130630 Monthly Economic Brief by Ake Saroj

Monthly Economic Brief July 2013 issue

Executive summary Growth Real GDP in 1Q13 grew 5.3% from a year ago, in line with consensus projections for the year. On the expenditure side, the growth was driven by Export. On the production side, the growth was driven by the resurgence of Manufacturing. In May, both Manufacturing and Agriculture production recovered from a dip in April. Private consumption and investment continued to cool down, although the yearͲtoͲ date cumulative level are still higher than last year’s. Export tumbled and registered negative growth in the first 5 months of 2013. The problem occurred in every main export markets. On the other hand, Import grew at a lower rate of 1.2%. Tourist arrivals grew at an impressive 19% in the period. Looking forward, Monetary policies are proͲ growth, with policy rate remains low. Government spending so far this year has been tightening compared with the same period last year.

Confidence in private s Businesses turned opt were less pessimistic. C were more pessimistic

The Economist poll rev growth to 4.7%. Conse between 4.4Ͳ5.3% for 2014.

Employment and wea Unemployment rate in April, still the lowest u 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 Income distribution is but there has been ove the past two decades, Bangkok. Poverty head have declined over the

sector is improving. imistic while Industries Consumer, however, c.

vised up next year’s ensus projection is now 2013 and 4.7Ͳ5.0% for

alth distribution ncreased to 0.89% in nemployment level erging economies.

ncome was at USD 83rd in the world. An y poorer than an more than three times e Indian. Thailand’s among the worst in Asia erall improvement over except for only in dcount and poverty rate e last decade.

Stability Both Head line and Core inflation decreased again in June to a rather low level by historical and international standards. Banking system is quite stable. Bank’s capital ratio increased to 16.1%, a rather high level, in April. Total system’s NPL decreased as percent to total loan in 1Q13. Fiscal balance is improving. Budget deficit for the first 5 months of 2013 improved significantly compared to same period last year. Public debt as percentage of GDP increased slightly so far 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 in the first 5 months of 2013 is positive thanks to improvement in net service income. External debt increased slightly but capability to repay is not a concern as debt service ratio remained low and international reserves is at healthy level. THB depreciated almost 4% against a basket of key currencies in June.

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CONTENT

Executive summary

Growth

Income distribution

Stability

• Real GDP in 1Q13 grew 5.3% from Ͳ On the expenditure side, th Ͳ On the production side, Ma • In May, Manufacturing and Agricult • Private consumption and investme • Export tumbled, Import grew less, t • Monetary policy is still proͲgrowth • Businesses turned optimistic; Cons • The Economist poll revised up next between 4.4Ͳ5.3% for 2013 and 4.7

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

• Both Head line and Core inflation d international standards • Banking system is quite stable. Ban NPL decreased as percent to total l • Budget deficit for the first 5 month last year. Public debt is increasing b • Balance of Payment so far this year dangerous. THB depreciate almost

a year ago, in line with consensus projections for the year he growth was driven mainly by Export anufacturing is still the main force behind the growth ture production recovered from last month nt started to show signs of slow down tourist arrivals grew strongly while Fiscal spending tightened umer more pessimistic t year’s growth to 4.7% in June; consensus projection is now 7Ͳ5.0% for 2014

Page 4

7 13 21 28 31 34

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

nk’s capital ratio increased to 16.1% in April. Total system’s oan in 1Q13. hs of 2013 improved significantly compared to same period but not too worrying just yet. r is positive. External debt has been increasing but still not 4% in June.

60 67

GDP in 1Q13 grew 5.3% from a ye projections for the year Chart 1.05 – Historical Real GDP growth rate Annual growth, percent

7.1% 6.3% 5.3%

CAGR* 2001Ͳ2012 = 4.3%

4.6%

2.2%

5.1% 5.0%

2.5

2001 2002 2003 2004 2005 2006 2007 200

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

ear ago, in line with consensus

7.8% 6.5% 5.3%

5% 0.1%

-2.3%

08 2009 2010 2011 2012

1Q13 2Q13 3Q13 4Q13

4 www.ChartingThailandEconomy.com

Manufacturing is still the main fo

Chart 1.06a – Real growth by sector, 1Q13 YearͲonͲYear percentage change GDP

5.3

Hotel&Res

14.8

Construction

10.5

Mining

10.5

Financial

10.1

Other social

9.5

Transport

8.7

Trading

5.0

Manufacture

4.8

RealEstate

4.4

Utilities

3.0

Agriculture

2.0

Health&Social

-0.1

PublicAdmin

-0.6

Education Private HH

-3.4 -4.9

Fishing -6.7 Source: NESDB; CTE analysis

orce behind 1Q13 GDP growth

Chart 1.06b â&#x20AC;&#x201C; Sectoral contributions, 1Q13 Contributions to total Real GDP growth GDP

5.3

Manufacture

1.9

Transport

0.8

Trading

0.7

Hotel&Res

0.6

Financial

0.4

Mining

0.2

Other social

0.2

Construction

0.2

RealEstate

0.2

Agriculture

0.2

Utilities

0.1

Health&Social

0.0

Private HH

0.0

PublicAdmin

0.0

Education

-0.1

Fishing

-0.1

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Export contributed the most to to

Chart 1.08a – Real growth by expenditure, 1Q YearͲonͲYear percentage change GDP

5.3

8.4

ͲM

8.2

7.0

I (capital)

6.0

C G

4.2

2.2

Note: (*) C = Private consumption, I = Investment which includes I (capital) = Capital fo G = Government consumption, X = Export of goods and services, M = Import

