 68.4 64.9 61.8 63.6 63.4 61.1 61.4 62.2 62.12. Private investment in overview showed slowing signs. Investment in construction as reflected by real estate tax collection in August 2016 turned to increase by 4.9 percent per year and increased by 33.0 percent per month after seasonal adjustment. However, domestic cement sales in August 2016 continued to contract by -5.5 percent per year and Construction Materials Price Index (CMI) in August 2016 recorded a decrease by -3.2 percent per year as price index in steel and steel products declined due to decreasing prices of steel in world market. Investment in equipment and machinery as reflected by commercial car sales in August 2016 contracted with slower pace by -0.9 percent per year but expanded by 5.6 percent per month after seasonal adjustment. Meanwhile, the imports of capital goods continued to contract by -5.6 percent per year and imports of capital goods excluding special items (airplane, ship, train) contracted by -1.2 percent per year but expanded by 6.2 percent per month after seasonal adjustment.
Private Investment 2015 2015 2016 Indicators Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Construction sector Real estate tax collection (%yoy) 8.7 7.3 2.9 -0.5 22.2 6.6 12.9 -23.5 4.9 5.0 %qoq_SA / %mom_SA -1.7 -3.0 2.3 24.1 -13.1 3.3 -18.5 33.0 Cement sales (%yoy) -0.4 -2.5 -0.2 -0.7 2.1 3.1 -1.6 -4.0 -5.5 -0.6 %qoq_SA / %mom_SA 0.3 1.8 -1.4 1.3 1.4 -3.0 -2.5 -1.4 Construction Materials Price Index (CMI) -4.9 -3.7 -4.4 -5.7 -6.6 -5.1 -2.2 -3.9 -3.2 -3.6 Machinery sector Commercial car sales (%yoy) -2.6 -11.3 -17.3 -0.3 17.2 4.0 13.6 -6.1 -0.9 5.3 %qoq_SA / %mom_SA -1.7 -5.8 14.4 8.4 -9.9 2.3 -5.6 5.6 Imports of capital goods (%yoy) -2.2 0.9 2.0 -10.8 0.2 -1.0 -11.6 -0.7 -5.6 -5.6 %qoq_SA / %mom_SA 0.3 1.2 -6.1 5.0 -0.6 -9.6 2.3 0.0 Imports of capital goods (exclude aircraft, -1.4 0.1 -3.6 -2.3 0.1 0.0 -5.1 -5.0 -1.2 -2.7 ship, and train) (%yoy) %qoq_SA / %mom_SA -1.0 0.1 0.8 2.0 -1.1 -5.9 -3.8 6.23. Government expenditures particularly capital expenditures expanded as total government expenditure in August 2016 was disbursed 158.7 billion baht, expanding by 7.0 percent per year. The annual budgetary expenditure was disbursed 149.2 billion baht or expanded by 7.4 percent per year as supporting factor from capital expenditure which disbursed 30.5 billion baht, highly expanding by 37.2 percent per year. Net government revenue collection (net of local authorities' allocation) in August 2016 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.
