121231 emag eng by Ake Saroj

Monthly Economic Brief January 2013 issue

About Charting Thailand’s Economy

Different ways to utilize us

Charting Thailand’s Economy® is an illustrative eͲmagazine providing a monthly check up on the economy, available on the 5th of every month.

For professionals, this will be your o with readyͲtoͲuse charts for all important macro indicators. You ca copy and use them in your presentations, as long as you show there are the work of ChartingThailandEconomy.com and keep out from editing.

We believe that following and understanding the economy should be exhaustive yet easy for everyone. Yet in reality it is so hard to make sense of all the information (news, opinions, etc.) presented to us. This is where we come in and offer an easy way to follow the Thai economy. Our report includes test results (economic indicators) and summary. All the data used in our charts are from official sources, but we try to present them in a way that make sense and easy to understand.

For busy business people, this is an easy and very objective way of keep up with the economy. If you are rea busy, we also provide executive summary. You might also use this as your macro economic ‘desk referen

For students and selfͲlearners, this great educational tool for you to further your understandings of the economy.

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Editor’s talk

oasis

Dear readers,

n that

n ping ally

s nce’. is a

First of all, let me say “Happy New Year 2013” to all of you. 2012 was the year we, Charting Thailand’s Economy, were born and 2013 will be the year that we leap forward in term of services. On our website, if you haven’t noticed, we now have interactive charts for some of the indicators. We strongly believe that this feature, along with others to be introduced this year, will certainly enrich your experience and understanding. For Thailand’s economy, 2013 will bring back the growth rate to longͲterm ‘normal’ level, believed to be around 3Ͳ4% p.a. As mentioned last month, the growth engine for the economy is changing from external to domestic demand and this is likely to continued in 2013 and beyond. 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. Monthly MPI continued to recover in November, growing 8.8% from last month and 83.3% from a year ago. Private consumption and Private Investment, including FDI, continued their strong growth this year. Property sector picked up strongly in October. Export situation has improved moderately, growing 5.2% in the first 11 months of 2012 while Import grew 11.5%. Tourist arrivals grew at an impressive 14% in the period. Looking forward, both Fiscal and Monetary policies are proͲgrowth. Government spending in the first 11 months 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 Businesses were less o and Consumers were l

In December, Fiscal Po 2012 growth to 5.7% w Poll’s was down to 5.8 projection is now betw and between 4.2Ͳ5.0%

Employment and wea Thailand’s unemploym to 0.56% in October 20 among major and eme

Thailand’s per capita in 4,420 in 2011, ranked 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 earlier in 2012. optimistic. Industries ess pessimistic.

olicy Office revised up while The Economist 8%. The consensus ween 5.5Ͳ5.8% for 2012 % for 2013.

alth distribution ment rate dropped back 012, the lowest level erging economies.

ncome was at USD 83rd 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 Head line inflation jumped to 3.6% in December driven mainly by energy and vegetables. Core inflation remained at 1.8%, a rather low level by historical and international standards. Banking system is quite healthy. Bank’s capital ratio increased to 16% in October. Total system’s NPL decreased to 2.47% in 3Q12. Fiscal stability is still worrying as budget deficits in the first 11 months of 2012 is more than THB 400 billion worse off than the same period last year. Budget deficit for Thailand is expected to be Ͳ4% 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 remained low and international reserves is at healthy level. Thai Baht appreciated slightly against a basket of key currencies in December .

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Real GDP in 3Q/2012, grew 3.0% • Monthly MPI continued to recov 83.3% from a year ago; while A • Private consumption and Private Property sector picked up strong • Export situation has improved o • Both Fiscal and Monetary policie • Businesses were less optimistic. • Fiscal Policy Office revised up 20 down to 5.8%. The consensus p between 4.2-5.0% for 2013

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

• Head line inflation jumped to 3.6 rather low level by historical and • Banking system is quite healthy. system’s NPL decreased to 2.47 • Fiscal stability is still worrying as than THB 400 billion worse off t but not too worrying just yet. • Balance of Payment has improve dangerous. THB appreciated slig

% y-o-y, a disappointing level compared to 2Q/2012 er in November, growing 8.8% from last month and Agriculture production continued its strong year e Investment continued their strong growth this year. gly in October. nly moderately. Tourist arrivals grew impressively. es are pro-growth. Industries and Consumers were less pessimistic. 012 growth to 5.7% while The Economist Pollâ&#x20AC;&#x2122;s was projection is now between 5.5-5.8% for 2012 and

Page 5 8 14 23 30 34 37

dropped back to 0.56% in October 2012, still the lowest g 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.

