131130 eng emag split by Ake Saroj

Monthly Economic Brief December 2013 issue

Executive summary Growth GDP in 3Q13 grew 2.7% from a year ago, a slower pace than the first two quarters. On the expenditure side, , Export contributed the most to total real GDP growth. On the production side, Manufacturing is the main drag. Manufacturing production continued to drop in October, while Agriculture production recovered impressively. On the expenditure side, Private consumption recovered well, but Private Investment continued to slow down. FDI also dropped significantly yearͲtoͲdate. Export tumbled and registered Ͳ3.0% growth in the first 10 months of 2013. The problem occurred in every main export markets, except ASEAN. On the other hand, Import also registered a negative growth, driven by lower intermediate goods import. Tourist arrivals grew at an impressive 21% in the period. Looking forward, Monetary policies are proͲ growth, with another 0.25% cut of policy rate in November. Government spending so far this year has been tightening compared with the same period last year.

Confidence in private s Businesses were more Industries and Consum

November saw anothe down of Thailand’s GD projection is now betw 2013 and 4.4Ͳ5.1% for

Employment and wea In September unemplo 0.67%, a very low rate major and emerging ec

Thailand’s per capita in 5,210 in 2012, 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 mixed. e pessimistic while mers less pessimistic.

er round of revising DP growth. Consensus ween 3.0%Ͳ3.8%. for r 2014.

alth distribution oyment rate dropped to e compared to other conomies.

ncome was at USD 102nd 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 increased slightly in November to 1.92% and 0.85% respectively, a rather low level by historical and international standards. Banking system is quite stable. Bank’s capital ratio is still high, at 16.6% in September. Total system’s NPL increased slightly in 3Q13. Liquidity in the system improved as loan growth decelerated. Big improvement in budget deficit in the first 10 months of 2013. Public debt as percentage of GDP increased slightly so far this year due mainly to direct government debt, but the current level of 45% is not yet dangerous. Majority of the public debt is domestic based. Balance of Payment in the first 10 months of 2013 is slightly negative due to net service and transfer. 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 slightly against a basket of key currencies in November.

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

• GDP in 3Q13 grew 2.7% from a yea Ͳ On the expenditure side, Ex Ͳ On the production side, Ma • Manufacturing production continue recovered impressively • Private consumption recovered we • Export tumbled, Import decreased, • Monetary easing with another 0.25 • Industries and consumers were les • Another round of revising down of between 3.0%Ͳ3.8%. for 2013 and

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

• Both Head line and Core inflation in respectively • Banking system is quite stable. Ban slightly in the third quarter but is st • Big improvement in budget deficit not too worrying just yet. • Balance of Payment turned to defic THB depreciate slightly in Novembe

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

ell, but Private Investment continued to slow down , tourist arrivals grew strongly 5% cut on policy rate while Fiscal spending tightened s pessimistic Thailand’s GDP growth; consensus projection is now 4.4Ͳ5.1% for 2014

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

GDP in 3Q13 grew 2.7% from a ye first two quarters Chart 1.05 – Historical Real GDP growth rate Annual growth, percent

7.1% 6.3% 5.3% 4.6%

CAGR* 2001Ͳ2012 = 4.3% 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, a slower pace than the

7.8% 6.5% 5.4%

2.9% 2.7%

0.1%

-2.3%

08 2009 2010 2011 2012

1Q13 2Q13 3Q13 4Q13

4 www.ChartingThailandEconomy.com

Manufacturing’s slow down has d the most Chart 1.06a – Real growth by sector, 3Q13 YearͲonͲYear percentage change GDP

2.67

Hotel&Res

15.10

Financial

11.32

Transport

8.64

Other social

6.00

Education

5.90

Health&Social

5.08

RealEstate

3.33

PublicAdmin

2.84

Trading

2.50

Utilities

1.04

Agriculture Manufacture

0.46 -0.43

Construction

-2.20

Mining

-2.48

Private HH

-2.64

Fishing-7.42 Source: NESDB; CTE analysis

dragged the overall GDP growth

Chart 1.06b â&#x20AC;&#x201C; Sectoral contributions, 3Q13 Contributions to total Real GDP growth GDP

2.67

Transport

0.86

Hotel&Res

0.63

Financial

0.56

Trading

0.33

Education

0.16

Other social

0.14

RealEstate

0.14

PublicAdmin

0.08

Health&Social

0.07

Utilities

0.04

Agriculture

0.03

Private HH

0.00

Construction

-0.06

Mining

-0.06

Fishing

-0.07

Manufacture

-0.17

5 www.ChartingThailandEconomy.com

Export contributed the most to to

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

2.7

7.4

3.8

ͲM

0.7

-1.0

-1.2

I (capital)

