140331 eng emag split by Ake Saroj

Monthly Economic Brief April 2014 issue

Executive summary Growth GDP in 4Q13 grew only 0.56% from a year ago, a slower pace than the first three quarters. Total growth for the whole year is 2.9%. On the expenditure side, Investment and Private consumption were affected and contributed negatively to the overall growth in 4Q13. On the production side, Manufacturing’s slow down was the main drag. Manufacturing production continues its decline into 2014, while Agriculture production recovered impressively. On the expenditure side, Private consumption started to decline while Private Investment continued to slow down. BOI net application dropped significantly. Export grew 8.5% in THB term. Positive growth occurred in all major markets. Import, however, registered a negative growth, driven by lower intermediate goods import. Tourist arrivals dropped 4%. Looking forward, Monetary policies are proͲ growth, with policy rate cut by another 0.25%. Government spending was slightly higher than a year ago.

Confidence in private s Businesses were less p Industries and Consum pessimistic.

More downward revis The consensus project 3.5% for 2014 and 4.1Ͳ

Employment and wea In February unemploy 0.86%, 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. pessimistic. However, mers were more

ions for 2014 growth. tion is between 2.6%Ͳ Ͳ4.8% for 2015

alth distribution ment rate increased 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 Head line inflation increased to 2.11% while Core increased slightly to 1.31% in March. Producer Price Index decreased 1.4% from a year ago. Banking system is quite stable. Bank’s capital ratio dropped but is still high. Total system’s NPL ended 2013 lower than a year ago. Liquidity improved as loan growth decelerated. Higher deficit in the first 2 months of 2014, compared to the same period in 2013. Public debt as percentage of GDP increased slightly so far this year due mainly to direct government debt, but the current level of 46% is not yet dangerous. Majority of the public debt is domestic based. Balance of Payment turned negative in the first 2 months of 2014, due to capital outflow. 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 appreciated against a basket of key currencies in March.

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CONTENT

Executive summary

Growth

Income distribution

Stability

• Slower growth in 4Q13 made 2013 Ͳ On the expenditure side, In contributed negatively to t Ͳ On the production side, Ma growth the most in 4Q13 • Manufacturing production continue • Private consumption started to dec • Export grew in THB term, Import de • Monetary easing with policy rate o • Industries and consumers were mo • The consensus projection is 2.6%Ͳ3

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

• Head line inflation increased to 2.1 Producer Price Index decreased 1.4 • Banking system is quite stable. Ban ended 2013 lower than a year ago. • Higher deficit in the first 2 months increasing but not too worrying jus • Balance of Payment turned negativ THB appreciated in March.

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

es its decline into 2014 cline while Private Investment continued to slow down ecreased. Tourist arrival dropped. n downward trend while Fiscal spending caught up ore pessimistic 3.5% for 2014 and 4.1Ͳ4.8% for 2015

ecreased to 0.86%, still 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

11% while Core increased slightly to 1.31% in March. 4% from a year ago. nk’s capital ratio dropped but is still high. Total system’s NPL . Liquidity improved as loan growth decelerated. of 2014, compared to the same period in 2013. Public debt is st yet. ve. External debt has been increasing but still not dangerous.

Slower growth in 4Q13 made 201

Chart 1.05 – Historical Real GDP growth rate Annual growth, percent 7.1% 6.3% 5.3%

CAGR* 2002Ͳ2013 = 4.1%

4.6%

5.1% 5.0%

2.5%

-2.3

2002 2003 2004 2005 2006 2007 2008 200

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

13 GDP growth of only 2.9%

7.8% 6.5% 5.4%

2.9%

0.1%

2.9% 2.7%

0.6%

09 2010 2011 2012 2013

1Q13 2Q13 3Q13 4Q13

4 www.ChartingThailandEconomy.com

Manufacturing’s slow down has d the most in 4Q13 Chart 1.06a – Real growth by sector, 4Q13 YearͲonͲYear percentage change 0.56

GDP

9.1

Financial

6.98

Transport

5.42

Hotel&Res

4.37

RealEstate

3.71

Agriculture Other social

2.19

Trading

2.15 1.53

Health&Social

0.08

PublicAdmin -1.81

Education Private HH

-2.45

Mining

-2.61

Manufacture

-2.88

Utilities Fishing

-3.23 -5.24

Construction -7.73 Source: NESDB; CTE analysis

dragged the overall GDP growth

Chart 1.06b â&#x20AC;&#x201C; Sectoral contributions, 4Q13 Contributions to total Real GDP growth 0.56

GDP

0.69

Transport 0.38

Financial Agriculture

0.31

Trading

0.27

Hotel&Res

0.24 0.16

RealEstate Other social

0.05

Health&Social

0.02

PublicAdmin

0.00

Private HH

0.00

Education

-0.04

Mining

-0.06

Fishing

-0.08

Utilities

-0.11

Construction

-0.14

Manufacture

-1.13

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Most sectors contributed positive for private household and fishing Chart 1.07a – Real growth by sector, 2013 YearͲonͲYear percentage change 2.9

GDP

12.1

Hotel&Res

10.2

Financial 7.9

Transport

7.0

Other social 4.6

RealEstate Trading

3.2

Agriculture

2.9

Health&Social

2.8 2.2

Mining Education

1.7

PublicAdmin

1.3

Construction

1.2

Utilities

0.9 0.1

Manufacture Private HH

-1.4

Fishing -6.7 Source: NESDB; CTE analysis

ely to total 2013 growth except g Chart 1.07b â&#x20AC;&#x201C; Sectoral contributions, 2013 Contributions to total Real GDP growth 2.9