6% in December. Core inflation remained at 1.8%, a d international standards . Bankâ&#x20AC;&#x2122;s capital ratio increased to 16% in October. Total % in 3Q12. s budget deficits in the first 11 months of 2012 is more han the same period last year. Public debt is increasing

ed. External debt has been increasing but still not ghtly in December.

57 62

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 d level among major and emergin • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

MPI increased strongly in Novem

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

ber

Monthly Average 250.0

190.1 172.9

200.0

2012 150.0

MͲoͲM 100.0

2011

8.8% YͲoͲY

83.3% 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 November 2012, percent

795.

Vehicles 254.8

Office automate Machineries

138.8

Transport Equip

117.6

Electrical

78.3

Electronic

58.4

Basic Mat

25.0

Petroleum

24.5

Textiles

23.0

Mineral

22.6

Metal products

19.5

Rubber&Plastic

18.7

Food & Bev

17.9

Chemical

16.6

Leather

13.7

Paper

-0.9

Apparel

-2.1

Furniture

-4.4

Precision instru

-14.6

Tobacco

-19.7

Wood products

-21.5

Source: The Office of Industrial Economics; CTE analysis

tion increased from a year ago

Chart 1.12b – MͲonͲM change in MPI by sector November 2012, percent 8

-0.2 42.7 3.4 1.9 -2.1 -8.1 -0.9 9.0 1.0 -2.8 -7.0 -2.9 8.9 -6.8 1.3 -12.7 -8.8 -4.1 -19.5 47.2 4.8

www.ChartingThailandEconomy.com

Capacity utilization rate continue

Chart 1.13a â&#x20AC;&#x201C; Overall Capacity Utilization Rate Percent 68.6 67.7

66.5 65.8 65.4

64.2

Jun-12

Jul-12

Aug-12 Sep-12

Source: The Office of Industrial Economics

Oct-12

Nov-12

d to rise in November

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

117.8 109.2 80.8 79.3 78.2 75.8 70.1 69.4 67.1 66.7 64.6 62.9 60.3 58.6 57.8 51.3 42.7 36.8 34.2 30.1 18.3

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 Nov 10.1

China Ͳ Nov Indonesia Ͳ Oct

8.9

India Ͳ Oct

8.2 5.8

Malaysia Ͳ Oct Taiwan Ͳ Oct

4.6

Australia Ͳ Q3

4.3

Pakistan Ͳ Oct

2.5

US Ͳ Nov

2.5

Brazil Ͳ Oct

2.3

Russia Ͳ Nov

1.9

Hong Kong Ͳ Q3

-0.1

South Korea Ͳ Oct

-0.8

Singapore Ͳ Oct

-2.2

Euro Area Ͳ Oct

-3.6

Japan Ͳ Oct

-4.5

Source: The Economist

the latest period, thanks to last

x 83.3

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

112.5

118.5

200.0

YͲoͲY 8.4% MͲoͲM 112%

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 d level among major and emergin • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

Private consumption picked up st continue its impressive growth th

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

3.0%

105.9

111.2

117.8

125.5 121.5 123.7

129.8

126.4

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

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

trongly from last month to his year

Index*

133.2

Monthly Average 155.0

150.0

2012

137.9

10-Avg 11-Avg

145.0

2011

140.0

135.0

MͲoͲM 1.8% 130.0

YͲoͲY

11.6% 125.0

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

15 www.ChartingThailandEconomy.com

All key consumption expenditure same period last year Chart 1.16a – YͲonͲY change First 11 months of 2012 vs 2011, percent 77.5

Passenger Car (Unit)

67.6

Commercial Car (Unit) 21.3

NGV (kg.) LPG (litre)

15.5

Real VAT (2000 prices, baht)

14.8

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

12.1

HH electricity (kilowatt/hour)