-6.5

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 3Q13

Q13 Chart 1.08b – Expenditure Contributions, 3Q13 Contributions to total Real GDP growth GDP

2.7

2.9

I (Inventory)

1.4

0.9

Discrpncy ͲM C

0.1

-0.4

-0.6

I (capital) -1.6

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

6 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

Manufacturing production contin

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

4.3%

194.2 174.8 161.1

182.6 170.0

152.1 138.6 124.2

2003 2004 2005 2006 2007 2008 2009 2010

Source: The Office of Industrial Economics

nued to drop in October

Monthly Average 250.0

200.0

2012

177.7 181.6

2013 150.0

100.0

MͲoͲM Ͳ0.9% YͲoͲY Ͳ4.0%

50.0

0.0

2011 2012

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

8 www.ChartingThailandEconomy.com

Big drop in Vehicle production in

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

Wood products

22.4

Petroleum

14.7

Office automate

10.5

Metal products

4.7

Rubber&Plastic

4.4

Textiles

1.9

Electronic

1.2

Mineral

-0.5

Paper

-1.4

Leather

-2.0

Chemical

-2.2

Basic Mat

-2.5

Precision instru

-3.3

Apparel

-4.4

Food & Bev

-5.7

Machineries

-7.4

Transport Equip

-12.6

Electrical Furniture Vehicles

-17.2 -21.7 -27.3

Source: The Office of Industrial Economics; CTE analysis

October

6.2

Chart 1.12b – MͲonͲM change in MPI by sector October 2013, percent -18.5 -4.0 5.1 -9.0 2.4 -0.3 3.6 5.8 0.2 4.8 0.3 0.7 -5.9 -1.6 -6.8 19.2 -4.1 9.0 3.8 -10.7 -6.3

9 www.ChartingThailandEconomy.com

Capacity utilization rate decrease

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

63.5%

60% 50% 40% 30% 20% 10% 0% May-13 Jun-13

Jul-13 Aug-13 Sep-13 Oct-13

Source: The Office of Industrial Economics

ed slightly in October

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

117% 87% 87% 83% 81% 73% 69% 69% 68% 66% 63% 61% 55% 54% 50% 49% 44% 40% 36% 31% 22%

10 www.ChartingThailandEconomy.com

Thailand’s MPI dropped the most Philippines and China enjoyed hig

Chart 1.14 – Manufacturing Production Index Latest, percent change on year ago Philippines Ͳ Sep China Ͳ Oct Singapore Ͳ Oct Pakistan Ͳ Aug Vietnam Ͳ Nov Indonesia Ͳ Sep Japan Ͳ Sep Australia Ͳ Q2 US Ͳ Oct India Ͳ Sep Brazil Ͳ Sep Malaysia Ͳ Sep

1.0

Euro Area Ͳ Sep

1.0

Taiwan Ͳ Oct

0.8

Hong Kong Ͳ Q2

0.3

Russia Ͳ Oct South Korea Ͳ Sep Thailand Ͳ Oct Source: The Economist

-0.2 -3.6 -4.0

t from a year ago, while ghest growth

x 16.2 10.3 8.0 6.9 5.7 5.6 5.1 3.9 3.2 2.0 2.0

11 www.ChartingThailandEconomy.com

Big improvement in Agriculture p

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

3.1%

105.9

112.8 112.3 109.4 111.2

100.0

2003 2004 2005 2006 2007 2008 2009 2010

Source: Office of Agricultural Economics, Ministry of Agriculture a

production in October

Monthly Average 250.0

122.5

127.3

200.0

YͲoͲY 5.3% MͲoͲM 7.9%

150.0

2012 100.0

2013

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

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

Private consumption recovered in

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

n October

Index* Monthly Average 160.0

147.0

155.0

139.2

11-Avg 12-Avg

2012 150.0

2013

145.0

140.0

MͲoͲM 1.2%

135.0

YͲoͲY 0.0%

130.0

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

14 www.ChartingThailandEconomy.com

Most consumption expenditures

Chart 1.16a – YͲonͲY change First 10 months of 2013 vs 2012, percent NGV (kg.)* Benzene & Gasohol (litre)

8.6

HH electricity (kilowatt/hour)

