Charting Thailand’s Economy
MONTHLY
July 2015
Charting Thailand’s Economy Monthly Brief, July 2015 Publication Date: July 3rd, 2015 Number of pages: 64
DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, ChartingASEAN™. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that ChartingASEAN™ delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such ChartingASEAN™ can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect. ASK THE EDITOR ChartingASEAN™ team consists of editors, analysts, and researchers. For any questions and comments about this report, you can contact the chief editor directly at editor@chartingasean.com.
About This Report This report is designed to chart out the economic outlook of Thailand on a monthly basis. It is ideal for strategic management and corporate planning functions in companies operating or looking to get into the second largest economy in ASEAN.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
2
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
3
3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy Chart 1.05 – Historical Real GDP growth rate Annual growth, percent
Real GDP growth 7.5%
7.2%
This chart gives the long-term perspective of the historical GDP growth of Thailand. It also gives the latest annual growth during the last four quarters. It shows the real growth, which already excludes the effect from inflation. GDP calculations are prepared by Office of The National Economic and Social Development Board and released quarterly.
7.3%
6.3% 5.4% 5.0%
CAGR* 2003‐2014 = 3.7%
4.2% 3.0%
2.8%
Historical growth for the Thai economy The cumulative annual growth rate between 2001-2012 was 4.3%. During the last 12 years, only one year (2009) that registered a negative growth. Growth in 2010 and 2012 were exceptionally high, representing the Vshape recovery from the global sub-prime debt and the country’s flood crisis respectively. A 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy.
1.7% 0.8%
0.9%
-0.7% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Note: (*) Cumulative Annual Growth Rate Source: NESDB; ChartingAsean analysis
1Q15 2Q15 3Q15 4Q15
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
4
Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. Chart 1.06a – Real growth by sector, 1Q15
Chart 1.06b – Sectoral contributions, 1Q15
Year‐on‐Year percentage change
Contributions to total Real GDP growth
Construction
25.4
Hotel&Res
13.5
Financial
9.6
Transport
7.1
Other social
5.0
GDP
3.0
Manufacture
0.7
Transport
0.7
Trading
0.6
Hotel&Res
0.6
Trading
3.9
Financial
0.6
Utilities
3.8
Construction
0.6
GDP
3.0
RealEstate
RealEstate
2.8
Utilities
0.1
Health&Social
2.4
Other social
0.1
Manufacture
2.3
Health&Social
0.0
Fishing
0.0
Private HH
0.0
Private HH
1.5
Fishing
0.6 -1.1
Mining
0.0
Education
-1.2
Education
0.0
PublicAdmin
-1.4
PublicAdmin
-0.1
-5.3
Agriculture Stat diff
Chart A shows the real growth rate of value added from each production sector. Chart B shows each sector’s contribution to the overall GDP growth. The contribution from each sector must add up to the overall growth. GDP calculations are prepared by Office of The National Economic and Social Development Board and released quarterly.
0.2
Mining
Agriculture
Source of Growth – Production side
Most contributing sectors for the Thai economy in 1Q15 Chart A says that Construction have grown most from 1Q14 to 1Q15, while Agriculture dropped the most. Chart B looks at the contributions to total growth from all sectors. Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin.
-0.3 -0.7 © ChartingASEAN™
Source: NESDB; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
5
Investment and Tourism contributed the most to the overall growth in 1Q15 Chart 1.08a – Real growth by expenditure, 1Q15 Chart 1.08b – Expenditure Contributions, 1Q15 Year‐on‐Year percentage change
Contributions to total Real GDP growth
X (services)
14.3
I (capital)
10.7
I
8.1
M (goods)
4.0
GDP
3.0
GDP
3.0
I (capital)
2.3
X (services)
2.2
C
1.2
M (services)
0.5
G
2.5
Discrpncy
0.4
C
2.4
G
0.4
X (goods)
-2.5
M (services)-3.6
I (Inventory) X (goods) M (goods)
-0.4
Chart A shows the real growth rate of each expenditure. Chart B shows each expenditure’s contribution to the overall GDP growth. The contribution from each sector must add up to the overall GDP growth. GDP calculations are prepared by Office of The National Economic and Social Development Board and released quarterly.