GDP 0.8

Transport Hotel&Res

0.5

Financial

0.5

Trading

0.4

Agriculture

0.2

RealEstate

0.2

Other social

0.2

Mining

0.0

Education

0.0

Health&Social

0.0

PublicAdmin

0.0

Utilities

0.0

Manufacture

0.0

Construction

0.0

Private HH Fishing

0.0 -0.1

6 www.ChartingThailandEconomy.com

Investment and Private consumpt contributed negatively to the ove

Chart 1.08a – Real growth by expenditure, 4Q YearͲonͲYear percentage change GDP

0.6

X (services)

M (services)

6.3

0.9

X (goods)

0.2

Discrpncy

-0.6

-2.7

-4.5

M (goods) I (capital)

-5.3 -11.3

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

tion were affected and erall growth in 4Q13

Q13 Chart 1.08b â&#x20AC;&#x201C; Expenditure Contributions, 4Q13

Contributions to total Real GDP growth GDP

0.6

M (goods)

2.6

I (Inventory)

1.8

X (services)

1.3

X (goods)

0.1

Discrpncy

0.0

M (services)

-0.6

-2.3

I (capital)

-2.4

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

7 www.ChartingThailandEconomy.com

Tourism was clearly the main driv

Chart 1.09a – Real growth by expenditure, 20 YearͲonͲYear percentage change GDP

2.9

X (services)

19.7

Discrpncy

12.9

M (services)

5.2

4.9

2.2

M (goods)

1.8

0.2

X (goods)

0.2

I (capital)

-1.9

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

ver for 2013 growth

013 Chart 1.09b â&#x20AC;&#x201C; Expenditure Contributions, 2013 Contributions to total Real GDP growth GDP

2.9

X (services)

3.0

I (Inventory)

1.0

0.5

X (goods)

0.1

Discrpncy

0.1

I (capital)

-0.4

M (services)

-0.5

M (goods)

-0.9

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

8 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Manufacturing production contin

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

2.7%

194.2 174.8 152.1

182.6

161.1

170.0

177.7

138.6

2004 2005 2006 2007 2008 2009 2010 2011 Source: The Office of Industrial Economics

nues its decline into 2014

Monthly Average 250.0

200.0

2013

181.6

175.8

150.0

100.0

2014

MͲoͲM Ͳ2.4% YͲoͲY Ͳ4.4%

50.0

0.0

2012 2013

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

10 www.ChartingThailandEconomy.com

Most sectors had their production

Chart 1.12a – YͲonͲY change in MPI by sector February 2014, percent

Electrical Wood products

18.7

Precision instru

18.6 12.5

Apparel

8.5

Metal products Chemical

5.8

Electronic

5.7

Rubber&Plastic

5.7

Paper

4.9

Machineries

3.9

Textiles

3.4 0.0

Mineral -2.0

Food & Bev Basic Mat

-4.5

Office automate

-4.6

Transport Equip

-8.5

Petroleum

-8.6 -11.1

Leather Furniture Tobacco Vehicles

-13.9 -16.2 -21.3

Source: The Office of Industrial Economics; CTE analysis

n decreased from last month

Chart 1.12b – MͲonͲM change in MPI by sector February 2014, percent .5

-1.5 -0.9 -9.0 11.2 -3.7 -9.5 -1.1 1.3 -5.7 3.1 2.6 -0.6 -5.0 10.1 -4.9 -13.6 -12.4 -2.1 5.7 -17.5 5.4

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A slight increase in Capacity utiliz

Chart 1.13a â&#x20AC;&#x201C; Overall Capacity Utilization Rate Percent 100% 90% 80% 70% 59.2%

60% 50% 40% 30% 20% 10% 0%

Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14

Source: The Office of Industrial Economics

zation rate in February

Chart 1.13b â&#x20AC;&#x201C; Capacity utilization rate by sector February 2014, percent Electrical Vehicles Machineries Chemical Mineral Paper Rubber&Plastic Petroleum Precision instru Transport Equip Metal products Electronic Office automate Basic Mat Food & Bev Textiles Apparel Tobacco Furniture Leather Wood products

98% 83% 77% 74% 72% 67% 65% 65% 64% 63% 63% 60% 54% 49% 47% 43% 42% 40% 32% 27% 22%

12 www.ChartingThailandEconomy.com

Thailand’s MPI dropped the most and Singapore enjoyed highest gr

Chart 1.14 – Manufacturing Production Index Latest, percent change on year ago Vietnam Ͳ Feb Singapore Ͳ Feb Japan Ͳ Jan China Ͳ Feb Philippines Ͳ Jan Taiwan Ͳ Feb Malaysia Ͳ Jan US Ͳ Feb Australia Ͳ Q4 Pakistan Ͳ Jan Euro Area Ͳ Jan Russia Ͳ Feb

0.9

Indonesia Ͳ Jan

0.5

Hong Kong Ͳ Q4

0.1

India Ͳ Jan -2.4

Brazil Ͳ Jan South Korea Ͳ Jan Thailand Ͳ Feb Source: The Economist

-3.8 -4.4

t from a year ago, while Vietnam rowth

x 15.2 12.8 10.3 8.6 7.3 7.0 3.6 2.8 2.8 2.6 2.1 2.0

13 www.ChartingThailandEconomy.com

Agriculture production grew sligh

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

CAGR

3.2% 122.5

100.0

105.9

112.8 112.0 109.4 111.2

2004 2005 2006 2007 2008 2009 2010 2011

Source: Office of Agricultural Economics, Ministry of Agriculture a

htly from a year ago

Monthly Average 300.0

128.0 128.8

YͲoͲY 1.9%

250.0

MͲoͲM

200.0

Ͳ11.0%

150.0

2014

2013

100.0

50.0

0.0

2012 2013

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

14 nd Cooperatives

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CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Private consumption started to de

