Issue 11/2017
30 March 2017
Mr. Krisada Chinavicharana, Director-General of the Fiscal Policy Office, Spokesperson of the Ministry of Finance revealed that "The Thai economy in February 2017 expanded from private expenditures as reflected by improving signs in private consumption and investment. In addition, supply-side economy was supported by agricultural sector as Agricultural Production Index and Agricultural Price Index expanded well, resulting in a continued high expansion of real farmers' income" The details were summarized as follows:
Economic indicators on private expenditures in February 2017 showed improving signs as reflected by real VAT collection which expanded by 3.4 percent per year due to an increase in real VAT collection from domestic consumption base and from import base and this corresponded with import of consumer goods which expanded by 1.7 percent per year. Meanwhile, new motorcycle registrations expanded by 14.9 percent per year as new motorcycle registration in Bangkok Metropolitan Region and other regions expanded by 10.6 and 16.3 percent per year, respectively. Likewise, real farmers' income continued to increase by 19.8 percent per year due to an increase in agricultural products and prices. Meanwhile, passenger car sales continuously increased by 49.8 percent per year due to new-model cars introduced to the market and low base of the previous year when the passenger car sales were decelerated after excise tax restructuring during the beginning of 2016. In addition, Consumer Confidence Index (CCI) increased for 3 months consecutively, highest in 14 months due to increasing agricultural prices resulting in an increase in farmer's income .
Private investment showed positive signs. Investment in equipment and machinery as reflected by commercial cars sales expanded by 6.3 percent per year due to an increase in 1-ton pickup truck sales which increased by 9.8 percent per year.Meanwhile, import of capital goods expanded by 20.4 percent per year and expanded by 40.7 percent per month after seasonal adjustment. Domestic cement sales in February 2017 contracted by -0.1 percent per year but expanded by 2.4 percent per month after seasonal adjustment.
Export values in February 2017 contracted by -2.8 percent per year, the first contraction in 3 months, but after excluding exports of gold and aircrafts, export values expanded by 8.5 percent per year. Export commodities showing expansion composed of agricultural products, rubber products, and electronics. Export markets showing expansion composed of China, CLMV, Hong Kong, USA, and EU. Import values highly expanded by 20.4 percent per year from main import goods such as raw materials and semi-finished materials which expanded by 20.9 percent per year and capital goods which expanded by 23.3 percent per year. As such the greater export values compared to that of imports resulted in the continued trade surplus of 1.6 billion USD in February 2017.
Supply-side indicators in February 2017 were supported by agricultural sector as reflected by Agricultural Product Index which expanded by 8.2 percent per year due to expansion in main crops such as paddy, corn, oil palm, and fruits. Agricultural Price Index increased by 12.7 percent per year due to increasing prices in main crops such as rubber, and oil palm which was adjusted to increase due to crude oil prices in world market. Meanwhile, fishery expanded due to increasing external demand.
Economic stabilities remained robust. Headline inflation and core inflation in February 2017 expanded by 1.4 and 0.6 percent per year, respectively. In addition, unemployment rate was 1.1 percent of total labor force. Meanwhile, Public debt to GDP at the end of January 2017 stood at 42.0 percent to GDP, lower than the Fiscal Sustainability Framework of 60 percent to GDP. The international reserves at the end of February 2017 were high at 183.0 billion USD, approximately 3.3 times of short-term external debt as of January 2017 reflecting the resilient ability to risk from the volatilities in global economy.
Source: Fiscal Policy Office / www.fpo.go.th