Fiscal Sector Indicators FY2015 FY2016 (Billion Baht) FY2015 Q1/ Q2/ Q3/ Q4/ Q1/ Q2/ Q3/ Jul Aug FYTD FY15 FY15 FY15 FY15 FY16 FY16 FY16 Net Government Revenue (net of local 2,213.4 507.5 469.9 652.5 585.5 585.9 492.6 717.2 177.3 208.6 2,181.7 authorities' allocation) (%y-o-y) 6.7 0.8 7.5 7.2 11.0 15.5 4.8 9.9 24.5 -7.9 9.1 Total government 2,601.4 844.1 617.6 569.6 570.1 890.9 680.0 677.8 184.2 158.7 2,591.5 expenditure (%y-o-y) 5.8 1.6 11.7 10.7 1.6 5.5 10.1 19.0 -17.0 7.0 7.9 Annual budgetary 2,378.1 766.4 557.7 529.4 524.6 807.7 604.2 638.8 176.1 149.2 2,376.0 expenditure (%y-o-y) 5.9 0.7 15.6 11.1 -0.3 5.4 8.3 20.7 -15.6 7.4 7.9 Current expenditure 2,106.6 725.1 481.0 452.3 448.1 739.6 509.0 537.2 153.9 118.8 2,058.6 (%y-o-y) 7.4 12.5 7.3 8.1 -0.7 2.0 5.8 18.8 -17.3 1.8 5.0 Capital expenditure 271.6 41.3 76.7 77.1 76.4 68.1 95.1 101.5 22.2 30.5 317.4 (%y-o-y) -4.4 -64.6 123.2 32.4 2.1 64.9 24.0 31.7 -2.0 37.2 32.3 Expenditure (last year) 223.3 77.7 59.9 40.1 45.5 83.2 75.8 39.0 8.1 9.4 215.5 Budget Balance -394.4 -347.3 -138.9 89.4 2.3 -306.9 -203.9 70.7 -32.1 27.5 -442.14.External demand as shown by exports of goods in August 2016 turned to expand in 5 months. Exports values were amounted at 18.8 billion USD or expanded by 6.5 percent per year, highest in 6 months and expanded by 8.1 percent per month after seasonal adjustment. Major export markets showed high expansion particularly Australia, China, U.S.A. and EU, while exports to Middle East showed a contraction. Export goods showing an expansion were manufacturing goods such as vehicles and parts, and agricultural goods such as cassava, fruits, and processed chicken . Meanwhile, imports values were recorded at 16.7 billion USD or contracted with slower pace at -1.5 percent per year. As such the greater export values compared to that of imports resulted in the trade surplus of 2.1 billion USD.
Main trading partners (16 2015 2016 countries) (Export share 2014 >> 15 ) 2015 Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Exports to the world (%yoy) -5.8 -4.7 -5.0 -5.3 -8.1 0.9 -4.1 -6.4 6.5 -1.2 1.USA (10.5% >> 11.2%) 0.7 5.6 2.6 0.2 -4.9 -3.2 0.6 0.0 14.9 0.9 2.China (11.0% >> 11.1%) -5.4 -14.4 1.2 -1.0 -6.3 -6.4 -10.3 -13.5 4.4 -7.4 3.Japan (9.6% >> 9.4%) -7.7 -9.2 -3.9 -8.2 -9.6 5.7 -7.5 -8.5 5.7 -1.1 4.EU (9.2% >> 9.3%) -5.7 -3.9 -8.4 -4.4 -5.9 -0.5 -1.0 -11.7 11.8 -0.6 5.Malaysia (5.6% >> 4.8%) -20.2 -14.7 -18.3 -18.7 -28.5 -4.1 -12.9 -14.0 -5.9 -8.9 6.Hong Kong (5.6% >> 5.5%) -6.2 -11.5 -9.0 -2.0 -1.9 0.6 -8.2 -5.6 -4.3 -4.0 7.Middle East (5.1% >> 4.8%) -10.0 -6.4 -23.7 -6.4 -3.0 -9.5 -2.5 -20.6 -2.3 -7.6 8.Australia (4.8% >> 5.3%) 5.3 10.1 7.6 8.4 -3.5 5.5 12.4 4.2 24.0 10.1 9.Singapore (4.6% >> 4.1%) -16.2 -5.4 0.3 -26.1 -31.0 22.5 -35.7 -9.6 -17.0 -11.5 10.Indonesia (4.2% >> 3.7%) -17.6 -15.4 -20.6 -21.0 -12.7 8.9 -7.3 10.8 30.0 5.4 11.Africa (3.7% >> 3.2%) -20.2 -14.5 -15.9 -22.1 -27.9 -11.7 -9.8 -31.2 -6.9 -13.1 12.Vietnam (3.5% >> 4.2%) 13.0 17.7 16.7 8.3 10.9 3.1 -0.1 -4.7 10.2 1.7 13.Philippines (2.6% >> 2.8%) 2.1 7.4 -3.4 -6.4 10.8 15.4 13.5 -0.6 22.4 13.6 14.India (2.5% >> 2.5%) -5.7 6.1 -4.8 -11.5 -11.8 -9.1 -2.4 -7.1 1.1 -5.1 15.South Korea (2.0% >> 1.9%) -9.2 0.6 -16.4 -10.7 -8.6 -9.7 -8.3 -9.6 -1.8 -8.2 16.Taiwan (1.8% >> 1.6%) -12.0 4.7 -11.5 -15.3 -23.1 -18.1 -1.1 -19.7 5.4 -9.6 PS.ASEAN-9 (26.1% >> 25.7%) -7.2 -2.5 -5.9 -10.6 -9.3 3.9 -10.4 -6.0 2.6 -3.0 PS.ASEAN-5 (17.0% >> 15.3%) -15.1 -9.5 -11.8 -19.5 -19.1 9.1 -38.0 -4.9 4.2 -2.6 PS.CLMV (9.1% >> 10.4%) 7.7 10.5 5.5 7.2 7.9 -4.0 -3.5 -7.7 0.3 -3.8However, to compare the Thai exports values with that of other countries in region, it was found that exports values of other countries contracted as well. In addition, to compare with the first 8 months of 2016, Thai exports values contracted by -1.2 percent per year, less than that of other countries in region.