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

2.5%

117.8

126.1 121.9 124.2

130.6

134.2

139.2

127.2

04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg 1

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

ecline

Index*

147.0 147.5

12-Avg 13-Avg

Monthly Average 150.0

149.0

2013

148.0

147.0

2014 146.0

145.0

144.0

MͲoͲM Ͳ1.2% YͲoͲY Ͳ2.5%

143.0

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

16 www.ChartingThailandEconomy.com

Vehicle consumption expenditure far this year Chart 1.16a – YͲonͲY change First 2 months of 2014 vs 2012, percent NGV (kg.)* LPG (litre)*

Real VAT (2000 prices, baht) -1.9

Diesel (litre)

-5.2

Benzene & Gasohol (litre)

-9.4

HH electricity (kilowatt/hour) Real import of consumer goods (2000 prices, US$)

-12.3 -23.1

Motocycle (Unit) Commercial Car (Unit) Passenger Car (Unit) -54.8 Note: (*) figures are 1Ͳmonth delayed Source: Bank of Thailand; CTE analysis

-36.1

es were the biggest decliners so

Chart 1.16b – MͲonͲM change Feb vs Jan 2014, percent 7.6

-0.5

2.9

1.2 -3.1

0.0

-0.6 -2.1 1.4 -6.4 14.9 -6.3 4.9

17 www.ChartingThailandEconomy.com

Private Investment continued to d

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

CAGR

4.9% 209.1 172.4 175.2 175.7 156.0

193.5

183.9 161.2

04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg 1

Source: Bank of Thailand

decline

240.8 240.1

12-Avg 13-Avg

Monthly Average 255.0

MͲoͲM Ͳ1.9%

250.0

245.0

2013

240.0

YͲoͲY Ͳ7.7%

235.0

230.0

225.0

2014

220.0

215.0

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

18 www.ChartingThailandEconomy.com

Most private investment expendi

Chart 1.18a – YͲonͲY change First 2 month of 2014 vs 2013, percent

2.6

Domestic Cement sales (ton)

Domestic Machinery sales* (2000 prices, Baht)

-0.6

Construction Area permitted (sqm)

-0.7

Import of Capital Goods (2000 prices, Baht)

Domestic commercial car -29.3 sales (unit)

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

-13.0

tures declined in 2014

Chart 1.18b – MͲonͲM change Feb vs Jan 2014, percent

-1.2

1.9

0.7

-4.1

-3.4

19 www.ChartingThailandEconomy.com

BOI’s net application dropped 43% 2014 compared to same period la

Chart 5.15 – BOI net application of foreign di Billion Baht 648

396 351 236

09FY

10FY

11FY

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

Source: Board of Investment

12FY

% during the first 2 months of ast year

irect investment*

525

13FY

2013/2M

2014/2M

20 www.ChartingThailandEconomy.com

FDI from Japan, the biggest sourc years

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

Others USA ANIEs

23%

27%

3% 6% 6%

2% 7% 8%

ASEAN

17%

Europe 44%

49%

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

Source: Board of Investment; CTE analysis

11FY

ce, has been declining in recent

kdown by country group

11% 4% 10% 7% 10%

21%

25%

2% 6% 10%

21%

7% 5% 6% 7% 58%

54% 37%

12FY

13FY

2014/2M 21 www.ChartingThailandEconomy.com

Property indicators have all dropp

Chart 1.19a – YͲonͲY change First month of 2014 vs 2013, percent

45.4

Condo unit registered

New housing unit

Value of land transaction -7.4

Constr. Area in municipal -14.8

Source: Bank of Thailand; CTE analysis

17.2

ped from last month

Chart 1.19b – MͲonͲM change Jan 2014 vs Dec 2013, percent

-28.3

-50.4

-34.8

-17.0

22 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

es its decline into 2014 cline while Private Investment continued to slow down ecreased. Tourist arrival dropped n downward trend while Fiscal spending caught up ore pessimistic 3.5% for 2014 and 4.1Ͳ4.8% for 2015

ecreased to 0.86%, still 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

Export grew 8.5% in the first 2 mo Other export

Chart 5.05a – YTD annual change in Export in First 2 months of 2014 vs those of 2013, percent Total export ReͲexports Other export Machinery Electrical Forestry PetroͲchemical Electronics Other manufacturing Automotive Jewellery Optical instru Agriculture Footware Apparels Furniture Aircrafts Chemicals Toiletries Agro products Fishery Photo instru Petroleum Metal Mining

8.5 >1,000.0 364.8 22.4 19.0 15.4 13.1 12.3 12.0 11.3 11.1 9.8 8.5 8.2 7.8 7.2 6.8 4.2 2.5 0.8 -1.6 -2.7 -3.3 -34.3 -45.2

Source: Bank of Thailand; CTE analysis

onths of 2014, thanks mainly to Baht Chart 5.05b – Sectoral contributions Contributions to total export growth Total export Other export Electronics Machinery Automotive Electrical Agriculture PetroͲchemical Other manufacturing Jewellery Apparels Chemicals ReͲexports Agro products Optical instru Aircrafts Forestry Furniture Toiletries Footware Fishery Photo instru Petroleum Mining Metal

8.5 2.4 1.7 1.6 1.5 1.0 0.8 0.7 0.4 0.3 0.3 0.2 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 -0.2 -0.4 -2.3