Growth drivers for the Thai economy in 1Q15 Chart A shows that Tourism (X of services) grew the most in 1Q15. Chart B shows that Investment and Tourism contributed the most to the overall growth in 1Q15. Increasing import and Decreasing export of goods were the main drag on the overall growth.
-1.5 -2.0
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; ChartingAsean analysis
Source of Growth – Expenditure side
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
6
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
7
Manufacturing production decreased more than 7% year‐on‐year in May Chart 1.10 – Manufacturing Production Index (2000=100)
Monthly Average 200.0
Manufacturing Production Index (MPI)
180.0 160.0
2014
194.2 182.9 174.6
170.0
161.1
177.6 181.6 175.7
140.0
167.7
152.1
2015
120.0
Manufacturing Production Index is a composite index calculated by the Office of Industrial Economics, Ministry of Industry. The composite includes all industries and weighted by their value added. The year 2000 is used as the base year and the figure is released monthly.
100.0
Latest development 80.0
Manufacturing production decreased more than 7% year-on-year in May 2015.
60.0 40.0 20.0 0.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
J F M A M J J A S O N D © ChartingASEAN™
Source: The Office of Industrial Economics
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
8
Most sectors had their production increased from ‘Songran” month, but were still down from a year ago Chart 1.11a – Y‐on‐Y change in MPI by sector
Chart 1.11b – M‐on‐M change in MPI by sector
May 2015, percent
May 2015, percent
Petroleum
18.1
Chemical
2.4
Machineries Apparel
Office automate
26.1
Metal products
23.4
0.6
Apparel
20.1
MPI by sectors
0.1
Basic Mat
20.1
Chart A shows the year-on-year change in Manufacturing Production Index (MPI) by sector, that is comparing the MPI for the latest month with the MPI for the same month of the previous year. Chart B shows the month-on-month change in MPI by sector, that is comparing the MPI for the latest month with the MPI for the previous month.
Mineral
-0.7
Precision instru
Paper
-1.0
Mineral
13.9
14.7
Metal products
-2.6
Rubber&Plastic
13.8
Electrical
-3.0
Machineries
13.2
Rubber&Plastic
-4.2
Electrical
Food & Bev
-4.8
Transport Equip
Precision instru
-4.8
Textiles
9.8
Textiles
-4.8
Chemical
9.4
Basic Mat
-8.6
11.8 10.4
Vehicles
8.0
Electronic
-10.7
Leather
7.9
Wood products
-11.5
Paper
7.7
Leather
-12.4
Petroleum
2.3
Vehicles
-12.5
Wood products
1.9
Tobacco
1.9
Transport Equip
-15.6
Office automate
-20.0
Furniture Tobacco
-22.2 -42.2
Electronic Furniture Food & Bev
Latest development Most sectors had their production increased from ‘Songran” month, but were still down from a year ago.
1.1 -0.4 -6.2 © ChartingASEAN™
Source: The Office of Industrial Economics; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
9
Capacity utilization rate is still in declining trend
Chart 1.12a – Overall Capacity Utilization Rate
Chart 1.12b – Capacity utilization rate by sector
Percent
May 2015, percent
70% 68% 66% 64% 62% 60% Seasonally adjusted
58% 56%
Normal 54% 52% 50% Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Rubber&Plastic Electronic Metal products Electrical Furniture Basic Mat Wood products Leather Textiles Office automate Food & Bev Precision instru Mineral Paper Vehicles Chemical Machineries Petroleum Tobacco Transport Equip Apparel
87% 83% 78% 76% 75% 74% 72% 65% 61% 59%
Capacity Utilization rate Capacity utilization rate is a composite index of the capacity utilization rate of all major industries. The index is prepared by the Office of Industrial Economics, Ministry of Industry and released monthly. Chart A shows the composite Capacity Utilization rate in the last 6 months. Chart B shows the Capacity Utilization rate of the last month by industries.