5.3

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

3.7

Passenger Car (Unit)

3.6

LPG (litre)*

2.9

Diesel (litre)

2.0

Real VAT (2000 prices, baht) Motocycle (Unit) Commercial Car (Unit)

-0.1 -3.7 -5.3

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

still grew so far this year

Chart 1.16b – MͲonͲM change Oct vs Sep 2013, percent 11.1

-1.7 -0.7 0.7 6.5 -12.9 -3.2 1.0 3.8 -3.3 -6.3

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

decline

Monthly Average 300.0

2012 250.0

2013 242.1 200.0

210.2

11-Avg 12-Avg

150.0

100.0

MͲoͲM Ͳ0.9%

YͲoͲY Ͳ4.9%

50.0

0.0

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

16 www.ChartingThailandEconomy.com

Most private investment expendi far this year despite recent slow d Chart 1.18a – YͲonͲY change First 10 months of 2013 vs 2012, percent

Domestic Cement sales (ton)

Domestic Machinery sales* (2000 prices, Baht)

5.5

Construction Area permitted (sqm)

5.4

Domestic commercial car sales (unit)

5.1

Import of Capital Goods (2000 prices, Baht)

-4.8

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

itures had impressive growth so down Chart 1.18b – MͲonͲM change Oct vs Sep 2013, percent

2.1

0.1

-0.1

-0.8

-4.1

-0.4

17 www.ChartingThailandEconomy.com

Cumulative FDI in the first 9 mont the level at the same period last y Chart 5.14 â&#x20AC;&#x201C; Foreign Direct Investment Million USD 11,331

1 9,460

9,112

8,999

10FY

11FY

8,547

4,853

06FY

07FY

(*) Preliminary figures

Source: BOT

08FY

09FY

ths of 2013 dropped 12% from year

Monthly cumulative FDI* 12,000

2012

10,697

12FY

10,000

8,000

6,000

4,000

2013 2,000

F M A M J

A S O N D

18 www.ChartingThailandEconomy.com

BOI’s net application for the first from the same period last year

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

10 months of 2013 dropped 22%

irect investment*

648

466 365

12FY

2012/10M 2013/10M

19 www.ChartingThailandEconomy.com

Property indicators recovered in S

Chart 1.19a – YͲonͲY change First 9 months of 2013 vs those of 2012, percent

Condo unit registered

42.1

Value of land transaction

19.5

New housing unit

Constr. Area in municipal

1.9

-4.6

Source: Bank of Thailand; CTE analysis

September

Chart 1.19b – MͲonͲM change Sep vs Aug 2013, percent

-47.1

10.5

16.5

27.9

20 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

Export has decreased in the first 1 Agro and Electronics the main dra

Chart 5.05a – YTD annual change in Export in First 10 months of 2013 vs that of 2012, percent Total export ReͲexports Forestry Automotive Chemicals Optical instru PetroͲchemical Other manufacturing Jewellery Apparels Furniture Metal Electrical Machinery Toiletries Electronics Agriculture Aircrafts Agro products Footware Petroleum Photo instru Mining Fishery Other export

-3.0 682.6 11.4 7.7 6.0 3.9 3.0 2.6 1.8 0.9 0.9 0.7 -0.4 -0.4 -1.9 -3.5 -5.1 -5.4 -5.7 -6.9 -7.4 -13.6 -20.7 -27.1 -47.9

Source: Bank of Thailand; CTE analysis

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

-3.0 1.0 0.2 0.2 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 -0.2 -0.2 -0.3 -0.4 -0.4 -0.5 -0.7 -1.7

22 www.ChartingThailandEconomy.com

Apart from ASEAN, export decrea year 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

11.7

11.1

11.3

12.7

12.2

17.4

18.1

18.4

18.1

21.0

Japan NAFTA

᪛ 7.1 (Trilli

Rest of the world

16.6

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

ased in every regions so far this

Chart 5.07b â&#x20AC;&#x201C; Change in Export In THB term, First 10 months of 2013 vs 2012

ion) 2.8% ASEAN

-0.4%

-2.0%

-2.8%

-3.1%

NAFTA

Middle East

East Asia ex Japan

-8.7%

Japan

-9.3%

Rest of the world 23 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 6.4

12.4

10.9

12.6

21.3

24.6

23.2

40.0

37.6

36.5

18.9

19.1

19.8

7.5

7.8

8.0

11FY

12FY

13/10MO

(Trillion)

24 www.ChartingThailandEconomy.com

Import has decreased in the first decrease in intermediate goods

Chart 5.09a – YTD annual change in Import in First 10 months of 2013 vs 2012, percent

Total import

-1.6

Others

11.

