MONTHLY ECONOMIC
October 2014 issue
Feature: Assessing Thailand’s FDI situation
Executive summary Growth Economic contraction ended with a minimal growth of 0.4% in 2Q14. On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth. On the production side, contraction in Manufacturing and Construction has dragged the overall GDP growth. In August, Manufacturing production picked up from last month but still lower than a year ago . On the other hand, Agriculture production increased impressively. On the expenditure side, Private consumption was down and Private Investment continued to decline. BOI net application dropped. Export grew 7% in THB term but decreased in USD term. Import, however, registered a negative growth, driven by lower intermediate goods import. Tourist arrivals dropped 11% in the first 8 months. Looking forward, Monetary policies are pro‐ growth, with policy rate unchanged at 2%. Government spending was recovered with the new government.
Confidence in private sector was mixed. Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. The consensus projection is between 1.5%‐ 2.6% for 2014 and 4.5‐4.8% for 2015.
Employment and wealth distribution Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies. Thailand’s per capita income was at USD 5,370 in 2013, ranked 103rd in the world. An average Thai is slightly poorer than an average Chinese but more than three times richer than an average Vietnamese. Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok. Poverty headcount and poverty rate have declined over the last decade.
Stability In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. Producer Price Index dropped from a year ago, creating a deflation. Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted for the first time in three years. Budget balance during the first 8 months of 2014 is almost 70 Billion Baht worse off than 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. Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
2
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
3
Economic contraction ended with a minimal growth in 2Q14
Chart 1.05 – Historical Real GDP growth rate Annual growth, percent 7.8% 7.1% 6.5%
6.3% 5.3%
CAGR* 2002‐2013 = 4.1%
4.6%
5.1% 5.0%
2.9%
2.5%
0.4%
0.1% -0.5%
-2.3% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Note: (*) Cumulative Annual Growth Rate Source: NESDB; CTE analysis
1Q14 2Q14 3Q14 4Q14
4 www.ChartingThailandEconomy.com
GDP grew 0.4% in 2Q14 despite contraction in Manufacturing
Chart 1.06a – Real growth by sector, 2Q14
Chart 1.06b – Sectoral contributions, 2Q14
Year‐on‐Year percentage change
Contributions to total Real GDP growth
GDP
GDP
0.4
Financial
6.1
Transport
5.3
PublicAdmin
4.0
Utilities
3.4
0.4
Transport
0.5
Financial
0.3
Agriculture
0.2
Utilities
0.1 0.1
Agriculture
2.7
PublicAdmin
Education
2.6
Education
0.1
Trading
0.0
Private HH
1.5
Health&Social
0.9
Trading
0.3
RealEstate
-0.7
Fishing
-1.2
Health&Social
0.0
Private HH
0.0
Fishing
0.0
RealEstate
0.0
Manufacture
-1.6
Mining
0.0
Mining
-1.7
Other social
-0.1
Construction
-0.1
Other social Construction
-2.6 -3.2
Hotel&Res-4.2 Source: NESDB; CTE analysis
Hotel&Res Manufacture
-0.2 -0.6
5 www.ChartingThailandEconomy.com
Apart from the decrease in Import, the increase in Export contributed the most to the overall 2Q14 GDP growth Chart 1.08a – Real growth by expenditure, 2Q14 Chart 1.08b – Expenditure Contributions, 2Q14 Year‐on‐Year percentage change
Contributions to total Real GDP growth
G
1.9
M (goods)
X (goods)
1.5
X (goods)
5.7 0.8
GDP
0.4
GDP
0.4
M (services)
0.2
G
0.2
C
0.2
C
0.1
Discrpncy
0.1
I (capital)
-6.9
X (services)
-8.4
M (goods) I
-10.8 -20.4
M (services)
0.0
X (services)
-1.3
I (capital) I (Inventory)
-1.7 -3.6
Note: (*) C = Private consumption, I = Investment which includes I (capital) = Capital formation and I (inventory) = Change in inventory G = Government consumption, X = Export of goods and services, M = Import of goods and services
Source: NESDB; CTE analysis
6 www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
7
Manufacturing production picked up from last month but was still lower than a year ago Chart 1.11 – Manufacturing Production Index (2000=100)
Monthly Average 250.0
CAGR
2.7% 200.0
2013 194.2 174.6
182.9
161.1
170.0
177.6 181.6 175.7
150.0
2014
152.1 138.6 100.0
M-o-M
+2.6%
Y-o-Y
50.0
-2.7%
0.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
J F M A M J J A S O N D
8 Source: The Office of Industrial Economics
www.ChartingThailandEconomy.com
Most sectors had their production decreased substantially from last month Chart 1.12a – Y‐on‐Y change in MPI by sector
Chart 1.12b – M‐on‐M change in MPI by sector
August 2014, percent
August 2014, percent
Office automate
13.5
Electronic
10.0
Wood products
8.3
Precision instru
6.2
Basic Mat
3.9
Petroleum
18.1
Office automate
17.2
Paper
6.0
Apparel
5.9
Transport Equip
4.2
Leather
2.1
Basic Mat
3.9
Electrical
1.8
Chemical
3.7
Paper
1.7
Furniture
Chemical
1.3
Leather
-0.7
Textiles
-1.1
Rubber&Plastic
0.1
0.0
Metal products
-1.9
Mineral
-2.4
Textiles
-2.4
Wood products
-2.6
Tobacco
-3.1
Tobacco
-2.7
Mineral
-4.1
Rubber&Plastic
-4.3
Petroleum
-4.5
Food & Bev
