Monthly Econ Brief - December 2012 by Ake Saroj

Monthly Economic Brief December 2012 issue

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Editor’s talk

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Dear readers,

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n ping ally

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As early signs have indicated, Manufacturing had a bad quarter and dragged the overall GDP growth to only 3% in the 3rd quarter, lower than the 4.4% growth in the 2nd quarter. But as we discover this month, the early signs have improved, Manufacturing Production Index recovered for the first time in 5 months. Export has also improved. And thanks to last year’s low base (flood in 4Q), we expect to see a very high growth in the 4th quarter. Looking forward, Business and Consumer confidences have improved. Inflation is low. The only concern on macro economic stability is a huge budget deficit this year. Other than that, the economy is doing quite well. We hope you enjoy our new way of helping you making sense of all economic data. See you again next month.

Saroj Khongkhaprasertsin Managing Editor Editor@chartingthailandeconomy.com

ni 12150, Thailand

www.ChartingThailandEconomy.com

Executive summary Growth Real GDP in 3Q/2012, grew 3.0% yͲoͲy, a rather disappointing level compared to the 4.4% growth in 2Q/2012. The growth was driven mainly by domestic consumption, public and private. On the production side, Manufacturing had a bad quarter and dragged the overall GDP growth while other sectors mostly contributed positively. In October, Manufacturing production recovered for the first time in 5 months, growing 0.3% mͲoͲm and 36.1% yͲoͲy. Private consumption and Private Investment, including FDI, continued their strong growth this year. Property sector picked up strongly in September. Export situation has improved only slightly, growing 3.5% in the first 10 months of 2012 while Import grew 10.4%. However, tourist arrivals grew at an impressive 10% in the period. Looking forward, both Fiscal and Monetary policies are proͲgrowth. Government spending in the first half of 2012 has increased substantially with compensation for flood victims and new investments among the extra items.

Market interest rates l October’s Policy rate c loan continued to incre to the policy rate cuts turned optimistic while pessimistic and Consum

In November, NESDB r growth to 5.5% while B 2013’s to 4.7%. The co still between 5.5Ͳ6.0% 4.2Ͳ5.2% for 2013.

Employment and wea Thailand’s unemploym slightly in September 2 lowest level among ma economies.

Thailand’s per capita in 4,420 in 2011, ranked8 average Thai is slightly average Chinese but m richer than an average distribution in Thailand Asia but the trend has improving. Absolute Po to be working over the number of poor peopl current level is low by

lowered in response to cut to 2.75%. Bank’s ease, reacting positively this year. Business e Industries were more mers less pessimistic.

revised down 2012 BOT revised down onsensus projection is for 2012 and between

alth distribution ment rate increased 2012 to 0.63%, still the ajor and emerging

ncome was at USD 83th in the world. An y poorer than an more than three times e Indian. Income d is among the worst in been slightly overty reduction seems e past six years as e decreasing and international standard.

Stability Price stability is maintained with Head line inflation at 2.7% and Core inflation at 1.8% in November, a rather low level by historical and international standards. Banking system is quite healthy. Bank’s capital ratio is at 15.9% in September. Total system’s NPL decreased to 2.47% in 3Q12. Fiscal stability is still worrying as budget deficits in the first 10 months of 2012 is more than THB 300 billion worse off than the same period last year. Budget deficit for Thailand is expected to be Ͳ3.8% of GDP, a sizable level. Public debt as percentage of GDP increased slightly this year due mainly to direct government debt, but the current level of 44% is not yet dangerous. Majority of the public debt is domestic based. Balance of Payment improved this year due largely to improving Net service and capital flow. External debt increased slightly this year but capability to repay is not a concern as debt service ratio continued to decline and international reserves is at healthy level. Thai Baht appreciated slightly against a basket of key currencies in November .

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Real GDP in 3Q/2012, grew 3.0% • In October, Manufacturing prod 0.3% m-o-m and 36.1% y-o-y; • Private consumption and Private Property sector picked up strong • Export situation has improved o • Both Fiscal and Monetary policie • Business turned optimistic while pessimistic. • The consensus growth projectio 5.2% for 2013

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

• Price stability is maintained with in November. • Banking system is quite healthy. system’s NPL decreased to 2.47 • Fiscal stability is still worrying as than THB 300 billion worse off t but not too worrying just yet. • Balance of Payment deficit has i dangerous. THB appreciated slig

Page

% y-o-y, a disappointing level but no disaster uction recovered for the first time in 5 months, growing while Agriculture production continued its strong year e Investment continued their strong growth this year. gly in September. nly slightly. Tourist arrivals grew impressively. es are pro-growth. e Industries were more pessimistic and Consumers less

5 8 14 23 30 32

n is still between 5.5-6.0% for 2012 and between 4.2-

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

3% yearͲonͲyear growth for 3Q12 disaster Chart 1.05 – Historical Real GDP growth rate Annual growth, percent

7.1% 6.3%

CAGR* 2000Ͳ2011 = 3.9%

5.3%

4.8%

4.6%

5.1% 5.0

2.2%

2000 2001 2002 2003 2004 2005 2006 200

Note: (*) Cumulative Annual Growth Rate Source: NESDB; CTE analysis

2 GDP, disappointing but no

7.8%

4.4% 3.0%

2.5% 0.1%

0.4%

-2.3%

07 2008 2009 2010 2011

1Q12 2Q12 3Q12 4Q12

5 www.ChartingThailandEconomy.com

As early signs have indicated, Ma and dragged the overall GDP grow Chart 1.06a – Real growth by sector, 3Q12 YearͲonͲYear percentage change 3.0

GDP

12.2

Mining

11.7

Agriculture

9.8

Construction

8.0

Transport

6.9

Hotel&Res Utilities

4.9

Health&Social

4.7

Private HH

4.6

RealEstate

4.4

Financial

4.2

PublicAdmin

4.1

Trading

4.1 3.6

Education 1.0

Other social -1.1

Manufacture Fishing

-6.4

Source: NESDB; CTE analysis

nufacturing had a bad quarter wth Chart 1.06b â&#x20AC;&#x201C; Sectoral contributions, 3Q12 Contributions to total Real GDP growth 3.0