Source: NESDB; CTE analysis

otal real GDP growth in 1Q13

Q13 Chart 1.08b – Expenditure Contributions, 1Q13 Contributions to total Real GDP growth GDP

5.3

6.0

2.1

I (capital)

1.3

I (Inventory)

0.4

0.2

Discrpncy ͲM

-0.1

-4.6

ormation and I (inventory) = Change in inventory t of goods and services

6 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Manufacturing production rose st lower than a year ago

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

4.1% 190.2 172.4 159.5

179.1 166.3

149.9 137.6 123.9

2003 2004 2005 2006 2007 2008 2009 2010

Source: The Office of Industrial Economics

trongly from April but is still

Monthly Average 250.0

173.6

177.9

200.0

2012

2013

150.0

100.0

MͲoͲM 10.0% YͲoͲY Ͳ7.8%

50.0

0.0

2011 2012

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

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All sectors except Electronics and increased from April

Chart 1.12a – YͲonͲY change in MPI by sector May 2013, percent Tobacco

Vehicles

Electrical

12.0

Furniture

10.1

Paper

4.5

Textiles

4.3

Basic Mat

3.4

Mineral

2.4

Metal products

2.0

Rubber&Plastic

0.2

Wood products

0.1

Chemical

-4.6

Food & Bev

-5.8

Machineries

-6.1

Leather

-10.5

Transport Equip

-12.8

Apparel

-12.8

Electronic Petroleum Precision instru Office automate

-15.3 -17.4 -20.7 -23.9

Source: The Office of Industrial Economics; CTE analysis

Petroleum had their production

Chart 1.12b – MͲonͲM change in MPI by sector May 2013, percent

6.5

14.3

37.9 22.5

33.3 6.9 7.7 9.1 11.4 27.2 8.9 7.0 4.5 3.6 15.8 9.0 18.6 21.4 -2.5 -12.5 18.9 2.5

9 www.ChartingThailandEconomy.com

Capacity utilization rate increased

Chart 1.13a â&#x20AC;&#x201C; Overall Capacity Utilization Rate Percent 100% 90% 80% 70%

65.8%

60% 50% 40% 30% 20% 10% 0% Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13

Source: The Office of Industrial Economics

d slightly in May

Chart 1.13b â&#x20AC;&#x201C; Capacity utilization rate by sector May 2013, percent Precision instru Vehicles Chemical Machineries Electrical Mineral Transport Equip Paper Petroleum Metal products Rubber&Plastic Office automate Food & Bev Basic Mat Tobacco Electronic Textiles Apparel Furniture Leather Wood products

117% 113% 95% 90% 86% 77% 76% 72% 66% 66% 65% 55% 53% 49% 47% 47% 43% 42% 33% 29% 23%

10 www.ChartingThailandEconomy.com

Thailand has the lowest growth in a year ago

Chart 1.14 – Manufacturing Production Index Latest, percent change on year ago Indonesia Ͳ Apr Pakistan Ͳ Mar China Ͳ May Brazil Ͳ Apr Malaysia Ͳ Apr Australia Ͳ Q1 India Ͳ Apr Singapore Ͳ May South Korea Ͳ Apr US Ͳ May Hong Kong Ͳ Q1 Taiwan Ͳ May

-0.1

Euro Area Ͳ Apr

-0.6

Russia Ͳ May

-1.6

Japan Ͳ Apr Thailand Ͳ May Source: The Economist

-3.4 -7.8

n manufacturing production from

x 11.0 9.3 9.2 8.4 4.8 3.6 2.3 2.2 1.7 1.6 0.5

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Improvement in Agriculture prod

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

3.3%

106.1

113.0 112.5 109.3 110.9

100.0

2003 2004 2005 2006 2007 2008 2009 2010

Source: Office of Agricultural Economics, Ministry of Agriculture a

uction in May

Monthly Average 250.0

YͲoͲY 0.5%

128.6

122.4

200.0

MͲoͲM 7.0% 150.0

100.0

2013

2012

50.0

0.0

2011 2012

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

12 nd Cooperatives

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CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Private consumption hardly chang

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

3.2%

117.8

126.2 121.9 124.2

130.6

134.2 127.2

111.2

03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 1

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

ged from last month

Index* Monthly Average 160.0

147.0

155.0

139.2

11-Avg 12-Avg

2013 150.0

2012 145.0

140.0

MͲoͲM 0.0%

135.0

YͲoͲY

Ͳ0.2% 130.0

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

14 www.ChartingThailandEconomy.com

Most consumption expenditures year Chart 1.16a – YͲonͲY change First 5 months of 2013 vs 2012, percent Passenger Car (Unit) Commercial Car (Unit)

17.1

NGV (kg.)*

10.6

Benzene & Gasohol (litre)

8.3

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

7.9

LPG (litre)*

5.3

Real VAT (2000 prices, baht)

4.9

HH electricity (kilowatt/hour)

4.7

Diesel (litre)

4.5

Motocycle (Unit)

2.2

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

grew impressively so far this

Chart 1.16b – MͲonͲM change May vs April 2013, percent 53.6

-8.1 -3.1 -0.1 -3.0 1.7 -0.1 0.0 2.6 0.4 -4.3

15 www.ChartingThailandEconomy.com

Private Investment continued to d

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

CAGR

6.9%

172.1 174.9 175.3 155.8

193.0

183.4 160.8

133.2

03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 1

Source: Bank of Thailand

drop in May

Monthly Average 300.0

2013 250.0

2012 242.1 200.0

210.2

11-Avg 12-Avg

150.0

100.0

MͲoͲM Ͳ0.7%

YͲoͲY Ͳ3.3%

50.0

0.0

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

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All key private investment expend far this year despite set back in M Chart 1.18a – YͲonͲY change First 5 months of 2013 vs 2012, percent