57%
Latest development
56%
Capacity utilization rate is still in declining trend. Rubber and Plastic was the sector with the highest utilization rate in May, with Apparel’s the lowest.
50% 49% 48% 45% 42% 39% 30% 28% 23%
© ChartingASEAN™
Source: The Office of Industrial Economics
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
10
Thailand’s MPI negative growth of ‐7.6% was the lowest on the list Chart 1.13 – Manufacturing Production Index Latest, percent change on year ago Vietnam ‐ Jun
11.1
China ‐ May
6.1
Indonesia ‐ Apr
5.8
Pakistan ‐ Apr
Change in MPI in the world
5.0
Malaysia ‐ Apr
4.1
India ‐ Apr
4.1
Australia ‐ Q1
Year-on-year change in Manufacturing Production Index from the latest period across major economies. The chart shows the current state of manufacturing production in the world. The figures are compiled by The Economist magazine.
2.8
Philippines ‐ Apr
1.4
US ‐ May
1.4
Euro Area ‐ Apr
Latest development 8 out of 18 major economies had negative MPI growth during the last period reported. Thailand’s negative growth of -7.6% was the lowest on the list.
0.8
Hong Kong ‐ Q1
-1.6
Singapore ‐ May
-2.4
South Korea ‐ May
-2.8
Taiwan ‐ May
-3.2
Japan ‐ May
-4.0
Russia ‐ May
-5.4
Brazil ‐ Apr
-7.6
Thailand ‐ May
-7.6 © ChartingASEAN™
Source: The Economist
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
11
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
12
Private consumption in overall dropped 0.4% from a year ago despite big increase in tourists’ spending Chart 1.14a – Composite Private Consumption Index
Chart 1.14b – Y‐on‐Y change
(2010=100)
May 2015 vs 2014, percent Composite Private Consumption Index
130.0
2015
Non‐resident
120.0
110.0
53.0
Services
5.6
Non‐durables
3.1
2014 100.0
90.0
Semi‐durables
A composite index representing private consumption conditions. It comprises of 5 components including Non-durables Index, Semi-durables Index, Durables Index, Services Index, and Non-residents expenditure Index. Prepared by the Bank of Thailand using 2010 as the base year and is released monthly and each component was seasonally adjusted. Chart A shows the Composite Index movement over the latest 2 years. Chart B shows the annual change of each component.
0.1
Latest development 80.0
Composite Index
-0.4
Durables
-9.7
In May 2015, Private consumption in overall dropped 0.4% from a year ago despite big increase in tourists’ spending.
70.0
60.0
J
F
M
A
M
J
J
A
S
O
N
D © ChartingASEAN™
Source: Bank of Thailand
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
13
Private Investment is still on the declining trend
Chart 1.15a – Private Investment Index
Chart 1.15b – Y‐on‐Y change
(2010=100)
May 2015 vs 2014, percent
Composite Private Investment Index
120.0
Domestic Machinery sales* (2010 prices, Baht)
119.0
10.9
Construction Area permitted (sqm)
118.0
2014 117.0
2015 116.0
0.3
Composite Index
-0.4
Construction Material Sales Index
-1.4
115.0
Latest development
Import of Capital Goods (2010 prices, Baht)
-6.2
114.0
Domestic Commercial Car Sales Index
113.0
J
F
M
A
M
J
Note: (*) figures are 1‐month delayed Source: Bank of Thailand
J
A
S
O
N
A composite index representing private investment conditions. It is constructed from 5 components including Construction Area Permitted in Municipal Zone (9-month moving average), Construction Material Sales Index (3-month moving average), Imports of Capital Goods at 2010 Prices, Domestic Machinery Sales at 2010 Prices, Domestic Car Sales Index for investment (3month moving average.). The index is prepared by the Bank of Thailand, using 2010 as the base year. Chart A shows the Composite Index movement over the latest 2 years. Chart B shows the annual change of each component.