-4.5
Machineries
-5.0
Precision instru
Food & Bev
-5.8
Metal products
Apparel
-6.1
Electrical
Transport Equip
-15.0
Vehicles
Furniture
-26.1
Electronic
Vehicles
-26.7
Machineries
Source: The Office of Industrial Economics; CTE analysis
-5.4 -6.1 -7.4 -8.4 -10.0 -11.0
9 www.ChartingThailandEconomy.com
Capacity utilization rate almost unchanged in August
Chart 1.13a – Overall Capacity Utilization Rate
Chart 1.13b – Capacity utilization rate by sector
Percent
August 2014, percent
100% 90% 80% 70%
Seasonally adjusted
60% Normal
50% 40% 30% 20% 10% 0% Mar-14 Apr-14 May-14 Jun-14
Jul-14
Aug-14
Rubber&Plastic Wood products Electronic Furniture Electrical Basic Mat Textiles Mineral Chemical Metal products Food & Bev Office automate Leather Precision instru Paper Vehicles Machineries Transport Equip Petroleum Tobacco Apparel
88% 77% 75% 75% 74% 70% 69% 68% 68% 64% 60% 60% 60% 58% 53% 48% 44% 43% 42% 34% 28%
10 Source: The Office of Industrial Economics
www.ChartingThailandEconomy.com
Thailand’s among the economies whose MPI dropped from a year ago Chart 1.14 – Manufacturing Production Index Latest, percent change on year ago Philippines ‐ Jul
9.6
Taiwan ‐ Aug
7.0
China ‐ Aug
6.9
Vietnam ‐ Sep
6.7
Australia ‐ Q2
4.6
Singapore ‐ Aug
4.2
US ‐ Aug
4.1
Hong Kong ‐ Q2
2.2
Euro Area ‐ Jul
2.2
Indonesia ‐ Jul
1.4
Pakistan ‐ Jul
1.2
Malaysia ‐ Jul
0.5
India ‐ Jul
0.5
Russia ‐ Aug
0.1
Thailand ‐ Aug
-2.7
South Korea ‐ Aug
-2.8
Japan ‐ Aug
-2.9
Brazil ‐ Jul
-3.5
11 Source: The Economist
www.ChartingThailandEconomy.com
Agriculture production still grew healthily from a year ago
Chart 1.10 – Agriculture production index (2005=100)
Monthly Average 250.0
CAGR Y-o-Y
3.0% 122.5 105.9
128.4 126.6
+2.1% 200.0
113.0 112.1 109.4 111.2
M-o-M
+12.8%
100.0 150.0
2014 2013 100.0
50.0
0.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
J F M A M J J A S O N D
12 Source: Office of Agricultural Economics, Ministry of Agriculture and Cooperatives
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
13
Private consumption was down in August
Chart 1.15 – Composite Private Consumption Index* (2000=100)
Monthly Average 150.0
CAGR
2.5%
117.8
126.1 121.9 124.2
130.6
147.0 147.5 134.2
149.0
139.2
127.2
148.0
2013 147.0
146.0
2014 145.0
144.0
Y-o-Y
M-o-M
-0.8%
-0.2%
143.0 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg 12-Avg 13-Avg
Note: (*) seasonally adjusted Source: Bank of Thailand
J F M A M J J A S O N D
14 www.ChartingThailandEconomy.com
Vehicle consumption expenditures were the biggest decliners so far this year Chart 1.16a – Y‐on‐Y change
Chart 1.16b – M‐on‐M change
First 8 months of 2014 vs 2013, percent
August vs July 2014, percent
NGV (kg.)*
3.9
HH electricity (kilowatt/hour)
1.2
Benzene & Gasohol (litre)
1.0
LPG (litre)*
0.7
Real VAT (2000 prices, baht)
0.6
Diesel (litre)
0.3
Real import of consumer goods (2000 prices, US$)
-6.7
Motocycle (Unit)
-18.0
Commercial Car (Unit) Passenger Car (Unit)
-31.1 -45.9
Note: (*) figures are 1‐month delayed Source: Bank of Thailand; CTE analysis
2.2 -2.4 0.1 -2.8 1.3 0.1 -8.4 -3.1 -1.6 3.5
15 www.ChartingThailandEconomy.com
Private Investment continues its declining trend in August
Chart 1.17 – Private Investment Index (2000=100)
Monthly Average 255.0 M-o-M
-1.2%
250.0
CAGR
4.9%
245.0
Y-o-Y
-5.6%
240.8 240.1 240.0
209.1 172.4 175.2 175.7 156.0
193.5
183.9 161.2
235.0
2013
230.0
2014 225.0 220.0 215.0 210.0 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg 12-Avg 13-Avg
J F M A M J J A S O N D
16 Source: Bank of Thailand
www.ChartingThailandEconomy.com
Commercial car sales took the biggest hit so far this year
Chart 1.18a – Y‐on‐Y change
Chart 1.18b – M‐on‐M change
First 8 months of 2014 vs 2013, percent
August vs July 2014, percent
Domestic Machinery sales* (2000 prices, Baht)
1.2
Domestic Cement sales (ton)
1.2
Construction Area permitted (sqm)
Import of Capital Goods (2000 prices, Baht)
Domestic commercial car -31.0 sales (unit)
Note: (*) figures are 1‐month delayed Source: Bank of Thailand; CTE analysis
-0.7
-0.4
-1.4
-5.8
-1.5
-2.2
-0.8
17 www.ChartingThailandEconomy.com
FDI value increased almost by 30% during the first 7 months
Chart 5.14 – Foreign Direct Investment Million USD
Monthly cumulative FDI* 14,000
12,807 12,000
11,331
2013
10,699 10,000
9,112 8,547 8,000
6,000
4,853 4,000
3,861
2014 2,000
0
07FY
08FY
(*) Preliminary figures
Source: BOT
09FY
10FY
11FY
12FY
13FY
J
F M A M J
J
A S O N D
18 www.ChartingThailandEconomy.com
BOI’s net application decreased 9% during the first 8 months of 2014
Chart 5.15 – BOI net application of foreign direct investment* Billion Baht 648
525
396 351 316
288
236
09FY
10FY
11FY
Note: (*) Foreign investment (foreign equity>=10%)
Source: Board of Investment
12FY
13FY
2013/8M
2014/8M
19 www.ChartingThailandEconomy.com
FDI from Japan, the biggest source, has been declining in recent years Chart 5.16 – BOI net application of FDI* breakdown by country group Percent of total
11%
11%
Others
23%
27%
4% 10%
USA ANIEs ASEAN
3% 6% 6%
Europe
17%
2% 7% 8%
7% 10%
21% 2% 6% 10%
14% 8% 6%
7%
7% 26%
58%
Japan
44%
49%
54% 35%
10FY Note: (*) Foreign investment (foreign equity>=10%) (**) ANIEs: Taiwan, Hong Kong, South Korea
