Thai economy in August showed slowing signs from demand-side indicators, particularly export sector. However, the supply-side indicators showed recovery from foreign tourisms with the highest level of increase in foreign tourists in last eight months, along with growth in the agricultural sector. Economic stability remains favorable, although it is crucial to closely monitor global economic uncertainty.
Mr. Wuttipong Jittungsakul, Deputy 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 August 2019: ”Thai economy in August showed slowing signs from demand-side indicators, particularly export sector. However, the supply-side indicators showed recovery from foreign tourisms with the highest level of increase in foreign tourists in last eight months, along with growth in the agricultural sector. Economic stability remains favorable, although it is crucial to closely monitor global economic uncertainty.”
Economic indicator for private consumption expenditures of August 2019 dropped slightly, indicated by the declines of imports of consumption goods at -1.9 percent per year, the passenger car sales at -3.3 percent per year, and the VAT collection at -5.3 percent per year. However, when taking into account only the VAT collected from domestic consumptions, the total value becomes the increase at 4.1 percent per year. Meanwhile, the Consumer Confidence Index (CPI) dropped due to the concerns regarding the slow recovery of economy, weak Thai baht which could affect exports, and global economic uncertainty.
Economic indicator for private investment showed signs of decline. The private investment in equipment is indicated by decline of imports of capital goods and commercial car sales, at -9.6 and -9.2 percent per year respectively. Private investment in construction also showed signs of decline, indicated by decline of real estate tax collection and cement sales, at -9.2 percent and -12.9 percent per year respectively. Additionally, the Construction Materials Index (CMI) also dropped by -2.3 percent per year. Parts of the aforementioned decline were the results of reducing investments due to concerns about economic situation.
Fiscal sector is indicated by total government expenditure in August 2019 which totaled 168.1 billion baht. Among this is the expenditure in the current fiscal year (FY2019), at 158.2 billion baht, which consists of: current expenditure at 125.2 billion baht, capital expenditure at 33.0 billion baht, and the carry over at 9.9 billion baht.
International trades declined, indicated by real export of goods in form of US dollar which shrank at -4.0 percent per year compared to the same period of the previous year. This is the result from decline in exports of products in electronic goods and vehicle category. In contrast, those of the following products remained growing: frozen and processed vegetables and fruits, sugar, frozen and processed fresh chicken meat, jewels and accessories, and motorcycles. Important growing export destinations are United States, Australia continent, and Middle East. Imports of goods in form of US dollar decline at -14.6 percent per year. This results in trade surplus at $2.1 billion US dollar.
Regarding the supply-side economy, tourism and agricultural sectors grew, while manufacturing sectors declined. The growth in tourism is indicated by the number of foreign tourists in Thailand at 3.47 million, an increase at 7.4 percent per year. Among this, the numbers of Chinese and Indian tourists rose significantly, at 18.9 and 32.4 percent per year respectively. Also, the numbers of tourists from some other countries, such as Laos, Japan, and Malaysia, remain constantly rising. These numbers resulted in the total revenue from foreign tourism at 169,772 million baht, an increase at 6.2 percent per year. Likewise, the growth in agricultural sector is indicated by the agricultural products which rose slightly at 0.8 percent per year. In contrast, there was a decline in manufacturing sector, indicated by a decline in manufacturing productions at -4.4 percent per year, and Thai Industries Sentiment Index (TISI) from 93.5 in the previous month to 92.8. The decline was the result from concerns of entrepreneurs regarding situations of international trades, which is affected by weak Thai baht, and concerns regarding the declining purchasing power caused by floods. Nevertheless, entrepeneurs are confident in economic policies, causing the TISI forecast for the next 3 months to rise.
Internal economic stability remained favorable, indicated by the headline inflation at 0.5 percent per year, the result from increase in the price of fresh foods. However, the price of energy products dropped. The core inflation was at 0.4 percent per year, and the unemployment rate at 1.0 percent of total labors. Public debt at the end of July 2019 was at 41.5 percent of GDP, a number under the regulation of the Fiscal Discipline which specifies the maximum at 60 percent. External economic stability remains robust and favorable, and is capable of tackling negative factors from global economic uncertainty. This is indicated by the international reserves at the end of August 2019, which is significantly at high level of $220.2 US dollar.
Source: Ministry of Finance