Private Investment continued to decline in May 2015, with Domestic Commercial Car Sales the biggest loser.
-18.7
D © ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
14
FDI value increased 31% in the first 4 months of 2015
Chart 5.14 – Foreign Direct Investment Million USD
Monthly cumulative FDI*
Foreign Direct Investment
14,000
14,416
2014
12,000
12,899
12,728 10,000
9,112
8,000
8,547
6,000
2015 4,853
Foreign direct investment (FDI) reflects the lasting interests of Non-residents of an economy in a resident entity. A direct investor may invest in equity capital, lending to affiliates, or reinvested earnings. Investment in equity is treated as a direct investment when the direct investors own 10 per cent or more of the voting shares for an enterprise or the equivalent for an unincorporated enterprise. Data is compiled by BOT. The left chart shows the annual figures. The right chart shows the cumulative monthly figures for the current year and the year before.
Latest development
4,000
FDI value increased 31% in the first 4 months of 2015.
2,000
2,474
0
08FY
09FY
10FY
11FY
12FY
13FY
14FY
J
F M A M J
J
A S O N D
(*) Preliminary figures
Source: BOT
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
15
BOI’s net application almost doubled in 2014, but for the first 4 months of 2015, it has almost been wiped out
Chart 5.15 – BOI net application of foreign direct investment* Billion Baht BOI net application Value is derived from total investment of all projects which have foreign equity participation (shown by registered capital amount) of one particular nation or the sum of all foreign registered capital from more than two nations of at least 10%. The chart shows the value of BOI net application for projects defined as FDI.
1,023
648
Latest development
525
BOI’s net application almost doubled in 2014, but for the first 4 months of 2015, it has almost been wiped out, registering only THB 7 billion.
396 220 236 7
10FY
11FY
12FY
13FY
14FY
2014/4M
2015/4M
Note: (*) Foreign investment (foreign equity>=10%) © ChartingASEAN™
Source: Board of Investment
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
16
FDI from Japan, the biggest source, has declined sharply in 2014
Chart 5.16 – BOI net application of FDI* breakdown by country group Percent of total
11%
Others
27%
4% 10%
USA ANIEs ASEAN Europe
2% 7% 8%
7% 10%
21%
25%
33%
2% 6%
BOI net application by country
10%
13%
1%
7%
7%
18%
7%
BOI net application of foreign direct investment projects breakdown by country. FDI from Japan, the biggest source, has declined sharply in 2014.
10% 8% 58%
Japan
49%
11FY
12FY
17%
8%
29%
31%
14FY
2015/4M
54%
13FY
Note: (*) Foreign investment (foreign equity>=10%) (**) ANIEs: Taiwan, Hong Kong, South Korea © ChartingASEAN™
Source: Board of Investment; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
17
Mixed picture in the Property market so far this year
Chart 1.16a – Y‐on‐Y change
Chart 1.16b – M‐on‐M change
First 4 months of 2015 vs those of 2014, percent
Apr vs Mar 2015, percent
Condo unit registered
47.8
-82.2
Key property indicators
New housing unit
0.3
37.5
Chart A compares key property indicators during this year to the current month to those in the same period of the previous year. Chart B compares key property indicators in the current month to those of the previous month.
Latest development Value of land transaction
-10.0
Constr. Area in municipal
-16.6
Mixed picture in the Property market so far this year.
