Attachment
"The Thai economy in February 2016 was supported by government expenditures particularly 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. Domestic expenditures showed some improving signs in private investment, while private consumption was still contracted in which the Fiscal Policy Office will keep closely monitoring."
1. 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, real VAT collection from imports decreased by -1.3 percent per year due to import values which declined from the decrease in crude oil prices in global market. Meanwhile, the motorcycle sales contracted by -11.1 percent per year due to the contraction of the sales in Bangkok and regions which declined by -0.5 and -14.2 percent per year, respectively. This contraction was due to the accelerating purchase from previous month which was a result of sale promotion of entrepreneurs during New Year, and an increase in farmers' income in previous month. Likewise, passenger car sales continued to decrease by -29.9 percent per year. In addition, Consumer Confidence Index decreased for 2 months consecutively by standing at 63.5 points as consumers were anxious about Thai economy which recovered slowly and was affected from the uncertainty of global economy particularly the economic slowdown of China that affected unrecovered exports of Thailand. In addition, prices of agricultural products stayed at the low level particularly agricultural export goods such as rubber and rice which declined from crude oil's prices and global economic situation and this affected consumers' purchasing power to stay at low level. Meanwhile, the imports of consumer goods contracted by -4.2 percent per year and real farmers' income contracted by -9.5 percent per year.
Private Consumption 2015 2015 2016 Indicators Q1 Q2 Q3 Q4 Jan. Feb. YTD Real Value Added Tax Collection (%yoy) 1.0 1.0 1.7 -0.7 2.1 -0.6 3.0 1.0 %qoq_SA /%mom_SA 1.0 -0.5 -1.4 2.8 -4.4 1.7 Imports of Consumer Goods (%yoy) 2.2 10.8 2.0 1.5 -4.4 -2.9 -4.2 -3.5 %qoq_SA / %mom_SA 0.0 -3.8 0.0 -1.1 0.0 -4.8 Passenger Car Sales (%yoy) -19.1 -12.5 -27.3 -24.9 -11.7 -30.0 -29.9 -30.0 %qoq_SA / %mom_SA -4.4 -13.6 -5.5 12.2 -18.6 -3.3 Motorcycle Sales (%yoy) -0.2 10.9 -2.9 -10.6 2.3 12.9 -11.1 0.5 %qoq_SA / %mom_SA 9.5 -11.9 -2.6 8.8 5.1 -19.5 Farmers' real incomes (calculated by FPO) -9.9 -3.6 -12.9 -5.0 -15.0 -7.0 -9.5 -8.2 Consumer Confidence Index 64.7 68.4 64.9 61.8 63.6 64.4 63.5 64.02. Private investment in February 2016 showed improving signs in construction sector as reflected by real estate tax collection which turned to increase by 3.7 percent per year and increased by 4.3 percent per month after seasonal adjustment. Meanwhile, the cement sale turned to expand by 6.0 percent per year and increased by 4.9 percent per month after seasonal adjustment. Construction Materials Price Index (CMI) continued to decrease with slower rate at -5.0 percent per year due to the declining prices in steel and steel products which decreased by -12.0 percent per year from declining prices in world steel market . For investment in equipment and machinery sector, commercial car sales expanded by 1.9 percent per year and increased by 2.9 percent per month after seasonal adjustment. Meanwhile, the imports of capital goods contracted by -11.6 percent per year and the imports of capital goods excluding special items (airplanes, ships, and trains) contracted by -8.3 percent per year.