24 www.ChartingThailandEconomy.com

Positive growth in all export mark

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

᪛ 6.9 (Trilli

᪛ 5.2

᪛ 6.1

᪛ 6.7

᪛ 7.1

Middle East

5.7

5.0

4.7

5.1

11.9

11.3

10.9

9.5

9.8

Japan

10.3

10.5

10.7

10.2

9.7

12.2

11.7

11.1

11.4

11.5

17.4

18.1

16.7

18.4

18.1

East Asia exͲJapan

21.0

21.2

20.1

20.4

ASEAN

21.3

23.0

24.3

24.6

25.9

09FY

10FY

11FY

12FY

13FY

100% =

NAFTA Rest of the world

Source: Bank of Thailand; CTE analysis

kets so far this year

Chart 5.07b â&#x20AC;&#x201C; Change in Export In THB term, First 2 months of 2014 vs those of 2013

ion) 14.2%

EU Middle East

12.0%

10.8%

Japan Rest of the world NAFTA East Asia ex Japan ASEAN

10.0%

7.1%

6.8%

6.0%

25 www.ChartingThailandEconomy.com

Import has decreased 9% so far in decrease in Others

Chart 5.09a – YTD annual change in Import in First 2 months of 2014 vs those of 2013, percent

-9.3

Total import

17.2

Intermediate Ͳ Fuel

-0.2

Intermediate Ͳ Non fuel

Capital goods

-3.3

Consumer goods

-4.1

Others

-62.9

Source: Bank of Thailand; CTE analysis

n 2014, due mainly to the

n Baht Chart 5.09b – Sectoral contributions Contributions to total import growth

Total import

-9.3

3.1

Intermediate Ͳ Fuel

Intermediate Ͳ Non fuel

-0.1

Consumer goods

-0.3

Capital goods

-0.7

Others

-11.2

26 www.ChartingThailandEconomy.com

Intermediate goods has gained m

Chart 5.08 – Import by economic classificatio Percent of total import in Baht term Ѯ 4.6

Ѯ 5.9

Ѯ 7.0

Others

7.8

10.2

12.4

Capital goods

22.3

20.9

Intermediate – NonͲFuel

43.0

44.0

40.0

Intermediate Ͳ Fuel

18.6

17.4

18.9

Consumer goods

8.3

7.5

09FY

10FY

11FY

100% =

Source: Bank of Thailand; CTE analysis

21.3

more share this year

Ѯ 7.8

Ѯ 7.7

11.4

12.1

24.4

23.2

Ѯ 1.2

(Trillion)

7.3 23.4

37.7

37.5

36.0

18.9

20.6

23.1

7.8

8.0

8.5

12FY

13FY

14/2MO 27 www.ChartingThailandEconomy.com

Tourist arrivals dropped 4% in the compared to the same period last Chart 5.18 â&#x20AC;&#x201C; International Tourist Arrivals Million visits

CAGR

10.6%

19.2 15.9 14.5 10.8

11.7

14.1

11.5

10.0

04FY 05FY 06FY 07FY 08FY 09FY 10FY 11FY Source: Department of Tourism

e first 2 months of this year t year

Monthly cumulative 30.0

26.7 25.0

22.4

Y 12FY 13FY

2013 20.0

15.0

10.0

5.0

0.0

2014 J F M A M J J A S O N D

28 www.ChartingThailandEconomy.com

Russian is by far the highest grow month of 2014 Chart 5.19a International Tourist Arrivals by country of nationality Percent of total Rest of world Americas

Europe

East Asia

15.3 6.0

28.7

15.6 5.3

27.9

14.7

13.8

5.0

4.8

26.5

25.3

50.0

51.2

53.8

56.0

09FY

10FY

11FY

12FY

Source: Department of Tourism; CTE analysis

11.8 4.4

23.6

60.2

13FY

wth tourist nationality in the first

Chart 5.19b 10 Highest Change in International Tourist Arrivals by country of nationality First 2 month of 2014 vs 2013, Thousands 91.3

Russia 47.0

Laos 17.3

Vietnam

10.9

France

9.4

United Kingdom Singapore S.Africa

6.6 5.1

Indonesia

3.5

Austria

3.0

Switzerland

3.0

29 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Another 0.25% cut in policy intere

Chart 3.01a – BOT’s policy rate

Apr-13

2.80% 2.70% 2.60% 2.50% 2.40% 2.30% 2.20% 2.10% 2.00% Mar-14

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

2.50%

Min Apr-13

0.00% Mar-14

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

Source: Bank of Thailand

est rate in March

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% Mar-14

Apr-13

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

10.00% 7.50%

Min 5.00% 2.50%

Apr-13

anches

0.00% Mar-14

31 www.ChartingThailandEconomy.com

7% increase in fiscal expenditure

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

2500

2000

1500

1000

500

2014

Source: Bank of Thailand; CTE analysis

in the first 2 month of 2014

2013

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Businesses were less pessimistic b pessimistic in February Chart 1.21a â&#x20AC;&#x201C; Business Sentiment Index* 100

Better

47.5

47.4

46.9

45.0

45.4

46.5

Worse

0 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14

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

but Industries were more

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

Better

100

90.4

92.8

90.3

88.3

86.9

85.7

Worse

0 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14

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

34 www.ChartingThailandEconomy.com

Consumer confidence took a dive

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

100

Better

50 Worse

Worse

0 Aug-13

Oct-13

Dec-13

Feb-14

Aug-13

Oct-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

e in February

On job

On future income

100

Better 50 Worse

0 Dec-13

onth e prior month he prior month

Feb-14

Aug-13

Oct-13

Dec-13

Feb-14

35 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Big downward revision for 2014 g

Chart 1.03a â&#x20AC;&#x201C; Real GDP growth projections For 2014, Annual percentage change 6.00 5.50 5.00