-7.0
0.2
© ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
18
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
19
Improved trade balance so far in 2015 is the case of import declining more than export Chart 5.03a – Trade balance* in THB
Chart 5.03b – Trade balance* in USD
First 5 months, Billion Baht
First 5 months, Billion USD 100
3,500
Trade balance Foreign trade statistics refer to transactions involving movements of goods out of or into the Kingdom of Thailand over a specific time period. It is not equal to the one shown on the Balance of Payment chart due to a few adjustments. The charts show the breakdown of Trade Balance into Export and Import.
3,000 80 2,500 60
2,000 1,500
2014 2015 -3.7%
-8.9%
40
-4.2%
-9.4%
Latest development Improved trade balance in both THB and USD terms in the first 5 months of 2015. This is the case of import declining more than export.
1,000 20 500 0
0 -500
Export
–
Import
=
Trade balance
-20
Export
–
Import
=
Trade balance
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; ChartingAsean analysis
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
20
Export declined 3.7% in the first 5 months of 2015, with Petroleum and Chemicals the main drag Chart 5.05a – YTD annual change in Export in Baht Chart 5.05b – Sectoral contributions First 5 months of 2015 vs those of 2014, percent Total export Optical instru Jewellery Automotive Forestry Machinery Other manufacturing Photo instru Metal Electronics Electrical Agro products Footware Apparels Toiletries Furniture Agriculture Other export Petro‐chemical Fishery Chemicals Petroleum Aircrafts Re‐exports Mining -51.4
-3.7
-1.4 -3.6 -5.7 -6.6 -7.1 -7.6 -8.2 -9.6 -11.4 -15.1 -21.7 -24.1 -27.1 -28.9
Contributions to total export growth Total export -3.7 Automotive 13.9 Machinery 4.9 Jewellery 4.8 Optical instru 4.3 Other manufacturing 2.6 Electronics 2.6 Forestry 1.8 Photo instru 0.2 Metal 0.2 Footware Re‐exports Furniture Toiletries Electrical Fishery Other export Apparels Aircrafts Mining Agro products Agriculture Petro‐chemical Chemicals Petroleum
0.7 0.2 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 -0.1 -0.1 -0.2 -0.2 -0.3 -0.3 -0.4 -0.7 -0.7 -0.8 -1.1
YTD change in Export by product The left chart shows the year-to-date change in Baht term of export value by product group. The right chart shows each group’s contribution to the total export growth.
Latest development Export, in THB, decreased 3.7% in the first 5 months of 2015. The increase in Automotive and Machinery export were the growth drivers while Petroleum and Chemicals were the main drag to total export growth.
© ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
21
NAFTA is the only growing markets for Thai export so far in 2015
Chart 5.07a – Export by country
Chart 5.07b – Change in Export
Percent of total export in THB term
In THB term, First 5 months of 2015 vs those of 2014
100% =
฿ 6.1
฿ 6.7
฿ 7.1
฿ 6.9
฿ 7.3 (Trillion)
NAFTA Rest of the world
18.1
17.4
18.1
16.7
16.5
Middle East
5.0
4.7
5.1
5.1
5.2
Japan
10.5
10.7
10.2
9.7
9.6
EU
11.3
10.9
9.5
9.8
10.3
NAFTA
11.7
11.1
11.4
11.5
12.0
East Asia ex‐Japan
20.4
21.0
21.0
21.2
20.3
23.0
24.3
24.6
25.9
26.1
10FY
11FY
12FY
13FY
14FY
ASEAN
7.5%
Rest of the world
-1.1%
ASEAN
-3.7%
EU
-6.5%
Japan
-6.6%
East Asia ex Japan
-7.0%
Middle East
Export destinations The left chart shows Export value (in Baht term) broken down by country of destination. The right chart shows change in export value to each destination.
Latest development NAFTA is the only growing markets for Thai export in the first 4 months of 2015. Middle East was the hardest hit market with export declining 10% from a year ago.