Source: Board of Investment; CTE analysis
11FY
12FY
13FY
2014/8M 20 www.ChartingThailandEconomy.com
All key Property indicators have decreased so far in 2014
Chart 1.19a – Y‐on‐Y change
Chart 1.19b – M‐on‐M change
First 7 months of 2014 vs 2013, percent
July vs June 2014, percent
Condo unit registered
-7.6
Constr. Area in municipal
New housing unit
-48.7
-9.4
30.4
-12.6
Value of land transaction -17.2
32.5
-11.6
21 Source: Bank of Thailand; CTE analysis
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
22
Improvement in trade balance is a combination of weaker THB and lower import Chart 5.03a – Trade balance* in THB
Chart 5.03b – Trade balance* in USD
First 8 months of 2014 vs 2013, Billion Baht
First 8 months of 2014 vs 2013, Billion USD
6,000
200
5,000 150 4,000 2013
3,000
100
2014 -5.7%
+6.6%
-1.4%
-12.7%
2,000 50 1,000 0
0
-1,000
Export
–
Import
=
Trade balance
-50
Export
Note: (*) Not equal to the one in Balance of Payment decomposition due to few adjustments (**) Excluding Electricity and aircraft export, adjustment for Balance of payment and exchange rate conversion (***) Excluding Electricity and military import, adjustment for Balance of payment and exchange rate conversion
Source: Bank of Thailand; CTE analysis
–
Import
=
Trade balance
23 www.ChartingThailandEconomy.com
Export grew 6.6% in the first 8 months of 2014, thanks mainly to machinery, automotive and electronics Chart 5.05a – YTD annual change in Export in Baht Chart 5.05b – Sectoral contributions First 8 months of 2014 vs those of 2013, percent Total export Re‐exports Machinery Petro‐chemical Other manufacturing Jewellery Electrical Footware Agriculture Optical instru Automotive Electronics Furniture Apparels Fishery Toiletries Forestry Agro products Chemicals Other export Petroleum -2.5 Photo instru -9.4 Metal -10.7 Aircrafts -13.4 Mining-31.3
Contributions to total export growth
6.6 >100.0 17.0 15.4 15.1 12.1 11.2 11.0 9.5 9.1 8.8 8.5 7.6 7.2 6.5 5.0 3.6 2.8 0.9 0.6
Source: Bank of Thailand; CTE analysis
Total export Machinery Electronics Automotive Petro‐chemical Agriculture Electrical Other manufacturing Agro products Jewellery Apparels Re‐exports Optical instru Fishery Toiletries Furniture Footware Chemicals Forestry Other export Photo instru Petroleum Aircrafts Mining Metal
6.6 1.3 1.2 1.2 0.8 0.7 0.6 0.5 0.3 0.3 0.2 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 -0.1 -0.1 -0.2 -0.2 -0.5
24 www.ChartingThailandEconomy.com
Positive growth in all export markets so far this year
Chart 5.07a – Export by country
Chart 5.07b – Change in Export
Percent of total export in THB term
In THB term, First 8 months of 2014 vs those of 2013
฿ 5.2
฿ 6.1
฿ 6.7
฿ 7.1
Middle East
5.7
5.0
4.7
5.1
5.1
EU
11.9
11.3
10.9
9.5
9.8
Japan
10.3
10.5
10.7
10.2
9.7
Middle East
11.7
11.1
11.4
11.5
NAFTA
NAFTA
12.2
17.4
18.1
18.4
18.1
16.7
Rest of the world East Asia ex‐Japan
20.1
20.4
21.0
21.0
100% =
฿ 6.9 (Trillion)
EU
ASEAN
21.3
09FY
23.0
10FY
24.3
11FY
24.6
12FY
14.2%
11.4%
10.5%
Japan 21.2
ASEAN
25.9
East Asia ex Japan
13FY
Rest of the world
6.4%
5.4%
4.3%
3.2%
25 Source: Bank of Thailand; CTE analysis
www.ChartingThailandEconomy.com
Import has decreased 5.7% so far in 2014, due mainly to the decrease in Others (mainly vehicle parts) Chart 5.09a – YTD annual change in Import in Baht Chart 5.09b – Sectoral contributions First 8 months of 2014 vs those of 2013, percent
Total import
Contributions to total import growth
Total import -5.7
-5.7
Intermediate ‐ Fuel
2.6
Intermediate ‐ Fuel
Consumer goods
1.2
Consumer goods
Intermediate ‐ Non fuel
-0.1
Intermediate ‐ Non fuel
Capital goods
-1.6
Capital goods
Others
-45.3
0.5
0.1
0.0
-0.4
Others -5.9
26 Source: Bank of Thailand; CTE analysis
www.ChartingThailandEconomy.com
Intermediate goods has gained more share this year
Chart 5.08 – Import by economic classification Percent of total import in Baht term ฿ 4.6
฿ 5.9
฿ 7.0
฿ 7.8
฿ 7.7
Others
7.8
10.2
12.4
11.4
12.1
Capital goods
22.3
20.9
21.3
24.4
23.2
100% =
฿ 4.9
(Trillion)
7.6
24.0
Intermediate – Non‐Fuel
43.0
44.0
40.0
37.5
36.0
Intermediate ‐ Fuel
18.6
17.4
18.9
18.9
20.6
22.0
Consumer goods
8.3
7.5
7.5
7.8
8.0
8.4
09FY
10FY
11FY
12FY
13FY
14/8MO
38.0
27 Source: Bank of Thailand; CTE analysis
www.ChartingThailandEconomy.com
Tourist arrivals dropped 11% in the first 8 months of this year compared to the same period last year Chart 5.18 – International Tourist Arrivals Million visits
Monthly cumulative 30.0
26.7
CAGR
25.0
10.6% 22.4
2013 20.0
19.2 15.9 14.5 10.8
11.7
15.0
14.1
11.5
10.0
10.0
2014 5.0
0.0
04FY 05FY 06FY 07FY 08FY 09FY 10FY 11FY 12FY 13FY
J F M A M J J A S O N D
28 Source: Department of Tourism
www.ChartingThailandEconomy.com
Laos and Russia have been the two highest growing market for tourists so far this year Chart 5.19a International Tourist Arrivals by country of nationality
Chart 5.19b 10 Highest Change in International Tourist Arrivals by country of nationality
Percent of total
First 8 month of 2014 vs 2013, Thousands
Rest of world
15.3
15.6
14.7
13.8
Americas
6.0
5.3
5.0
4.8
Europe
28.7
27.9
26.5
25.3
11.8
Laos
4.4
Russia
23.6
85.6 49.8
Cambodia
31.1
France
24.1