BOT NESDB

4.50

FPO

4.00

The Economist poll

3.50 3.00 2.50 2.00

Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14

Forecast as of, month ending

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

growth from BOT and FPO

omist

Chart 1.03b â&#x20AC;&#x201C; Real GDP growth projections For 2015, Annual percentage change 6.00 5.50

BOT

5.00 4.50

The Economist poll

4.00 3.50 3.00 2.50 2.00

Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14

Forecast as of, month ending 37 www.ChartingThailandEconomy.com

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

Chart 1.04a â&#x20AC;&#x201C; Real GDP growth projections 2014, Annual % change, as of Mar 29th 2014 7.2 6.9

China Philippines Vietnam India Indonesia Malaysia Singapore Pakistan Hong Kong South Korea

6.1 6.1 5.4 5.1 4.2 3.9 3.5 3.3 3.2 3.0

Taiwan Thailand US Australia Russia Brazil Japan Euro Area

Source: The Economist

2.8 2.6 2.0 1.8 1.4 1.1

e quite low compared to other

Chart 1.04b â&#x20AC;&#x201C; Real GDP growth projections 2015, Annual % change, as of Mar 29th 2014 6.9 6.3 6.5 6.4 6.1 5.5 4.5 4.1 2.4 4.0 3.4 4.1 2.9 2.9 2.5 2.1 1.3 1.5 38 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Unemployment rate decreased to

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

2.07 1.83 1.51

1.49 1.38

1.38

1.04

0.68

04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg 1

Source: National Statistical Office, Bank of Thailand

o 0.86% in February

Monthly Average 1.00 0.90

2014

0.80 0.70 0.60

2013

0.50 0.40

0.66

0.72

12-Avg 13-Avg

0.30 0.20 0.10 0.00

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

40 www.ChartingThailandEconomy.com

Thailand’s unemployment rate is leading economies Chart 2.09 – Unemployment rate Latest, percent Thailand Ͳ Feb Singapore Ͳ Q4

0.9 1.8

Malaysia Ͳ Dec

3.0

Hong Kong Ͳ Feb

3.1

Vietnam Ͳ 2012

3.2

Japan Ͳ Jan

3.7

China Ͳ Q4

4.1

Taiwan Ͳ Feb

4.1

South Korea Ͳ Feb Brazil Ͳ Jan Russia Ͳ Feb Indonesia Ͳ Q4 Australia Ͳ Feb Pakistan Ͳ 2013 US Ͳ Feb Philippines Ͳ Q1 India Ͳ 2012 Euro Area Ͳ Feb Source: The Economist

lowest comparing to other

4.5 4.8 5.6 5.8 6.0 6.2 6.7 7.5 9.9 12.0

41 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

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 44

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

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

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 60.2

Pakistan

57.3

Nepal

53.3

Cambodia 46.1

Indonesia

43.4

Vietnam

41.5

Philippines 31.3

South Africa China

29.8

Bhutan

29.8

Sri Lanka

29.1

Iraq Colombia Source: The World Bank

21.4 15.8

cially ASEAN, still have majority than $2.00 a day

ountries

Latest 95.2 92.6 84.5 77.6 76.5 72.8 68.7

66.0

15.4

Egypt, Arab Rep. Venezuela, RB

12.9

Peru

12.7 10.8

Brazil

8.0

Iran, Islamic Rep. Mexico

5.2

Thailand

4.6

Turkey

4.2

Chile

2.7

Malaysia

2.3

Argentina

1.9

Romania

1.7

Bulgaria

0.4

Hungary

0.4

Montenegro

0.3

Poland

0.2

Slovak Republic

0.1

Slovenia

0.1

Croatia

0.1

Russian Federation

0.1

www.ChartingThailandEconomy.com

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

Chart 2.06 â&#x20AC;&#x201C; GNI per capita, selected countrie 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 49

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 50

www.ChartingThailandEconomy.com

Increasing trend in household inc debt service year has reduced fro Chart 2.10a â&#x20AC;&#x201C; Monthly income per household Average, Baht

14,963

2004

17,787

18,660

2006

2007

20,903

2009

23,236

2011

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

12,297

2004

14,311

14,500

2006

2007

16,205

2009

Source: National Statistic Office survey; CTE analysis

17,403

2011

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

hold

Chart 2.10c – Debt per household Average, Baht

104,571

2004

116,585

116,681

2006

2007

134,699

134,900

2009

2011

Chart 2.10d – Debt service year* 3.3 2.8 2.3

2.4 1.9

2004

2006

2007

2009

2011

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

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Both headline and core inflation i