Consumer goods

1.4

Intermediate Ͳ Fuel

0.2

Capital goods

-4.8

Intermediate Ͳ Non fuel

-4.9

Source: Bank of Thailand; CTE analysis

10 months of 2013, driven by the

n Baht Chart 5.09b – Sectoral contributions

Contributions to total import growth

Total import -1.6

Others

1.3

Consumer goods

0.1

Intermediate Ͳ Fuel

0.0

Capital goods

-1.2

Intermediate Ͳ Non fuel-1.9

25 www.ChartingThailandEconomy.com

Tourist arrivals increased 21% 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 10 months of 2013

Monthly cumulative 25.0

22.3 20.0

19.2

Y 11FY 12FY

2012 15.0

10.0

2013 5.0

0.0

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

26 www.ChartingThailandEconomy.com

China accounted for almost half o 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

of the total increase in tourist

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

% of total change

1,798.6

48%

Malaysia

335.7

Russia

335.5

Japan

160.6

Indonesia

135.3

Singapore

121.9

Korea

118.0

Vietnam

115.4

Hong Kong

110.0

Taiwan

101.0

27 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

MPC decided to cut policy interes

Chart 3.01a – BOT’s policy rate

Dec-12

2.80% 2.70% 2.60% 2.50% 2.40% 2.30% 2.20% 2.10% 2.00% Nov-13

Chart 3.01c – Saving deposit rate* 10.00% 7.50% 5.00% Max

2.50%

Min Dec-12

0.00% Nov-13

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

Source: Bank of Thailand

st rate by 0.25% in November

Chart 3.01b â&#x20AC;&#x201C; BIBOR overnight rate 2.80% 2.70% 2.60% 2.50% 2.40% 2.30% 2.20% 2.10% 2.00% Nov-13

Dec-12

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

10.00% 7.50%

Min 5.00% 2.50%

Dec-12

anches

0.00% Nov-13

29 www.ChartingThailandEconomy.com

8% decrease in fiscal expenditure

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

2500

2000

1500

1000

500

2013 0

Source: Bank of Thailand; CTE analysis

e in the first 10 months of 2013

2012

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

Industries were less pessimistic in

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

Better 53.9 49.9 50

48.3

47.5

47.4

Worse

0 May-13 Jun-13

Jul-13 Aug-13 Sep-13 Oct-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

n October

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

Better

100

94.3

93.1

91.9

91.3

90.4

92.8

Worse

0 May-13 Jun-13

Jul-13 Aug-13 Sep-13 Oct-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

Consumer were less pessimistic in

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

100

Better

50 Worse

Worse

0 Apr-13

Jun-13

Aug-13

Oct-13

Apr-13

Jun-1

Note: (*) The index ranges from 0 to 100 50 means consumer confidence is equal to those of the prior mo Over 50 means consumer confidence is better than those of the Under 50 means consumer confidence is worse than those of th Source: Ministry of Commerce

n October

On job

On future income

100

Better 50 Worse

0 3

Aug-13

onth e prior month he prior month

Oct-13

Apr-13

Jun-13

Aug-13

Oct-13

33 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

Another round of revising down o

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

5.50

5.00

FPO The Economist poll

4.50

4.00

BOT 3.50

NESDB 3.00 Jun-13

Jul-13

Aug-13 Sep-13 Oct-13 Nov-13

Forecast as of, month ending

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

of Thailand’s GDP growth

omist

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

5.50

FPO 5.00

BOT The Economist poll

4.50

NESDB 4.00

3.50

3.00 Jun-13

Jul-13

Aug-13 Sep-13 Oct-13 Nov-13

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

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

Chart 1.04a â&#x20AC;&#x201C; Real GDP growth projections 2013, Annual % change, as of Nov 30th 2013 China Philippines Pakistan Indonesia Vietnam India Malaysia Thailand Singapore Hong Kong South Korea Australia Brazil Taiwan Japan US Russia Euro Area -0.4

Source: The Economist

7.7 7.1 6.1 5.6 5.3 4.9 4.5 3.8 3.5 3.0 2.7 2.5 2.5 2.0 1.9 1.6 1.5

e in the middle compared to

Chart 1.04b â&#x20AC;&#x201C; Real GDP growth projections 2014, Annual % change, as of Nov 30th 2013

