Consumption, investment take a dip in December
Private consumption and investment slowed in December, but the country's economic fundamentals remained strong, according to the Bank of Thailand.
Mathee Supapongse, BOT senior director for macroeconomic and monetary policy, said that after expansion in the previous period, the Thai economy, in terms of private consumption, private investment and exports, started slowing down in December, and this was in line with reduced manufacturing output.
The country's economic fundamentals remained satisfactory with consistent employment. November's unemployment rate dropped to 0.4 per cent, compared with 0.6 per cent a month earlier.
Mathee said the slowdown of private consumption was due partly to highly accelerated spending earlier. The private consumption index contracted 2.9 per cent based on lower collections of value-added tax, a drop in imports of consumer goods and a decrease in automotive-sector expenses.
Slowing private investment was partly attributable to the completed restoration of most operators' facilities after the 2011 floods and a labour shortage in the construction sector, causing the private investment index to contract 0.8 per cent.
December exports totalled Bt17.96 billion, slightly lower than the prior month, reflecting a fragile recovery of demand overseas.
Exports of electronics products, particularly for hard-disk drives, petroleum and steel fell after accelerating in the previous period. However, exports from the automotive and electrical-appliance sectors continued to expand.
Natural-rubber exports staged a recovery from higher demand from China.
"Despite the slowdown in December's private consumption and private investment, they continue to support the economy. Farmers' incomes remained satisfactory and unemployment remained low," Mathee said.
Business and consumer confidence increased, with private-sector loans expanded. The December decline does not indicate that the economy will slow down in the future, Mathee said.
He noted that December had only 18 business days, compared with other months' 20 days, and that was another reason for the month's slowing figures.
Private-sector loan growth in the month stayed at 14.2 per cent, slightly lower than November's 15.9 per cent. However, auto instalment loans and personal loans continued to see high growth.
Foreign tourist arrivals totalled 2.3 million in December 2012, up 31 per cent year on year, driven by increases from China, Asean countries, South Korea and Japan.