Chart 3.07a – YͲoͲY change in CPI Percent 2.50%

2.00%

Head line 1.50%

Core* 1.00%

0.50%

0.00% Oct-13

Nov-13 Dec-13

Jan-14

Feb-14

Mar-14

Note: (*) exclude raw food and energy

Source: Bureau of Trade and Economic Indices; CTE analysis

increased slightly in March

Chart 3.07b – YͲoͲY change in CPI by product March 2014, percent Meat

8.1

Veg & fruit

5.9

Tobacco & alcohol

5.1

Food away from home

4.4

Eggs & milk

4.0

Seasoning

3.8

Prepared food at home

3.2

Energy

2.3

Rice

1.8

Housing & furnishing

1.0

Apparel and footware

0.9

Non alcoholic beverage

0.8

Medical care

0.8

Transport & Commu

0.8

Recreation & Education

0.5

53 www.ChartingThailandEconomy.com

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

Latest

India Ͳ Feb Pakistan Ͳ Feb Indonesia Ͳ Feb 6.2

Russia Ͳ Feb

5.7

Brazil Ͳ Feb 4.4

Vietnam Ͳ Mar

4.1

Philippines Ͳ Feb

3.9

Hong Kong Ͳ Feb

3.5

Malaysia Ͳ Feb 2.7

Australia Ͳ Q4 Thailand Ͳ Mar

2.1

China Ͳ Feb

2.0 1.4

Japan Ͳ Jan US Ͳ Feb

1.1

South Korea Ͳ Feb

1.0 0.7

Euro Area Ͳ Feb

0.4

Singapore Ͳ Feb Taiwan Ͳ Feb

0.0

Note: (*) The Economist Poll

Source: The Economist

he low side compared to other

2014* 8.1

7.9

6.9

7.7

7.0 5.6 6.0 6.7 3.4 3.6 3.2 2.7 2.4 2.8 2.5 1.6 2.0 0.9 2.7 1.0

54 www.ChartingThailandEconomy.com

Inflation at producer level increas

Chart 3.09a – YͲoͲY change in PPI Percent 3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

-0.5% Oct-13

Nov-13 Dec-13

Jan-14

Feb-14

Mar-14

Source: Bureau of Trade and Economic Indices; CTE analysis

sed slightly but remained low

Chart 3.09b – YͲoͲY change in PPI by product March 2014, percent Fishing Petroluem products Livestocks Energy Metal Textile Leather & footware NonͲmetallic mineral Mechinery Chemical Food Transport equip Wood Pulp & paper Forestry Electrical equip -0.4 Crop -0.5 Basic metals -1.3 Other manu goods -3.6 Rubber & plastic -6.9

23.9 11.4 11.4 10.2 2.6 1.2 1.1 0.8 0.6 0.5 0.5 0.3 0.2 0.2 0.0

55 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Bank’s loan dropped from prior m in financial market Chart 3.02a – Commercial Banks’ Loan THB billion 10,800 10,600 10,400 10,200 10,000 9,800 9,600 9,400 9,200 Feb-13

Mar-13

Apr-13

May-13

Jun-13

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

93.9%

93.4%

95.3%

Apr-13 May-13 Jun-13

93.5%

93.3%

90% 85% Feb-13 Mar-13

Source: Bank of Thailand

month, a clear sign of slow down

M-o-M -0.1% Y-o-Y +10.4%

ul-13

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-14

it* ratio

94.9%

Jul-13

95.7%

95.5%

Aug-13 Sep-13

95.0%

96.6%

96.0%

Oct-13 Nov-13 Dec-13 Jan-14

57 www.ChartingThailandEconomy.com

Gross NPL increased slightly in 20 decreased as percent of total loan

Chart 3.03a – Total Financial Institutions’ Gros Billion Baht

445

06YE

458

07YE

401

08YE

380

09YE

317

10YE

270

11Y

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

7.47%

7.31% 5.29%

4.85% 3.60%

06YE

07YE

Source: Bank of Thailand

08YE

09YE

10YE

2.75

11Y

013 in absolute value but n

ss NPLs Outstanding

256

267

12YE

13YE

2014/Q1 2014/Q2 2014/Q3

ss NPLs Outstanding

2.26%

2.16%

12YE

13YE

2014/Q1 2014/Q2 2014/Q3 58 www.ChartingThailandEconomy.com

Banksâ&#x20AC;&#x2122; capital ratio continue to d level Chart 3.04 â&#x20AC;&#x201C; Capital ratio of all commercial ba % of risk assets, at year end

15.8% 14.9% 13.3%

16.1% 14.8%

14.0%

13.9%

12.4%

2004

2005

2006

2007

2008

2009

2010

2011

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

Source: Bank of Thailand

rop in 2014, but is still at healthy

nks* Month End 16.8%

16.2%

15.7%

16.6% 16.4% 16.2% 16.0%

2013 15.8% 15.6% 15.4%

2014

15.2% 15.0%

2012

anches

2013

14.8%

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

59 www.ChartingThailandEconomy.com

Thailand’s real interest rate is slig Chart 3.05 – Real interest rates Percent, as of Mar 29th 2014

3M riskͲfree interest rates 10.8

Brazil

10.1

Pakistan India

8.9

Russia

8.8 8.1

Indonesia 6.0

Vietnam

5.5

China 3.3

Malaysia South Korea

2.7

Australia

2.6

Thailand

1.9

Philippines

1.7

Taiwan

0.9

Singapore

0.4

Hong Kong

0.4

Euro Area

0.3

0.2

Japan

0.1

Note: (*) The Economist Poll

Source: The Economist

൞

ghtly negative

Expected 2014 inflation*

Real interest rates

6.0 3.2

6.9 1.0

7.9

3.2

5.6 1.1

7.0 -0.7

6.7

2.7

2.8 0.1

3.2

0.7

2.0 -0.1

2.7

-0.5

2.4 3.4

-1.7 -0.1

1.0 -2.3

2.7 3.6

-3.2 -0.6

0.9

-1.4

1.6 2.5

-2.4

www.ChartingThailandEconomy.com

SET rebounded again in March am Chart 3.06a â&#x20AC;&#x201C; Monthly performance of SET index Percent change from prior month, at month end 4.3%

4.0%

3.8%

Feb-14

Mar-14

-1.9%

Oct-13

-5.0%

-5.3%

Nov-13

Dec-13

Jan-14

Chart 3.06b â&#x20AC;&#x201C; Cumulative net foreign fund flow SET & MAI, Billion Baht, Month end 0.0 -5.0 -10.0 -15.0 -20.0 -25.0 -30.0 -35.0 -40.0

D-13 J-14 F-14 M-14 A-14 M-14 J-14 J-14 A-14 S-14 O-14 N-14 D-14

Source: SET, The Economist; CTE analysis

mid foreign inflow Chart 3.06c â&#x20AC;&#x201C; Change since Dec 31st 2013 Percent, as of Mar 26th 2014 10.6%

Indonesia (JSX) 6.2%

Pakistan (KSE) Thailand (SET)

4.8%

India (BSE)

4.4% 2.1%

France (CAC 40)

1.5%

Taiwan (TWI) Australia (All Ord.)