GDP 0.8

Transport

0.6

Agriculture

0.5

Trading Hotel&Res

0.3

Mining

0.3

Construction

0.2

Financial

0.2

Utilities

0.2

RealEstate

0.2

PublicAdmin

0.1

Education

0.1

Health&Social

0.1

Other social

0.0

Private HH

0.0

Fishing

-0.1

Manufacture -0.4

6 www.ChartingThailandEconomy.com

Growth in 3Q12 was mainly contr consumption

Chart 1.08a – Real growth by expenditure, 3Q YearͲonͲYear percentage change GDP

3.0

6.0

ͲM

-1.4

-1.8

-2.8

Source: NESDB; CTE analysis

ributed from domestic

Q12 Chart 1.08b – Expenditure Contributions, 3Q12

Contributions to total Real GDP growth GDP

3.0

3.1

ͲM

1.2

1.1

Discrpncy

0.3

-0.3

-2.2

7 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

MPI increased for the first time in

Chart 1.11 â&#x20AC;&#x201C; Manufacturing Production Index (2000=100) CAGR

5.2% 172.4 159.5

179.1 166.3

149.9 137.6 123.9 109.9

2002 2003 2004 2005 2006 2007 2008 2009 Source: The Office of Industrial Economics

n 5 months

Monthly Average 250.0

190.1 172.9

200.0

2012 150.0

MͲoͲM 100.0

2011

0.3% YͲoͲY

36.1% 50.0

0.0

2010 2011

J F M A M J J A S O N D

9 www.ChartingThailandEconomy.com

Most industries had their product

Chart 1.12a – YͲonͲY change in MPI by sector October 2012, percent 387.2

Vehicles 132.2

Transport Equip

105.4

Electrical

85.8

Machineries Electronic

26.2

Metal products

24.8

Food & Bev

22.5

Chemical

20.4

Mineral

19.9

Tobacco

19.9

Rubber&Plastic

15.7

Petroleum

14.9

Paper

14.5

Precision instru

11.8

Basic Mat

10.7

Leather

10.3

Textiles

10.0

Furniture

7.5

Apparel

4.9

Office automate Wood products

-3.4 -23.7

Source: The Office of Industrial Economics; CTE analysis

tion increased from last month

Chart 1.12b – MͲonͲM change in MPI by sector October 2012, percent 9.2 -5.6 33.1 1.6 3.1 5.0 10.0 2.2 2.3 59.8 -0.8 -1.8 1.3 2.4 2.4 0.7 0.1 3.0 3.3 -15.9 -15.4

10 www.ChartingThailandEconomy.com

Capacity utilization rate picked up

Chart 1.13a â&#x20AC;&#x201C; Overall Capacity Utilization Rate Percent

68.2 67.9

66.5 65.8 65.4

64.2

May-12 Jun-12

Jul-12

Aug-12 Sep-12

Source: The Office of Industrial Economics

Oct-12

p strongly in October

Chart 1.13b â&#x20AC;&#x201C; Capacity utilization rate by sector October 2012, percent Vehicles Precision instru Electrical Chemical Transport Equip Petroleum Paper Electronic Mineral Rubber&Plastic Machineries Metal products Food & Bev Basic Mat Office automate Textiles Tobacco Apparel Furniture Leather Wood products

118.5 117.0 110.3 85.0 74.4 72.3 71.9 71.8 71.7 68.6 67.7 62.5 57.7 51.6 44.1 43.1 39.8 39.4 36.1 30.5 17.3

11 www.ChartingThailandEconomy.com

Thailand’s MPI grew the most in t year’s low base

Chart 1.14 – Manufacturing Production Index Latest, percent change on year ago Thailand Ͳ Oct China Ͳ Oct Taiwan Ͳ Feb Indonesia Ͳ Sep Malaysia Ͳ Sep Pakistan Ͳ Sep Russia Ͳ Oct

1.8

US Ͳ Oct

1.7

South Korea Ͳ Sep

0.7

Australia Ͳ Q2

0.5 -0.4

India Ͳ Sep Singapore Ͳ Oct

-2.2

Euro Area Ͳ Sep

-2.3 -3.0

Hong Kong Ͳ Q2

-3.8

Brazil Ͳ Sep Japan Ͳ Sep Source: The Economist

-8.1

the latest period, thanks to last

x 36.1 9.6 8.4 7.6 4.8 4.0

12 www.ChartingThailandEconomy.com

Strong growth in Agriculture prod

Chart 1.10 â&#x20AC;&#x201C; Agriculture production index (2005=100) CAGR

2.9%

106.7

113.1 110.2 111.8

100.0

2002 2003 2004 2005 2006 2007 2008 2009

Source: Office of Agricultural Economics, Ministry of Agriculture a

duction so far this year

Monthly Average 250.0

118.4

200.0

112.2

YͲoͲY 5.4% MͲoͲM Ͳ1.6%

150.0

2012 100.0

2011 50.0

0.0

2010 2011

J F M A M J J A S O N D

13 nd Cooperatives

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Private consumption picked up sl continue its strong growth this ye

Chart 1.15 â&#x20AC;&#x201C; Composite Private Consumption I (2000=100) CAGR

3.1%

105.9

111.4

118.1

126.0 121.9 124.1

130.5

127.1

02-Avg 03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 1

Note: (*) seasonally adjusted Source: Bank of Thailand

ightly from last month to ear

Index*

134.1

Monthly Average 150.0

2012 138.9

10-Avg 11-Avg

145.0

140.0

2011 135.0

130.0

MͲoͲM 0.4% YͲoͲY

9.2% 125.0

J F M A M J J A S O N D

15 www.ChartingThailandEconomy.com

Most consumption expenditures

Chart 1.16a – YͲonͲY change First 10 months of 2012 vs 2011, percent 61.5

Passenger Car (Unit)

56.7

Commercial Car (Unit) 19.0

NGV (kg.) LPG (litre)

14.7

Real VAT (2000 prices, baht)

13.4

Real import of consumer goods (2000 prices, US$)

11.2

HH electricity (kilowatt/hour)

10.7 7.9

Diesel (litre) Benzene & Gasohol (litre)

3.4

Motocycle (Unit)

3.1

Source: Bank of Thailand; CTE analysis

increased from last month

Chart 1.16b – MͲonͲM change Oct vs Sep 2012, percent 11.5 -1.0 1.1 2.0 -1.7 8.8 5.5 1.9 3.8 -10.8

16 www.ChartingThailandEconomy.com

Private Investment also picked up

Chart 1.17 â&#x20AC;&#x201C; Private Investment Index (2000=100)

CAGR

6.1%

169.6 172.2 171.9 154.4

178.0 156.6

132.4 118.3

02-Avg 03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 1

Source: Bank of Thailand

p slightly from last month

Monthly Average 300.0

250.0

2012

201.9

186.4

10-Avg 11-Avg

2011 200.0

150.0

100.0

MͲoͲM

0.9% YͲoͲY

16.4%

50.0

0.0

J F M A M J J A S O N D

17 www.ChartingThailandEconomy.com

Growth in private investment exp far this year Chart 1.18a – YͲonͲY change First 10 months of 2012 vs 2011, percent

Domestic commercial car sales (unit)

41.5

Import of Capital Goods (2000 prices, Baht)

21.8

Domestic Machinery sales* (2000 prices, Baht)

10.2

8.8

Domestic Cement sales (ton)

Construction Area permitted (sqm)

2.7

Note: (*) figures are 1Ͳmonth delayed Source: Bank of Thailand; CTE analysis

penditures across the board so

Chart 1.18b – MͲonͲM change Oct vs Sep 2012, percent

-2.4

0.6

-4.3

1.6

5.8

18 www.ChartingThailandEconomy.com

FDI grew 7% in the first 9 months period last year Chart 5.14 â&#x20AC;&#x201C; Foreign Direct Investment Million USD 11,331

