Economic performance was below potential last quarter as consumer spending and production contracted, a trend worsened by the political unrest, the Fiscal Policy Office said.
The Office’s director-general Somchai Sajjapong said last month’s economic indicators signalled shrinkage in local spending and production as the political situation eroded consumer and business confidence. However, exports improved after the recovery of trading partners’ economies.
Based on December figures, Thai gross domestic product is projected to post growth of 2.8 per cent for the whole of 2013.
There were signs last month of lower private consumption, particularly for durable products, Somchai said. Passenger-car sales shrank by 28.3 per cent year on year, the eighth consecutive month of decline. In the fourth quarter, the car-sales decline was 39.7 per cent.
Motorcycle sales were down 17.2 per cent year on year in December, while the fourth-quarter decline was 14.9 per cent. For commercial vehicles, the sales contractions were 14.5 and 24.1 per cent respectively.
Collection of value-added tax at constant prices rose 3.1 per cent, partly because of the low inflation recorded last month. Fourth-quarter VAT collection contracted 1.0 per cent. Construction investment rose 9.1 per cent in December and by the same amount in the fourth quarter. In the third quarter, it rose by 22.0 per cent.
The Office expected exports to improve last month on the back of improvements in the economies of major trading partners, particularly the United States and Europe, Somchai said.
However, manufacturing also showed signs of a slowdown last month, with the Manufacturing Production Index (MPI) contracting 6.1 per cent. The automobile industry saw a 21.3-per-cent shrinkage, the furniture and accessories industry 15.3 per cent and the food industry 14.3 per cent.
In the final quarter of 2013, the MPI contracted by 7.1 per cent, compared with the third quarter’s 3.5-per-cent shrinkage.
The manufacturing confidence index fell to 88.3, lowest in 25 months, on manufacturers’ concerns over the domestic political conflicts that could affect economic activities, Somchai said. Index scores below 100 indicate weak confidence.
Foreign tourists continued to visit the Kingdom last month, their numbers rising 6.3 per cent year on year, with fourth-quarter increase of 10.7 per cent. However, that compared with the previous quarter’s increase of 26.1 per cent.
Inflation was 1.7 per cent last month and the unemployment rate was 0.6 per cent. Foreign reserves at the end of 2013 stayed at about 2.8 times the short-term external debt, enough to cope with the global economic volatility, Somchai said.