10.8 8.3

Diesel (litre) Benzene & Gasohol (litre)

4.9

Motocycle (Unit)

4.8

Source: Bank of Thailand; CTE analysis

s grew impressively from the

Chart 1.16b – MͲonͲM change Nov vs Oct 2012, percent 3.2 -2.1 1.2 0.2 6.0 0.0 8.5 4.1 5.7 0.4

16 www.ChartingThailandEconomy.com

Private Investment continued to r

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

CAGR

6.1%

169.5 172.1 171.8 154.9

178.0 156.5

132.2 118.2

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

Source: Bank of Thailand

rise from last month

Monthly Average 300.0

250.0

2012

202.2

186.5

10-Avg 11-Avg

2011 200.0

150.0

100.0

MͲoͲM

1.8% YͲoͲY

26.2%

50.0

0.0

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

17 www.ChartingThailandEconomy.com

All key private investment expend period last year Chart 1.18a – YͲonͲY change First 11 months of 2012 vs 2011, percent

Domestic commercial car sales (unit)

47.5

Import of Capital Goods (2000 prices, Baht)

23.1

Domestic Machinery sales* (2000 prices, Baht)

10.5

Domestic Cement sales (ton)

10.1

Construction Area permitted (sqm)

2.1

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

ditures grew from the same

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

-3.1

6.3

-3.3

0.1

-1.0

18 www.ChartingThailandEconomy.com

FDI grew 25% in the first 10 mont 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

ths of 2012 compared to same

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

7,778

11FY

6,000

2011

5,000

2012 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

68%

297 236

08FY

09FY

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

Source: Board of Investment

10FY

11 months of 2012 grew 40%

irect investment*

496 40%

396

11FY

355

2011/11M

2012/11M

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

23% 3% 6% 6%

27% 2% 7%

9% 3% 8% 8% 9%

8% 17%

63% 44%

10FY

49%

11FY

2012/11M 21 www.ChartingThailandEconomy.com

October was considered another

Chart 1.19a – YͲonͲY change First 10 months of 2012 vs 2011, percent

63.6

Condo unit registered

22.8

New housing unit

7.5

Value of land transaction

Constr. Area in municipal

-0.3

Source: Bank of Thailand; CTE analysis

good month for property

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

47.2

39.6

-22.2

13.4

22 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

Moderate growth in Export after Agriculture dragging

Chart 5.05a – YTD annual change in Export in First 11 months of 2012 vs 2011, percent Total export Automotive Mining Petroleum Metal Photo instru Other export Toiletries ReͲexports Agro products Jewellery Other manufacturing Chemicals Machinery Forestry Electrical Optical instru Electronics PetroͲchemical Furniture Fishery Aircrafts Apparels Footware Agriculture

5.2 25.9 22.9 21.6 20.8 17.2 15.9 11.1 10.0 7.6 5.6 5.6 5.5 5.2 5.0 3.5 3.4 1.5 0.7 -0.9 -3.8 -5.0 -10.3 -17.9 -20.7

Source: Bank of Thailand; CTE analysis

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

5.2 2.7 1.1 0.9 0.9 0.5 0.4 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.0 0.0 0.0 0.0 0.0 -0.1 -0.1 -0.1 -0.4 -2.2

24 www.ChartingThailandEconomy.com

EU is the main problem for expor

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

rt this year

Chart 5.07b â&#x20AC;&#x201C; Change in Export In THB term, First 11 months of 2012 vs those of 2011

7 (Trillion)

15.8%

Middle East

9.0%

Rest of the world NAFTA

8.0%

ASEAN

7.2%

East Asia ex Japan

5.1%

Japan

0.8%

-8.1%

FY 25 www.ChartingThailandEconomy.com

Capital goods has contributed mo year

Chart 5.09a – YTD annual change in Import in First 11 months of 2012 vs 2011, percent

11.5

Total import

Capital goods

18.5

Consumer goods

14.3

Intermediate Ͳ Fuel

4.1

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

8.4

Contributions to total import growth

11.5

Total import

6.1

Capital goods

2.7

Intermediate Ͳ Fuel

Intermediate Ͳ Non fuel

1.7

Consumer goods

1.4

Others

-0.2

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 7.1

10.2

12.4

10.5

21.3

24.5

44.0

40.0

37.9

17.4

18.9

19.2

7.5

7.8

10FY

11FY

12/11MO

20.9

(Trillion)

