The economy in July grew at a decelerating pace from the previous month in line with softening private consumption, export and production sectors due partly to temporary factors and recorded-high economic activities in June.
However, tourism sector continued to expand particularly from resuming trips of tourists from ASEAN countries and China. Meanwhile, private investment improved constantly. The growth momentum from the first half of 2010, the resilience of the Thai economic fundamentals and improving consumer and investor confidence will be the supporting factors to economic expansion during the second half of the year. Overall stability remained sound. Headline inflation moderately increased from rising prices of raw food, vegetable and fruit.
Details of the economic conditions are as follows:
Tourism sector continued to expand after the political unrest has been subsided. The number of foreign tourist arrivals in Thailand, totaling 1,258,000 persons, grew by 14.9 percent year-on-year (yoy) in response to rising number of tourists from ASEAN countries and China. Correspondingly, hotel occupancy rate rose to 46.9 percent from 37.3 percent in June, owing to increases in hotel occupancy in all regions, especially in the south.
Likewise, investment continued to improve as Private Investment Index (PII) surged by 22.1 percent (yoy) following an investment expansion in machinery and equipment to accommodate expected domestic and external demand, especially in electronics, electrical appliance and vehicle industries. Concurrently, investment in construction also ameliorated from an expansion in residential and commercial construction, particularly in Bangkok.
Private consumption remained favorable.
Private Consumption Index (PCI) increased by 5.1 percent (yoy), moderating from a noticeable acceleration last month. All private consumption indicators grew satisfactorily, especially vehicle sale which rose further in tandem with economic expansion and order bookings pending delivery. Besides, VAT collection and imports of consumer goods expanded well. External demand grew moderately.
Export value, amounting to 15,475 million US dollars, increased by 21.2 percent (yoy), but decelerating from a growth of 47.1 percent (yoy) in June. Nevertheless, export expanded satisfactorily in all categories. However, agricultural sector whose overall expansion mainly came from rising price contracted in term of export volume, especially rice, due to intense competition from Vietnam.
Import value, totaling 16,266 million US dollars, rose across the board by 36.5 percent (yoy), particularly from imports of vehicles and parts as well as raw materials to be partly used for export production going forward. Production sector expanded at a slower pace in line with private consumption and export.
Manufacturing Production Index rose by 16.3 percent (yoy), decelerating from last month’s expansion of 21.9 percent (yoy) due partly to accelerated production in the earlier period, factory maintenance shutdowns in petroleum and chemical industries, as well as shortage of raw materials in food industry.
Agricultural sector continued to grow favorably mainly from price. Crop prices edged up by 44.5 percent (yoy) in tandem with rising prices of vegetable, rubber, fruit, glutinous paddy and cassava due to strong world demand and supply shortage from drought and pest outbreak. Crop production grew by 1.1 percent (yoy) following increases in production of oil palm and rubber, owing to an expansion of plantation area.
Farm income therefore surged by 46.1 percent (yoy). -2- With regard to fiscal position, the government’s expenditure, including disbursement of projects under the Strong Thailand 2012 Project, was higher than the government’s revenue collection, causing the deficit of cash balance of 56.3 billion baht. This reflected the continuous support of fiscal stimulus to the economy. Depository corporations’ deposits (including bill of exchange) expanded by 8.4 percent (yoy), accelerating from the previous month mainly due to an increase in bill of exchange to accommodate rising demand for credit.
Depository corporations’ credits increased further by 8.9 percent (yoy) mainly from household credit expansion. Concurrently, credits extended to businesses continued to expand for the third consecutive month, compared to the same period last year. With regard to internal stability, headline inflation rose from the previous month in line with raw food prices. Meanwhile, core inflation accelerated from rising prices of condiments and cleaning supplies.
Unemployment rate declined from the previous month in response to improving employment in manufacturing and trade sectors. External stability remained sound. Although the trade balance and the current account were in deficits, the balance of payments registered a surplus, and international reserves remained at a high level.
Press Release on Economic and Monetary Conditions for July 2010
Bank of Thailand 31 August 2010
Thai fruit exports to FTA markets up 107 percent
China, Malaysia, Singapore, Indonesia, the Philippines, Hong Kong, Australia and Chile are top importers of Thai fruits, especially fresh durian, mangosteen, longan and mango. Thai exporters are able to benefit from FTA privileges.
BANGKOK (NNT) – Thailand’s fruit exports continue to increase, despite the sluggish global economy caused by the COVID-19 pandemic, with key trade partners being countries that have free trade agreements (FTAs) with the kingdom.
The Future of Asia: greener but with a public and private debt hangover
The COVID-19 pandemic has been a perfect storm, destroying jobs, worsening poverty and inequality, and creating a public and private debt problem—especially for countries and firms already in fragile financial health beforehand
50:50 campaign may not get immediate extension
BANGKOK (NNT) – The government’s 50:50 co-pay campaign expiring on 31st March may not be getting an immediate campaign extension. The Minister of Finance says campaign evaluation is needed to improve future campaigns.
The Minister of Finance Arkhom Termpittayapaisith today announced the government may not be able to reach a conclusion on the extension of the 50:50 co-pay campaign in time for the current 31st March campaign end date, as evaluations are needed to better improve the campaign.
Originally introduced last year, the 50:50 campaign is a financial aid campaign for people impacted by the COVID-19 pandemic, in which the government subsidizes up to half the price of purchases at participating stores, with a daily cap on the subsidy amount of 150 baht, and a 3,500 baht per person subsidy limit over the entire campaign.
The campaign has already been extended once, with the current end date set for 31st March.
The Finance Minister said that payout campaigns for the general public are still valid in this period, allowing time for the 50:50 campaign to be assessed, and to address reports of fraud at some participating stores.
The Fiscal Police Office Director General and the Ministry of Finance Spokesperson Kulaya Tantitemit, said today that a bigger quota could be offered in Phase 3 of the 50:50 campaign beyond the 15 million people enrolled in the first two phases, while existing participants will need to confirm their identity if they want to participate in Phase 3, without the need to fill out the registration form.
Mrs Kulaya said the campaign will still be funded by emergency loan credit allocated for pandemic compensation, which still has about 200 billion baht available as of today.
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