9,460

9,112 8,547

8,048

4,853

05FY

06FY

(*) Preliminary figures

Source: BOT

07FY

08FY

09FY

10FY

s of 2012 compared to same

Monthly cumulative FDI* 9,000 8,000 7,000

7,778

11FY

6,000 5,000

2012

2011

4,000 3,000 2,000 1,000 0

F M A M J

S O N D

19 www.ChartingThailandEconomy.com

BOI’s net application for the first

Chart 5.15 – BOI net application of foreign di Billion Baht

351 297 236

08FY

09FY

Note: (*) Foreign investment (foreign equity>=10%)

Source: Board of Investment

10FY

9 months of 2012 grew 70%

irect investment*

433 396

11FY

255

2011/9M

2012/9M

20 www.ChartingThailandEconomy.com

Japan has been the biggest source

Chart 5.16 â&#x20AC;&#x201C; BOI net application of FDI* break Percent of total

Others

20%

17%

USA ANIEs

3% 6%

10%

ASEAN

15%

12% 12%

Europe

23% 27%

Japan

35% 22%

08FY Note: (*) Foreign investment (foreign equity>=10%) (**) ANIEs: Taiwan, Hong Kong, South Korea

Source: Board of Investment; CTE analysis

09FY

e of FDI for Thailand

kdown by country group

9% 23% 3% 6% 6%

27% 2% 7%

4% 7% 8% 8%

8% 17%

64% 44%

10FY

49%

11FY

2012/9M 21 www.ChartingThailandEconomy.com

September was considered a goo

Chart 1.19a – YͲonͲY change First 9 months of 2012 vs 2011, percent

Condo unit registered

15.3

New housing unit

5.5

Value of land transaction

Constr. Area in municipal

-6.6

Source: Bank of Thailand; CTE analysis

d month from property

Chart 1.19b – MͲonͲM change Sep vs Aug 2012, percent

16.1

-28.2

4.9

9.6

22 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Slow growth in Export after 10 m dragging

Chart 5.05a – YTD annual change in Export in First 10 months of 2012 vs 2011, percent Total export Other export Mining Petroleum Automotive Metal ReͲexports Toiletries Photo instru Agro products Forestry Machinery Other manufacturing Chemicals Jewellery PetroͲchemical Electrical Optical instru Electronics Furniture Fishery Aircrafts Apparels Footware Agriculture

3.5 21.6 21.2 21.1 20.2 15.4 14.1 10.0 8.4 7.7 6.8 6.0 5.0 4.4 3.8 0.4 0.2 -1.9 -2.0 -2.3 -3.0 -6.6 -11.7 -19.5 -21.5

Source: Bank of Thailand; CTE analysis

onths in 2012 with Agriculture Baht Chart 5.05b – Sectoral contributions Contributions to total export growth Total export Automotive Petroleum Agro products Other export Metal Machinery Other manufacturing Mining Chemicals Toiletries Jewellery Photo instru Forestry PetroͲchemical Electrical ReͲexports Furniture Optical instru Fishery Footware Aircrafts Electronics Apparels Agriculture

3.5 2.2 1.0 0.9 0.7 0.6 0.4 0.2 0.2 0.2 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 -0.1 -0.3 -0.4 -2.3

24 www.ChartingThailandEconomy.com

EU and Japan are the main proble

Chart 5.07a – Export by country Percent of total export in THB term ᪛ 5.3

᪛ 5.9

᪛ 5.2

᪛ 6.1

᪛ 6.

Middle East

4.9

5.4

5.7

5.0

14.1

13.2

11.9

11.3

11.8

11.3

10.3

10.5

12.7

12.2

11.7

18.4

18.1

100% =

Japan NAFTA Rest of the world

14.1 14.5

16.6

East Asia exͲJapan

19.4

18.3

20.1

20.4

ASEAN

21.3

22.5

21.3

23.0

07FY

08FY

09FY

10FY

11F

Source: Bank of Thailand; CTE analysis

ems for export this year

Chart 5.07b â&#x20AC;&#x201C; Change in Export In THB term, First 10 months of 2012 vs those of 2011

7 (Trillion)

12.8%

Middle East

Rest of the world

7.6%

NAFTA

6.8%

ASEAN

6.2%

East Asia ex Japan

2.4%

Japan

-0.3%

-10.7%

FY 25 www.ChartingThailandEconomy.com

Capital goods has contributed mo year

Chart 5.09a – YTD annual change in Import in First 10 months of 2012 vs 2011, percent

10.4

Total import

Capital goods

18.3

Consumer goods

16.5

Intermediate Ͳ Fuel

2.0

Intermediate Ͳ Non fuel

Others

-2.1

Source: Bank of Thailand; CTE analysis

ost to import growth so far this

n Baht Chart 5.09b – Sectoral contributions

5.6

Contributions to total import growth

10.4

Total import

5.4

Capital goods

3.1

Intermediate Ͳ Fuel

1.3

Consumer goods

0.8

Intermediate Ͳ Non fuel

Others

-0.3

26 www.ChartingThailandEconomy.com

Capital goods and Fuel have gaine import so far this year

Chart 5.08 – Import by economic classificatio Percent of total import in Baht term Ѯ 4.9

Ѯ 6.0

Ѯ 4.6

Others

6.7

8.0

7.8

Capital goods

20.4

19.3

22.3

Intermediate – NonͲFuel

47.5

44.8

43.0

Intermediate Ͳ Fuel

18.4

20.7

18.6

Consumer goods

7.0

7.1

8.3

07FY

08FY

09FY

100% =

Source: Bank of Thailand; CTE analysis

ed its importance in overall

Ѯ 5.9

Ѯ 7.0

Ѯ 6.5

10.2

12.4

10.5

21.3

24.2

44.0

40.0

37.9

17.4

18.9

19.6

7.5

7.8

10FY

11FY

12/10MO

20.9

(Trillion)

27 www.ChartingThailandEconomy.com

Tourist arrivals increased 10% yͲo

Chart 5.18 – International Tourist Arrivals Million visits

CAGR

6.6%

13.8 11.7 10.8

14.5

14.6

14.1

11.5

10.0

02FY 03FY 04FY 05FY 06FY 07FY 08FY 09FY Source: Department of Tourism

oÍ˛y for the first 10 months of 2012

Monthly cumulative 19.2

15.9

Y 10FY 11FY

25.0

20.0

15.0

2011

10.0

2012

5.0

0.0

J F M A M J J A S O N D

28 www.ChartingThailandEconomy.com

Tourist structure does not change important market

Chart 5.19 â&#x20AC;&#x201C; International Tourist Arrivals bre Percent of total

Rest of world

14.0

14.3

15.3

Americas

6.4

6.2

6.0

Europe

27.0

27.3

28.7

East Asia

52.6

52.1

50.0

07FY

08FY

09FY

Source: Department of Tourism; CTE analysis

e much with East Asia as the most

eakdown by country of nationality

15.6

14.7

14.4

5.3

5.0

4.8

27.9

26.5

24.2

51.2

53.8

56.5

10FY

11FY

2012/10M 29 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Policy rate remains at 2.75% whil down in response to last month’s Chart 3.01a – BOT’s policy rate 3.3% 3.2% 3.1% 3.0% 2.9% 2.8% 2.7% 2.6% 2.5% Nov-12