Private Investment Indicators 2558 2558 2559 Q1 Q2 Q3 Q4 Jan. Feb. YTD Construction sector Real estate tax collection (%yoy) 8.4 7.3 2.9 -0.5 21.2 -7.2 3.7 -1.9 %qoq_SA / %mom_SA -1.5 -4.5 4.8 21.7 -34.7 4.3 Cement sales (%yoy) -0.4 -2.5 -0.2 -0.7 2.1 -0.3 6.0 2.8 %qoq_SA / %mom_SA 0.9 1.6 -1.5 1.1 2.1 4.9 Construction Materials Price Index (CMI) -4.9 -3.7 -4.4 -5.7 -6.6 -6.2 -5.0 -5.6 Machinery sector Commercial car sales (%yoy) -2.6 -11.3 -17.3 -0.3 17.2 -2.4 1.9 -0.2 %qoq_SA / %mom_SA -5.2 -6.4 15.6 13.3 -20.9 2.9 Imports of capital goods (%yoy) -2.2 0.9 2.0 -10.8 0.2 2.9 -11.6 -4.2 %qoq_SA / %mom_SA 1.2 -0.3 -5.3 4.7 4.7 -8.3 Imports of capital goods (exclude aircraft, ship, and -1.4 0.1 -3.6 -2.3 0.1 4.9 -8.3 -1.6 train) (%yoy) %qoq_SA / %mom_SA -0.7 -2.0 0.7 2.1 -1.7 -4.63. 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. As a result, total annual budgetary expenditure for the first 5 months of fiscal year 2016 was disbursed as 1,187.3 billion baht or 43.6 percent of FY2016 expenditure framework (2,720.0 billion baht). Meanwhile, 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.
Fiscal Sector Indicators FY2015 FY2015 FY 2016 (Billion Baht) Q1/ Q2/ Q3/ Q4/ Q1/ Jan. Feb. FYTD FY15 FY15 FY15 FY15 FY16 Net Government Revenue (net of local authorities' 2,207.5 507.5 469.9 652.5 577.5 585.7 158.2 154.1 898.1 allocation) (%y-o-y) 6.4 0.8 7.5 7.2 9.9 15.4 -1.5 3.0 9.8 Total government 2,601.4 844.1 617.6 569.6 570.1 890.9 259.9 160.6 1,311.4 expenditure (%y-o-y) 5.7 1.6 11.7 10.7 1.6 5.5 20.5 6.8 8.4 Annual budgetary 2,378.1 766.4 557.7 529.4 524.6 807.7 241.0 138.6 1,187.3 expenditure (%y-o-y) 5.9 0.7 15.6 11.1 -0.3 5.4 21.8 5.5 8.4 Current expenditure 2,106.6 725.1 481.0 452.3 448.1 739.6 220.8 108.9 1,069.3 (%y-o-y) 7.4 12.5 7.3 8.1 -0.7 2.0 22.0 -0.8 5.3 Capital expenditure 271.6 41.3 76.7 77.1 76.4 68.1 20.1 29.8 118.0 (%y-o-y) -4.4 -64.6 123.2 32.4 2.1 65.0 19.6 36.9 47.7 Budget Balance -402.3 -347.3 -138.9 89.4 -5.5 -307.1 -108.0 -13.9 -429.04.Exports in February 2016 improved as the export value was amounted at 19.0 billion 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. Meanwhile , import value was amounted at 14.0 billion USD or contracted by -16.8 percent per year. As such, the greater exports compared to that of imports resulted in the trade surplus of 5.0 billion USD in February 2016.