Domestic commercial car sales (unit)

Domestic Machinery sales* (2000 prices, Baht)

16.1

Domestic Cement sales (ton)

14.5

Construction Area permitted (sqm)

Import of Capital Goods (2000 prices, Baht)

3.1

0.6

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

ditures had impressive growth so May

5.3

Chart 1.18b – MͲonͲM change May vs April 2013, percent

-3.6

-0.4

0.9

-0.4

-0.6

17 www.ChartingThailandEconomy.com

Cumulative FDI in the first 4 mont the level from the same period la Chart 5.14 â&#x20AC;&#x201C; Foreign Direct Investment Million USD 11,331

9,460

9,112 8,547 7,778

4,853

06FY

07FY

(*) Preliminary figures

Source: BOT

08FY

09FY

10FY

11FY

ths of 2013 is catching up with ast year

Monthly cumulative FDI* 8,000

7,000

2012

6,000

7,235

12FY

5,000

4,000

3,000

2,000

1,000

2013

F M A M J

S O N D

18 www.ChartingThailandEconomy.com

BOI’s net application for the first more than double the growth rat

Chart 5.15 – BOI net application of foreign di Billion Baht

CAGR

21.5%

396 351 297 236

08FY

09FY

10FY

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

Source: Board of Investment

11FY

4 months of 2013 grew 44%, e over the past 5 years

irect investment*

648

44%

224 155

12FY

2012/4M

2013/4M

19 www.ChartingThailandEconomy.com

Property indicators have all increa

Chart 1.19a – YͲonͲY change First 4 months of 2013 vs those of 2012, percent

Condo unit registered

66.2

Value of land transaction

35.3

Constr. Area in municipal

New housing unit

2.7

-18.6

Source: Bank of Thailand; CTE analysis

ased in April

Chart 1.19b – MͲonͲM change April vs March 2013, percent

205.4

41.0

21.6

60.6

20 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Export has decreased in the first 5 decrease in “Other export”

Chart 5.05a – YTD annual change in Export in First 5 months of 2013 vs that of 2012, percent Total export Metal Optical instru Automotive Chemicals PetroͲchemical Electrical Other manufacturing Furniture Forestry Toiletries Apparels Jewellery Machinery Footware Electronics Agro products Agriculture Photo instru Aircrafts Petroleum Fishery Mining Other export ReͲexports

-2.7

31 11.0 9.6 8.5 4.6 3.1 2.6 2.1 1.0 -0.7 -0.7 -1.9 -2.4 -3.2 -6.0 -6.9 -7.1 -10.8 -14.2 -16.5 -25.3 -25.8 -62.4 -95.9

Source: Bank of Thailand; CTE analysis

5 months due mainly in the Baht Chart 5.05b – Sectoral contributions Contributions to total export growth Total export Metal .0 Automotive Chemicals PetroͲchemical Electrical Optical instru Other manufacturing Furniture Forestry ReͲexports Toiletries Footware Apparels Jewellery Photo instru Machinery Aircrafts Mining Fishery Agriculture Electronics Agro products Petroleum Other export

-2.7 1.3 1.2 0.3 0.2 0.2 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 -0.1 -0.2 -0.2 -0.3 -0.3 -0.6 -0.9 -0.9 -1.0 -1.5

22 www.ChartingThailandEconomy.com

Export decreased in every regions

Chart 5.07a – Export by country Percent of total export in THB term 100% =

᪛ 5.9

᪛ 5.2

᪛ 6.1

᪛ 6.7

Middle East

5.4

5.7

5.0

4.7

5.1

13.2

11.9

11.3

10.9

9.5

10.5

10.7

10.2

11.3

10.3 12.2

11.7

11.1

11.3

17.4

18.1

18.4

18.1

21.0

Japan NAFTA Rest of the world

12.7

16.6

᪛ 7.1 (Trilli

East Asia exͲJapan

18.3

20.1

20.4

ASEAN

22.5

21.3

23.0

24.3

24.7

08FY

09FY

10FY

11FY

12FY

Source: Bank of Thailand; CTE analysis

s so far this year

Chart 5.07b â&#x20AC;&#x201C; Change in Export In THB term, First 5 months of 2013 vs 2012

ion) -1.0%

-2.6%

East Asia ex Japan

-2.6%

NAFTA

-3.0%

-3.5%

-4.8%

-5.0%

ASEAN

Rest of the world

Japan

Middle East 23 www.ChartingThailandEconomy.com

Others import has contributed m 2013

Chart 5.09a – YTD annual change in Import in First 5 months of 2013 vs 2012, percent

Total import

1.2

Others

Consumer goods

Capital goods

4.4

-1.5

Intermediate Ͳ Fuel

-3.0

Intermediate Ͳ Non fuel

-3.3

Source: Bank of Thailand; CTE analysis

ost to import growth so far in

n Baht Chart 5.09b – Sectoral contributions

5.7

Contributions to total import growth

Total import

1.2

Others

3.0

Consumer goods

Capital goods

Intermediate Ͳ Fuel

Intermediate Ͳ Non fuel

0.3

-0.4

-0.6

-1.2

24 www.ChartingThailandEconomy.com

Others import has gained more sh

Chart 5.08 – Import by economic classificatio Percent of total import in Baht term Ѯ 6.0