United Kingdom
18.7
Myanmar
East Asia
50.0
09FY
51.2
10FY
53.8
11FY
56.0
12FY
Source: Department of Tourism; CTE analysis
60.2
13FY
Italy
12.6 9.1
Brazil
5.9
Finland
5.7
Switzerland
4.9
29 www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
30
Policy interest rate unchanged in September
Chart 3.01a – BOT’s policy rate
Oct-13
Chart 3.01b – BIBOR overnight rate 2.60% 2.50% 2.40% 2.30% 2.20% 2.10% 2.00% 1.90% 1.80% Sep-14
Chart 3.01c – Saving deposit rate*
2.60% 2.50% 2.40% 2.30% 2.20% 2.10% 2.00% 1.90% 1.80% Sep-14
Oct-13
Chart 3.01d – Commercial bank MLR* 10.00%
Max
7.50%
10.00% 7.50%
Min Max
5.00%
5.00%
2.50%
2.50%
Min Oct-13
0.00% Sep-14
Oct-13
Note: (*) All Commercial Banks registered in Thailand, excluding foreign branches
Source: Bank of Thailand
0.00% Sep-14
31 www.ChartingThailandEconomy.com
Government spending recovered
Chart – Monthly cumulative Fiscal expenditure Billion Baht 3000
2500
2000
2013 1500
1000
2014
500
0
J
F
M
A
M
J
J
A
S
O
N
D
32 Source: Bank of Thailand; CTE analysis
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
33
Recently improving business confidence seemed to end in August
Chart 1.21a – Business Sentiment Index* 100
Chart 1.21b – Thai Industries Sentiment Index** 200
Better
Better
49.4 50
48.6 44.3
48.0
49.6
49.1 100
Worse
84.7
84.0
85.1
88.4
89.7
88.7
Worse
0
0 Mar-14 Apr-14 May-14 Jun-14
Jul-14
Aug-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
Mar-14 Apr-14 May-14 Jun-14
Jul-14 Aug-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 Source: Bank of Thailand, The Federation of Thai Industries
www.ChartingThailandEconomy.com
Consumers are optimistic on future income
Chart 1.20a – Consumer Confidence Index Overall
100
On job
100
Better
Better
50
Better
50 Worse
50 Worse
0
Worse
0 Feb-14
Apr-14
Jun-14
Aug-14
0 Feb-14
Apr-14
Jun-14
Note: (*) The index ranges from 0 to 100 50 means consumer confidence is equal to those of the prior month Over 50 means consumer confidence is better than those of the prior month Under 50 means consumer confidence is worse than those of the prior month Source: Ministry of Commerce
On future income
100
Aug-14
Feb-14
Apr-14
Jun-14
Aug-14
35 www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
36
BOT lowered its growth projection for next year
Chart 1.03a – Real GDP growth projections
Chart 1.03b – Real GDP growth projections
For 2014, Annual percentage change
For 2015, Annual percentage change 6.00
6.00
5.50
5.50
5.00
BOT
4.50
5.00 4.50
The Economist poll
4.00
4.00
3.50
3.50
3.00
3.00
2.50
2.50
2.00
2.00
1.50
1.50
NESDB FPO
The Economist poll
BOT 1.00 Apr-14 May-14 Jun-14
Jul-14
Aug-14 Sep-14
Forecast as of, month ending
1.00 Apr-14 May-14 Jun-14
Jul-14
Aug-14 Sep-14
Forecast as of, month ending 37
Source: NESDB, Fiscal Policy Office, Bank of Thailand, The Economist
www.ChartingThailandEconomy.com
Low growth prospect for Thailand in 2014
Chart 1.04a – Real GDP growth projections
Chart 1.04b – Real GDP growth projections
2014, Annual % change, as of Sep 30th
2015, Annual % change, as of Sep 30th 2014
China Philippines India Vietnam Malaysia Pakistan Indonesia South Korea 3.6 Singapore 3.5 Taiwan 3.5 Australia 3.0 Hong Kong 2.4 US 2.0 Thailand 1.9 Japan 1.3 Euro Area 0.9 Brazil 0.4 Russia 0.4
2014 7.5 6.4 6.0 6.0 6.0
5.4 5.2
China Vietnam India Philippines Indonesia Malaysia Thailand Pakistan Singapore South Korea Taiwan US Australia Hong Kong Brazil Euro Area Japan Russia
7.0 6.6 6.5 6.3 5.9 5.4 4.5 4.2 3.8 3.7 3.3 3.0 2.8 2.6 1.4 1.3 1.2 1.0 38
Source: The Economist
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
39
Unemployment rate dropped significantly in August
Chart 2.08 – Unemployment rate Percent
Monthly Average 1.40
1.20
2.07
2014 1.83
1.00
1.51
1.49 1.38
0.80
2013
1.38 0.60
1.04
0.68
0.66
0.72
0.40
0.20
0.00 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg 12-Avg 13-Avg
J F M A M J J A S O N D
40 Source: National Statistical Office, Bank of Thailand
www.ChartingThailandEconomy.com
Thailand’s unemployment rate is lowest comparing to other leading economies Chart 2.09 – Unemployment rate Latest, percent Thailand ‐ Aug Singapore ‐ Q2 Malaysia ‐ Jul
0.7 2.0 2.8
Hong Kong ‐ Aug
3.3
South Korea ‐ Aug
3.3
Japan ‐ Aug
3.5
Vietnam ‐ 2013
3.6
Taiwan ‐ Aug China ‐ Q2 Russia ‐ Aug Brazil ‐ Aug Indonesia ‐ Q1
3.9 4.1 4.8 5.0 5.7
US ‐ Aug
6.1
Australia ‐ Aug
6.1
Pakistan ‐ 2013
6.2
Philippines ‐ Q3 India ‐ 2013 Euro Area ‐ Aug
6.7 8.8 11.5
41 Source: The Economist
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
42
Overall improvement in income distribution in Thailand, except for only in Bangkok Chart 2.01 – Thailand’s GINI coefficient 0.55
Overall 0.50
South North East
0.45
North Central Bangkok
0.40
0.35
0.30
'88
'90
'92
'94
'96
'98
'00
'02
'04
'06
'07
'09
'11
Note: (*) The Gini coefficient is a measure of inequality of a distribution of income. It is defined as a ratio with values between 0 and 1 Here, 0 corresponds to perfect income equality (i.e. everyone has the same income) and 1 corresponds to perfect income inequality (i.e. one person has all the income, while everyone else has zero income). Therefore, the lower the ratio the better the income distribution.