0.6%

Euro Area (FTSE Euro 100)

0.5%

US (S&P 500)

0.2% -0.1%

US (NAScomp) Singapore (STI)

-0.8%

Germany (DAX)

-1.1%

Malaysia (KLSE)

-1.5%

US (DJIA)

-1.9%

UK (FTSE 100)

-2.1%

S Korea (KOSPI)

-2.3%

China (SSEA)

-2.4% -6.1%

HK (Hang Seng) China (SSEB, $ terms) Japan (Nikkei 225)

-8.0% -11.1%

61 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Lower budget and cash deficit as

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

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

1.4%

1.1%

0.0% 0.1%

-0.5%-0.6% -1.1%-1.1 -1.7% -2.0%

04FY

05FY

06FY

Source: Bank of Thailand; CTE analysis

07FY

08FY

percentage of GDP in 2013

ance as percentage of nominal GDP

plus)

-0.3% -0.7%

-0.9% -2.0% -2.3%

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

09FY

-4.1%

10FY

11FY

12FY

13FY 63

www.ChartingThailandEconomy.com

Higher deficit in the first 2 month period in 2013 Chart 4.2 â&#x20AC;&#x201C; Government budget balance Billion Baht

1,751

Revenue 1,109

1,241

-36

Budget balance -1,109

-1,277

1,390

1,455

1,498

-174

-100

-1,629

-1,598

1,484

110

-75 -364

-1,280

Expenditure

-1,849

-1,825

-1

04FY 05FY 06FY 07FY 08FY 09FY 10FY 1 Source: Bank of Thailand; CTE analysis

hs of 2014, compared to the same

Monthly cumulative Budget balance (Billion Baht)

,902

2,078

2,153

100.0

50.0

0.0

2014 -50.0

-28 -412

-271 -100.0

2013

-150.0

-200.0

1,930 -2,489

-2,424

-250.0

-300.0

1FY 12FY 13FY

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

64 www.ChartingThailandEconomy.com

Smaller deficit in 2013

Chart 4.3 â&#x20AC;&#x201C; Government cash balance Billion Baht

Budget cash balance Overall Cash balance (including non-budgetary deficit/ surp 110

-36 -45 -100 -96 -144 -174

-3

04FY

05FY

06FY

Source: Bank of Thailand; CTE analysis

07FY

08FY

plus)

-28 -75

-95

-96

-156 -236 -266

-271

364 -401

-412 -466

09FY

10FY

11FY

12FY

13FY

'14/2mo

65 www.ChartingThailandEconomy.com

Thailand budget deficit is expecte rather low level compared to oth

Chart 4.4 â&#x20AC;&#x201C; Government Budget balance as pe 2014*, percent Hong Kong Singapore South Korea Russia Philippines China Taiwan Indonesia Thailand Euro Area Australia US Brazil Malaysia Vietnam

-5.3

India -6.3

Pakistan Japan

-8.1

Note: (*) The Economist Poll, actual for Thailand

Source: The Economist, Bank of Thailand

ed to be around 2.6% of GDP, a ers

ercentage of GDP 1.4 0.7 0.5 -0.4 -1.2 -1.9 -2.1 -2.3 -2.6 -2.6 -2.8 -2.9 -4.0 -4.1 -4.3

66 www.ChartingThailandEconomy.com

A slight increase in Public debt in

Chart 4.5a â&#x20AC;&#x201C; Composition of Public debt THB Trillion 6.0

5.0 Public debt from State Enterprises 4.0

Bond to Compensate FIDF's Loss & Prefunding debt

3.0

2.0

Direct Government debt

1.0

0.0 2010 10%

2011

2012

2013

Feb-14

Source: Public Debt Management Office

Ext as

absolute term so far in 2014

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%

Bond to Compensate FIDF's Loss & Prefunding debt

25% 20% 15% 10%

Direct Government debt

5% 0%

2010

ternal debt percent of total

2011

2012

2013

Feb-14

67 www.ChartingThailandEconomy.com

Thailand’s public debt is not high standard Chart 4.6 – Public debt in the world Percentage of GDP, 2013 est. 1 Japan 3 Greece 4 Italy 5 Iceland 6 Portugal 7 Ireland 10 Singapore 11 Cyprus 12 Sudan 17 France 18 Spain 19 Egypt 20 United Kingdom 23 Canada 26 Germany 27 Hungary 29 Sri Lanka 31 Morocco 32 Austria 35 Netherlands 36 United States 39 Israel 44 El Salvador 45 Bahrain 46 Albania

22 175 133 131 128 124 114 113 111 94 94 92 91 86 80 80 78 77 76 73 72 67 62 61 61

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

compared to international

48 Brazil 53 Croatia 54 Finland 58 Pakistan 59 Malaysia 63 India 68 Philippines 70 Vietnam 71 Poland 77 Laos 78 Thailand 79 Argentina 88 Ukraine 93 Bhutan 94 Taiwan 99 Mexico 102 Turkey 105 Korea, South 106 Hong Kong 107 Switzerland 114 China 118 Bangladesh 123 Norway 128 Indonesia 148 Russia

