Don Nakornthab, the director of macroeconomic policy at the BOT, said the acceleration of domestic consumption along with increased business and investment sentiment from the stable political situation and economic certainty would pave the way for GDP growth in the second half of the year. “There is the possibility that the economy will return to positive expansion year on year [in July] and we have high hopes for June, since the overall economy is starting to get back on track,” he said.
Don said the positive economic numbers would be more tangible once June figures are compiled as a result of increased domestic consumption, a spike in government spending and a clearer investment timeline for the public sector.
“Overall economic activities in May picked up slightly from the previous month, since manufacturing production and private-sector spending started to show signs of recovery,” he said.
“Private consumption has picked up pace, as has spending on non-durable items, which benefited from higher non-farm income from overtime.”
However, he said that when the second quarter was compared with the same quarter in 2013, growth contracted slightly, while the Private Consumption Index contracted 0.3 per cent as a result of the political uncertainty before the coup.
That was the result of businesses continuing to delay new investments while waiting for clearer signs of an economic recovery and government policy clarity.
The value of imports increasing from US$16.5 billion in April to $17.5 billion (Bt568 billion) in May was in line with the sequential expansion in manufacturing production and domestic investment.
However, he said the Manufacturing Production Index contracted 4.1 per cent in May year on year as a result of a slowdown in production of automobiles, electrical appliances, and frozen shrimp.
In terms of exports, he said that if the country depended on the old economic structure, which concentrated on exports, it would be in trouble when the export value and volume contracted, and this was a good opportunity to switch on the domestic engines to help drive the economy.
The export value would have to reach$20 billion per month from June onwards to fulfil the central bank’s export-growth prediction of 3 per cent this year.
Export value in May was equal to $19.268 billion, contracting 1.2 per cent year on year, while the average export value from January to May was $18.386 billion per month.