Source: National Statistics Office, NESDB
43
www.ChartingThailandEconomy.com
Slight improvement of income distribution when compared the top and the bottom 20% Chart 2.02 – Quintile by income Percent of total income
Top 20% Bottom 20%
11.9
13.3
14.9
14.1
13.5
13.1
14.6
13.4
12.2
14.4
12.8
11.8
11.1
Top 20%
54.4
57.0
59.0
57.2
56.5
56.1
57.5
56.0
54.7
56.0
54.6
54.1
54.2
Second 20%
20.6
19.5
19.7
19.9
19.8
19.8
20.1
20.3
20.2
20.5
20.4
19.5
18.9
Third 20%
12.4
11.7
11.1
11.7
11.8
12.0
11.5
12.1
12.5
12.2
12.6
12.7
12.8
Forth 20%
8.1
7.5
7.4
7.6
7.8
8.0
7.7
8.0
8.3
8.6
4.6
4.3
4.1
4.2
4.3
7.3 4.0
7.7
Bottom 20%
7.1 4.0
4.2
4.5
3.9
4.3
4.6
4.9
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2007
2009
2011 44
Source: National Statistics Office, NESDB
www.ChartingThailandEconomy.com
Data from World Bank suggests that income equality problem in Thailand is not as bad as in Malaysia or China Chart 2.03 – Income equality in the world Ratio of the share of national income going to the richest 20% to the share of the poorest 20% Latest, selected countries Honduras Bolivia Comoros South Africa Namibia Brazil Colombia Guatemala Seychelles Central African Republic Paraguay Panama Zambia Costa Rica El Salvador Swaziland Chile Peru Qatar Ecuador Nigeria Venezuela, RB Mexico Malaysia Dominican Republic
29.7 27.8 26.7 25.3 21.8 20.6 20.1 19.6 18.8 18.0 17.3 17.1 16.6 14.5 14.3 14.0 13.5 13.5 13.3 12.5 12.2 11.5 11.3 11.3 11.3
Source: The World Bank; CTE analysis
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
45
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
46
Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade Chart 2.04a
Chart 2.04b
Chart 2.04c
Thailand Poverty Line
Number of poor people
Percent of Poor people
Baht/ month/ person
Million
Percentage of total population
3,500
25
60%
3,000
50% 20
2,500 40% 15
2,000
30% 1,500
10 20%
1,000 5
10%
500
0
0 '01
'03
'05
'07
'09
Legend color:
'11
Overall
0% '01
'03
Bangkok
'05
'07
Central
'09
North
'11
'01
'03
North East
South
'05
'07
Note: Before 2006, poverty survey was normally conducted every 2 years. For the missing year, we use the average value between the prior and later years
Source: NESDB
'09
'11
47
www.ChartingThailandEconomy.com
Many countries in Asia and especially ASEAN, still have majority of their populations earning less than $2.00 a day Chart 2.05 – Poverty in the world, selected countries Poverty headcount ratio at $2 a day (PPP) (% of population), Latest Congo, Dem. Rep.
95.2
Madagascar
92.6
Nigeria
84.5
Ethiopia
77.6
Bangladesh
76.5
Timor‐Leste
72.8
India
68.7
Lao PDR
66.0
Pakistan
60.2
Nepal
57.3
Cambodia
53.3
Indonesia
46.1
Vietnam
43.4
Philippines
41.5
South Africa
31.3
Egypt, Arab Rep.
15.4
Venezuela, RB
12.9
Peru
12.7
Brazil
10.8
Iran, Islamic Rep.
8.0
Mexico
5.2
Thailand
4.6
Turkey
4.2
Chile
2.7
Malaysia
2.3
Argentina
1.9
Romania
1.7
Bulgaria
0.4
Hungary
0.4
Montenegro
0.3
China
29.8
Poland
0.2
Bhutan
29.8
Slovak Republic
0.1
Sri Lanka
29.1
Slovenia
0.1
Croatia
0.1
Russian Federation
0.1
Iraq Colombia Source: The World Bank
21.4 15.8
48
www.ChartingThailandEconomy.com
An average Thai is slightly poorer than an average Chinese but more than three times richer than an average Vietnamese Chart 2.06 – GNI per capita, selected countries
( ) = World rank
2013 or latest, Atlas method (current US$) Monaco (1) Liechtenstein (2) Bermuda (3) Norway (4) Qatar (5) Switzerland (6) Luxembourg (7) Australia (8) Macao SAR, China (9) Denmark (10) Sweden (11) Singapore (12) United States (13) North America (14) Canada (15) San Marino (16) Austria (17) Netherlands (18) Finland (19) Japan (20) Germany (21) Belgium (22) Kuwait (23) Iceland (24) Andorra (25)
Source: The World Bank
186,950 136,770 104,610 102,610 85,550 80,950 71,810 65,520 64,050 61,110 59,130 54,040 53,670 53,533 52,200 51,470 48,590 47,440 47,110 46,140 46,100 45,210 44,940 43,930 43,110
France (26) United Kingdom (27) Hong Kong SAR,… Brunei Darussalam… Korea, Rep. (39) Chile (52) Venezuela, RB (64) Brazil (67) Malaysia (73) Mexico (74) China (94) Thailand (103) Mongolia (120) Indonesia (125) Philippines (130) Bhutan (140) Vietnam (147) Lao PDR (153) Cambodia (165) Bangladesh (167) Mali (176) Gambia, The (182) Ethiopia (185) Liberia (189) Malawi (192)
42,250 39,110 38,420 31,590 25,920 15,230 12,550 11,690 10,400 9,940 6,560 5,370 3,770 3,580 3,270 2,460 1,730 1,460 950 900 670 510 470 410 270 49
www.ChartingThailandEconomy.com
Using Purchasing Power Parity, Thailand’s rank improved to 82nd, with higher GNI per capita than China Chart 2.07 – GNI per capita, selected countries
( ) = World rank
2013 or latest, PPP (current international $) Qatar (1) Macao SAR, China (2) Kuwait (3) Singapore (4) Brunei Darussalam (5) Norway (6) Bermuda (7) Luxembourg (8) United Arab Emirates (9) Hong Kong SAR, China (10) United States (11) Switzerland (12) Saudi Arabia (13) Oman (14) Sweden (15) Germany (16) Denmark (17) Austria (18) Netherlands (19) Canada (20) Australia (21) Belgium (22) Iceland (23) Finland (24) Japan (25)
Source: The World Bank
88,170 76,850 68,090 66,520 66,390 59,750 58,090 54,260 53,960 53,920 53,780 52,170 44,660 44,540 44,440 43,810 43,210 42,590 42,540 40,280 38,870 38,480 37,630
France (26) 37,580 United Kingdom (28) 35,760 Korea, Rep. (31) 33,440 Israel (32) 32,140 Russian Federation… 23,200 Malaysia (50) 22,460 Lebanon (66) 17,390 Mexico (71) 16,110 Brazil (78) 14,750 Thailand (82) 13,510 China (88) 11,850 Sri Lanka (104) 9,470 Indonesia (105) 9,260 Mongolia (108) 8,810 Philippines (112) 7,820 Bhutan (116) 7,210 Timor‐Leste (122) 6,410 India (129) 5,350 Vietnam (132) 5,030 Lao PDR (137) 4,570 Cambodia (148) 2,890 Bangladesh (151) 2,810 Nepal (157) 2,260 Uganda (174) 1,370 Malawi (185) 760 50
