Mr. Krisada Chinavicharana, Director-General of the Fiscal Policy Office, Spokesperson of the Ministry of Finance, revealed that "The Thai economy in February 2016 was supported by government expenditures particularly in capital expenditure which highly expanded by 36.9 percent per year. In addition, inbound tourism sector expanded by 16.0 percent per year and export sector showed an improvement. Given that domestic expenditures showed some improving signs in private investment, the private consumption was still contracted in which the Fiscal Policy Office will keep closely monitoring." The details were summarized as follows:
Private consumption in February 2016 showed slowing signs, even though real VAT collection in February 2016 expanded by 3.0 percent per year and increased by 1.7 percent per month after seasonal adjustment due to an increase of real VAT collection from domestic consumption which expanded by 5.7 percent per year. However,other consumption indicators showed contraction as reflected by motorcycle sales which decreased by -11.1 percent per year. Motorcycle sales showed a contraction in Bangkok and other regions due to the accelerated purchase in previous month resulting from sale promotion of entrepreneurs during New Year. Meanwhile, passenger car sales continued to decrease by -29.9 percent per year and Consumer Confidence Index declined for 2 months consecutively by standing at 63.5 points reflected that consumers were anxious about Thai economy which recovered slowly and was affected from the uncertainty of global economy particularly the slowdown in China economy which adversely affected Thai export products. In addition, prices of agricultural products stayed at the low level particularly agricultural export goods such as rubber and rice which decreased due to crude oil prices and global economic situation. In this month farmers' real income contracted by -9.5 percent per year.
Private investment in February 2016 showed improving signs in construction sector as reflected by real estate tax collection which expanded by 3.7 percent per year or increased by 4.3 percent per month after seasonal adjustment. Meanwhile, the cement sale turned to expand by 6.0 percent per year or increased by 4.9 percent per month after seasonal adjustment. Construction Materials Price Index (CMI) continued to contract by -5.0 percent per year due to a decline in prices of steel and steel products which were adjusted to the global market prices. For investment in equipment and machinery sector,commercial car sales turned to expand by 1.9 percent per year and expanded by 2.9 percent per month after seasonal adjustment. However, the imports of capital goods turned to contract by -11.6 percent per year and after excluded special items (airplane, ship, and train), the imports of capital goods showed a contraction of -8.3 percent per year.
Fiscal indicators in February 2016 showed the role of fiscal policy to support continuously Thai economy particularly from the government expenditures in accelerating public investments which showed high expansion. Total government expenditure was disbursed at 160.6 billion baht or expanded by 6.8 percent per year. The annual budgetary expenditure was disbursed at 138.6 billion baht or increased by 5.5 percent per year where its expenditure comprised (1) current expenditure which was disbursed at 108.9 billion baht, decreased by -0.8 percent per year and (2) capital expenditure which was disbursed at 29.8 billion baht, expanded by 36.9 percent per year. The net government revenue collection (net of allocation to local authorities) amounted at 154.1 billion baht, expanded by 3.0 percent per year. As a result, the budget balance showed the deficit of -13.9 billion baht.
External demand as reflected by exports in February 2016 showed improving signs. The export value in terms of U.S. dollars (USD) expanded by 10.3 percent per year and expanded by 17.6 percent per month after seasonal adjustment. The expansion of this export value came from temporary exported goods in some special commodities such as gold and weapons. Consequently, export value after excluding gold showed an expansion of 0.2 percent per year. The exports this month expanded in almost all destinations particularly main trade partners such as Japan, EU, U.S.A., Hong Kong, and ASEAN-5 where the export expansion mainly came from commodities in agro industry such as canned and processed fruits and vegetables, sugar cane, and gem and jewellery.
Supply side expanded from tourism sector as reflected by the number of inbound foreign tourists in February 2016 which was recorded at 3.1 million persons, expanded consecutively by 16.0 percent per year or increased by 4.0 percent per month after seasonal adjustment. The good expansion was mainly caused by tourists from East Asia and Europe which expanded 2 months consecutively while tourists from Russia turned to be the first expansion in 22 months since April 2014. Meanwhile,the Agricultural Production Index (API) showed a contraction of -2.0 percent per year mainly from agricultural products i.e. paddy, cassava, corn, and oil palm. Manufacturing Production Index (MPI) contracted by -1.6 percent per year but expanded by 1.9 percent per month after seasonal adjustment. Thai Industries Sentiment Index (TISI) was at 85.1 points lower from previous month due to an anxiety of purchase power decelerated in regions, drought problem, and global economic slowdown.
Internal stabilities remained favourable and external stabilities remained robust. Headline inflation in February 2016 was -0.5 percent per year and Core inflation was 0.7 percent per year. Meanwhile, unemployment rate was 0.9 percent of total labor force or equivalent to 340,000 unemployed persons. Public debt to GDP at the end of January 2016 stood at 44.1 percent of GDP below the Fiscal Sustainability Framework of 60 percent to 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 February 2016 were high at 168.0 billion USD, or approximately 3.1 times of short-term external debt.
Source: Fiscal Policy Office / www.fpo.go.th