The Thai economy should continue on a growth trend, give good indications for exports, while both consumption and investment continue to expand favourably, according to the Bank of Thailand.
Mathee Supapongse, senior director at the BOT, said economic indicators in October were satisfactory, particularly consumption and private investment, which have seen consistent growth rates.
Despite some impacts on exports from the global woes, these could be mitigated after the recovery of export indicators of other Asian economies such as mainland China, South Korea and Taiwan. The performance of those places usually has an impact on Thai exports.
Besides, based on the central bank’s survey of exporters, most expect shipments to stabilise.
October exports were affected by the global economic situations, decreasing by 3.5 per cent year on year in value to US$19.13 billion (Bt586.7 billion). Excluding gold from that figure, exports expanded 2.4 per cent in October thanks to increased exports of agricultural products, particularly rice.
The Private Consumption Index rose by 0.4 per cent month on month, close to its normal growth trend, thanks to an acceleration in imports of consumer goods, particularly food and beverages, and spending on automobiles.
The Private Investment Index expanded by 0.9 per cent from September, with a surge in spending on machinery and equipment as indicated by the pick-up in such imports across almost all industries. This was in part for the ongoing reconstruction after last year’s flood and in part to accommodate the expansion in domestic demand.
The Manufacturing Production Index grew by 5.4 per cent, with a particularly strong rise in production in domestic-oriented industries, especially food and beverages, cement, and construction materials. Production in export-oriented industries expanded slightly from production of apparel and electrical appliances.
However, production of integrated circuits and parts as well as of hard-disk drives continued to contract as a result of weak global demand. In the agricultural sector, farm income stabilised as higher prices compensated for slightly lower production.
Government spending increased mainly from transfers to the Bank for Agriculture and Agricultural Coop-eratives for price-pledging schemes and transfers to the National Health Security Fund. The government’s revenue collection remained high from strong growth in excise-tax collection, especially on automobile sales. Spending that outpaced revenue collection led to a cash balance deficit of Bt162 billion.
Unemployment continued to be low, and headline inflation declined slightly to 3.32 per cent year on year. Core inflation moderated to 1.83 |per cent.
On the external side, the balance of payments registered a deficit from a combination of current-account deficit and net capital outflows.
The current account deficit was mainly a result of accelerating imports, while net capital outflows were mainly attributable to Thai direct investment, Thai investment overseas, and repayment of maturing short-term loans by commercial banks.