Domestic demand maintained the momentum of the economic recovery last month while exports sharply slowed, said Satit Rungkasiri, directorgeneral of the Fiscal Policy Office.
Economic indicators suggested that growth decelerated last month, Satit told a press conference yesterday.
Valueaddedtax collection in July expanded by 12.9 per cent year on year compared with an expansion of 21.1 per cent in June, said Satit. Although VAT, an indicator of household consumption, deceleratŽed, consumption has played an increasingly important role while export growth slows, he said.
Higher prices of farm products and almost full employment conŽtributed to the strengthening of conŽsumption, he said.
Real income of farmers rose 21.2 per cent last month and it conŽtributed to a 14.5percent increase in motorcycle sales, said Finance Ministry spokesman Ekniti Nitithanprapas. Meanwhile, car sales rose 64.7 per cent as consumer had high confidence about their future income.
Private investment also decelerŽated as import of capital goods expanded 25.4 per cent, lower than the expansion rate of 41.5 per cent in June. Sales of commercial vehicles increased 44 per cent, decelerating from 52.6 per cent in June.
The government ran a fiscal deficit of Bt37.3 billion in June, suggesting government spending boosted growth. Budget disbursement in the first 10 months of the current fiscal year totalled Bt1.48 trillion, out of fiscal expenditure worth Bt1.7 trillion. Spending under the economic stimulus package was Bt20.7 billion in July, leading to total disbursement of Bt199.6 billion of the Bt350 billion planned.
Exports in US dollars rose 20.6 per cent, compared with an increase of 46.3 per cent in June, while exports in volume last month rose 11.4 per cent, decelerating from 35.2per cent growth in June.
Faster recovery of tourism also shored up growth, government figures showed. The number of foreign tourists increased 14.2 per cent in July. Tourist arrivals at Suvarnabhumi Airport accounted for 70 per cent of the total.
Public debts in July stood at 42.6 of gross domestic product, lower than the sustainable debt level at 60 per cent of GDP. Foreign reserves were worth US$151.2 billion (Bt4.73 trillion) at the end of July, 4.7 times shortterm debts, indicating high stability of the economy, the Finance Ministry said.
Though the United States and Japan have prepared to stimulate their economies more, the ministry is not worried about a sharp slowdown. "We are not much concerned as our unemployment is very low at 1.2 per cent in June," said Satit. Meanwhile, unemployment in Europe and the US remains high.
Satit believes that fullyear economic growth will be about 7 per cent or more after 10.6percent growth in the first half of the year. The ministry will next month revise its previous growth projection of 5.5 per cent.