According to the latest Press Release on the Economic and Monetary Conditions for December and the fourth quarter of 2019 Bank of Thailand, the Thai economy slightly improved in December 2019 .
The value of merchandise exports, manufacturing production, private investment indicators, and public spending contracted at a lower rate. However, private consumption indicators expanded at a pace close to the previous month.
Meanwhile, the tourism sector expanded at a slower pace after the low base effect from the tour boat incident in Phuket last year abated.
Overall economic activity in the fourth quarter of 2019 continued to be on the decelerating trend
The continued contraction of merchandise export value affected domestic economic activities more evidently.
Private consumption indicators decelerated relative to the first half of the year, in line with softening non-farm income and consumer confidence despite supports from the government’s economic stimulus measures.
The slowdown in both domestic and external demand led to a higher contraction in manufacturing production and private investment indicators.
Meanwhile, public spending contracted due to the FY2020 budget has yet to be enforced. Only the tourism sector continued to expand well, partly due to the low base effect from the tour boat incident in Phuket last year.
On the stability front, headline inflation declined from the previous quarter on the back of fresh food prices. The seasonally adjusted unemployment rate was unchanged. Meanwhile, the number of employed persons slightly increased. The current account remained surplus. Capital and financial accounts recorded a deficit from the asset position.
The number of foreign tourist arrivals expanded by 2.5 percent compared with the same period last year.
This was attributed to the exemption of the visa on arrival (VOA) fee, encouraging more visitors from China, India, and Taiwan, together with the continued expansion of other tourists such as those from Laos, Japan, South Korea,and Russia. However, the number of foreign tourists grew at a softer pace from the previous month as the low base effect from the tour boat incident in Phuket last year disappeared.
The value of merchandise exports contracted by 1.7 percent from the same period last year
This was the lower rate from7.7 percent in the previous month as
1) exports of petroleum-related products contracted at a lower rate due to some oil refineries were back to operate normally after the temporary shutdown in the preceding period, coupled with the increase in global crude oil prices;
2) exports of electric appliances and hard disk drive turned into expansion thanks to the relocation of production base to Thailand in the previous periods;
3) exports of other electronic parts expanded in line with a clearer recovery sign of the electronic cycle; and
4) the temporary effect of Chinese lunar new year that came earlier than last year. As a consequence of improved merchandise exports, manufacturing production contracted at a slower pace.
Thailand’s economic growth expected to return to 2019 levels in mid-2023
Although the economy would recover next year, the recovery is still substantially below potential level resulting in a large output loss and could affect Thailand’s potential economic growth in the future with the economy expected to return to 2019 levels in mid-2023.
The Siam Commercial Bank (SCB), one of Thailand’s largest commercial banks, said in its latest economic outlook report that the country’s economy may wait until the second semester of 2023 to return to 2019 growth levels.(more…)
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