5. Supply side indicators in August 2016 showed improving signs as reflected by the number of inbound foreign tourists which (preliminary) was recorded at 2.87 million persons or expanded by 9.9 percent per year mainly due to an expansion of tourists from China and CLMV. Agricultural Production Index in August 2016 turned to contract by -8.3 percent per year but expanded by 0.9 percent per month after seasonal adjustment 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 contracted due to the end of harvest season, while livestock and fishery expanded due to no epidemic. Meanwhile, Agricultural Price Index in August 2016 continued to expand by 15.2 percent per year and expanded 0.4 percent per month after seasonal adjustment 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.
Supply Side Indicators 2015 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Agricultural Production Index (%yoy) -4.3 2.4 -11.3 -10.5 -0.8 -6.0 -1.9 0.9 -8.3 -4.2 %qoq_SA / %mom_SA 2.4 -10.5 1.4 6.3 -2.8 -5.4 2.9 -6.9 Thai Industries Sentiment Index (TISI) 85.8 89.2 85.2 82.7 86.0 86.0 85.6 84.7 83.3 85.4 (percent)Manufacturing Production Index 0.3 0.4 -0.3 0.9 0.3 -0.9 1.5 -5.1 n.a. -0.5 (%yoy) %qoq_SA / %mom_SA 0.5 -2.3 1.5 0.5 0.1 0.7 -3.7 n.a. Number of Inbound foreign Tourists 20.4 22.8 36.9 24.9 3.7 15.5 8.2 10.8 9.9* 11.8* (%yoy) %qoq_SA / %mom_SA 3.0 8.2 -1.7 -5.7 15.4 1.2 6.2 -4.6 *preliminary6. Internal stabilities remained favourable and external stabilities remained robust. Headline inflation was 0.3 percent per year and accelerated from previous month as prices of fresh and processed food increased. Meanwhile, core inflation was 0.8 percent per year, stable from last month. Unemployment rate in August 2016 was at 0.9 percent of total labor force equivalent to 360,000 persons. Public debt to GDP at the end of July 2016 stood at 42.9 percent of GDP, below the Fiscal Sustainability Framework of 60 percent of GDP. External stability remained robust and reflected the resilient ability to risk from the volatilities in global economy as 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.
Macroeconomic Stability 2015 2015 2016 Indicators Q1 Q2 Q3 Q4 Q1 Q2 Jul Aug YTD Internal Stability Headline Inflation (%yoy) -0.9 -0.5 -1.1 -1.1 -0.9 -0.5 0.3 0.1 0.3 0.0 Core Inflation (%yoy) 1.1 1.5 1.0 0.9 0.8 0.7 0.8 0.8 0.8 0.7 Unemployment rate (% of 0.9 1.0 0.9 0.9 0.8 0.9 1.1 1.0 0.9 1.0 total labor force) Public debt (% of GDP) 44.4 43.3 42.7 43.1 44.4 44.1 42.8 42.9 n.a. 42.9 External Stability Current Account Balance 31.6 8.4 6.1 6.9 10.2 16.6 8.4 3.7 n.a. 28.6 (Billion USD) International Reserves (Billion 156.5 156.3 160.3 155.5 156.5 175.1 175.5 180.2 180.8 180.8 USD) Net Forward (Billion USD) 11.7 19.6 18.4 13.3 11.7 13.9 15.7 16.9 19.1 19.1 International reserves to short term external debt 3.0 3.0 2.9 2.9 3.1 3.2 3.2 3.4 n.a. 3.3 (times)The financial and fiscal measures that the Ministry of Finance has carried forward government policy and launched in September 2015 onwards would help support the economic growth of Thailand in previous year and 2016. The progress of measures until as of 26 September 2016 was summarized as follows:
1.Project to strengthen the grass-root economy under People's State approach through 79,556 village and urban community funds under the 35-billion-baht budget in which each village fund would be allocated budget up to 500,000 baht via the National Village and Urban Community Fund Office for investing in community infrastructure such as rice warehouse and mill, water reservoirs, and agricultural processing machines. The allocation would be also spent on various activities to enhance local workers' potential and upgrade the quality of life of residents.As of current status, Committee of the National Village and Urban Community Fund issued criteria for eligible projects and approved projects and budget for 64,909 funds worth 32,409 million baht and already transferred 29,240 million baht which was disbursed 19,735 million baht.