www.ChartingThailandEconomy.com
Increasing trend in household income, expenditure and debt, but debt service year has reduced from the recent peak in 2004 Chart 2.10a – Monthly income per household
Chart 2.10c – Debt per household
Average, Baht
Average, Baht 23,236 17,787
18,660
2006
2007
25,403 134,900 104,571
14,963
2004
159,492
2011
2013
Chart 2.10b – Monthly expenditure per household
2004
116,585
116,681
2006
2007
2011
2013
Chart 2.10d – Debt service year*
Average, Baht 3.3 2.8 17,403 12,297
2004
14,311
14,500
2006
2007
2011
19,259
2.3 1.9
2013
2004
2006
2007
2011
2.2
2013
Note: (*) Avg. debt / (annual income – annual expenditure)
51
Source: National Statistic Office survey; CTE analysis
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
52
Both Headline and Core inflation dropped in September
Chart 3.07a – Y‐o‐Y change in CPI
Chart 3.07b – Y‐o‐Y change in CPI by product
Percent
September 2014, percent
3.00%
Meat
5.6
Food away from home
5.5
Prepared food at home
2.50%
Head line 2.00%
5.1
Seasoning
5.0
Tobacco & alcohol
4.9
Housing & furnishing
Core*
1.4
Rice
1.3
Non alcoholic beverage
1.3
Medical care
1.2
1.50%
1.00%
0.50%
0.00% Apr-14
May-14 Jun-14
Jul-14
Aug-14 Sep-14
Apparel and footware
0.8
Recreation & Education
0.7
Energy
0.6
Veg & fruit
0.6
Eggs & milk Transport & Commu
Note: (*) exclude raw food and energy
Source: Bureau of Trade and Economic Indices; CTE analysis
0.0 -0.5
53 www.ChartingThailandEconomy.com
Thailand’s inflation is rather on the low side compared to other economies Chart 3.08 – Consumer Price Index Annual percentage change
Latest
2014*
India ‐ Aug
7.8
Russia ‐ Aug
7.6
Pakistan ‐ Aug
6.1
4.9
Indonesia ‐ Aug
4.0
Hong Kong ‐ Aug
3.9
Vietnam ‐ Sep
2.1 8.2 4.5
3.6
Japan ‐ Aug
3.3
Malaysia ‐ Aug
3.3
Australia ‐ Q2
6.3 0.9 1.9
3.0
Taiwan ‐ Aug
2.1
China ‐ Aug
2.0
Thailand ‐ Sep
1.8
US ‐ Aug
1.7
South Korea ‐ Aug
1.5
Singapore ‐ Aug
Source: The Economist
8.5
6.5
Philippines ‐ Aug
Note: (*) The Economist Poll
6.5
7.0
Brazil ‐ Aug
Euro Area ‐ Sep
9.5
2.4 1.6 -0.8 2.6 1.5 1.5
0.9 0.3
2.0 1.1
54 www.ChartingThailandEconomy.com
Deflation at the producer level
Chart 3.09a – Y‐o‐Y change in PPI
Chart 3.09b – Y‐o‐Y change in PPI by product
Percent
September 2014, percent
3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% Apr-14 May-14 Jun-14
Jul-14
Aug-14 Sep-14
Livestocks Metal Mechinery Basic metals Chemical Transport equip Wood Forestry Forestry Food Textile Pulp & paper Leather & footware Petroluem products Fishing Electrical equip Energy Other manu goods Crop Rubber & plastic -12.3
5.7 3.4 2.1 1.5 1.4 0.2 0.2 0.0 0.0 -0.1 -0.1 -0.1 -0.1 -0.5 -0.7 -0.8 -2.0 -3.4 -4.5
55 Source: Bureau of Trade and Economic Indices; CTE analysis
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
56
Bank’s loan decrease for the first time in three years Chart 3.02a – Commercial Banks’ Loan THB billion 11,000 10,800 M-o-M
10,600
-0.1%
10,400 Y-o-Y
10,200
+7.0%
10,000 Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Chart 3.02b – Commercial Banks’ Loan/Deposit* ratio Percent 100% 97.8% 95.7%
96.6% 95.5%
95.0%
96.3%
95.0%
96.2%
98.3%
97.7%
96.7%
95.3%
95%
90% Aug-13 Sep-13
Oct-13 Nov-13 Dec-13 Jan-14
Feb-14 Mar-14
Apr-14 May-14 Jun-14
Jul-14
57 Source: Bank of Thailand
www.ChartingThailandEconomy.com
Gross NPL continued to increase in 14/Q2 in both absolute value and percent of total loan Chart 3.03a – Total Financial Institutions’ Gross NPLs Outstanding Billion Baht
445
458
401
380 317
06YE
07YE
08YE
09YE
10YE
270
256
267
11YE
12YE
13YE
281
285
2014/Q1 2014/Q2 2014/Q3
Chart 3.03b – Total Financial Institutions’ Gross NPLs Outstanding Percentage of Total Loans
7.47%
7.31% 5.29%
4.85% 3.60%
06YE
07YE
08YE
09YE
10YE
2.75%
11YE
2.26%
2.16%
12YE
13YE
2.26%
2.29%
2014/Q1 2014/Q2 2014/Q3 58
Source: Bank of Thailand
www.ChartingThailandEconomy.com
Banks’ capital ratio increased slightly in July
Chart 3.04 – Capital ratio of all commercial banks* % of risk assets, at year end
Month End 16.8%
15.8%
16.2%
16.1%
14.9%
16.6%
15.7%
14.8%
16.4%
14.0%
13.9% 13.3%
16.2%
12.4%
16.0%
2013 15.8% 15.6% 15.4%
2014
15.2% 15.0% 14.8% 2004
2005
2006
2007
2008
2009
2010
2011
2012
Note: (*) All Commercial Banks registered in Thailand, excluding foreign branches
Source: Bank of Thailand
2013
J F M A M J J A S O N D
59 www.ChartingThailandEconomy.com
Thailand’s real interest rate is slightly positive Chart 3.05 – Real interest rates Percent, as of Sep 30th 2014
3M risk‐free interest rates Brazil
10.0
Pakistan
10.0
Russia
10.0
India
3.9 8.5
3.5 9.5
1.8
Philippines
1.7 0.9
Hong Kong
0.4
Singapore
0.3
US
0.2
Japan
0.1
Euro Area
0.1
Note: (*) The Economist Poll
1.9
1.9
1.9
2.4
2.3
Thailand
-0.3
2.6
2.8
South Korea
-0.1
6.3
3.8
Australia
-1.0
8.2
4.5
Malaysia
1.5
6.5
6.0
China
Real interest rates
6.1
8.1
Vietnam
Source: The Economist
=
Expected 2014 inflation*
8.5
Indonesia
Taiwan
─
0.4
1.5
0.8
1.6
0.2
2.1
-0.4
-0.8
1.7 4.5 2.0 1.5 0.9 1.1
-4.1 -1.7 -1.3 -0.8 -1.0
60
www.ChartingThailandEconomy.com
SET went up 1.5% in September amid foreign fund inflow Chart 3.06a – Monthly performance of SET index
Chart 3.06c – Change since Dec 31st 2013
Percent change from prior month, at month end
Percent, as of Sep 24th 2014 India (BSE)
4.9%
26.3%
Thailand (SET)
3.9%
22.6%
Indonesia (JSX)
2.8%
21.1%
Pakistan (KSE) 1.5%
1.1%
19.1%
China (SSEA)
10.8%
US (NAScomp)
0.1%
9.1%
US (S&P 500) Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Chart 3.06b – Cumulative net foreign fund flow SET & MAI, Billion Baht, Month end 0.0 -10.0
8.1%
Taiwan (TWI)
5.7%
China (SSEB, $ terms)
5.5%
Singapore (STI)
4.0%
US (DJIA)
3.8%
Euro Area (FTSE Euro 100)
3.6%
France (CAC 40)
2.7%
HK (Hang Seng)
2.6%
S Korea (KOSPI)
1.2%
-20.0
Germany (DAX)
1.1%
-30.0
Australia (All Ord.)
