“Economic indicators in the month of February 2010 showed positive signs from strong growth in export sector while domestic demand improved as reflected by increasing imports of capital and consumer goods”.
Mr Satit Rungkasiri, Director-General of Fiscal Policy Office, revealed that “Export value in February 2010 expanded strongly at 23.1 percent per year with improvements in all export products and markets, particularly exports to Asian economies. As for domestic spending, consumption indicator from real-term value added tax expanded at a high level of 7.8 percent per year for the fourth consecutive month supported by real farm income growth at 12.0 percent per year. The rising number of sales of motorcycles grew at 26.0 percent per year reflecting continued improvement in durable good consumption. Private investment indicators also picked up from expanding capital good imports at 19.1 percent per year.
Dr. Ekniti Nitithanprapas, Director of Macroeconomic Policy Bureau and Ministry of Finance Spokesperson, elaborated further that “economic indicators from the production-side in February 2010 showed that industrial sector improved substantially from the increased number of sale orders in radio and television appliances, car industry, office machinery, furniture and jewelry. At the same time, the service sector from tourism expanded strongly as the number of in-bound tourists amounted to 1.64 million persons with the growth rate of 44.3 percent per year. Internal and external economic stabilities remained robust as seen from low unemployment rate and a high level of international reserves.
Further details are as follows;
Attached documents
Monthly Economic Report for February 2010
Thai economy in February 2010 showed clear signs of improvement from a positive growth in export while domestic spending continued to improve from private consumption and investment. Moreover, fiscal policy played a supportive role through accelerated government spending from the previous month. Production-side indicators also showed signs of improvement, as reflected from positive growths in Manufacturing Production Index and improved service sector from tourism while at the same time, Agricultural Price Index showed a smaller contraction. Economic stability remained robust.
1. Private consumption in February 2010 showed clear sign of continuous improvement especially from the import volume of durable goods coupled with the increase in real farm income. This was reflected by the numbers of motorcycle sales, which expanded at 26.0 percent per year, and passenger car sales, which grew for the sixth successive month at 57.3 percent per year. This was in tandem with imports volume of consumer goods that increased at 19.6 percent per year from 23.8 percent per year in the previous month. Real-term value-added tax collection in February 2010 grew for the fourth consecutive month at 26.7 percent per year from 13.6 percent per year in the previous month. It also grew at 0.1 percent per month with seasonal adjustment from the contraction of -0.3 percent per month in the previous month showing that private consumption improved continuously. Consumer Confidence Index decreased to the level of 70.9, from 71.9 in the previous month resulting from (1) higher living costs and prices following the increase of oil prices, and (2) growing concerns over the country’s political situation in the late February 2010.
2. Private investment in February 2010 showed more revitalizing signs compared to previous month particularly in machinery. The imports volume of capital goods in February expanded at 19.1 percent per year and at 37.1 percent per year when excluding special items such as planes, ships and trains. It also grew at 5.1 percent per month with seasonal adjustment from 0.8 percent growth in the previous month. This was consistent with the increase in commercial car sales in its fifth successive month at 58.0 percent per year. Indicators of the construction and real-estate sectors as measured by real-estate tax collection grew positive for the fourth consecutive month at 39.2 percent per year from 28.9 percent in the previous month, indicating improvement in real-estate sector activities.
3. Fiscal indicators in February 2010 showed that fiscal policy continued to support the growth of economy through high level of government expenditures disbursed from the budget and Strong Thailand 2012 Program. Total government expenditures were amounted to 182.9 billion Baht, expanded by 1.8 percent per year. While budget disbursement from the Strong Thailand 2012 Program in February was 42.1 billion Baht. From September 2009 to 19 March 2010, the total amount of disbursement was at 96.6 billion Baht or 27.6 percent of the budget framework (350 billion Baht). Net government revenue collection (net of Local Authorities subsidy allocation) amounted to 97.4 billion Baht, increased from the same period of the previous year by 13.5 percent per year. This increase in revenue reflected the improving state of the Thai economy and the impact of increase in the tax rates for oil and petrochemicals, brewed alcohol, tobacco and cigarettes, and distilled alcohol since May 2009. As a result, fiscal deficit was at 88.7 billion Baht reflecting expansionary fiscal policy aimed to stimulate the economy.
4. Exports showed clear sign of improvement in February 2010 and were the main driving force of the economy. Value of exports in term of USD in February amounted to USD 14.4 billion, expanded positively for the fourth successive month at 23.1 percent per year mainly from accelerated growth in volume of exports at 9.9 percent per year while price of exports grew at 12 percent per year. Additionally, value of exports also increased at 2.5 percent, when comparing against the previous month with seasonal adjustment, indicating clear signs of export sector revival in almost all products and markets. Import value in terms of USD continually increased in February 2010 reflecting the improvement of domestic spending. Import value equated to USD 14.0 billion, expanded, for the third consecutive month, by 71.2 percent per year. This was attributed to a fairly large expansion in import volume of 52.9 percent per year and an increase in import price of 11.9 percent per year. In terms of import items, import value expanded in almost all categories, in particular raw material and consumer good imports expanding at 130.1 percent per year and 45.2 percent per year, respectively.
5. Supply-side sector indicators in February 2010 showed that manufacturing sector and service sector from tourism strongly improved while agricultural sector contracted slightly. Manufacturing Production Index remained positive for the fourth consecutive month at 31.1 percent per year. This could be contributed to improvements in radio and television appliances, car industry, office machinery, furniture and jewelry. It also grew at 3.5 percent per month with seasonal adjustment from the contraction of -6.2 percent per month in the previous month. Service sector from tourism continued to improve as the number of in-bound tourists to Thailand in February was recorded at 1.64 million persons, grew for its sixth consecutive month by 44.3 percent per year. The number of in-bound tourists increased in all countries, particularly Asian countries such as China and Japan. Meanwhile, agricultural sector indicator measured from Agricultural Production Index contracted at -0.2 percent per year, compared to a growth of 0.2 percent per year in the previous month. This contraction was due to lowered agricultural production of plant foods, namely major rice and tapioca as the end of harvesting season drew closer. Nevertheless, Agricultural Price Index increased at 19.4 percent per year which led to the growth of real-farm income at 12.0 percent per year.
6. Economic Stability remained robust. Unemployment in January 2010 remained low at 1.4 percent of total labor force. Headline inflation in February grew at 3.7 percent per year which came from the increase in prices of vehicles and fuel due to higher retail oil price, as well as from the cessation of 6-month subsidized rates of water utility. Public debt to GDP at the end of December 2009 stood at 43.9 percent and remained well below the 50 percent public debt ceiling under the Fiscal Sustainability Framework. Likewise, external economic stability remained robust and resilient to risk from volatilities that could arise from world economy as indicated by high-level international reserves at 141.8 billion USD or almost 5.0 times of short-term external debt.
Source: Fiscal Policy Office / www.fpo.go.th