Attachment: Monthly Economic Report (February 2017)

ข่าวเศรษฐกิจ Thursday March 30, 2017 15:35 —Ministry of Finance

Attachment

Monthly Economic Report (February 2017)

"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"

1. Private consumption showed improving signs as real VAT collection in February 2017 continued to expand by 3.4 percent per year and expanded by 2.7 percent per month after seasonal adjustment due to the expansion of real VAT collection from domestic consumption base and from import base. In addition, new motorcycle registrations in February 2017 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. Meanwhile, passenger car sales in February 2017 continued to expand for 2 months consecutively at 49.8 percent per year and expanded by 13.1 percent per month after seasonal adjustment corresponding with real farmer's income in February 2017 which continued to expand by 19.8 percent per year, while import of consumers' goods expanded by 1.7 percent per year. In addition, Consumer Confidence Index (CCI) in February 2017 stood at 64.3 points, highest in 14 months, due to an increase in agricultural products prices and the exports that tend to expand continually.

Private Consumption 2015 2016 2016 2017 Indicators Q1 Q2 Q3 Q4 Jan Feb YTD Real Value Added Tax Collection (%yoy) 1.3 1.4 0.3 3.8 1.3 0.2 2.1 3.4 2.7 %qoq_SA /%mom_SA -0.8 2.9 -3.0 1.0 0.0 2.7 Passenger Car Sales (%yoy) -19.1 -6.5 -26.6 4.9 10.6 -10.6 23.5 49.8 37.2 %qoq_SA / %mom_SA -18.7 20.4 -0.4 -8.7 12.0 13.1 Registration of new motorcycles (%yoy) -0.2 5.5 -3.3 7.9 14.1 4.6 -6.2 14.9 3.4 %qoq_SA / %mom_SA 4.7 -0.1 1.9 -1.9 0.2 -0.5 Imports of consumers' goods (%yoy) 2.2 2.2 3.6 3.4 1.5 0.4 4.0 1.7 2.9 %qoq_SA / %mom_SA 7.8 -3.7 -1.3 -2.1 1.7 -0.1 Farmers' real incomes (calculated by FPO) -9.4 -0.2 -13.4 -1.4 9.7 4.8 8.8 19.8 14.0 Consumer Confidence Index 64.7 62.2 63.4 61.1 62.3 61.9 63.1 64.3 63.7

2. Private investment in February 2017 showed remaining signs in construction sector, while investment in equipment and machinery expanded well. Domestic cement sales in February 2017 showed slightly contracted by -0.1 percent per year but expanded by 2.4 percent per year after seasonal adjustment corresponding with Construction Materials Price Index which expanded by 2.1 percent per year as price index in steel and steel products increased by 14.1 percent per year . Meanwhile, real estate tax collection in February 2017 contracted by -8.4 percent per year due to high base from temporary reduction of real estate transfer and mortgage registration fees (effective from 29 October 2015 to 28 April 2016) but expanded at 7.2 percent per month after seasonal adjustment. Meanwhile, investment in equipment and machinery as reflected by commercial car sales in February 2017 continued to increase for 2 months consecutively at 6.3 percent per year and expanded by 3.5 percent per month after seasonal adjustment due to an increase in 1-ton pickup truck sales which expanded by 9.8 percent per year. Meanwhile, Import volumes of capital goods in February 2017 expanded by 20.4 percent per year but expanded by 40.7 percent per month after seasonal adjustment.

Private Investment Indicators 2015 2016 2016 2017 Q1 Q2 Q3 Q4 Jan Feb YTD Construction sector Real estate tax collection (%yoy) 8.7 -2.5 6.6 13.2 -5.7 -17.0 -10.7 -8.4 -9.5 %qoq_SA / %mom_SA -10.8 2.0 -12.6 2.7 -11.3 7.2 Cement sales (%yoy) -0.4 -1.6 3.1 -1.6 -6.0 -2.3 2.0 -0.1 0.9 %qoq_SA / %mom_SA 1.4 -3.1 -4.9 4.5 -0.5 2.4 - Construction Materials Price Index (CMI) -4.9 -2.7 -5.1 -2.2 -3.0 -0.4 2.4 2.1 2.2 Machinery and equipment sector Commercial car sales (%yoy) -2.6 -2.0 4.0 13.6 -3.4 -15.3 4.5 6.3 5.4 %qoq_SA / %mom_SA -8.5 2.4 -4.8 -5.8 1.0 3.5 Import volumes of capital goods (%yoy) -2.2 -4.0 -1.0 -11.6 -0.3 -2.9 -22.4 20.4 -3.0 %qoq_SA / %mom_SA -0.7 -8.7 4.5 2.6 -18.2 40.7 Import volumes of capital goods (less airplanes, trains, ships) (%yoy) -1.4 -2.6 0.0 -5.1 -2.4 -2.7 -16.7 10.0 -4.4 %qoq_SA / %mom_SA -0.9 -5.3 2.2 1.5 -15.3 24.3