-40.0
UK (FTSE 100)
-0.6%
Japan (Nikkei 225)
-0.8%
-50.0 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
Malaysia (KLSE)
0.4%
-1.4%
61 Source: SET, The Economist; CTE analysis
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
62
Lower budget and cash deficit as percentage of GDP in 2013
Chart 4.1 – Government budget and cash balance as percentage of nominal GDP Percent Budget cash balance Overall Cash balance (including non-budgetary deficit/ surplus)
1.4%
1.1%
0.0% 0.1% -0.3%
-0.5%-0.6%
-0.7% -1.1%-1.1%
-0.9%
-1.7% -2.0%
-2.0% -2.3% -2.6% -3.6% -4.0% -4.4%
04FY
05FY
06FY
07FY
08FY
09FY
-4.1%
10FY
11FY
12FY
13FY 63
Source: Bank of Thailand; CTE analysis
www.ChartingThailandEconomy.com
Budget balance during the first 8 months of 2014 is almost 70 Billion Baht worse off than the same period in 2013 Chart 4.2 – Government budget balance Billion Baht Monthly cumulative Budget balance (Billion Baht) 2,078
Revenue 1,109
1,751 1,241
1,390
1,455
1,498
2,153
100.0
1,902 50.0
1,484 0.0
0
-36
Budget balance
110 -174
-75
-100
-50.0
-28
-364
-412
2014
-271 -100.0
2013 -1,109 -1,277
-150.0
-1,280 -1,629
Expenditure
-1,598 -1,849
-1,825
-200.0
-1,930 -2,489
-2,424
-250.0
-300.0
04FY 05FY 06FY 07FY 08FY 09FY 10FY 11FY 12FY 13FY Source: Bank of Thailand; CTE analysis
J F M A M J J A S O N D
64 www.ChartingThailandEconomy.com
Non‐budgetary deficit so far in 2014
Chart 4.3 – Government cash balance Billion Baht Budget cash balance Overall Cash balance (including non-budgetary deficit/ surplus) 110 88
0
8
-28
-36 -45
-42 -74
-75 -96
-100 -96 -144 -174
-236 -266
-271
-364 -401
-412 -466
04FY
05FY
06FY
07FY
08FY
09FY
10FY
11FY
12FY
13FY
'14/8mo
65 Source: Bank of Thailand; CTE analysis
www.ChartingThailandEconomy.com
Thailand’s budget deficit is expected to be around 2.1% of GDP, slightly lower than Indonesia’s Chart 4.4 – Government Budget balance as percentage of GDP 2014*, percent Hong Kong
0.7
South Korea Singapore
0.6 0.5
Russia Taiwan
0.4 -1.4
Australia Philippines Thailand
-1.5 -1.5 -2.1
Indonesia Euro Area
-2.2 -2.6
US China Malaysia
-2.8 -2.9 -3.5
Brazil Vietnam
-3.9 -4.7
India Pakistan Japan Note: (*) The Economist Poll
Source: The Economist
-4.9 -7.0 -7.9
66 www.ChartingThailandEconomy.com
A slight increase in Public debt so far in 2014
Chart 4.5a – Composition of Public debt
Chart 4.5b – Composition of Public debt
THB Trillion
As percentage of nominal GDP 50%
6.0
45%
5.0 Public debt from State Enterprises
40%
Public debt from State Enterprises
35%
4.0
30% Bond to Compensate FIDF's Loss & Prefunding debt
Bond to Compensate FIDF's Loss & Prefunding debt
3.0
25% 20%
2.0
15%
Direct Government debt
1.0
10%
Direct Government debt
5%
0.0 2010 10%
0%
2011
2012
2013
Jul-14
8%
8%
7%
7%
Source: Public Debt Management Office
2010
External debt as percent of total
2011
2012
2013
Jul-14
67 www.ChartingThailandEconomy.com
Thailand’s public debt is not high compared to international 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
226 175 133 131 128 124 114 113 111 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 data
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
Int’l rule of thumb <60% of GDP
68
www.ChartingThailandEconomy.com
CONTENT
Executive summary
Growth
• Economic contraction ended with a minimal growth of 0.4% in 2Q14 ‐ On the expenditure side, apart from the decrease in Import, the increase in Export contributed the most to the overall growth ‐ On the production side, Contraction in Manufacturing and Construction has dragged the overall GDP growth • In August, Manufacturing production picked up from last month but still lower than a year ago • Private consumption was down and Private Investment continued to decline • Export grew in THB term, Import decreased. Tourist arrival dropped. • Monetary easing with policy rate on downward trend while Fiscal spending recovered • Businesses and Industries were more pessimistic in August. Consumers were less pessimistic. • The consensus projection is between 1.5%‐2.6% for 2014 and 4.5‐4.8% for 2015
Income distribution
• Unemployment rate dropped significantly to 0.7% in August. Thailand’s unemployment rate is the lowest amongst leading economies • Thailand’s Income distribution is among the worst in Asia but there has been overall improvement over the past two decades, except for only in Bangkok • Except for only Bangkok, poverty headcount and poverty rate have declined over the last decade
Stability
• In September, Headline inflation dropped to 1.75% while Core inflation dropped to 1.73%. Meat is leading the way in price increase compared to a year ago. • Banking system is quite stable. Bank’s capital ratio increased and is still high. Total system’s NPL increased slightly in 2Q14. Liquidity improved slightly as loan contracted. • Budget balance during the first 8 months of 2014 is 70 Billion Baht worse off than the same period in 2013. Public debt is increasing but not too worrying just yet. • Year‐to‐date Balance of Payment surplus, thanks to trade surplus. External debt has been increasing but still not dangerous. THB appreciated 5‐month in a row in September.