Dec-11

Chart 3.01c – Saving deposit rate 1.0% Max

0.9% 0.8%

Min

0.7% 0.6% 0.5% 0.4%

Nov-11 Source: Bank of Thailand

0.3% Oct-12

e other interest rates moved s policy rate cut Chart 3.01b â&#x20AC;&#x201C; Inter bank overnight rate 3.3% 3.2% 3.1% 3.0% 2.9% 2.8% 2.7% 2.6% 2.5% Oct-12

Nov-11

Chart 3.01d â&#x20AC;&#x201C; Commercial bank MLR 8.0% Max Min

7.5% 7.0% 6.5% 6.0% 5.5%

Nov-11

5.0% Oct-12

31 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Business turned optimistic while

Chart 1.21a â&#x20AC;&#x201C; Business Sentiment Index* 100

Better 53.8

51.5

51.7

50.2

49.9

52.1

Worse

0 May-12 Jun-12

Jul-12 Aug-12 Sep-12 Oct-12

Note: (*) Below is the interpretation of the index: Index = 50 indicates that business sentiment remains stable Index > 50 indicates that business sentiment has improved Index < 50 indicates that business sentiment has worsened Source: Bank of Thailand, The Federation of Thai Industries

Industries were more pessimistic

Chart 1.21b â&#x20AC;&#x201C; Thai Industries Sentiment Index** 200

Better 106.0

102.7

100

98.7

98.5

94.1

93.0

Worse

0 May-12 Jun-12

Jul-12 Aug-12 Sep-12 Oct-12

Note: (*) Below is the interpretation of the index: Index = 100 indicates that industries sentiment remains stable Index > 100 indicates that industries sentiment has improved Index < 100 indicates that industries sentiment has worsened

33 www.ChartingThailandEconomy.com

Consumers were in overall less pe

Chart 1.20a â&#x20AC;&#x201C; Consumer Confidence Index 200

Better

100

On future incom

Worse

0 Nov-11 Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

Note: (*) The index ranges from 0 to 200 100 means consumer confidence is equal to those of the prior m Over 100 means consumer confidence is better than those of th Under 100 means consumer confidence is worse than those of t

Source: The Center for Economic and Business Forecasting, UTC

essimistic

On job Overall

May-12 Jun-12

month he prior month the prior month

Jul-12

Aug-12 Sep-12

Oct-12

34 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

NESDB revised down 2012 growth down 2013’s to 4.7% Chart 1.03a – Real GDP growth projections For 2012, Annual percentage change 7.00

6.50

The Economist poll NESDB

6.00

BOT FPO

5.50

5.00

4.50

4.00 Jun-12

Jul-12

Aug-12 Sep-12 Oct-12 Nov-12

Forecast as of, month ending

Source: NESDB, Fiscal Policy Office, Bank of Thailand, The Econo

h to 5.5% while BOT revised

omist

Chart 1.03b â&#x20AC;&#x201C; Real GDP growth projections For 2013, Annual percentage change 7.00

6.50

6.00

5.50

FPO NESDB The Economist poll

5.00

BOT 4.50

4.00 Jun-12

Jul-12

Aug-12 Sep-12 Oct-12 Nov-12

Forecast as of, month ending 36 www.ChartingThailandEconomy.com

Thailandâ&#x20AC;&#x2122;s growth for 2012 is exp

Chart 1.04a â&#x20AC;&#x201C; Real GDP growth projections 2012, Annual % change, as of Dec 1st 2012

7.7

China Thailand

6.0

Indonesia

6.0 5.8

India 5.1

Malaysia 4.2

Pakistan

3.7

Russia

3.4

Australia 2.4

Singapore South Korea

2.2

Japan

2.1

Hong Kong

1.6

Brazil

1.5

Taiwan Euro Area -0.5

Source: The Economist

1.3

ected to be behind only China

Chart 1.04b â&#x20AC;&#x201C; Real GDP growth projections 2013, Annual % change, as of Dec 1st 2012

8.5 4.2 6.4 6.5 4.5 3.3 3.7 2.8 4.0 3.4 0.9 1.9 2.2 4.2 2.7 0.0 37 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Unemployment rate increased sli

Chart 2.7 â&#x20AC;&#x201C; Unemployment rate Percent 2.4

02-Avg

2.2

2.1

03-Avg

1.8

04-Avg

0.82

05-Avg

0.81 0.66

0.56

1.5

06-Av

0.7

0.43

Oct-11

Nov-11

Dec-11

Jan-12

Source: National Statistical Office, Bank of Thailand

Feb-12

Mar-

ghtly in September

1.4

1.0 0.7

07-Avg

0.97

08-Avg

09-Avg

0.67

Apr-12

10-Avg

11-Avg

0.92

-12

1.5

1.4

May-12

Jun-12

0.56

Jul-12

Aug-12

0.63

Sep-12

39 www.ChartingThailandEconomy.com

Thailand’s unemployment rate is leading economies Chart 2.8 – Unemployment rate Latest, percent Thailand Ͳ Sep Singapore Ͳ Q3 South Korea Ͳ Oct Malaysia Ͳ Sep Hong Kong Ͳ Oct

0.6 1.9 2.8 3.2 3.5

China Ͳ Q3

4.1

Japan Ͳ Sep

4.2

Taiwan Ͳ Oct

4.3

Russia Ͳ Oct

Brazil Ͳ Oct

Australia Ͳ Oct

Pakistan Ͳ 2011 Indonesia Ͳ Q3 US Ͳ Oct India Ͳ 2011 Euro Area Ͳ Sep Source: The Economist

lowest comparing to other

3 3

.4 6.0 6.1 7.9 9.8 11.6

40 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Slight improvement in Thailand’s

Chart 2.1 – Thailand’s GINI coefficient

0.520

0.513

0.507

1994

1996

1998

0.522

2000

Note: (*) The Gini coefficient is a measure of inequality of a distribution o It is defined as a ratio with values between 0 and 1 Here, 0 corresponds to perfect income equality (i.e. everyone has and 1 corresponds to perfect income inequality (i.e. one person Therefore, the lower the ratio the better the income distribution

Source: National Statistics Office, NESDB

income distribution since 2007

0.507

2002

0.493

2004

0.515

2006

0.499

2007

0.485

2009

of income.

the same income) n has all the income, while everyone else has zero income). n.