27 www.ChartingThailandEconomy.com

Tourist arrivals increased 14% 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 11 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

14.3

5.3

5.0

4.8

27.9

26.5

24.3

51.2

53.8

56.5

10FY

11FY

2012/11M 29 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

32% increase in fiscal expenditure compared to the same period last

Chart â&#x20AC;&#x201C; Monthly cumulative Fiscal expenditure Billion Baht 2500

2000

1500

2012 1000

500

Source: Bank of Thailand; CTE analysis

e in the first 11 months of 2012 t year

2011

www.ChartingThailandEconomy.com

Policy rate remains at 2.75% whil moved down in response to Octo Chart 3.01a – BOT’s policy rate 3.25% 3.00% 2.75% 2.50% Dec-12

Jan-12

Chart 3.01c – Saving deposit rate 1.0% Max

0.9% 0.8%

Min

0.7% 0.6% 0.5% 0.4%

Dec-11 Source: Bank of Thailand

0.3% Nov-12

e inter bank overnight rate ober’s policy rate cut Chart 3.01b – Inter bank overnight rate 3.25% 3.00% 2.75% 2.50% Nov-12

Dec-11

Chart 3.01d – Commercial bank MLR 8.0% Max 7.5% Min

7.0% 6.5% 6.0% 5.5%

Dec-11

5.0% Nov-12

32 www.ChartingThailandEconomy.com

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

Dec-11

Jan-12

Feb-12

Mar-12

Chart 3.02b – Commercial Banks’ Loan/Depos Percent 100% 98% 96% 94% 92% 90% 88% 86% 84%

89.3%

89.9%

89.6%

Nov-11 Dec-11 Jan-12

Source: Bank of Thailand

89.6%

90.2%

Feb-12 Mar-12

e while liquidity in the system

MͲoͲM

1.2% YͲoͲY

13.9% r-12

May-12

Jun-12

Jul-12

92.4%

91.9%

Apr-12 May-12 Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

90.8%

91.4%

91.1%

Aug-12 Sep-12

Oct-12

it* ratio

91.7%

92.8%

33 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

Businesses are less optimistic wh

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

Better 51.5

51.7

50.2

49.9

52.1

52.0

Worse

0 Jun-12

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

ile Industries are less pessimistic

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

Better

102.7 100

98.7

98.5

94.1

93.0

95.2

Worse

0 Jun-12

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

35 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 Dec-11

Jan-12

Feb-12

Mar-12

Apr-12 May-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

Jun-12

Jul-12

month he prior month the prior month

Aug-12 Sep-12

Oct-12

Nov-12

36 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

2012 growth consensus narrowed

Chart 1.03a â&#x20AC;&#x201C; 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 Jul-12

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

Forecast as of, month ending

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

d down to 5.5Ͳ5.8%

omist

Chart 1.03b – 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 Jul-12

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

Forecast as of, month ending 38 www.ChartingThailandEconomy.com

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

Chart 1.04a â&#x20AC;&#x201C; Real GDP growth projections 2012, Annual % change, as of Dec 22nd 2012

7.7

China 6.3

Indonesia Thailand

5.8

India

5.8 5.2

Malaysia 4.2

Pakistan

3.7

Russia

3.4

Australia South Korea

2.2

Japan

1.7

Hong Kong

1.6

Singapore

1.5

Brazil

1.5

Taiwan Euro Area -0.4

Source: The Economist

1.1

ected to be behind only China

Chart 1.04b â&#x20AC;&#x201C; Real GDP growth projections 2013, Annual % change, as of Dec 22nd 2012

8.5 6.4 4.2 6.5 4.5 3.3 3.7 2.8 3.4 1.9 0.8 2.6 2.9 4.2 2.7 -0.2 39 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