Main trading partners (16 countries) 2015 2015 2016 (Export share 2014 >> 15 ) Q1 Q2 Q3 Q4 Jan. Feb. YTD Exports to the world (%yoy) -5.8 -4.7 -5.0 -5.3 -8.1 -8.9 10.3 0.7 1.USA (10.5% >> 11.2%) 0.7 5.6 2.6 0.2 -4.9 -8.5 0.3 -4.2 2.China (11.0% >> 11.1%) -5.4 -14.4 1.2 -1.0 -6.3 -6.1 -7.6 -6.9 3.Japan (9.6% >> 9.4%) -7.7 -9.2 -3.9 -7.9 -9.6 -10.1 34.8 12.1 4.EU (9.2% >> 9.3%) -5.7 -3.9 -8.4 -4.4 -5.9 -2.4 4.1 0.8 5.Malaysia (5.6% >> 4.8%) -20.2 -14.7 -18.3 -18.7 -28.5 -18.5 -0.3 -9.8 6.Hong Kong (5.6% >> 5.5%) -6.2 -11.5 -9.0 -2.0 -1.9 -13.9 16.8 2.0 7.Middle East (5.1% >> 4.8%) -10.0 -6.4 -23.7 -6.4 -3.0 -12.1 -11.2 -11.6 8.Australia (4.8% >> 5.3%) 5.3 10.1 7.6 8.4 -3.5 13.6 1.3 6.6 9.Singapore (4.6% >> 4.1%) -16.2 -5.4 0.3 -26.1 -31.0 -35.4 109.1 25.6 10.Indonesia (4.2% >> 3.7%) -17.6 -15.4 -20.6 -21.0 -12.7 -1.3 13.8 6.3 11.Africa (3.7% >> 3.2%) -20.2 -14.5 -15.9 -22.1 -27.9 -10.2 -21.7 -16.6 12.Vietnam (3.5% >> 4.2%) 13.0 17.7 16.7 8.3 10.9 -1.8 6.7 2.2 13.Philippines (2.6% >> 2.8%) 2.1 7.4 -3.4 -6.4 10.8 7.9 19.1 13.6 14.India (2.5% >> 2.5%) -5.7 6.1 -4.8 -11.5 -11.8 -5.6 -18.4 -12.3 15.South Korea (2.0% >> 1.9%) -9.2 0.6 -16.4 -10.7 -8.6 -9.2 -12.3 -10.8 16.Taiwan (1.8% >> 1.6%) -12.0 4.7 -11.5 -15.3 -23.1 -31.4 -15.4 -24.3 PS.ASEAN-9 (26.1% >> 25.7%) -7.2 -2.5 -5.9 -10.6 -9.3 -8.8 16.6 3.5 PS.ASEAN-5 (17.0% >> 15.3%) -15.1 -9.5 -11.8 -19.5 -19.1 -14.9 31.8 7.2 PS.CLMV (9.1% >> 10.4%) 7.7 10.5 5.5 7.2 7.9 1.2 -5.8 -2.35. 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. However, tourists from Oceania contracted by -2.3 percent per year as tourists from Australia continued to decline. 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.
Supply Side Indicators 2015 2015 2016 Q1 Q2 Q3 Q4 Jan. Feb. YTD Agricultural Production Index (%yoy) -4.9 2.0 -10.7 -11.9 -2.0 -0.9 -2.0 -1.4 %qoq_SA / %mom_SA 1.0 -11.5 2.1 5.5 -15.3 -2.8 Manufacturing Production Index (%yoy) 0.3 0.4 -0.3 0.9 0.3 -3.5 -1.6 -2.6 %qoq_SA / %mom_SA 0.3 -2.0 1.1 0.9 -4.1 1.9 Thai Industries Sentiment Index (TISI) 85.8 89.6 85.2 82.7 86.0 86.3 85.1 85.7 (percent) Number of Inbound Tourists (%yoy) 20.4 22.8 36.9 24.9 3.7 15.0 16.0 15.5 %qoq_SA / %mom_SA 4.2 7.7 -1.8 -6.3 8.2 4.06. Internal stabilities remained favourable and external stabilities remained robust. Headline inflation in February 2016 was -0.5 percent per year due to declining in retail domestic oil prices which affected LNG prices, bus fares between provinces to decline. In addition, electrical prices were adjusted to decline due to energy prices. Meanwhile, prices of meat and fruits and vegetables increased due to Chinese New Year festival. Core inflation was 0.7 percent per year higher than that of previous month. 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.