7.3 6.6 3.9 5.5 5.5 6.0 5.0 4.4 3.9 3.8 3.5 2.8 2.6 2.9 1.7 2.6 3.0 1.0 36 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

Unemployment rate dropped in S

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

September

Monthly Average 1.20

1.00

2013 0.80

0.60

0.40

0.68

2012 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 Sep Singapore Ͳ Q3 South Korea Ͳ Oct

0.7 1.8 2.8

Malaysia Ͳ Sep

3.1

Vietnam Ͳ 2012

3.2

Hong Kong Ͳ Oct

3.3

Japan Ͳ Sep

4.0

China Ͳ Q3

4.0

Taiwan Ͳ Oct Brazil Ͳ Oct Russia Ͳ Oct Australia Ͳ Oct Pakistan Ͳ 2012 Indonesia Ͳ Q3 US Ͳ Oct Philippines Ͳ Q3 India Ͳ 2012 Euro Area Ͳ Sep Source: The Economist

4.2

lowest comparing to other

5.2 5.5 5.7 6.2 6.3 7.3 7.3 9.9 12.2

39 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

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

19.8

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

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

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 2012 or latest, Atlas method (current US$) Monaco (1) Liechtenstein (2) Bermuda (3) Norway (4) Switzerland (5) Qatar (6) Luxembourg (7) Channel Islands (8) Denmark (9) Australia (10) Sweden (11) Macao SAR, China (12) San Marino (13) Canada (14) United States (15) Isle of Man (16) Netherlands (17) Austria (18) Japan (19) Singapore (20) Finland (21) Belgium (22) Kuwait (23) Germany (24) Andorra (25)

Source: The World Bank

1 106,920 98,860 82,730 78,720 76,960 65,440 59,770 59,570 56,210 55,720 51,470 50,970 50,120 48,550 48,250 48,160 47,870 47,210 46,940 44,990 44,730 44,010 43,110

r than an average Chinese but n an average Indian

( ) = World rank 186,950

36,770

France (26) 41,750 Ireland (27) 38,970 United Kingdom (29) 38,250 Hong Kong SAR,… 36,560 Brunei Darussalam… 31,590 Spain (35) 30,110 Greece (39) 23,260 Korea, Rep. (41) 22,670 Russian Federation… 12,700 Malaysia (73) 9,800 Mexico (74) 9,740 Maldives (95) 5,750 China (96) 5,740 Thailand (102) 5,210 Iran, Islamic Rep.… 4,290 TimorͲLeste (120) 3,670 Indonesia (124) 3,420 Egypt, Arab Rep. (133) 3,000 Sri Lanka (135) 2,920 Philippines (139) 2,470 Bhutan (140) 2,420 India (149) 1,530 Vietnam (152) 1,400 Lao PDR (157) 1,260 Cambodia (166) 880 47

www.ChartingThailandEconomy.com

Using Purchasing Power Parity, Th with higher GNI per capita than C

Chart 2.07 â&#x20AC;&#x201C; GNI per capita, selected countrie 2012 or latest, PPP (current international $) Qatar (1) Macao SAR, China (2) Norway (3) Luxembourg (4) Singapore (5) Switzerland (6) Hong Kong SAR, China (7) United States (8) Brunei Darussalam (9) Kuwait (10) Netherlands (11) Austria (12) Australia (13) Sweden (14) Canada (15) Denmark (16) United Arab Emirates (17) Germany (18) Belgium (19) Finland (20) France (21) Japan (22) United Kingdom (23) Ireland (24) Iceland (25)

Source: The World Bank

64,03 63,00 61,100 54,870 53,050 50,610 49,370 49,230 43,360 43,220 43,170 43,160 42,690 42,620 42,380 41,370 39,260 38,210 36,460 36,320 35,800 35,110 33,550

hailand’s rank improved to 89th, China

8,710

( ) = World rank 84,670

Italy (26) 32,280 Korea, Rep. (28) 30,890 Israel (32) 28,070 Greece (38) 24,790 Russian Federation… 22,760 Mexico (60) 16,630 Malaysia (61) 16,530 Argentina (75) 11,740 Brazil (76) 11,720 Thailand (89) 9,430 China (94) 9,210 Bhutan (105) 6,310 Sri Lanka (107) 6,120 Indonesia (119) 4,810 Philippines (121) 4,400 India (128) 3,840 Vietnam (132) 3,440 Lao PDR (137) 2,730 Cambodia (140) 2,360 Bangladesh (147) 2,070 Kenya (154) 1,760 Ethiopia (169) 1,140 Madagascar (172) 950 Niger (176) 650 Congo, Dem. Rep.… 370 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