69
Year‐to‐date Balance of Payment surplus, thanks to trade surplus Trade Balance (F.O.B) 32.6
Chart 5.01 – Balance of Payment decomposition
29.8
Billion USD
17.0
09FY
31.3
10FY
11FY
16.2 6.0
6.4
12FY
13FY
14/8mo
-7.5
-9.1
-8.1
12FY
13FY
14/8mo
Net service income & transfer
24.1
+
-10.7
-12.9 -19.7
5.3 1.4
1.2
09FY
10FY
11FY
12FY
13FY
11FY
Net Capital Movement + errors and omissions
-5.0 09FY
10FY
14/8mo 21.3 6.7
2.2
-2.3
-2.9 09FY
Source: Bank of Thailand; CTE analysis
10FY
11FY
12FY
13FY
-6.8 14/8mo
70
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Strong Asian export engines reflecting in huge current account surplus Chart 5.02 – Current Account balance As % of 2014 GDP*
Last 12 months, USD Billion
Singapore ‐ Q2
19.7%
Taiwan ‐ Q2
56.5
11.8%
Malaysia ‐ Q2
6.0%
South Korea ‐ Aug
5.8%
Vietnam ‐ 2013
5.6%
64.0 18.7 87.8 9.5
Russia ‐ Q2
3.3%
Philippines ‐ Jun
3.0%
9.9
Thailand ‐ Q2
2.6%
12.5
Euro Area ‐ Jul
2.3%
China ‐ Q2
2.0%
Hong Kong ‐ Q2
0.5%
Japan ‐ Jul
0.3%
Pakistan ‐ Q2
-2.1%
Australia ‐ Q2
-2.2%
US ‐ Q2
-2.4%
India ‐ Q2
-2.8%
Indonesia ‐ Q2
-3.5%
Brazil ‐ Aug
-3.6%
Note: (*) The Economist Poll
Source: The Economist
51.5
318.2 164.8 4.4 -7.1 -2.6 -42.8 -389.2 -18.4 -26.3 -78.4
71 www.ChartingThailandEconomy.com
External debt increased slightly in the first half of 2014
Chart 5.10a – External Debt Level Billion USD 160 120 80 40 0
05YE
06YE
07YE
08YE
09YE
10YE
11YE
12YE
13YE
14/2Q
Chart 5.10b – External Debt as % of GDP
37.0%
05YE
38.5%
06YE
35.4%
07YE
31.4%
28.8%
08YE
09YE
35.2%
33.7%
10YE
11YE
38.0%
38.2%
39.2%
12YE
13YE
14/2Q
72 Source: Bank of Thailand
www.ChartingThailandEconomy.com
Structure of external debt does not change from end of last year
Chart 5.11a – External debt breakdown
Chart 5.11b – External debt breakdown
Private vs Public
Long‐Term vs Short‐Term
Private Public = General Government and Monetary Authorities
13%
16%
20%
18%
Long term Short term
17%
50%
87%
84%
80%
82%
11YE
12YE
13YE
44%
43%
43%
55%
56%
57%
57%
11YE
12YE
13YE
14/2Q
83%
50%
10YE
45%
14/2Q
10YE
73 Source: Bank of Thailand
www.ChartingThailandEconomy.com
Capability to repay external debt deteriorated but not yet a concern as debt service ratio is low and reserves at healthy level Chart 5.12a – International reserves
Chart 5.12b – Debt service ratio*
As % of ST external debt
Percent
7.6%
418% 370% 340% 312% 279%
269%
4.7%
4.6% 4.2%
4.0%
3.4%
09YE
10YE
11YE
12YE
13YE
14/2Q
Note: (*) Debt service payment / Export of goods and services
Source: Bank of Thailand; CTE analysis
09FY
10FY
11FY
12FY
13FY
14/2Q
74 www.ChartingThailandEconomy.com
Net International reserves increased slightly so far this year and still considered excessive Chart 5.13a – International reserves level* At the end of period, Billion USD
191.7
206.4
205.8
2011
2012
190.2
191.2
2013
Aug-14
154.1 55.9
2005
106.5
118.0
2007
2008
73.9
2006
2009
2010
Chart 5.13b – International reserves as number of months of import** 13.8
12.6 10.8
9.1 5.7
2005
6.9
2006
2007
7.9
2008
2009
2010
Note: (*) Including Net Forward position (**) For the last period using average monthly import value during the last 12 months
Source: Bank of Thailand; CTE analysis
9.9
2011
2012
9.1
2013
10.0
Aug-14
75 www.ChartingThailandEconomy.com
THB appreciated again in September, making it 5 months in a row
Chart 5.17a – Nominal Effective Exchange Rate
Chart 5.17b – Y‐o‐Y change in FX rate*
2007=100
Percentage change in avg. selling rate as of Sep 30th 2014 JPY ‐ 29.8871 106.0
Baht appreciates
105.0 104.0 103.0
Jun-14
IDR ‐ 2.8726
1.5
VND ‐ 0.0015
0.0
100.0
TWD ‐ 1.0679
99.0
MXN ‐ 2.4088
98.0
SGD ‐ 25.6609
97.0 Sep-14
CNY ‐ 5.3181
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
3.1
101.0
+2.3% Mar-14
EUR ‐ 41.3681
0.3
Y‐o‐Y
Dec-13
3.4
PHP ‐ 0.7348
+0.9%
Sep-13
AUD ‐ 28.5168
102.0
M‐o‐M
Baht depreciates
8.5
0.0 -0.4 -1.7 -2.1
MYR ‐ 10.0489
-2.4
USD ‐ 32.5161
-3.0
GBP ‐ 52.9263 INR ‐ 0.5629 KRW ‐ 0.0309
-3.5 -4.8 -5.2
Baht depreciates
Baht appreciates 76
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