Mr. Lavaron Sangsnit, Director of Fiscal Policy Office, and Mr. Pisit Puapan, Executive Director of Macroeconomic Policy Bureau, as the Deputy Spokesperson of Fiscal Policy Office, revealed the economic report of September 2019: “Thai economy in September 2019 showed softening signs from demand-side indicators, particularly export sector. However, the supply-side indicators showed signs of recovery from foreign tourisms with the highest level of increase in foreign tourists in last 15 months, along with growth in the agricultural sector. Economic stability remains favorable.”
Private consumption slowed overall, indicated by the real VAT collection which declined at -2.3 percent per year, -3.3 percent down from the previous month (seasonally adjusted). This resulted in a decline in the third quarter at -5.7 percent per year. The sales of passenger cars also declined at -2.4 percent per year, -2.1 percent down from the previous month (seasonally adjusted). However, the number for the third quarter was a slight decline at -1.7 percent per year. Additionally, the number of registration of new motorcycles decline at -3.2 percent per year, -5.1 percent down from the previous month (seasonally adjusted). However, the number for the third quarter was a slight growth at 0.9 percent per year. Meanwhile, the Consumer Confidence Index dropped from 60.9 to 59.3, a 7-month consecutive decline. Despite economic stimulus policies, consumers are still concerned about situations regarding global economy, particularly the US-China trade war and Brexit. This results in the decline of the Index in the third quarter at 60.8. The real income of farmers grew at 3.0 percent per year, resulting in the growth in the third quarter at 2.4 percent per year.
Private investment in equipment sectors showed signs of slowing pace, while the constuction sectors started improving. The former is indicated by decline of commercial car sales at -21.4 percent per year; -9.0 percent down from the previous month (seasonally adjusted). This resulted in the -11.3 percent-per-year decrease in the third quarter of 2019. The latter is indicated by the real estate tax collection which grew at 8.5 percent per year; 5.7 percent up from the previous month (seasonally adjusted). Despite this, the number of the third quarter was a -2.3 percent-per-year decline. The sales of cement also remained declining at -10.0 percent per year, an 8-month consecutive drop. This resulted in a -9.2 percent-per-year decline in the third quarter. From the previous month, however, the sales grew at 4.4 percent (seasonally adjusted). The Construction Material Index declined at -2.8 percent per year, particularly due to the drop in the global price of products in steel categories, alongside the slowing demand. This resulted in the decrease at -2.4 percent per year in the third quarter.
Fiscal sector is indicated by total government expenditure in September 2019 which totaled 288.7 billion baht. Among this is the expenditure in the current fiscal year (FY2019), at 258.0 billion baht, which consists of: current expenditure at 201.8 billion baht, capital expenditure at 56.2 billion baht, and the carry over at 30.7 billion baht.
International trades declined, indicated by real export of goods in form of US dollar which shrank at 1.4 percent per year. This is the result from decline in exports of products of the following categories: computer and the components, plastic beads, chemical products, fuel oil, and machinery and the components. In contrast, products in the following categories remained growing: vehicle accessories and the components, gold, latex products, and jewels and accessories. Main export destinations whose markets grew are: United States at 7.8 percent, China at 6.1 percent, Japan at 2.4 percent, and Taiwan at 13.0 percent (%YoY). Meanwhile, imports in form of US dollar declined at -4.2 percent per year. International trade of Thailand in September 2019 resulted in trade surplus at 1.3 billion US dollar.
On a side note, decline of exports is noticeable in many countries, particularly South Korea, India, and Hong Kong, whose decline is at a significant level.
Regarding the demandside, tourism and agricultural sectors grew, while manufacturing sector remained slow. The tourism sector is indicated by the number of foreign tourists in September 2019, which totaled 2.90 million. This resulted in the growth at 10.1 percent per year, the highest number in last 15 months. Among this is the number of Chinese tourists which increased sharply at 31.6 percent per year, the highest number in last 17 months. Additionally, the numbers of tourists from some countries also increased at a significant rate. Some examples are: Indian at 26.9 percent, Laotian at 16.8 percent, and Japanese at 9.0 percent (%YoY). Therefore in the third quarter of 2019, the total number of foreign tourists grew at 7.2 percent per year. The total revenue from foreign tourists totaled 139,621 million baht, a growth at 8.7 percent per year, resulting in a 5.8 percent-per-year growth in the third quarter. The agricultural sector also grew, indicated by the agricultural products index which grew at 1.3 percent per year, resulting in a growth at 1.1 percent per year in the third quarter. In contrast, the manufacturing sectors slowed, indicated by the manufacturing products index which declined at -4.7 percent per year, resulting in a decline at -4.2 percent per year in the third quarter. In addition, the Thai Industries Sentiment Index (TISI) dropped to 92.1 from the previous month, due to the fact that entrepreneurs are concerned about uncertainty of global economy caused by US-China trade war, alongside strong baht which could potentially affect the exports of Thailand, resulting in the 92.8 average point of Index in the third quarter. Despite this, the 3-month prediction of TISI increased from 102.9 to 103.4, due to the fact that the entrepreneurs are confident in the economy stimulation policies for the next three months.
Internal economic stability remained favorable, indicated by the headline inflation at 0.3 percent per year (0.6 percent in Q3), a decline form the previous month due to the drop in price of domestic fuel oils. Excluding products in categories of fresh food and energy, the core inflation was at 0.4 percent per year (same for Q3). The unemployment rate was at 1.0 percent of total labors, or 0.38 million people. Public debt per GDP at the end of August 2019 was at 41.3 percent, a number under the regulation of the State Fiscal and Financial Disciplines Act, B.E.2561 (2018), which designates the maximum rate at 60 percent. External stability also remained favorable, and is capable of tackling risks and uncertainty of global economy. This is indicated by the international reserves at the end of September 2019, which is at a high level of 220.5 billion US dollar.
Source: Ministry of Finance