Macroeconomic Stability 2015 2015 2016 Indicators Q1 Q2 Q3 Q4 Jan. Feb. YTD Internal Stability Headline Inflation (%yoy) -0.9 -0.5 -1.1 -1.1 -0.9 -0.5 -0.5 -0.5 Core Inflation (%yoy) 1.1 1.5 1.0 0.9 0.8 0.6 0.7 0.6 Unemployment rate (% of total labor 0.9 1.0 0.9 0.9 0.8 0.9 0.9 0.9 force) Public debt (% of GDP) 44.4 43.3 42.8 43.3 44.4 44.1 n.a. 44.1 External Stability Current Account Balance (Billion USD) 34.8 8.4 6.1 7.2 13.1 4.1 n.a. 4.1 International Reserves (Billion USD) 156.5 156.3 160.3 155.5 156.5 160.1 168.0 168.0 Net Forward (Billion USD) 11.7 19.6 18.4 13.3 11.7 9.2 10.2 10.2 International reserves to short term 2.8 3.0 2.9 2.9 3.0 3.1 n.a. 3.1 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 in previous year and 2016. Measures taken and progress as of 28 March 2016 are as follows:
1.Project of strengthening grass-root economy under the People's State approach by providing 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. It will also be spent on various activities to enhance local workers' potential and upgrade the quality of life of residents.Recently, Committee of the National Village and Urban Community Fund has issued criteria for eligible projects and has been considering and verify potential projects.
2. 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 consist of
2.1 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). The most recent data showed that total approved loan amounted 47,846 million baht was gave to 3,023,421 low-income people. This amount comprised (1) the Government Savings Bank which had approved 25,570 million baht in loan to 25,728 Village Funds, and the Village Funds gave loan to 1,631,186 low-income people amounted 21,342 million Baht, and (2) Bank for Agriculture and Agricultural Co-operatives (BAAC) which had approved 22,276 million baht in loan to 22,519 Village Funds and the Village Funds gave loan to 1,392,235 low-income people amounted 22,276 million Baht.
2.2 Measures to improve the well-being at the Tambon (sub-district) level (5 Million Baht per Sub-District with the budget framework of 36,275 Million Baht). As of 25 March 2016 the approved budget was totaled at 35,825 million baht or 98.8 percent of budget framework. The budget of contracted projects was amounted at 33,342 million baht which was disbursed at 17,104 million baht.
2.3 Measures to accelerate budget disbursements for existing and new small government projects below 1 million Baht with budget of 40,000 million baht). Contracted projects were worth 33,587 million baht and were disbursed at 31,576 million baht comprised (1) mid-year budget of 2015 which was disbursed at 21,344 million baht and (2) budget of 2016 which was disbursed at 10,232 million baht (as of 25 March 2016).
3. Short-term financial and fiscal measures to encourage SMEs competitiveness enhancement .
3.1 Soft loan for working capital for SMEs (Soft Loan SMEs with the interest rate of 4 percent for 7 years with the budget of 150,000 million Baht). The total budget of 150,000 million baht was fully utilized to 21,504 SMEs entrepreneurs.
3.2 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. As of 28 March 2016 , the TCG guaranteed loans of 61,690 million Baht to 14,513 SMEs entrepreneurs.
4. 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.
4.1 Loan measure for low-and medium-income earners, the Government Housing Bank (GHB) has received the applications since 19 October 2015. As of 28 March 2016, GHB has approved loan for 15,189 applicants worth 21,026 million Baht.
4.2 Soft loans for lower-income first-home buyers under People's State approach (approved by the cabinet on 22 March 2016) to help people especially low-income people covering government servants, soldiers, policemen, academic personnel, and people who earn uncertain salary or become freelance, who have never owned any real estate to own their real estate as homeowner. It also covers loans for housing repair and/or enlargement purposes. Such loans are provided through state-owned bank's housing soft loan project. Currently, there are 298 loan applicants worth 262.9 million baht and Government Housing Bank has approved loans worth 8.79 million baht to 10 applicants.
Source: Fiscal Policy Office / www.fpo.go.th