www.ChartingThailandEconomy.com

Not much has changed for income

Chart 2.2 â&#x20AC;&#x201C; Quintile by income Percent of total income

Top 20% Bottom 20%

11.9

13.3

14.9

14.1

13.5

Top 20%

54.4

57.0

59.0

57.2

56.5

Second 20%

20.6

19.5

18.9

19.7

19.9

Third 20%

12.4

11.7

11.1

11.7

11.8

Forth 20%

8.1

7.5

7.4

7.6

Bottom 20%

4.6

4.3

7.1 4.0

4.1

4.2

1988

1990

1992

1994

1996

Source: National Statistics Office, NESDB

e (in)equality in Thailand

13.1

14.6

13.2

12.1

13.9

12.5

11.3

56.1

57.5

55.9

54.9

56.1

54.9

54.2

19.8

20.1

20.2

20.0

20.2

20.1

12.0

11.5

12.1

12.4

12.1

12.4

12.6

7.8

7.3 4.0

7.7

8.0

7.7

8.0

8.4

4.2

4.5

4.0

4.4

4.8

2000

2002

2004

2006

2007

2009

4.3

998

43 www.ChartingThailandEconomy.com

Data from World Bank suggests th Thailand is not as bad as in Malay Chart 2.3 â&#x20AC;&#x201C; Income equality in the world

Ratio of the share of national income going to the richest 20% Latest, selected countries Honduras Bolivia Comoros South Africa Namibia Brazil Colombia Guatemala Seychelles Central African Republic Paraguay Panama Zambia Costa Rica El Salvador Swaziland Chile Peru Qatar Ecuador Nigeria Venezuela, RB Mexico Malaysia Dominican Republic

29.7 27.8 26.7 25.3 21.8 20.6 20.1 19.6 18.8 18.0 17.3 17.1 16.6 14.5 14.3 14.0 13.5 13.5 13.3 12.5 12.2 11.5 11.3 11.3 11.3

Source: The World Bank; CTE analysis

hat income equality problem in ysia or China

% to the share of the poorest 20%

Argentina Kenya China Philippines Turkey Russian Federation Thailand Iran, Islamic Rep. Sri Lanka Bhutan Maldives Lithuania Malawi Mongolia Cambodia Lao PDR Vietnam Indonesia Nepal India Bangladesh Egypt, Arab Rep. Pakistan Afghanistan Slovak Republic

11.3 11.0 9.6 8.3 7.9 7.3 7.1 7.0 6.9 6.8 6.8 6.7 6.6 6.2 6.1 5.9 5.9 5.1 5.0 4.9 4.7 4.4 4.2 4.0 3.6

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Poverty reduction, according to fi have been working over the past Chart 2.4a â&#x20AC;&#x201C; Thailand Poverty Line Baht/ month/ person 1,678

1,386

2006

Source: NESDB

1,579

1,586

2008

2009

1,443

2007

2010

igures from NESDB, seems to 7 years Chart 2.4b – Number of poor people Million 6.10

2006

5.40

2007

5.80

2008

5.30

5.08

2009

2010

8.1%

7.8%

2009

2010

Chart 2.4c – Poor people Percentage of total population 9.6%

2006

8.5%

9.0%

2007

2008

46 www.ChartingThailandEconomy.com

Many countries in Asia and espec of their populations earning less t

Chart 2.5 â&#x20AC;&#x201C; Poverty in the world, selected cou

Poverty headcount ratio at $2 a day (PPP) (% of population), L Congo, Dem. Rep.

Madagascar 84.5

Nigeria Ethiopia

77.6

Bangladesh

76.5 72.8

TimorÍ˛Leste

68.7

India

66.0

Lao PDR

60.2

Pakistan

57.3

Nepal

53.3

Cambodia

46.1

Indonesia

43.4

Vietnam

41.5

Philippines 31.3

South Africa China

29.8

Bhutan

29.8

Sri Lanka

29.1 21.4

Iraq Colombia

15.8

Source: The World Bank

cially ASEAN, still have majority than $2.00 a day

untries

Latest 95.2

92.6

15.4

Egypt, Arab Rep. Venezuela, RB

12.9

Peru

12.7 10.8

Brazil 8.0

Iran, Islamic Rep. 5.2

Mexico Thailand Turkey

4.6 4.2

Chile

2.7

Malaysia

2.3

Argentina

1.9

Romania

1.7

Bulgaria

0.4

Hungary

0.4

Montenegro

0.3

Poland

0.2

Slovak Republic

0.1

Slovenia

0.1

Croatia

0.1

Russian Federation

0.1

www.ChartingThailandEconomy.com

An average Thai is slightly poorer more than three times richer than

Chart 2.6 â&#x20AC;&#x201C; GNI per capita, selected countries 2011, Atlas method (current US$) Norway Qatar Luxembourg Switzerland Denmark Sweden Netherlands United States Finland Austria Belgium Canada Japan Germany Singapore France United Arab Emirates Ireland United Kingdom Italy Hong Kong SAR, China Iceland Spain Israel Greece Source: The World Bank

Rank (from

88,890 1 80,440 2 78,130 3 76,380 4 5 60,390 6 53,230 7 49,730 8 48,450 9 48,420 48,300 10 46,160 11 12 45,560 13 45,180 14 43,980 15 42,930 16 42,420 17 40,760 18 38,580 19 37,780 20 35,330 21 35,160 22 35,020 23 30,990 24 28,930 25 25,030

r than an average Chinese but n an average Indian

s Rank

m 166)

Czech Republic Hungary Brazil Turkey Argentina Mexico Malaysia South Africa Colombia China Thailand Ecuador Ukraine Indonesia Iraq Egypt, Arab Rep. Sri Lanka Philippines Bhutan India Nigeria Vietnam Lao PDR Cambodia Bangladesh

18,520 12,730 10,720 10,410 9,740 9,240 8,420 6,960 6,110 4,930 4,420 4,140 3,120 2,940 2,640 2,600 2,580 2,210 2,070 1,410 1,200 1,260 1,130 830 770

29 36 46 47 49 51 53 65 69 78 83 85 100 103 108 109 110 113 115 122 124 127 130 139 142

www.ChartingThailandEconomy.com

Increasing trend in household inc debt service year has reduced fro Chart 2.9a â&#x20AC;&#x201C; Monthly income per household Average, Baht

14,963

2004

17,787

18,660

2006

2007

20,903

2009

23,236

2011

Chart 2.9b â&#x20AC;&#x201C; Monthly expenditure per househo Average, Baht

12,297

2004

14,311

14,500

2006

2007

16,205

2009

Source: National Statistic Office survey; CTE analysis

17,403

2011

come, expenditure and debt, but om the recent peak in 2004

old

Chart 2.9c – Debt per household Average, Baht

104,571

2004

116,585

116,681

2006

2007

134,699

134,900

2009

2011

Chart 2.9d – Debt service year* 3.3 2.8 2.3

2.4 1.9

2004

2006

2007

2009

2011

Note: (*) Avg. debt / (annual income – annual expenditure)

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Both Head line and Core inflation