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

Both Head line and Core inflation

Chart 3.07a – YͲoͲY change in CPI Percent 2.50%

2.00%

Head line 1.50%

1.00%

0.50%

Core*

0.00% Jun-13

Jul-13

Aug-13 Sep-13

Oct-13

Nov-13

Note: (*) exclude raw food and energy

Source: Bureau of Trade and Economic Indices; CTE analysis

n increased in November

Chart 3.07b – YͲoͲY change in CPI by product November 2013, percent Meat

8.5

Eggs & milk

7.0

Veg & fruit

5.4

Tobacco & alcohol

3.9

Energy

2.3

Food away from home

2.2

Seasoning

2.2

Prepared food at home

1.7

Rice

1.7

Apparel and footware

0.9

Transport & Commu

0.8

Housing & furnishing

0.8

Medical care

0.7

Non alcoholic beverage

0.6

Recreation & Education

0.5

51 www.ChartingThailandEconomy.com

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

Latest

India Ͳ Oct Pakistan Ͳ Oct Indonesia Ͳ Oct Russia Ͳ Oct

6.2

Vietnam Ͳ Nov

5.8

Brazil Ͳ Oct

5.8

Hong Kong Ͳ Oct

4.3

China Ͳ Oct

3.2

Philippines Ͳ Oct

2.9

Malaysia Ͳ Oct

2.8

Australia Ͳ Q3

2.2

Singapore Ͳ Oct

2.0

Thailand Ͳ Nov

1.9

US Ͳ Oct

1.0

Japan Ͳ Sep

1.0

Euro Area Ͳ Oct

0.7

South Korea Ͳ Oct

0.7

Taiwan Ͳ Oct

0.6

Note: (*) The Economist Poll

Source: The Economist

he low side compared to other

2013* 10.1

9.8

9.1

7.5

8.3

7.1 6.4 6.8 6.2 4.3 2.6 2.8 2.0 2.3 2.4 2.2 1.5 0.3 1.4 1.2 0.9

52 www.ChartingThailandEconomy.com

Very low inflation at 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% Jun-13

Jul-13

Aug-13 Sep-13

Oct-13

Nov-13

Source: Bureau of Trade and Economic Indices; CTE analysis

vel

Chart 3.09b – YͲoͲY change in PPI by product November 2013, percent Fishing Livestocks Petroluem products Metal Energy Leather & footware Chemical NonͲmetallic mineral Food Transport equip Wood Pulp & paper Forestry Forestry Mechinery -0.3 Electrical equip -0.3 Crop -1.2 Basic metals -2.1 Rubber & plastic -4.6 Other manu goods -11.1

35.7 17.7 4.2 4.1 2.7 2.3 1.6 1.2 0.8 0.6 0.5 0.2 0.0 0.0

53 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

Bank’s loan growth decelerated a September Chart 3.02a – Commercial Banks’ Loan THB billion 10,600 10,400 10,200 10,000 9,800 9,600 9,400 9,200 9,000 8,800 Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

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

95% 91.1%

92.2%

93.1%

93.9%

90%

85% Oct-12 Nov-12 Dec-12 Jan-13

Source: Bank of Thailand

Feb-13 M

and liquidity improved in

M-o-M +0.4% Y-o-Y +11.6%

ar-13

Apr-13

May-13

Jun-13

Jul-13

95.3%

94.9%

93.4%

93.5%

Mar-13

Apr-13 May-13 Jun-13

Jul-13

Aug-13

Sep-13

95.7%

95.5%

it* ratio

93.3%

Aug-13 Sep-13

55 www.ChartingThailandEconomy.com

Gross NPL increased slightly in 3Q percent of total loan

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

Q13 in both absolute value and as

ss NPLs Outstanding

270

256

11YE

12YE

257

265

268

2013/Q1 2013/Q2 2013/Q3

ss NPLs Outstanding

2.75%

11YE

2.26%

12YE

2.18%

2.21%

2.23%

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

Banksâ&#x20AC;&#x2122; capital ratio increased to 1

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

16.6% in September

nks* Month End 17.0%

16.2% 16.5%

14.8%

2013 16.0%

15.5%

2012

15.0%

14.5%

14.0%

13.5% 2011

anches

2012

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

57 www.ChartingThailandEconomy.com

Thailand’s real interest rate is slig Chart 3.05 – Real interest rates Percent, as of November 30th 2013