Ѯ 4.6

Ѯ 5.9

Others

8.0

7.8

10.2

Capital goods

19.3

22.3

20.9

Intermediate – NonͲFuel

44.8

43.0

44.0

Intermediate Ͳ Fuel

20.7

18.6

17.4

Consumer goods

7.1

8.3

7.5

08FY

09FY

10FY

100% =

Source: Bank of Thailand; CTE analysis

hare this year

Ѯ 7.0

Ѯ 7.7

Ѯ 3.2

12.4

10.9

14.5

21.3

24.6

40.0

37.6

35.8

18.9

19.1

18.7

7.5

7.8

7.9

11FY

12FY

13/5MO

(Trillion)

23.0

25 www.ChartingThailandEconomy.com

Tourist arrivals increased 19% in t

Chart 5.18 â&#x20AC;&#x201C; International Tourist Arrivals Million visits

CAGR

8.4%

15.9 13.8 11.7 10.8

14.5

14.1

11.5

10.0

03FY 04FY 05FY 06FY 07FY 08FY 09FY 10FY

Source: Department of Tourism

the first 5 months of 2013

Monthly cumulative 25.0

22.3 20.0

19.2

Y 11FY 12FY

2012 15.0

10.0

5.0

2013 0.0

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

26 www.ChartingThailandEconomy.com

China accounted for more than ha arrivals so far this year Chart 5.19a International Tourist Arrivals by country of nationality Percent of total Rest of world

14.3

15.3

15.6

14.7

13.9

Americas

6.2

6.0

5.3

5.0

4.8

26.5

25.2

Europe

27.3

East Asia

28.7

27.9

52.1

50.0

51.2

53.8

56.1

08FY

09FY

10FY

11FY

12FY

Source: Department of Tourism; CTE analysis

alf of the total increase in tourist

Chart 5.19b 10 Highest Change in International Tourist Arrivals by country of nationality First 5 months of 2013 vs 2012, Thousands China

% of total change

918.5

Russia

210.0

54%

12%

Malaysia

95.5

Japan

95.4

Korea

69.5

Indonesia

58.1

Hong Kong

54.3

Taiwan

50.1

Singapore

48.7

Germany

37.2

27 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

No change in policy rate in June b drop following policy rate cut in M Chart 3.01a – BOT’s policy rate

Jul-12

3.10% 3.00% 2.90% 2.80% 2.70% 2.60% 2.50% 2.40% 2.30% 2.20% Jun-13

Chart 3.01c – Saving deposit rate* 10.00% 7.50% 5.00% Max 2.50% Min Jul-12

0.00% Jun-13

Note: (*) All Commercial Banks registered in Thailand, excluding foreign bra

Source: Bank of Thailand

but saving deposit rate started to May Chart 3.01b â&#x20AC;&#x201C; BIBOR overnight rate 3.10% 3.00% 2.90% 2.80% 2.70% 2.60% 2.50% 2.40% 2.30% 2.20% Jun-13

Jul-12

Chart 3.01d â&#x20AC;&#x201C; Commercial bank MLR* Max

10.00% 7.50%

Min 5.00% 2.50%

Jul-12

anches

0.00% Jun-13

29 www.ChartingThailandEconomy.com

Almost 12% decrease in fiscal exp 2013

Chart â&#x20AC;&#x201C; Monthly cumulative Fiscal expenditure Billion Baht 3000

2500

2000

1500

1000

500

2013 0

Jan

Feb

Mar

Source: Bank of Thailand; CTE analysis

Apr

May

Jun

penditure in the first 5 months of

2012

Jul

Aug

Sep

Oct

Nov

Dec

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Businesses turned optimistic whi pessimistic in May Chart 1.21a â&#x20AC;&#x201C; Business Sentiment Index* 100

Better

50.6 50

51.1

51.2

54.4

53.9 48.8

Worse

0 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13

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

le Industries were less

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

Better

98.8 100

97.3

95.5

93.5

92.9

94.3

Worse

0 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13

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

32 www.ChartingThailandEconomy.com

Consumers in overall were more

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

150

Better

100

100 Worse

Worse

50 Nov-12

Jan-13

Mar-13

May-13

Nov-12

Jan-1

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

pessimistic in May

On job

On future income

150

Better 100 Worse

50 3

Mar-13

month he prior month the prior month

May-13

Nov-12

Jan-13

Mar-13

May-13

33 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

The Economist poll revised up nex

Chart 1.03a â&#x20AC;&#x201C; Real GDP growth projections For 2013, Annual percentage change 6.00

5.50

FPO BOT

5.00

NESDB 4.50 The Economist poll

4.00

3.50

3.00 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13

Forecast as of, month ending

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

xt year’s growth to 4.7%

omist

Chart 1.03b – Real GDP growth projections For 2014, Annual percentage change 6.00

5.50

BOT

The Economist poll

5.00

4.50

4.00

3.50

3.00 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13

Forecast as of, month ending 35 www.ChartingThailandEconomy.com

Thailandâ&#x20AC;&#x2122;s growth projections are major economies

Chart 1.04a â&#x20AC;&#x201C; Real GDP growth projections 2013, Annual % change, as of Jun 29th 2013 China

India

6.2

Indonesia

6.2

Malaysia

4.4

Thailand

4.4

Pakistan

3.6

South Korea

3.2

Brazil

3.0

Russia

2.8

Australia

2.6

Hong Kong

2.6

Taiwan

2.3

Singapore

2.3

US Japan Euro Area -0.6

Source: The Economist

2.0 1.6

e relatively high compared to

Chart 1.04b â&#x20AC;&#x201C; Real GDP growth projections 2014, Annual % change, as of Jun 29th 2013