Unemployment rate dropped bac

Chart 2.08 â&#x20AC;&#x201C; Unemployment rate Percent 2.4

02-Avg

2.2

2.1

03-Avg

1.8

04-Avg

05-Avg

1.5

06-Av

0.9 0.82

0.81 0.66

0.73

0.43

Nov-11

Dec-11

Jan-12

Feb-12

Source: National Statistical Office, Bank of Thailand

Mar-12

Apr-

ck to 0.56% in October

-12

1.4

1.5

1.4

1.0 0.7

07-Avg

08-Avg

09-Avg

10-Avg

11-Avg

0.92 0.67

May-12

Jun-12

0.56

Jul-12

Aug-12

0.63

Sep-12

0.56

Oct-12

41 www.ChartingThailandEconomy.com

Thailand’s unemployment rate is leading economies Chart 2.09 – Unemployment rate Latest, percent Thailand Ͳ Oct Singapore Ͳ Q3 South Korea Ͳ Nov Malaysia Ͳ Sep Hong Kong Ͳ Nov

0.6 1.9 2.8 3.2 3.4

China Ͳ Q3

4.1

Japan Ͳ Oct

4.2

Taiwan Ͳ Oct

4.3

Russia Ͳ Oct

Brazil Ͳ Oct

Australia Ͳ Nov

5.2

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

lowest comparing to other

2 6.0 6.1 7.7 9.8 11.7

42 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

Slight improvement in Thailand’s

Chart 2.01 – 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 2.02 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

45 www.ChartingThailandEconomy.com

Data from World Bank suggests th Thailand is not as bad as in Malay Chart 2.03 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

2 26. 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%

29.7 27.8 .7

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 d level among major and emergin • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

Poverty reduction, according to fi have been working over the past Chart 2.04a 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 2.04b – 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 2.04c – Poor people Percentage of total population 9.6%

2006

8.5%

9.0%

2007

2008

48 www.ChartingThailandEconomy.com

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

Chart 2.05 â&#x20AC;&#x201C; Poverty in the world, selected co

Poverty headcount ratio at $2 a day (PPP) (% of population), L Congo, Dem. Rep. Madagascar Nigeria Ethiopia Bangladesh TimorÍ˛Leste India

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

Iraq Colombia Source: The World Bank

21.4 15.8

cially ASEAN, still have majority than $2.00 a day

ountries

Latest 95.2 92.6 84.5 77.6 76.5 72.8 68.7

66.0

15.4

Egypt, Arab Rep. Venezuela, RB

12.9

Peru

12.7 10.8

Brazil

8.0

Iran, Islamic Rep. Mexico

5.2

Thailand

4.6

Turkey

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 2.06 â&#x20AC;&#x201C; GNI per capita, selected countrie 2011, Atlas method (current US$) Norway (1) Qatar (2) Luxembourg (3) Switzerland (4) Denmark (5) Sweden (6) Netherlands (7) US (8) Finland (9) Austria (10) Belgium (11) Canada (12) Japan (13) Germany (14) Singapore (15) France (16) UAE (17) Ireland (18) UK (19) Italy (20) Hong Kong (21) Iceland (22) Spain (23) Israel (24) Greece (25)

Source: The World Bank

60,390 53,230 49,730 48,450 48,420 48,300 46,160 45,560 45,180 43,980 42,930 42,420 40,760 38,580 37,780 35,330 35,160 35,020 30,990 28,930 25,030

r than an average Chinese but n an average Indian

es 88,890 80,440 78,130 76,380

( ) = World rank Czech Republic (29) Hungary (36) Brazil (46) Turkey (47) Argentina (49) Mexico (51) Malaysia (53) South Africa (65) Colombia (69) China (78) Thailand (83) Ecuador (85) Ukraine (100) Indonesia (103) Iraq (108) Egypt (109) Sri Lanka (110) Philippines (113) Bhutan (115) India (122) Vietnam (124) Nigeria (127) Lao PDR (130) Cambodia (139) Bangladesh (142)

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 1,260 1,200 1,130 830 770 50

www.ChartingThailandEconomy.com

Using Purchasing Power Parity, Th to 81st, with GNI per capita almos

Chart 2.07 â&#x20AC;&#x201C; GNI per capita, selected countrie 2011, PPP (current international $) Qatar (1) Luxembourg (2) Norway (3) Singapore (4) Switzerland (5) Hong Kong (6) US (7) UAE (8) Netherlands (9) Sweden (10) Austria (11) Denmark (12) Germany (13) Canada (14) Belgium (15) Australia (16) Finland (17) UK (18) France (19) Japan (20) Ireland (21) Italy (22) Spain (23) Iceland (24) Korea, Rep. (25)