3M riskͲfree interest rates Brazil

10.0

Pakistan

9.8

India

9.0

Indonesia

7.6

Russia

7.3

Vietnam

6.5

China

4.7

Malaysia

3.2

South Korea

2.7

Australia

2.6

Thailand Taiwan

2.1 0.9

Hong Kong

0.4

Singapore

0.3

Philippines

0.3

0.2

Euro Area

0.2

Japan

0.1

Note: (*) The Economist Poll

Source: The Economist

൞

ghtly negative

Expected 2013 inflation*

Real interest rates

6.2

3.8 7.5

2.3 9.8

-0.8

7.1

0.5

6.4

0.9

6.8

-0.3

2.6

2.1

2.0

1.2

1.5 2.3

0.3

2.2

-0.1

0.9

0.0 4.3 2.4 2.8

0.3

-3.9 -2.1 -2.5

1.5

-1.3

1.4

-1.2 -0.2

www.ChartingThailandEconomy.com

SET dropped 5% in November am Chart 3.06a â&#x20AC;&#x201C; Monthly performance of SET index Percent change from prior month, at month end 6.9%

4.3%

-2.0% -5.0% -7.1% -9.1%

Jun-13

Jul-13

Aug-13

E Sep-13

Oct-13

Nov-13

Chart 3.06b â&#x20AC;&#x201C; Cumulative net foreign fund flow SET & MAI, Billion Baht, Month end 50.0 0.0 -50.0 -100.0 -150.0 -200.0 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

mid foreign selling Chart 3.06c â&#x20AC;&#x201C; Change since Dec 31st 2012 Percent, as of November 27th 2013 Japan (Nikkei 225)

48.6%

Pakistan (KSE)

40.6%

US (NAScomp)

34.0%

US (S&P 500)

26.7%

US (DJIA)

22.8%

Germany (DAX)

22.8%

Euro Area (FTSE Euro 100)

18.0%

France (CAC 40)

17.9%

Australia (All Ord.)

14.2%

UK (FTSE 100)

12.7%

Taiwan (TWI)

7.7%

Malaysia (KLSE)

6.5%

India (BSE)

5.1%

HK (Hang Seng)

5.1%

S Korea (KOSPI)

1.6%

Singapore (STI) China (SSEB, $ terms)

0.2% -0.1%

Thailand (SET)

-1.4%

Indonesia (JSX)

-1.5%

China (SSEA)

-3.0%

59 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

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 balance during the first 10 substantially from the same perio 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

0 months of 2013 has improved od last year

Monthly cumulative Budget balance (Billion Baht) 100.0 2,077 ,751

1,902

2013 0.0

-100.0

-75

-28 -412 -200.0

2012 -300.0

1,825

-1,930 -400.0 -2,489

-500.0

0FY 11FY 12FY

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

62 www.ChartingThailandEconomy.com

Cash balance for the first 10 mont

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

ths of this year is positive

plus)

1 -28

-30

-75 00 -96 -137

-266

-364 -401

-412 -466

08FY

09FY

10FY

11FY

12FY

'13/10mo

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 Philippines China Australia Taiwan Thailand Brazil Euro Area Indonesia US Malaysia

-4

Vietnam

-4.7

India Pakistan Japan Note: (*) The Economist Poll

Source: The Economist

-5.2 -8.0 -8.3

expected to be around 3% of

ercentage of GDP 1.8 0.7 0.7 -0.5 -1.8 -2.0 -2.1 -2.3 -3.0 -3.0 -3.0 -3.3 -4.1

4.3

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

Sep-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

Sep-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

• In September unemployment rate countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

Stability

ar ago, a slower pace than the first two quarters xport contributed the most to total real GDP growth anufacturing is the main drag ed to drop in October, while Agriculture production

dropped to 0.67%, a very low rate compared to other

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

ncreased slightly in November to 1.92% and 0.85%

nk’s capital ratio is still high. Total system’s NPL increased till low. Liquidity improved as loan growth decelerated. in the first 10 months of 2013. Public debt is increasing but

cit. External debt has been increasing but still not dangerous. er.