Chart 3.07a – YͲoͲY change in CPI Percent 4.00% 3.4%

3.50% 3.00% 2.6%

2.8%

2.7%

1.8%

3.3%

Head line

2.7%

2.50% 2.00%

1.9%

1.8%

Core*

1.50% 1.00% 0.50% 0.00% Jun-12

Jul-12

Aug-12 Sep-12

Oct-12 Nov-12

Note: (*) exclude raw food and energy Source: Bureau of Trade and Economic Indices; CTE analysis

n dropped in November

Chart 3.07b – YͲoͲY change in CPI by product November 2012, percent 14.4

Energy 7.6

Tobacco & alcohol Transport & Commu

4.1

Prepared food at home

4.1

Housing & furnishing

3.4

Veg & fruit

3.2

Non alcoholic beverage

2.7

Food away from home

2.7

Seasoning

2.4

Rice

1.3

Medical care

1.2

Apparel and footware

1.0

Recreation & Education

0.4

Meat

-0.4

Eggs & milk

-5.3

51 www.ChartingThailandEconomy.com

Apart from India and Pakistan, inf seems to be manageable Chart 3.08 – Consumer Price Index Annual percentage change

Latest

India Ͳ Oct Pakistan Ͳ Oct Russia Ͳ Oct

5.4

Brazil Ͳ Oct

4.6

Indonesia Ͳ Oct Singapore Ͳ Oct

4.0

Hong Kong Ͳ Oct

3.8 2.7

Thailand Ͳ Nov Euro Area Ͳ Oct

2.5

Taiwan Ͳ Oct

2.4

US Ͳ Oct

2.2

South Korea Ͳ Oct

2.1

Australia Ͳ Q3

2.0 1.7

China Ͳ Oct

1.3

Malaysia Ͳ Oct Japan Ͳ Sep Note: (*) The Economist Poll Source: The Economist

-0.3

flation in leading economies

2012* 9.8

9.3

7.7

10.0

6.6

5.1 5.4

4.4 4.5 4.1 3.1 2.5 2.1 2.1 2.3 1.8 2.8 1.7 0.0

52 www.ChartingThailandEconomy.com

Inflation at Producer level decrea

Chart 3.09a – YͲoͲY change in PPI Percent 3.0% 2.5% 2.0% 1.5% 1.1% 1.0%

0.7%

0.6%

0.5% 0.1%

0.1%

0.0% -0.4% -0.5% -1.0% Jun-12

Jul-12

Aug-12 Sep-12

Oct-12

Nov-12

Source: Bureau of Trade and Economic Indices; CTE analysis

ased to 0.6%, a very low level

Chart 3.09b – YͲoͲY change in PPI by product November 2012, percent Fishing Crop Food Mechinery Metal Transport equip Pulp & paper Textile Chemical Other manu goods Wood Leather & footware Forestry Electrical equip Petroluem products NonͲmetallic mineral Energy Basic metals Livestocks Rubber & plastic

3.4 2.7 2.6 2.1 1.6 1.2 1.1 0.8 0.6 0.4 0.3 0.1 0.0 -0.3 -0.3 -1.2 -2.7 -2.8 -3.8 -5.5

53 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Bank’s loan continued to increase slightly Chart 3.02a – Commercial Banks’ Loan THB billion 9,500 9,000 8,500 8,000 7,500 Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Chart 3.02b – Commercial Banks’ Loan/Depos Percent 100% 95% 90%

88.8%

89.3%

89.9%

89.6%

85% 80% Oct-11 Nov-11 Dec-11 Jan-12

Source: Bank of Thailand

Feb-12 M

e while L/D ratio increased

MͲoͲM

0.9% YͲoͲY

14.2% r-12

Apr-12

May-12

Jun-12

Jul-12

92.8%

92.4%

91.9%

Apr-12 May-12 Jun-12

Jul-12

Aug-12

Sep-12

90.8%

91.4%

it* ratio

90.2%

Mar-12

91.7%

Aug-12 Sep-12

55 www.ChartingThailandEconomy.com

Gross NPL increased in amount bu total loan

Chart 3.03a – Total Financial Institutions’ Gros Billion Baht 592 477

04YE

05YE

445

458

06YE

07YE

401

08YE

380

09Y

Chart 3.03b – Total Financial Institutions’ Gros Percentage of Total Loans

10.73% 8.16%

04YE

05YE

Source: Bank of Thailand

7.47%

06YE

7.31%

07YE

5.29%

4.85

08YE

09Y

ut decreased as percentage of

ss NPLs Outstanding

317

10YE

269

11YE

274

266

268

2012/Q1 2012/Q2 2012/Q3

ss NPLs Outstanding

3.60%

10YE

2.74%

11YE

2.68%

2.55%

2.47%

2012/Q1 2012/Q2 2012/Q3 56 www.ChartingThailandEconomy.com

Banksâ&#x20AC;&#x2122; capital ratio rose to 15.85%

Chart 3.04 â&#x20AC;&#x201C; Capital ratio of all commercial ba % of risk assets 20.0% 16.0%

13.7%

14.0%

2002

2003

13.0%

14.2%

2005

12.0% 8.0% 4.0% 0.0%

16.0% 15.8% 15.6% 15.4% 15.2% 15.0% 14.8% 14.6% 14.4%

15.3%

2004

15.4%

15.3% 15.2%

Oct-11 Nov-11 Dec-11 Jan-12

Feb-12 M

15.1%

Source: Bank of Thailand

% in September

nks

4.5%

15.4%

2006

2007

15.2%

Mar-12

14.1%

2008

16.1%

16.2%

2009

2010

15.1%

2011

15.9% 15.7% 15.3% 15.1%

15.0%

14.9%

Apr-12 May-12 Jun-12

Jul-12

Aug-12 Sep-12

57 www.ChartingThailandEconomy.com

Thailand is one of the many coun rates Chart 3.05 – Real interest rates Percent, as of Dec 1st 2012

൞

3M riskͲfree interest rates

9.5

Pakistan 8.2

India

7.6

Russia

7.1

Brazil 4.9

Indonesia 3.8

China

3.4

Australia

3.2

Malaysia

2.8

South Korea

2.4

Thailand Taiwan

0.9

Hong Kong

0.5

0.3

Singapore

0.3

Euro Area

0.2

Japan

0.2

Note: (*) The Economist Poll

Source: The Economist

tries with negative real interest

Expected 2012 inflation*

Real interest rates

10.0

-0.5

9.3

-1.1

5.1

2.5

5.4

1.7

4.4

0.5

2.8

1.0

1.8

1.6

1.7

1.5

2.3

0.5

3.1

-0.7

2.1

-1.2 4.1

2.1

-1.8 4.5

2.5 0.0

-3.7

-4.2 -2.3 0.2

www.ChartingThailandEconomy.com

Another profitable month for SET Chart 3.06a â&#x20AC;&#x201C; Monthly performance of SET index Percent change from prior month, at month end

5.8% 2.7%

2.3%

Jun-12

Jul-12

Aug-12

Sep-12

0.0%

1.9%

Oct-12

Nov-12

Chart 3.06b â&#x20AC;&#x201C; Cumulative net foreign fund flow SET & MAI, 2012, Billion Baht 100.0 80.0 60.0 40.0 20.0 0.0 J-12 F-12 M-12 A-12 M-12 J-12 J-12 A-12 S-12 O-12 N-12 D-12