Source: The World Bank

64,260 61,460 59,380 52,570 52,350 48,820 47,890 43,140 42,200 42,050 41,900 40,230 39,660 39,190 38,110 37,670 36,010 35,910 35,330 34,180 32,400 31,400 31,020 30,370

hailandâ&#x20AC;&#x2122;s rank improved slightly st the same as China

( ) = World rank 86,440

Israel (26) Greece (30) Saudi Arabia (31) Czech Republic (33) Russia (36) Croatia (40) Turkey (44) Malaysia (47) Mexico (48) Mauritius (55) Brazil (63) South Africa (68) China (80) Thailand (81) Bhutan (92) Sri Lanka (93) Indonesia (102) Philippines (106) India (112) Vietnam (116) Lao PDR (119) Cambodia (126) Bangladesh (132) Nepal (145) Ethiopia (150)

27,110 25,100 24,700 24,370 20,560 18,760 16,940 15,650 15,390 14,330 11,420 10,710 8,390 8,360 5,570 5,520 4,500 4,140 3,590 3,250 2,580 2,230 1,940 1,260 1,110 51

www.ChartingThailandEconomy.com

Increasing trend in household inc debt service year has reduced fro Chart 2.10a 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 2.10b â&#x20AC;&#x201C; Monthly expenditure per househ 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

hold

Chart 2.10c – Debt per household Average, Baht

104,571

2004

116,585

116,681

2006

2007

134,699

134,900

2009

2011

Chart 2.10d – 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 d level among major and emergin • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

Big jump in Head line inflation in remains the same Chart 3.07a – YͲoͲY change in CPI Percent 4.00%

3.6% 3.4%

3.50% 3.00%

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% Jul-12

Aug-12 Sep-12

Oct-12 Nov-12 Dec-12

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

December, while Core inflation

Chart 3.07b – YͲoͲY change in CPI by product December 2012, percent 16.8

Veg & fruit

15.4

Energy 7.6

Tobacco & alcohol Transport & Commu

4.5

Prepared food at home

3.8

Housing & furnishing

3.3

Food away from home

2.7

Non alcoholic beverage

2.6

Seasoning

2.4

Medical care

1.2

Apparel and footware

1.0

Rice

0.8

Recreation & Education

0.4

Meat

-0.6

Eggs & milk

-1.4

54 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 Nov Pakistan Ͳ Nov Russia Ͳ Nov

5.5

Brazil Ͳ Nov 4.3

Indonesia Ͳ Nov Singapore Ͳ Oct

4.0

Hong Kong Ͳ Oct

3.8

Thailand Ͳ Dec

3.6

Euro Area Ͳ Nov

2.2

Australia Ͳ Q3

2.0

China Ͳ Nov

2.0

US Ͳ Nov

1.8

Taiwan Ͳ Nov

1.6

South Korea Ͳ Nov

1.6 1.3

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

-0.4

flation in leading economies

2012* 9.9

9.3

6.9

9.7

6.4

5.1 5.4

4.3 4.5 4.1 3.1 2.5 1.9 2.8 2.1 2.1 2.3 1.7 -0.1

55 www.ChartingThailandEconomy.com

Inflation at Producer level increas level Chart 3.09a – YͲoͲY change in PPI Percent 3.0%

2.5%

2.0%

1.5% 1.1% 1.0%

0.9% 0.7% 0.6%

0.5% 0.1%

0.1%

0.0% Jul-12

Aug-12 Sep-12

Oct-12

Nov-12 Dec-12

Source: Bureau of Trade and Economic Indices; CTE analysis

sed slightly to 0.9%, a very low

Chart 3.09b – YͲoͲY change in PPI by product December 2012, percent Crop Fishing Metal Food Mechinery Other manu goods Transport equip Pulp & paper Chemical Leather & footware Wood Textile Forestry Livestocks -0.2 Electrical equip -0.3 Petroluem products -0.3 NonͲmetallic mineral -1.1 Energy -2.2 Rubber & plastic -3.2 Basic metals -3.7