3. Government expenditures continued to expand reflected by the annual budgetary expenditure in February 2017, which was disbursed at 142.8 billion baht or expanded by 3.0 percent per year due to a support from the current expenditure that was disbursed at 113.8 billion baht or expanded by 4.5 percent per year. Meanwhile, capital expenditure in February 2017 was disbursed at 29.0 billion baht, decreasing by -2.8 percent per year due to accelerated disbursement during the beginning of the fiscal year. As a result, for the first 5 months of the fiscal year (from October 2016 to February 2017), total government expenditure was amounted by 1,382.1 billion baht, expanding by 5.4 percent per year. The annual budgetary expenditure was disbursed 1,248.6 billion baht or expanded by 5.2 percent per year or equivalent to 45.7 percent of budget framework (2,733.0 billion baht) due to current expenditure which was disbursed at 1,108.8 billion baht, expanding by 3.7 percent per year and capital expenditure which was disbursed at 139.8 billion baht, expanding by 18.5 percent per year. Meanwhile, the carryover expenditure from previous year was disbursed at 133.4 billion baht, expanding by 7.5 percent per year.

Fiscal Sector Indicators FY 2016 FY2017 (Billion Baht) Budget framework of Q1/FY17 Jan Feb FYTD FY2017 Total government expenditure 2,807.4 2,990.4 969.1 255.0 157.9 1,382.1 (%y-o-y) 7.9 8.8 -1.9 -1.7 5.4 Annual budgetary expenditure 2,578.9 2,733.0 876.1 229.8 142.8 1,248.6 (%y-o-y) 8.4 8.5 -4.7 3.0 5.2 Current expenditure 2,214.1 2,183.6 783.9 211.1 113.8 1,108.8 (%y-o-y) 5.1 6.0 -4.4 4.5 3.7 Capital expenditure 364.9 549.4 92.2 18.7 29.0 139.8 (%y-o-y) 34.4 35.4 -7.2 -2.8 18.5 Carry-over budget (last year) 228.5 257.4 93.0 25.3 15.2 133.4

4.External demand as shown by exports of goods was recorded at 18.5 billion USD contracting by -2.8 percent per year and expanded by 2.9 percent per month after seasonal adjustment. However, when excluding exports of gold and arcrafts, export values expanded by 8.5 percent per year. The export goods showing expansion composed of agricultural products, rubber products, electronics, chemical products, and fuel. The export markets showing expansion were China expanding by 31.1 percent, CLMV expanding by 22.2 percent, Hong Kong expanding by 10.7 percent, U.S.A. expanding by 5.7 percent, and EU expanding by 5.4 percent. Import value in February 2017 was recorded at 16.9 billion USD expanding by 20.4 percent per year due to increasing imports of raw material and semi-finished raw material, capital goods, fuel, and consumers' goods. As such the greater export values compared to that of imports resulted in the continued trade surplus of 1.6 billion USD and in February 2017.

Main trading partners 2015 2016 2016 2017 (16 countries) Q1 Q2 Q3 Q4 Jan Feb YTD (Export shares 15 >> 16 ) Exports to the world (%yoy) -5.8 0.5 0.9 -4.1 1.2 3.8 8.8 -2.8 2.5 1.USA (11.2% >> 11.4%) 0.7 1.8 -3.2 0.6 7.0 2.7 9.5 5.7 7.6 2.China (11.1% >> 11.1%) -5.4 0.3 -6.4 -10.3 -0.4 17.4 30.8 31.1 31.0 3.Japan (9.4% >> 9.5%) -7.7 2.5 5.7 -7.5 0.8 11.5 6.4 -22.6 -10.9 4.EU (9.3% >> 9.3%) -5.7 1.0 -0.5 -1.0 2.7 2.6 10.4 5.4 7.8 5.Malaysia (4.8% >> 4.5%) -20.2 -5.5 -4.1 -12.9 -6.1 2.0 5.6 -4.3 0.3 6.Hong Kong (5.5% >> 5.3%) -6.2 -3.1 0.6 -8.2 -4.5 -0.3 -3.8 10.7 4.8 7.Middle East (4.8% >> 4.2%) -10.0 -12.4 -9.5 -2.5 -14.3 -22.1 -19.2 -17.6 -18.3 8.Australia (5.3% >> 5.6%) 5.3 5.4 5.5 12.4 10.7 -6.4 -0.3 -10.4 -5.7 9.Singapore (4.1% >> 3.8%) -16.2 -6.2 22.5 -35.7 -8.9 10.0 49.8 -52.5 -22.1 10.Indonesia (3.7% >> 3.8%) -17.6 3.1 8.9 -7.3 16.1 -4.9 -4.0 -14.2 -9.5 11.Africa (3.2% >> 2.9%) -20.2 -8.8 -11.7 -9.8 -13.1 0.5 -1.6 5.4 2.0 12.Vietnam (4.2% >> 4.4%) 13.0 5.8 3.1 -0.1 6.5 12.8 10.5 35.0 22.4 13.Philippines (2.8% >> 3.0%) 2.1 6.7 15.4 13.5 9.9 -8.1 9.8 -3.5 2.8 14.India (2.5% >> 2.4%) -5.7 -2.7 -9.1 -2.4 -2.0 4.0 17.7 23.1 20.3 15.South Korea (1.9% >> 1.9%) -9.2 -1.5 -9.7 -8.3 0.8 12.1 28.1 25.4 26.7 16.Taiwan (1.6% >> 1.6%) -12.0 -4.8 -18.1 -1.1 -3.0 4.4 4.6 15.9 10.2 PS.ASEAN-9 (25.7% >> 25.4%) -7.2 -0.9 3.9 -10.4 0.0 3.4 10.3 -8.8 -0.1 PS.ASEAN-5 (15.3% >> 15.0%) -15.1 -1.5 9.1 -38.0 1.1 -0.2 13.2 -23.8 -8.3 PS.Indochina-4 (10.4% >> 10.3%) 7.7 -0.1 -4.0 -3.5 -1.8 8.1 6.4 22.2 14.0