2. Relief measures for drought-affected farmers and agricultural competitiveness enhancement.
2.1 Relief measure for drought-affected farmers: implementation of policy loan as contingency fund (The credit line of 6,000 million baht). Loan period is for 1 year with 0 percent interest rate for the first six months, and increase to 4 percent for the remaining six months (Month 7-12). As of 20 September 2016, approved loans were amounted to 1,922 million baht to 162,574 farmers.
2.2 "One Tambon One Agricultural SME" policy loans to promote sustainability of Thai agricultural sector (The credit line of 72,000 million baht). Loan period is for 10 years with interest rate of 4 percent for the first seven years and apply to normal interest rate for the remaining three years (Year 8 - 10). As of 20 August 2016, loans were disbursed at 10,838 million baht to 8,342 agricultural SMEs.
3.Short-term financial and fiscal measures to encourage SMEs competitiveness enhancement .
3.1 Project of Policy Loan (The credit line of 15,000 million baht). As of current status, SME Bank approved loan worth 12,343 million baht to 4,058 SMEs and the Thai Credit Guarantee Corporation (TCG) guaranteed loans worth 11,472 million baht to 3,995 SMEs.
3.2 Project of Policy Loan for SMEs to modify machinery and improve productivity (The credit line of 15,000 million baht). Loan period is for 7 years with interest rate of 4 percent per year. As of 26 September 2016, approved loans were amounted to 2,108 million baht to 181 SMEs.
3.3 Project of loan guarantee for PGS-5 (revised) (Credit 30 percent per port would be guaranteed by the Thai Credit Guarantee Corporation (TCG) with the limit of 100,000 million baht). TCG guaranteed loans of 96,338 million Baht to 25,959 SMEs entrepreneurs.
3.4 Micro Entrepreneurs Guarantee Scheme Phase 2 (Guarantee budget framework of 13,500 million baht). Each micro entrepreneur could receive loan guarantee up to 200,000 baht. The guarantee would cover a loss/damage of 30-50 percent. As of 26 September 2016, The Thai Credit Guarantee Corporation (TCG) guaranteed an amount of 1,243 million baht to 11,569 Micro Entrepreneurs.
3.5 Measure to encourage SMEs through Venture Capital (The budget of 6,000 million baht). The Government Savings Bank approved venture capital to 3 SMEs entrepreneurs worth 70 million baht and SME Bank approved in principle for venture capital to 8 SME entrepreneurs worth 95.5 million baht which was already disbursed to 3 SME entrepreneurs worth 46 million baht.
4. Financial and fiscal measures to stimulate real estate sector. The goals are to boost real estate sector and to help low-income earners buy houses and be homeowner.
4.1 Loan measure for low-and medium-income earners, the Government Housing Bank has received the applications since 19 October 2015. Lately, the Government Housing Bank approved loan to 16,205 applicants worth 22,530 million Baht.
4.2 Soft loans for lower-income first-home buyers under People's State approach . The objectives are to help low-income people including government servants, soldiers, policemen, and academic personnel and people with uncertain salary or freelance who have never been homeowner and this measure covers housing repair and enlargement through relaxed home loans from stateowned banks. The most updated data (as of 26 September 2016) showed that the Government Housing Bank approved loans as Post Finance to 6,719 loan applicants worth 5,714 million baht and the Government Savings Bank approved loans as Pre Finance to 2 loan applicants worth 65 million baht, and approved loans as Post Finance to 3,355 loan applicants worth 3,284 million baht.
Source: Fiscal Policy Office / www.fpo.go.th