4.6 3.3 2.8 2.2 1.9 1.2 1.2 1.2 0.9 0.6 0.5 0.3 0.0

56 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

Banksâ&#x20AC;&#x2122; capital ratio rose to 16% in

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%

16.2% 16.0% 15.8% 15.6% 15.4% 15.2% 15.0% 14.8% 14.6% 14.4%

2004

15.4%

15.3%

15.2%

Nov-11 Dec-11 Jan-12

Feb-12 Mar-12

15.1%

Source: Bank of Thailand

n October

nks

4.5%

15.4%

2006

2007

14.1%

2008

16.1%

16.2%

2009

2010

15.7%

15.9%

15.1%

2011

16.0%

15.3% 15.1%

15.0%

14.9%

Apr-12 May-12 Jun-12

Jul-12

Aug-12 Sep-12

Oct-12

58 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 59 www.ChartingThailandEconomy.com

Thailand is one of the many coun rates Chart 3.05 – Real interest rates Percent, as of Dec 22nd 2012

൞

3M riskͲfree interest rates

9.4

Pakistan 8.2

India

7.5

Russia

7.0

Brazil 4.9

Indonesia 3.9

China Australia

3.2

Malaysia

3.2 2.9

South Korea

2.4

Thailand Taiwan

0.9

Singapore

0.5

Hong Kong

0.5

0.3

Euro Area

0.2

Japan

0.2

Note: (*) The Economist Poll

Source: The Economist

-0.

tries with negative real interest

Expected 2012 inflation*

Real interest rates

9.7

-0.3

9.3

-1.2

5.1

2.4

5.4

1.6

4.3

0.6

2.8

1.1

1.9

1.3

1.7

1.5

2.3

0.6

3.1

-0.7

2.1

-1.2 4.5 4.1

2.1 2.5

-4.0 -3.7 -1.8 -2.3 0.3

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% 2.3%

2.3%

Jul-12

Aug-12

Sep-12

5.1% 0.0%

1.9%

Oct-12

Nov-12

Dec-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 Dec 18th 2012 48.6%

Pakistan (KSE) 32.9%

Thailand (SET)

29.8%

Germany (DAX)

25.3%

India (BSE)

22.0%

HK (Hang Seng)

19.3%

Singapore (STI) Japan (Nikkei 225)

17.4%

US (NAScomp)

17.2%

France (CAC 40)

15.5%

US (S&P 500)

15.0%

Euro Area (FTSE Euro 100)

14.8%

Indonesia (JSX)

12.5%

Australia (All Ord.)

12.2%

US (DJIA)

9.3%

S Korea (KOSPI)

9.2%

Malaysia (KLSE)

8.4%

Taiwan (TWI)

8.1%

UK (FTSE 100)

6.5%

China (SSEB, $ terms)

5.9%

China (SSEA)

-1.7%

61 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

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

Source: Bank of Thailand; CTE analysis

06FY

-1.7%

07FY

o improve in 2011

ance as percentage of nominal GDP

plus)

-0.3% -0.7%

-1.1% -1.1%

-1.3%

% -2.6%

-4.0% -4.4%

08FY

09FY

10FY

11FY

63 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 400 eriod last year

Monthly cumulative Budget balance 1,751

1,902

100.0

,484 0.0

2011

-100.0

-75

-28

364 -200.0

2012

-300.0

1,849 -1,825

-1,930

-400.0

-500.0

9FY 10FY 11FY

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

64 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

-137

-144 74 -264

-364 -401

07FY

08FY

09FY

-428

10FY

11FY

-454

'12/11mo

65 www.ChartingThailandEconomy.com

Thailand is expected to have a bu 2012, a sizable level

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

-9.7

udget deficit of 4% of GDP in

ercentage of GDP 2.1 1.1 1.1 0.1 -0.7 -2.3 -2.5 -2.5 -2.7 -3.4 -4.0 -4.7 -6.0

6.6

66 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

67 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 d level among major and emergin • Thailand’s Income distribution is past 5 years. • Absolute Poverty reduction seem poor people decreasing and curr

dropped back to 0.56% in October 2012, still the lowest g 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.

ed. External debt has been increasing but still not ghtly in December.