Source: SET, The Economist; CTE analysis

T as foreign fund flow returned Chart 3.06c â&#x20AC;&#x201C; Change since Dec 31st 2011 Percent, as of Nov 28th 2012 44.7%

Pakistan (KSE) 26.8%

Thailand (SET)

24.5%

Germany (DAX)

21.9%

India (BSE)

17.8%

HK (Hang Seng) US (NAScomp)

14.8%

Singapore (STI)

13.8%

Indonesia (JSX)

12.6%

US (S&P 500)

12.1%

France (CAC 40)

11.2%

Euro Area (FTSE Euro 100)

10.9%

Japan (Nikkei 225)

10.1% 8.6%

Australia (All Ord.) US (DJIA)

6.3%

Taiwan (TWI)

5.1%

Malaysia (KLSE)

5.0%

S Korea (KOSPI)

4.8%

UK (FTSE 100)

4.1%

China (SSEB, $ terms)

-2.1%

China (SSEA)-10.3%

59 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Government finance continues to

Chart 4.1 â&#x20AC;&#x201C; Government budget and cash bala Percent

Budget cash balance Overall Cash balance (including non-budgetary deficit/ surp 1.4%

1.1%

0.0% 0.1% -0.5% -0.6%

-2.0%

04FY

05FY

06FY

-1.7%

07FY

CORRECTION: In the past few months we had shown in this chart t government revenue INSTEAD OF NOMINAL GDP. W Source: Bank of Thailand; CTE analysis

o improve in 2011

ance as percentage of nominal GDP

plus)

-0.3% -0.7%

-1.1% -1.1%

-0.9%

% -2.6%

-4.0% -4.4%

08FY

09FY

10FY

11FY

the figures of budget and cash balance as percentage of We have duly corrected and sincerely apologize.

www.ChartingThailandEconomy.com

Budget deficit worsened in Octob billion worse off than the same p Chart 4.2 â&#x20AC;&#x201C; Government budget balance Billion Baht

Revenue 877

Budget balance

1,013

-79

1,109

1,241

-36

1,390

1,455

1,498

-174

-100

110

-956

-996

-1,109

-1,277 -1,280

Expenditure

-1,629 -1,598

-1

02FY 03FY 04FY 05FY 06FY 07FY 08FY 0 Source: Bank of Thailand; CTE analysis

ber and is now more than 300 eriod last year

Monthly cumulative Budget balance 1,751

1,902

100.0 50.0

,484

0.0

2011

-50.0

-75

-28

-100.0

364 -150.0 -200.0

2012 -250.0

1,849 -1,825

-1,930

-300.0 -350.0 -400.0

9FY 10FY 11FY

J F M A M J J A S O N D

62 www.ChartingThailandEconomy.com

Apart from 2010, there were not budget and cash balance Chart 4.3 â&#x20AC;&#x201C; Government cash balance Billion Baht

Budget cash balance Overall Cash balance (including non-budgetary deficit/ surp

110 16 24

8 -36 -45

-79 -77

-1

02FY

03FY

04FY

Source: Bank of Thailand; CTE analysis

05FY

06FY

much differences between

plus)

-28

-75

-100 -96

-96

-144 74

-266

-292

-319

-364 -401

07FY

08FY

09FY

10FY

11FY

'12/10mo

63 www.ChartingThailandEconomy.com

With a few exceptions, most gove register huge budget deficit in 20

Chart 4.4 â&#x20AC;&#x201C; Government Budget balance as pe 2012*, percent South Korea Hong Kong Singapore Russia Australia China Indonesia Brazil Taiwan Euro Area Thailand Malaysia India Pakistan

-6

-7.0

Japan Note: (*) The Economist Poll Source: The Economist

-9.5

ernments in the world will 12

ercentage of GDP 2.1 1.1 0.9 -0.3 -0.7 -2.3 -2.4 -2.5 -2.8 -3.3 -3.8 -4.6 -6.0

6.6

64 www.ChartingThailandEconomy.com

Public debt increased in absolute due mainly to direct government Chart 4.5a â&#x20AC;&#x201C; Composition of Public debt THB Trillion 6.0

5.0

4.0 Public debt from State Enterprises 3.0

2.0

Bond to Compensate FIDF's Loss & Prefunding debt

1.0 Direct Government debt 0.0

2008

2009

2010

2011

Sep-1

12%

10%

Source: Public Debt Management Office

and relative to GDP this year, debt Chart 4.5b â&#x20AC;&#x201C; Composition of Public debt As percentage of nominal GDP 50% 45% 40%

Public debt from State Enterprises

35% 30% 25%

Bond to Compensate FIDF's Loss & Prefunding debt

20% 15% 10% 5%

Direct Government debt

2008

External debt as percent of total

2009

2010

2011

Sep-12

65 www.ChartingThailandEconomy.com

Thailandâ&#x20AC;&#x2122;s public debt is not high standard Chart 4.6 â&#x20AC;&#x201C; Public debt in the world Percentage of GDP, 2011 or latest 1 Zimbabwe 2 Japan 4 Greece 5 Lebanon 6 Iceland 9 Italy 10 Singapore 11 Ireland 13 Portugal 15 Belgium 17 Egypt 18 France 20 Canada 21 Hungary 22 Germany 23 UK 24 Bhutan 28 Bahrain 29 Israel 30 Austria 32 United States 33 Spain 38 Netherlands 40 Jordan 42 Pakistan Source: CIA fact book

2 208 165 137 130 120 118 107 103 100 86 86 84 83 82 80 79 75 74 72 69 68 64 61 60

compared to international Intâ&#x20AC;&#x2122;l rule of thumb <60% of GDP 31

44 Vietnam 47 Brazil 48 Malaysia 49 Switzerland 51 India 53 Philippines 56 Norway 67 UAE 69 China 72 Argentina 73 Turkey 78 Thailand 82 Mexico 86 Sweden 87 Bangladesh 91 South Africa 93 Taiwan 95 New Zealand 96 Korea, South 100 Australia 108 Indonesia 121 Iran 122 Hong Kong 123 Saudi Arabia 126 Russia

57 54 54 52 52 49 48 44 44 43 42 41 38 37 37 36 35 34 33 30 25 12 10 9 9

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Thailand’s unemployment rate in lowest level among major and e • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

ncreased slightly in September 2012 to 0.63%, still the emerging economies. s among the worst in Asia but has been improving in the

ms to be working over the past six years as number of rent level is low by international standard.

h Head line inflation at 2.7% and Core inflation at 1.8%

. Bankâ&#x20AC;&#x2122;s capital ratio is at 15.9% in September. Total % in 3Q12. s budget deficits in the first 10 months of 2012 is more han the same period last year. Public debt is increasing

mproved. External debt has been increasing but still not ghtly in November.