7.7 7.0 6.0 5.2 4.7 4.1 3.4 3.5 3.5 3.0 3.9 3.4 3.7 2.8 1.5 0.8 36 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Unemployment rate increased sli

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

2.16 2.07 1.83

1.51

1.49 1.38

1.38

1.04

03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 1

Source: National Statistical Office, Bank of Thailand

ghtly to 0.89% in April

Monthly Average 1.20

1.00

0.80

2012 0.60

2013

0.40

0.68

0.66

11-Avg 12-Avg

0.20

0.00

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

38 www.ChartingThailandEconomy.com

Thailand’s unemployment rate is leading economies Chart 2.09 – Unemployment rate Latest, percent Thailand Ͳ Apr

0.9

Singapore Ͳ Q1

1.9

South Korea Ͳ May

3.0

Malaysia Ͳ Apr

3.0

Hong Kong Ͳ May

3.4

China Ͳ Q1

4.1

Japan Ͳ Apr

4.1

Taiwan Ͳ May

4.2

Russia Ͳ May Australia Ͳ May Brazil Ͳ May Indonesia Ͳ Q1 Pakistan Ͳ 2011 US Ͳ May India Ͳ 2012 Euro Area Ͳ Apr Source: The Economist

lowest comparing to other

5.5 5.8 5.9 6.0 7.6 9.9 12.2

39 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Overall improvement in income d for only in Bangkok Chart 2.01 â&#x20AC;&#x201C; Thailandâ&#x20AC;&#x2122;s GINI coefficient 0.55

Overall 0.50

South

0.45

0.40

0.35

0.30

'88

'90

'92

'94

'96

'98

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

distribution in Thailand, except

North East North Central Bangkok

'00

'02

'04

'06

'07

'09

'11

of income.

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

www.ChartingThailandEconomy.com

Slight improvement of income dis top and the bottom 20% 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

stribution when compared the

13.1

14.6

13.4

12.2

14.4

12.8

11.8

11.1

56.1

57.5

56.0

54.7

56.0

54.6

54.1

54.2

19.8

20.1

20.3

20.2

20.5

20.4

19.5

12.0

11.5

12.1

12.5

12.2

12.6

12.7

12.8

7.8

7.7

8.0

7.7

8.0

8.3

8.6

4.3

7.3 4.0

4.2

4.5

3.9

4.3

4.6

4.9

1998

2000

2002

2004

2006

2007

2009

2011 42

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

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Except for only Bangkok, poverty have declined over the last decad Chart 2.04a

Chart 2.04b

Thailand Poverty Line

Number of poor pe

Baht/ month/ person

Million

3,500

3,000 20 2,500 15

2,000

1,500

1,000 5 500

0 '01

'03

'05

'07

'09

Legend color:

'11

Overall

'01

'03

Bangkok

'05

Centr

Note: Before 2006, poverty survey was normally conducted every 2 years. For the mi

Source: NESDB

headcount and poverty rate de Chart 2.04c

eople

Percent of Poor people Percentage of total population 60%

50%

40%

30%

20%

10%

0% '07

ral

'09

North

'11

'01

'03

North East

South

'05

'07

ssing year, we use the average value between the prior and later years

'09

'11

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

Pakistan

60.2

Nepal

57.3

Cambodia

53.3

Indonesia

46.1

Vietnam

43.4

Philippines

41.5

South Africa

31.3

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

Egypt, Arab Rep.

15.4

Venezuela, RB

12.9

Peru

12.7

Brazil

10.8

Iran, Islamic Rep.

8.0

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

( ) = World rank 88,890 80,440 78,130

76,380

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 47

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 48

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

17,787

18,660

2006

2007

20,903

23,236

14,963

2004

2009

2011

Chart 2.10b â&#x20AC;&#x201C; Monthly expenditure per househ Average, Baht

14,311

14,500

2006

2007

16,205

17,403

12,297

2004

2009

Source: National Statistic Office survey; CTE analysis

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

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Both Head line and Core inflation

Chart 3.07a – YͲoͲY change in CPI Percent 4.00% 3.50% 3.00%

Head line

2.50% 2.00% 1.50% 1.00%

Core* 0.50% 0.00% Jan-13

Feb-13

Mar-13

Apr-13

May-13 Jun-13

Note: (*) exclude raw food and energy

Source: Bureau of Trade and Economic Indices; CTE analysis

n continued to decrease in June

Chart 3.07b – YͲoͲY change in CPI by product June 2013, percent Veg & fruit

9.8

Tobacco & alcohol

7.3

Meat

6.1

Energy

5.6

Eggs & milk

5.1

Transport & Commu

2.0

Prepared food at home

1.4

Housing & furnishing

1.3

Rice

1.1

Food away from home

1.0

Non alcoholic beverage

1.0

Apparel and footware

0.9

Medical care

0.8

Seasoning

0.7

Recreation & Education

0.4

51 www.ChartingThailandEconomy.com

Thailand’s inflation is rather on th economies Chart 3.08 – Consumer Price Index Annual percentage change