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

4.5 1.2 07FY

08FY

09FY

10FY

Source: Bank of Thailand; CTE analysis

11FY

12/11mo

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

8.1

11FY

12/11mo

Net service income & transfer -11.0

-15.2

-10.7 -19.7

+ 07FY

08FY

-11.1

09FY

10FY

11FY

-6.1

12/11mo

Net Capital Movement + errors and omissions 22.5

21.3 2.5

2.2

1.4

-4.7 07FY

08FY

09FY

10FY

11FY

12/11mo

70 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 Hong Kong Ͳ Q2

7.0%

Malaysia Ͳ Q3

6.8% 4.5%

Russia Ͳ Q3 China Ͳ Q3

2.7%

South Korea Ͳ Oct

2.1%

Japan Ͳ Oct

1.0%

Euro Area Ͳ Oct

0.9%

Thailand Ͳ Q3

-0.1%

Pakistan Ͳ Q3

-2.0%

Indonesia Ͳ Q3

-2.3%

Brazil Ͳ Nov

-2.7%

US Ͳ Q3

-3.0%

Australia Ͳ Q3

-3.7%

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

-4.3%

ecting in huge current account

Last 12 months, USD Billion 14.9%

46.0

.1%

45.7 8.7 19.1 102.9 208.3 41.3 69.4 102.2 2.3 -2.9 -18.5 -51.8 -477.9 -52.2 -77.1

71 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 -567 07FY

08FY

09FY

10FY

11FY

12/11MO

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

6,540

11FY

12/11MO

6,983

7,107

11FY

12/11MO

5,195

09FY

10FY

Import***

5,962 4,870

07FY

5,857 4,602

08FY

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

09FY

10FY

72 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

35.2%

33.7%

10YE

11YE

12/3Q

37.7%

12/3Q

73 www.ChartingThailandEconomy.com

More public debt and more longͲ composition in 2012 Chart 5.11a – External debt breakdown Private vs Public Private Public = General Government and Monetary Authorities

96%

08YE

92%

09YE

Source: Bank of Thailand

13%

15%

87%

85%

10YE

11YE

21%

79%

12/3Q

term debt in external debt

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

44%

56%

08YE

09YE

50%

10YE

46%

45%

54%

55%

11YE

12/3Q

74 www.ChartingThailandEconomy.com

Capability to repay external debt concern as debt service ratio is lo Chart 5.12a â&#x20AC;&#x201C; International reserves As % of ST external debt 418% 372% 340%

330%

306% 257%

07YE

08YE

09YE

10YE

11YE

12/3Q

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

Source: Bank of Thailand; CTE analysis

deteriorated but not yet a ow and reserves at healthy level Chart 5.12b â&#x20AC;&#x201C; Debt service ratio* Percent

10.3%

7.7%

7.3%

4.5%

07FY

08FY

09FY

3.7%

3.8%

10FY

11FY

12/3Q

75 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

181.6

10YE

11YE

Nov-12

9.2

8.8

11YE

Nov-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

76 www.ChartingThailandEconomy.com

THB continues to appreciate in De

Chart 5.17a – Nominal Effective Exchange Rate 2007=100

104.0

Baht appreciates

103.0

102.0

MͲoͲM

0.3% YͲoͲY

1.8% Baht depreciates Dec-11

101.0

100.0 99.0 98.0 97.0 Dec-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

ecember

Chart 5.17b – YͲoͲY change in FX rate* Percentage change in avg. selling rate as of Dec 28th 2012 MXN Ͳ 2.3714

4.4

KRW Ͳ 0.0287

4.4

PHP Ͳ 0.7583

3.5

SGD Ͳ 25.2835

2.7

GBP Ͳ 49.703

1.0

TWD Ͳ 1.0599

0.8

MYR Ͳ 10.1638

0.3

VND Ͳ 0.0015

0.0

EUR Ͳ 40.8603

-1.2

AUD Ͳ 32.0665

-1.3

CNY Ͳ 4.9882

-2.4

USD Ͳ 30.7775

-3.3 -6.7

INR Ͳ 0.5998 -9.3

IDR Ͳ 3.3984 JPY Ͳ 35.796

-13.2

Baht appreciates

Baht depreciates 77