Thai economy expanded in Q2, but slowed in June due to decline in foreign tourists, exports, and production. Private consumption stable, private investment slightly up, government spending expanded. Inflation decreased, current account surplus higher, trade balance similar, labor market improving.
- The Thai economy saw a decrease in foreign tourist arrivals and tourism revenue in June, but an increase in tourist arrivals from the United States, Australia, and India.
- Private consumption remained stable, with increased spending on non-durables but decreased spending on durables, semi-durables, and services, reflecting declining consumer confidence.
- The Thai economy experienced a mixed performance in the second quarter, with expansion driven by the tourism sector and government spending, while facing challenges such as suppressed exports and production in some industries.
In June, Thailand experienced a decrease in foreign tourist arrivals, leading to a decline in tourism revenue. Private consumption remained stable, with increased spending on non-durables but decreased spending on durables and services. Merchandise exports decreased in several categories, while merchandise imports increased in various goods.
Manufacturing production index decreased, particularly in the automotive sector. Private investment indicators increased, and public spending expanded due to the enactment of the Budget Act. Headline inflation decreased, while core inflation remained similar. The Thai economy continued to expand in the second quarter, driven by the tourism sector and increased private consumption. However, some industries experienced suppressed exports and production due to high inventory levels and structural factors. The labor market improved, and government spending expanded significantly.
- The Thai economy continued to expand in the second quarter. However, economic activities in June slowed down compared to the previous month. This was primarily due to a decline in the number of foreign tourists and tourism revenue, which accelerated in the preceding period.
- Additionally, exports of goods decreased, particularly agricultural products as its production entered the end of its season, and electronic products that still have high inventories. These developments were in line with lower agricultural and industrial production.
- Private consumption remained stable, whereby higher spending on non-durable goods was being offset by a continuous decline in durable goods, especially in the automotive sector. However, private investment slightly increased. Government spending also expanded from the previous year in both current and capital expenditures of the central government, while investment expenditures of state-owned enterprises contracted due to lower disbursements in infrastructure and public utility projects.
- On the economic stability front, headline inflation in June decreased from the previous month from energy and fresh food categories. This was driven by lower benzene prices in line with the global crude oil prices, as well as lower vegetable prices as a result of increased output. Meanwhile, core inflation remained similar to the previous month.
- The current account registered a higher surplus, due to a lower deficit of services, income, and transfers, while the trade balance registered a similar surplus to the previous month. The labor market continued to improve steadily in both the service and manufacturing sectors.
Source : https://www.bot.or.th/en/news-and-media/news/news-20240731.html