Latest

India Ͳ May Russia Ͳ May Brazil Ͳ May

6.5

Indonesia Ͳ May

5.5

Pakistan Ͳ May

5.1

Hong Kong Ͳ May

3.9

Australia Ͳ Q1

2.5

Thailand Ͳ Jun

2.3

China Ͳ May

2.1

Malaysia Ͳ May

1.8

Singapore Ͳ May

1.6

Euro Area Ͳ May

1.4

US Ͳ May

1.4

South Korea Ͳ May Taiwan Ͳ May Japan Ͳ Apr -0.7 Note: (*) The Economist Poll

Source: The Economist

1.0 0.7

he low side compared to other

2013* 9.3

9.1

7.4

6.3 6.5 5.7 6.3 4.2 2.5 2.5 3.3 1.9 3.8 1.6 1.6 2.4 1.4 0.1

52 www.ChartingThailandEconomy.com

Mild inflation at the Producer lev

Chart 3.09a – YͲoͲY change in PPI Percent 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% Jan-13

Feb-13

Mar-13

Apr-13 May-13 Jun-13

Source: Bureau of Trade and Economic Indices; CTE analysis

vel

Chart 3.09b – YͲoͲY change in PPI by product June 2013, percent Fishing Livestocks Crop Metal Leather & footware Food Petroluem products Transport equip NonͲmetallic mineral Wood Forestry Pulp & paper Mechinery Electrical equip Energy Textile Chemical Basic metals Other manu goods Rubber & plastic

29.5 18.0 5.1 3.6 3.0 2.6 2.4 1.2 1.1 0.7 0.0 -0.1 -0.1 -0.1 -0.3 -0.8 -0.9 -6.5 -7.3 -7.7

53 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Bank’s loan continued to increase hardly changed in April Chart 3.02a – Commercial Banks’ Loan THB billion 10,000 9,800 9,600 9,400 9,200 9,000 8,800 8,600 8,400 May-12

Jun-12

Jul-12

Aug-12

Sep-12

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

95%

92.8%

92.4%

91.9%

91.4%

Aug-12 Sep-12

90.8%

90%

85% May-12 Jun-12

Source: Bank of Thailand

Jul-12

e while liquidity in the system

M-o-M 0.5% Y-o-Y 12.3%

ct-12

Nov-12

Dec-12

Jan-13

93.1%

Feb-13

Mar-13

Apr-13

93.9%

93.4%

93.5%

Feb-13 Mar-13

Apr-13

it* ratio

91.1%

92.2%

Oct-12 Nov-12 Dec-12 Jan-13

55 www.ChartingThailandEconomy.com

Gross NPL increased in amount bu total loan in the first quarter this

Chart 3.03a – Total Financial Institutions’ Gros Billion Baht

477

445

458

401

380

317

05YE

06YE

07YE

08YE

09YE

10Y

Chart 3.03b – Total Financial Institutions’ Gros Percentage of Total Loans 8.16%

7.47%

7.31% 5.29%

4.85%

3.60

05YE

06YE

Source: Bank of Thailand

07YE

08YE

09YE

10Y

ut decreased as percentage of year

ss NPLs Outstanding

270

256

11YE

12YE

257

2013/Q1 2013/Q2 2013/Q3

ss NPLs Outstanding

2.75%

11YE

2.26%

12YE

2.18%

2013/Q1 2013/Q2 2013/Q3 56 www.ChartingThailandEconomy.com

Banksâ&#x20AC;&#x2122; capital ratio increased to 1 so far this year Chart 3.04 â&#x20AC;&#x201C; Capital ratio of all commercial ba % of risk assets, at year end

15.8%

16.1%

14.9% 14.0%

13.9%

13.4%

13.3% 12.4%

2003

2004

2005

2006

2007

2008

2009

2010

Note: (*) All Commercial Banks registered in Thailand, excluding foreign bra

Source: Bank of Thailand

16.1% in April, the highest level

nks* Month End 16.5%

16.2%

14.8%

16.0%

2013

15.5%

2012

15.0%

14.5%

14.0% 2011

anches

2012

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

57 www.ChartingThailandEconomy.com

Thailand is one of the many coun rates Chart 3.05 – Real interest rates Percent, as of June 29th 2013

൞

3M riskͲfree interest rates Pakistan

9.1

Brazil

8.4

India

7.5

Russia

7.4

China

5.5

Indonesia

5.4

Malaysia

3.1

Australia

2.9

South Korea

2.7

Thailand Taiwan

2.1 0.9

Hong Kong

0.4

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 2013 inflation*

Real interest rates

6.3

2.8

6.5

1.9 9.1

-1.6

6.3

1.1

3.3

2.2 5.7

-0.4

1.9

1.2

2.5

0.4

2.4

0.3

2.5

-0.4

1.4

-0.5 4.2

-3.8

1.6

-1.3 3.8

1.6 0.1

-3.5 -1.4 0.1

www.ChartingThailandEconomy.com

SET decreased more than 7% in Ju Chart 3.06a â&#x20AC;&#x201C; Monthly performance of SET index Percent change from prior month, at month end 5.9%

4.6% 2.4%

1.3%

-2.2% -7.1%

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Chart 3.06b â&#x20AC;&#x201C; Cumulative net foreign fund flow SET & MAI, Billion Baht, Month end 20.0

0.0 -20.0 -40.0 -60.0 -80.0 -100.0 J-13 F-13 M-13 A-13 M-13 J-13

J-13 A-13 S-13 O-13 N-13 D-13

Source: SET, The Economist; CTE analysis

une amid heavy foreign sell out Chart 3.06c â&#x20AC;&#x201C; Change since Dec 31st 2012 Percent, as of June 28th 2013 Pakistan (KSE)

24.2%

Japan (Nikkei 225)

23.5%

US (DJIA)

13.8%

US (S&P 500)

12.4%

US (NAScomp)

11.8%

Indonesia (JSX)

6.3%

UK (FTSE 100)

4.5%

Germany (DAX)

4.3%

Malaysia (KLSE)

3.1%

Thailand (SET)

2.3%

France (CAC 40)

2.3%

Taiwan (TWI)

1.1%

Australia (All Ord.)

