Poor indicators in September, but some signs of recovery in Q3
The economy in the third quarter of 2013 showed some signs of recovery from the previous quarter as exports of some products gradually improved in line with global demand, according to the Bank of Thailand.
Meanwhile, the tourism sector continued to grow robustly in the quarter. Private consumption and investment stabilised, which made the recovery in manufacturing production still precarious. Fiscal spending accelerated but remained below target. The current account registered a deficit, albeit by less than in the previous quarter owing to less repatriation of profits and dividends. The capital account also recorded a deficit mainly from short-term loan repayments by financial institutions. Overall, the balance of payments registered a smaller deficit compared to the previous quarter.
In September, the tourism sector expanded robustly, with 2.1 million foreign tourist arrivals which increased by 27.6 per cent on year, thanks to more tourists from China, Malaysia and Russia.
However, other indicators looked dim. Thailandâ€™s exports contracted 6.3 per cent on year to US$19.17 billion. Exports of agricultural products, automobiles and integrated circuits and parts picked up in line with global recovery. Yet, exports of fishery and hard disk drives (HDD) continued to contract as the outbreak of shrimp disease persisted and domestic production technology could not fully reap the benefit of growing global demand for high-tech products.
On private consumption, while auto sale dropped, households became more cautious with other big-item spending given their previous debt accumulation and less optimistic sentiment. The Private Consumption Index dropped by 6.1 per cent on year.
The Private Investment Index also declined by 3.3 per cent on year, due mainly to a slowdown in commercial car sales and imports of machinery and equipment, especially in the electronics industry.
The Manufacturing Production Index (MPI) declined by 2.9 percent (yoy) as (1) production of frozen shrimp continued to be held back by the disease, (2) production of automobiles slowed down as the increase in export orders could not fully offset the decline in domestic orders, and (3) production of beer dropped temporarily as producers awaited more clarity in the excise tax levy. Meanwhile, merchandise imports stood at 16,608 million US dollars, declining by 6.1 percent (yoy) due to lower imports in all categories.