Deficit Balance of Payments in th largely to net service income and

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

31.3 24.7

24.1

5.3 1.2 -2.4 08FY

09FY

10FY

11FY

Source: Bank of Thailand; CTE analysis

12FY

13/10mo

e first 10 months of 2013 due transfer Trade Balance (F.O.B) 32.6

29.8

17.3

17.0 8.3

08FY

09FY

10FY

11FY

12FY

4.6 13/10mo

Net service income & transfer -5.6

-10.7

-10.3

-11.1

-15.2 -19.7

08FY

09FY

10FY

11FY

12FY

13/10mo

Net Capital Movement + errors and omissions 22.5

21.3 2.2

2.5

3.3

12FY

13/10mo

-4.7 08FY

09FY

10FY

11FY

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Strong Asian export engines refle surplus Chart 5.02 – Current Account balance As % of 2013 GDP* Singapore Ͳ Q3 Taiwan Ͳ Q3 Vietnam Ͳ 2012

5.4%

Malaysia Ͳ Q2

5.4%

South Korea Ͳ Oct

4.7%

Hong Kong Ͳ Q2

3.6%

Philippines Ͳ Jun

2.8%

Russia Ͳ Q3

2.6%

Euro Area Ͳ Sep

1.9%

China Ͳ Q3

1.9%

Japan Ͳ Sep

1.2%

Thailand Ͳ Q3 Pakistan Ͳ Q3 US Ͳ Q2 Australia Ͳ Q2

-0.3% -1.0% -2.5% -2.9%

Indonesia Ͳ Q3

-3.5%

Brazil Ͳ Oct

-3.5%

India Ͳ Q2 Note: (*) The Economist Poll

Source: The Economist

-4.0%

ecting in huge current account

Last 12 months, USD Billion 19.2%

49.8

11.8%

56.3 9.1 14.2 68.1 5.7 10.1 40.1 251.1 14.0 47.9 -4.1 -4.1 -412.9 -49.4 -32.1 -82.2 -92.7

69 www.ChartingThailandEconomy.com

Worsened trade balance so far in than import 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 -3.0%

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 export dropped more

Import

Cumulative Trade balance 0

-100

2012

-200 -300 -400 2013 -500 -600

Y-o-Y -1.6%

M J J A S O N D

stments t and exchange rate conversion t and exchange rate conversion

-700 -800

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

13/2Q

38.8%

39.3%

12YE

13/2Q

71 www.ChartingThailandEconomy.com

Structure of external debt does n year Chart 5.11a â&#x20AC;&#x201C; External debt breakdown Private vs Public Private Public = General Government and Monetary Authorities

92%

09YE

13%

15%

20%

87%

85%

80%

10YE

11YE

12YE

13/2Q

Source: Bank of Thailand

ot change much from end of last

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

44%

56%

09YE

50%

10YE

45%

46%

55%

54%

11YE

12YE

13/2Q

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% 266%

08YE

09YE

10YE

11YE

12YE

13/2Q

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%

4.7% 4.2% 3.4%

08FY

09FY

10FY

11FY

3.4%

12FY

13/2Q

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

193.9

2011

2012

Oct-13

154.1

2009

2010

er of months of import** 13.8

12.6 10.8

2009

the last 12 months

2010

2011

10.0

2012

9.2

Oct-13

74 www.ChartingThailandEconomy.com

THB depreciated slightly against k

Chart 5.17a – Nominal Effective Exchange Rate 2007=100

114.0

Baht appreciates

112.0

110.0

108.0

106.0

MͲoͲM

Ͳ0.5%

104.0

102.0

YͲoͲY

+1.7%

Baht depreciates Nov-12

Feb-13

May-13

Aug-13

100.0

98.0 Nov-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

key currencies in November

Chart 5.17b – YͲoͲY change in FX rate* Percentage change in avg. selling rate as of Nov 29th 2013 EUR Ͳ 43.9885

9.5

KRW Ͳ 0.0304

6.7

CNY Ͳ 5.3425

6.6

GBP Ͳ 52.8261

6.5

USD Ͳ 32.2395

MXN Ͳ 2.4649

TWD Ͳ 1.0877

SGD Ͳ 25.8014

VND Ͳ 0.0015

4.5 3.5 2.5 1.6 0.0

MYR Ͳ 10.0626

-1.8

PHP Ͳ 0.7461

-2.3

INR Ͳ 0.5503

-8.4

AUD Ͳ 29.4111 IDR Ͳ 2.8878 JPY Ͳ 31.6552

-8.9 -15.1 -16.0

Baht appreciates

Baht depreciates 75