5. Supply-side indicators in February 2017 were supported by agricultural sector as Agricultural Product Index in February 2017 expanded by 8.2 percent per year and expanded by 5.7 percent per month after seasonal adjustment due to the expansion in almost agricultural products comprising major crops expanding by 10.0 percent per year due to expansions in paddy, corn, oil palm, and fruits, while fishery expanded by 9.7 percent per year. Likewise, Agricultural Price Index continued to expand by 12.7 percent per year as main agricultural prices expanded by 18.1 percent per year from rubber prices, and oil palm prices which was adjusted to increase from crude oil prices in world market and prices in fishery expanded by 14.4 percent due to increasing external demand. The number of inbound foreign tourists in February 2017 was recorded at 3.0 million persons contracting by -3.2 percent per year partly due to high base in the previous year as Chinese New Year was celebrated in February 2016 while Chinese New Year this year was in January 2017. Considering by countries, a contraction was mainly due to tourists from China, and Malaysia, while tourists from Russia, Lao, India, and East Europe expanded well. Meanwhile, Thai Industries Sentiment Index (TISI)in February 2017 stood at 86.2 points due to a decelerated demand and purchasing power after economic stimulus measures during end of 2016 were ended. In addition, large entrepreneurs were anxious about Thai Baht appreciation, while SMEs were anxious about competitive environment and increasing of production costs.

Supply Side Indicators 2015 2016 2016 2017 Q1 Q2 Q3 Q4 Jan Feb YTD Agricultural Production Index (%yoy) -4.4 -2.2 -8.1 -4.8 -0.2 2.2 -3.8 8.2 1.8 %qoq_SA / %mom_SA -4.0 -3.3 2.9 9.5 -2.3 5.7 Thai Industries Sentiment Index (TISI) 85.8 85.9 86.0 85.6 84.3 87.5 87.2 86.2 86.7 (level) Manufacturing Production Index (MPI) 0.3 1.4 -0.2 3.7 1.0 1.2 1.3 n.a. 1.3 (%yoy) %qoq_SA / %mom_SA 1.7 1.1 -1.9 1.2 -0.3 - Number of Inbound foreign Tourists 20.6 8.9 15.5 8.2 12.8 -0.9 6.5 -3.2 1.6 (%yoy) %qoq_SA / %mom_SA 11.0 1.3 1.5 -12.9 11.7 -7.0

6. Internal economic stabilities remained favourable and external economic stabilities remained robust. Headline inflation in February 2017 was 1.4 percent per year due to an adjustment of domestic retail prices in fuel caused by an increase in crude oil prices in world market, and prices in finished food and sea foods increased. Core inflation in February 2017 was 0.6 percent per year. Meanwhile, unemployment rate in February 2017 was 1.1 percent of total labor force or equivalent to 430,000 persons. Public debt to GDP at the end of January 2016 stood at 42.0 percent to GDP, lower than the Fiscal Sustainability Framework of 60 percent to GDP. External stabilities were stable and reflected the resilient ability to risk from the volatilities in global economy as the international reserves at the end of February 2017 were high at 183.0 billion USD, or approximately 3.3 times of short-term external debt.

Macroeconomic Stability 2015 2016 2016 2017 Indicators Q1 Q2 Q3 Q4 Jan Feb YTD Internal Stability Headline Inflation (%yoy) -0.9 0.2 -0.5 0.3 0.3 0.7 1.6 1.4 1.5 Core Inflation (%yoy) 1.1 0.7 0.7 0.8 0.8 0.7 0.7 0.6 0.7 Unemployment rate (% of total labor 0.9 1.0 0.9 1.1 0.9 1.0 1.2 1.1 1.2 force) Public debt (% of GDP) 43.9 41.2 43.5 42.3 42.2 41.2 42.0 - 42.0 External Stability Current Account Balance (Billion USD) 32.1 46.4 17.9 8.4 10.4 9.8 5.0 - 5.0 International Reserves Position (Billion 156.5 171.9 175.1 175.5 180.5 171.9 179.2 183.0 183.0 USD) Net Forward (Billion USD) 11.7 25.8 13.9 15.7 20.2 25.8 23.6 22.9 22.9 International reserves to short term 3.0 3.2 3.0 2.9 3.2 3.2 3.3 - 3.3 external debt (times)

Source: Fiscal Policy Office / www.fpo.go.th

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