0.9%

Euro Area (FTSE Euro 100)

-0.2%

Singapore (STI)

-2.0%

China (SSEB, $ terms)

-4.1%

India (BSE)

-4.5%

HK (Hang Seng) -10.2% S Korea (KOSPI) -10.7% China (SSEA) -14.1%

59 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Huge government budget deficit r slightly better than in 2009

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% 0.3% 0.4%

1.1%

0.0% 0.1%

-0.5%-0.6%

-1.7 -2.0%

03FY

04FY

05FY

Source: Bank of Thailand; CTE analysis

06FY

07FY

relative to GDP in 2012, only

ance as percentage of nominal GDP

plus)

-0.3% -0.7% -1.1%-1.1%

-1.3%

% -2.6% -3.6% -4.0% -4.4%

08FY

09FY

-4.1%

10FY

11FY

12FY 61

www.ChartingThailandEconomy.com

Budget deficit for the first 5 mont significantly compared to same p Chart 4.2 â&#x20AC;&#x201C; Government budget balance Billion Baht

Revenue 1,013

1,109

Budget balance

1,241

-36

1,390

1,455

1,498

-174

-100

1,484

110 -364

-996

-1,109 -1,277

-1,280 -1,629

Expenditure

-1,598 -1,849

-1

03FY 04FY 05FY 06FY 07FY 08FY 09FY 1 Source: Bank of Thailand; CTE analysis

ths of 2013 improved eriod last year

Monthly cumulative Budget balance 0.0 2,079 ,751

1,902

-50.0

2013

-100.0 -150.0

-75

-28 -410

-200.0

2012 -250.0 -300.0

1,825

-1,930

-350.0 -2,489

-400.0 -450.0

0FY 11FY 12FY

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

62 www.ChartingThailandEconomy.com

Apart from 2010 and 2011, there between 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 88 16

24 0

-36 -45

-1 -144 -174

03FY

04FY

05FY

Source: Bank of Thailand; CTE analysis

06FY

07FY

were not much differences e

plus)

-28 -75 00 -96

-98 -133

-137

-266

-364 -401

-410 -466

08FY

09FY

10FY

11FY

12FY

'13/5mo

63 www.ChartingThailandEconomy.com

Thailand budget deficit in 2013 is GDP

Chart 4.4 â&#x20AC;&#x201C; Government Budget balance as pe 2013*, percent Hong Kong Singapore South Korea Russia Australia Taiwan Indonesia China Brazil Euro Area Thailand Malaysia

-4.

India

-4.9

Pakistan Japan Note: (*) The Economist Poll

Source: The Economist

-7.0 -8.7

expected to be around 3% of

ercentage of GDP 2.1 0.7 0.4 -0.5 -1.3 -1.9 -1.9 -2.1 -2.7 -3.1 -3.1

-4.2

64 www.ChartingThailandEconomy.com

A slight increase in Public debt so

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 Bond to Compensate FIDF's Loss & Prefunding debt 2.0

1.0 Direct Government debt 0.0 2009 10%

2010

2011

2012

Mar-13

Source: Public Debt Management Office

Ext as

o far in 2013

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%

Direct Government debt

5% 0%

2009

ternal debt percent of total

2010

2011

2012

Mar-13

65 www.ChartingThailandEconomy.com

Thailand’s public debt is not high standard Chart 4.6 – Public debt in the world Percentage of GDP, 2012 or latest 1 Japan 2 Zimbabwe 3 Greece 6 Lebanon 8 Italy 9 Portugal 10 Iceland 12 Ireland 14 Singapore 15 Belgium 18 France 19 United Kingdom 20 Egypt 21 Canada 22 Spain 25 Hungary 27 Germany 28 Sri Lanka 31 Malta 33 Israel 35 United States 37 Morocco 39 Netherlands 41 Croatia 43 Bhutan

219 203 161 128 126 120 119 118 107 101 89 89 85 84 83 81 81 79 77 74 74 72 69 66 64

Source: CIA fact book; Public Debt Management Office for Thailand’s dat

compared to international

Intâ&#x20AC;&#x2122;l rule of thumb <60% of GDP 52 Bahrain 53 Malaysia 54 Brazil 58 Switzerland 60 India 61 Philippines 64 Venezuela 66 Vietnam 67 Laos 74 Denmark 76 Thailand 79 Czech Republic 81 South Africa 84 New Zealand 85 Argentina 87 Turkey 92 Taiwan 95 China 100 Mexico 106 Korea, South 109 Bangladesh 113 Hong Kong 119 Australia 121 Indonesia 139 Russia

56 56 55 52 52 51 49 48 48 45 44 44 43 42 42 40 39 39 35 34 32 30 27 25 11

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.89% in March, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

decreased again in June to a rather low level by historical and

Positive Balance of Payments in t largely to net income and capital

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

31.3 24.7

24.1

5.3 3.3 1.2 08FY

09FY

10FY

11FY

Source: Bank of Thailand; CTE analysis

12FY

13/5mo

he first 5 months of 2013 due inflow Trade Balance (F.O.B) 32.6

29.8

17.3

17.0 8.3

-1.4 08FY

09FY

10FY

11FY

12FY

13/5mo

Net service income & transfer -5.6

-10.7

-1.8

-11.1

-15.2 -19.7

08FY

09FY

10FY

11FY

12FY

13/5mo

Net Capital Movement + errors and omissions 22.5

21.3 2.5

2.2

6.4

-4.7 08FY

09FY

10FY

11FY

12FY

13/5mo

www.ChartingThailandEconomy.com

Strong Asian export engines refle surplus Chart 5.02 – Current Account balance As % of 2013 GDP* Singapore Ͳ Q1 Taiwan Ͳ Q1