59 57 57 55 55 52 50 48 48 46 46 46 41 39 39 38 37 36 36 34 32 31 30 24 8

Intâ&#x20AC;&#x2122;l rule of thumb <60% of GDP

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

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

GDP growth of only 2.9% nvestment and Private consumption were affected and he overall growth in 4Q13 anufacturing’s slow down has dragged the overall GDP

ecreased to 0.86%, still 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

Negative Balance of Payment in t capital outflow

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

31.3 24.1

5.3 1.2 -0.3 -5.0 09FY

10FY

11FY

12FY

Source: Bank of Thailand; CTE analysis

13FY

14/2mo

he first 2 months of 2014, due to Trade Balance (F.O.B) 32.6

29.8 17.0

09FY

10FY

11FY

6.0

6.4

12FY

13FY

3.0 14/2mo

Net service income & transfer 2.3

-10.7 -19.7 09FY

10FY

-12.9

11FY

-7.5

-9.1

12FY

13FY

14/2mo

Net Capital Movement + errors and omissions 21.3 6.7

2.2

-2.3

-2.9 09FY

10FY

11FY

12FY

13FY

-5.6 14/2mo

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Strong Asian export engines refle surplus Chart 5.02 – Current Account balance As % of 2014 GDP* Singapore Ͳ Q4

Taiwan Ͳ Q4 Vietnam Ͳ 2012

5.3%

Malaysia Ͳ Q4

5.3% 4.4%

South Korea Ͳ Jan

2.6%

Hong Kong Ͳ Q4 Philippines Ͳ Dec

2.2%

Euro Area Ͳ Jan

2.1% 1.7%

China Ͳ Q4 Russia Ͳ Q4

0.9%

Japan Ͳ Jan

0.9%

Thailand Ͳ Q4

0.6%

Pakistan Ͳ Q4

-2.1%

US Ͳ Q4

-2.2%

India Ͳ Q4 Australia Ͳ Q4

-2.8% -3.2%

Brazil Ͳ Feb

-3.6%

Indonesia Ͳ Q4

-3.8%

Note: (*) The Economist Poll

Source: The Economist

ecting in huge current account

Last 12 months, USD Billion 19.5%

54.4

1.1%

57.4 9.1 11.7 72.0 5.6 9.4 298.0 188.6 33.0 23.0 -2.8 -4.0 -379.3 -49.2 -44.2 -82.5 -28.5

71 www.ChartingThailandEconomy.com

Improvement in trade balance is

Chart 5.03a â&#x20AC;&#x201C; Trade balance* in THB First 2 months of 2014 vs 2013, Billion Baht 1,600 1,400 1,200 1,000 800

600 400 200 0 -200

+8.5%

-400

Export

-9.3%

â&#x20AC;&#x201C;

Import

Trade balance

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

more of the case of weaker THB

Chart 5.03b – Trade balance* in USD First 2 months of 2014 vs 2013, Billion USD 50

2013

2014

-10

+0.2%

-20

Export

stments t and exchange rate conversion t and exchange rate conversion

-16.0%

–

Import

Trade balance

72 www.ChartingThailandEconomy.com

External debt level increased in a percentage of GDP 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%

38.5%

05YE

06YE

Source: Bank of Thailand

35.4%

07YE

31.4%

08YE

bsolute value but decreased as

09YE

28.8%

09YE

10YE

11YE

35.2%

33.8%

10YE

11YE

12YE

13/4Q

38.8%

38.2%

12YE

13/4Q

73 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%

18%

87%

85%

80%

82%

10YE

11YE

12YE

13/4Q

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%

43%

55%

54%

57%

11YE

12YE

13/4Q

74 www.ChartingThailandEconomy.com

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

418% 370% 340%

330%

312% 279%

08YE

09YE

10YE

11YE

12YE

13/4Q

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%

3.9%

3.4%

08FY

09FY

10FY

11FY

12FY

13/4Q

75 www.ChartingThailandEconomy.com

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

154.1 55.9

2005

106.5

118.0

2007

2008

73.9

2006

2009

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

13.8 9.1 5.7

2005

6.9

2006

2007

7.9

2008

2009

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

Source: Bank of Thailand; CTE analysis

sed slightly so far this year and

191.7

206.4

205.8

2011

2012

190.2

191.3

2013

Feb-14

9.1

9.4

2013

Feb-14

2010

er of months of import**

12.6 10.8

2010

the last 12 months

2011

9.9

2012

76 www.ChartingThailandEconomy.com

THB appreciated slightly against k

Chart 5.17a – Nominal Effective Exchange Rate 2007=100

112.0

Baht appreciates MͲoͲM

110.0

108.0

0.6%

106.0

104.0

102.0

100.0 98.0

YͲoͲY

Ͳ6.1%

Baht depreciates Mar-13

Jun-13

Sep-13

Dec-13

96.0

94.0 Mar-14

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 March

Chart 5.17b – YͲoͲY change in FX rate* Percentage change in avg. selling rate as of Mar 31st 2014 IDR Ͳ 3.0766

4.4

AUD Ͳ 30.2714

1.7

INR Ͳ 0.575

0.9

PHP Ͳ 0.7378

-1.0

JPY Ͳ 31.8378

-1.2

MXN Ͳ 2.4922

-4.4

MYR Ͳ 10.1229

-4.8

VND Ͳ 0.0015

-6.7

TWD Ͳ 1.0681

-7.7

SGD Ͳ 26.0126

-8.3

CNY Ͳ 5.2831

-9.2

USD Ͳ 32.5814

-9.6

KRW Ͳ 0.0304 EUR Ͳ 44.913

-13.2 -15.7

GBP Ͳ 54.3157 -17.4 Baht depreciates

Baht appreciates 77