Improving Balance of Payment th service income and capital movem

Chart 5.01 â&#x20AC;&#x201C; Balance of Payment decompositio Billion USD

31.3 24.7

24.1

17.1

1.2 07FY

08FY

09FY

10FY

Source: Bank of Thailand; CTE analysis

11FY

3.3

12/10mo

hanks to improvement in net ment Trade Balance (F.O.B)

32.6 26.6

29.8

17.3 07FY

08FY

09FY

10FY

17.0

7.4

11FY

12/10mo

Net service income & transfer -11.0

-15.2

-10.7

08FY

-5.8

-19.7

+ 07FY

-11.1

09FY

10FY

11FY

12/10mo

Net Capital Movement + errors and omissions 22.5

21.3 2.2

1.4

1.7 -4.7

07FY

08FY

09FY

10FY

11FY

12/10mo

68 www.ChartingThailandEconomy.com

Strong Asian export engines refle surplus Chart 5.02 – Current Account balance As % of 2012 GDP* Singapore Ͳ Q3

Taiwan Ͳ Q3 6.8%

Malaysia Ͳ Q3

5.4%

Hong Kong Ͳ Q2

4.6%

Russia Ͳ Q3 China Ͳ Q3

2.7%

South Korea Ͳ Oct

2.1%

Japan Ͳ Sep

1.3%

Euro Area Ͳ Sep

0.7%

Thailand Ͳ Q3

-0.6%

Pakistan Ͳ Q3

-1.7%

Indonesia Ͳ Q3

-2.4%

US Ͳ Q2

-2.7%

Brazil Ͳ Oct

-2.8%

Australia Ͳ Q2

-3.7%

India Ͳ Q2 Note: (*) The Economist Poll Source: The Economist

-4.3%

ecting in huge current account

Last 12 months, USD Billion 16.4%

46.0

9.5%

45.7 19.1 8.7 102.9 208.3 41.3 71.6 96.4 2.2 -2.9 -18.5 -477.8 -52.2 -42.1 -77.1

69 www.ChartingThailandEconomy.com

Worsened trade balance so far in

Chart 5.03 â&#x20AC;&#x201C; Trade balance* decomposition Billion Baht

593 432 257

-111 -275

07FY

08FY

09FY

10FY

11FY

-515 12/10MO

Note: (*) Not equal to the one in Balance of Payment decomposition due to few (**) Excluding Electricity and aircraft export, adjustment for Balance of p (***) Excluding Electricity and military import, adjustment for Balance of p

Source: Bank of Thailand; CTE analysis

2012

Export**

5,302

07FY

เต

5,851

08FY

6,113

6,708

5,195

09FY

10FY

11FY

5,944

12/10MO

Import*** 6,983 5,962 4,870

07FY

5,857

6,459

4,602

08FY

w adjustments ayment and exchange rate conversion payment and exchange rate conversion

09FY

10FY

11FY

12/10MO

70 www.ChartingThailandEconomy.com

External debt level increased in b terms Chart 5.10a – External Debt Level Billion USD 160 120 80 40 0 03YE

04YE

05YE

06YE

07Y

Chart 5.10b – External Debt as % of GDP

40.3%

40.9%

03YE

04YE

Source: Bank of Thailand

37.0%

38.5%

05YE

06YE

35.4%

07YE

both absolute and relative to GDP

08YE

09YE

31.4%

28.8%

08YE

09YE

10YE

11YE

12/2Q

35.2%

34.2%

37.0%

10YE

11YE

12/2Q

71 www.ChartingThailandEconomy.com

More public debt and more short composition so far in 2012 Chart 5.11a â&#x20AC;&#x201C; External debt breakdown Private vs Public Private Public = General Government and Monetary Authorities

96%

08YE

92%

09YE

Source: Bank of Thailand

13%

15%

18%

87%

85%

82%

10YE

11YE

12/2Q

tͲterm debt in external debt

Chart 5.11b – External debt breakdown LongͲTerm vs ShortͲTerm Long term Short term

44%

56%

08YE

09YE

50%

10YE

46%

49%

54%

51%

11YE

12/2Q

72 www.ChartingThailandEconomy.com

Capability to repay external debt service ratio continued to decline Chart 5.12a â&#x20AC;&#x201C; International reserves As % of ST external debt 418%

340%

330%

360% 296%

257%

07YE

08YE

09YE

10YE

11YE

12/2Q

Note: (*) Debt service payment / Export of goods and services

Source: Bank of Thailand; CTE analysis

is not yet a concern as debt e and reserves at healthy level Chart 5.12b â&#x20AC;&#x201C; Debt service ratio* Percent

10.3%

7.7%

07FY

08FY

7.3%

09FY

3.7%

10FY

11FY

3.3%

12/2Q

73 www.ChartingThailandEconomy.com

International reserves increased s level is still considered excessive Chart 5.13a â&#x20AC;&#x201C; International reserves level Billion USD

42.1

49.8

52.1

03YE

04YE

05YE

67.0

06YE

87.5

07YE

Chart 5.13b â&#x20AC;&#x201C; International reserves as numbe

6.7

6.4

03YE

04YE

5.3

05YE

6.2

06YE

7.5

07YE

Note: (*) For the last period using average monthly import value during t

Source: Bank of Thailand; CTE analysis

slightly this year and the current

172.1

175.1

181.4

10YE

11YE

Oct-12

9.2

9.0

11YE

Oct-12

138.4 111.0

08YE

09YE

er of months of import*

12.4

11.3

7.4

08YE

the last 12 months

09YE

10YE

74 www.ChartingThailandEconomy.com

THB continues to appreciate in No

Chart 5.17a â&#x20AC;&#x201C; Nominal Effective Exchange Rate 2007=100

104.0

103.0

102.0

101.0

100.0 99.0 98.0 Dec-11

97.0 Nov-12

Note: (*) Positive numbers mean the Baht has been depreciated against those currencies, the opposite applies to negative numbers USD = US$, GBP = Pound Sterling, EUR = Euro, JPY = Yen (per 100), CNY = Yuan Renminbi, SGD = Singapore $, MYR = Malaysia Ringgit, PHP = Philippines Peso, IDR = Indonesia Rupiah (per 1,000), INR = India Rupee, KRW = Korea Won, TWD = Taiwan $, VND = Vietnam Dong, MXN = Mexico Peso, AUD = Australia $

Source: Bank of Thailand; CTE analysis

ovember

Chart 5.17b – YͲoͲY change in FX rate* Percentage change in avg. selling rate as of Nov 30th 2012 PHP Ͳ 0.764

4.8

MXN Ͳ 2.3819

4.8 4.3

SGD Ͳ 25.3963

KRW Ͳ 0.0285

TWD Ͳ 1.061

2.8

MYR Ͳ 10.2422

2.5

AUD Ͳ 32.2957

2.2

GBP Ͳ 49.5921

1.1

CNY Ͳ 5.0116

0.5

VND Ͳ 0.0015

0.0

3.6

-1.7

USD Ͳ 30.8394

-4.1

EUR Ͳ 40.1634 INR Ͳ 0.6009

-6.8

JPY Ͳ 37.6722

-6.9

IDR Ͳ 3.4028

-8.5

Baht appreciates

Baht depreciates 75