Malaysia Ͳ Q1

6.7%

South Korea Ͳ May

3.4%

Russia Ͳ Q1

2.3%

China Ͳ Q1

1.7%

Euro Area Ͳ Apr

1.6%

Hong Kong Ͳ Q1

1.2%

Thailand Ͳ Q1

1.0%

Japan Ͳ Apr

0.9%

Pakistan Ͳ Q1 Indonesia Ͳ Q1

-1.0% -1.6%

US Ͳ Q1

-2.8%

Brazil Ͳ May

-3.1%

Australia Ͳ Q1 India Ͳ Q1

-3.6% -4.1%

Note: (*) The Economist Poll

Source: The Economist; actual figures for Thailand from Bank of T

ecting in huge current account

Last 12 months, USD Billion 19.2%

48.2

0.9%

49.9 15.9 57.8 63.5 217.2 207.6 2.2 2.6 54.2 -2.7 -26.2 -425.7

Thailand and NESDB

-73.0 -51.1 -87.8

69 www.ChartingThailandEconomy.com

Worsened trade balance so far in export dropped Chart 5.03 â&#x20AC;&#x201C; Trade balance* decomposition Billion Baht

ŕľ&#x17E;

Cumulative Export 8,000

Cumulative 8,000

7,000

2012

7,000

6,000

5,000

4,000

3,000

2,000

2,000 2013

1,000

Y-o-Y -2.7%

201 1,000 0

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

J F M A

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

Source: Bank of Thailand; CTE analysis

2013 as import grew while

Import

Cumulative Trade balance 0

-100

2012

-200

-300

-400

2013

-500

Y-o-Y 1.2%

M J J A S O N D

stments t and exchange rate conversion t and exchange rate conversion

-600

-700

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

70 www.ChartingThailandEconomy.com

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

04YE

05YE

06YE

07YE

08YE

Chart 5.10b – External Debt as % of GDP

40.9%

04YE

37.0%

05YE

Source: Bank of Thailand

38.5%

06YE

35.4%

07YE

31.4%

08YE

both absolute and relative to GDP

09YE

28.8%

09YE

10YE

11YE

35.2%

33.8%

10YE

11YE

12YE

13/1Q

38.8%

40.0%

12YE

13/1Q

71 www.ChartingThailandEconomy.com

More public debt and more longͲ composition in 2013 Chart 5.11a – External debt breakdown Private vs Public Private Public = General Government and Monetary Authorities

92%

09YE

13%

87%

10YE

Source: Bank of Thailand

15%

20%

23%

85%

80%

77%

11YE

12YE

13/1Q

term debt in external debt

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

44%

56%

09YE

50%

10YE

45%

46%

44%

55%

54%

56%

11YE

12YE

13/1Q

72 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% 370% 340%

330%

299%

08YE

09YE

10YE

11YE

12YE

286%

13/1Q

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

8.2% 7.6%

4.8%

4.7% 4.2% 3.4%

08FY

09FY

10FY

11FY

12FY

13/1Q

73 www.ChartingThailandEconomy.com

Net International reserves decrea still considered excessive Chart 5.13a â&#x20AC;&#x201C; International reserves level* At the end of period, Billion USD

54.4

55.9

2004

2005

106.5

118.0

2007

2008

73.9

2006

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

9.1 6.9

2004

5.7

2005

6.9

2006

2007

7.9

2008

Note: (*) Including Net Forward position (**) For the last period using average monthly import value during

Source: Bank of Thailand; CTE analysis

ased slightly so far this year but

191.7

206.4

205.8

198.7

2011

2012

May-13

10.0

9.4

2012

May-13

154.1

2009

2010

er of months of import** 13.8

12.6 10.8

2009

the last 12 months

2010

2011

74 www.ChartingThailandEconomy.com

THB depreciated almost 4% in Jun

Chart 5.17a – Nominal Effective Exchange Rate 2007=100

114.0

Baht appreciates

112.0

110.0

108.0

106.0

104.0

MͲoͲM

Ͳ3.9%

Baht depreciates Jun-12

Sep-12

Dec-12

Mar-13

102.0

100.0

YͲoͲY

98.0

5.5%

96.0 94.0 Jun-13

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

Chart 5.17b – YͲoͲY change in FX rate* Percentage change in avg. selling rate as of June 28th 2013 MXN Ͳ 2.4013

2.2

EUR Ͳ 40.9066

1.9

CNY Ͳ 5.1369

VND Ͳ 0.0015

SGD Ͳ 24.8277

-1.4

KRW Ͳ 0.0272

-1.4

MYR Ͳ 9.9581

-1.7

USD Ͳ 31.2675

-2.2

TWD Ͳ 1.0413

-2.5

0.9 0.0

GBP Ͳ 47.8137

-4.2

PHP Ͳ 0.7318

-4.4

INR Ͳ 0.5596

-6.3

IDR Ͳ 3.3146

-8.1

AUD Ͳ 29.0653 JPY Ͳ 31.8133

-10.4 -21.5

Baht appreciates

Baht depreciates