-12.9%
© ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
22
Big decrease in Import so far in 2015 due mainly to decrease in fuel import Chart 5.09a – YTD annual change in Import in Baht Chart 5.09b – Sectoral contributions First 5 months of 2015 vs those of 2014, percent
Total import
Contributions to total import growth
Total import
-8.9
Others
6.5
Consumer goods
4.3
YTD change in Import by product class
-8.9
Others
0.5
Consumer goods
0.4
The left chart shows the year-to-date change (in Baht term) of import value by product group. The right chart shows each group’s contribution to the total import growth.
Latest development Intermediate ‐ Non fuel
-0.9
Intermediate ‐ Non fuel
-0.3
Capital goods
-1.8
Capital goods
-0.4
Intermediate ‐ Fuel
-39.2
Intermediate ‐ Fuel
Import has decreased 8.9% in the first 5 months of 2015, due mainly to the decrease in Fuel import.
-9.0
© ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
23
Intermediate goods has gained more share this year
Chart 5.08 – Import by economic classification Percent of total import in Baht term 100% =
Others Capital goods
฿ 5.9
฿ 7.0
฿ 7.8
฿ 7.7
฿ 7.4
฿ 2.8
10.2
12.4
11.4
12.2
8.1
8.9
21.3
24.4
23.3
20.9
24.2
(Trillion)
Import composition
25.1
Import value (in Baht term) breakdown by economic classification into Consumer goods, Intermediate goods, Capital goods and Others.
Latest development
Intermediate – Non‐Fuel
44.0
40.0
37.5
35.7
38.3
Intermediate ‐ Fuel
17.4
18.9
18.9
20.8
20.8
15.3
Consumer goods
7.5
7.5
7.8
8.0
8.7
9.7
10FY
11FY
12FY
13FY
14FY
15/5MO
41.0
Intermediate is the major class in Thailand’s import, implying major portion of import is for reproduction. It has gained more share so far this year.
© ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
24
Tourist arrivals bounced back in the first quarter, increasing 23.5% from last year’s extraordinarily low base Chart 5.18 – International Tourist Arrivals Million visits
Monthly arrivals Million visits 3.0
2015
26.5
CAGR
10.6%
24.8
Tourist arrivals Number of the international tourist arrivals into Thailand. Prepared by Department of Tourism using data from Immigration Bureau, Police Department.
2.5
22.4 19.2
2.0
2014 15.9 14.5 11.7
14.1
Tourist arrivals bounced back in the first quarter, increasing 23.5% from last year’s extraordinarily low base, when there was political demonstrations in Bangkok.
1.5
11.5
10.0
Latest development
1.0
0.5
0.0
05FY 06FY 07FY 08FY 09FY 10FY 11FY 12FY 13FY 14FY
J F M A M J J A S O N D © ChartingASEAN™
Source: Department of Tourism
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
25
China and Malaysia have been the two highest growing markets for tourists in 2015 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 3 months of 2015 vs those of 2014, Thousands
Rest of world Americas
Europe
East Asia
15.6
14.7
13.8
5.3
5.0
4.8
27.9
51.2
10FY
26.5
53.8
11FY
25.3
56.0
12FY
11.9
11.9
China
4.4
4.5
Malaysia
23.8
24.8
59.9
13FY
58.8
Hong Kong
996.6
Chart A shows the composition of international tourist arrivals by their nationalities grouped by region. Chart B shows the top 10 highest change in arrivals by country and the percent of total arrival change.
369.2 85.8
Singapore
66.4
Taiwan
64.6
Korea
59.1
Japan
53.8
India
27.9
Vietnam
22.3
Cambodia
19.8
Tourist arrivals by nationality
Latest development Structure of tourist nationalities has changed a bit over the years. East Asia has been the largest group in the last six years and the figure is increasing every year. China and Malaysia have been the two highest growing markets for tourists in 2015.
14FY © ChartingASEAN™
Source: Department of Tourism; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
26
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
27
Unemployment rate increased slightly in May but is still below 1%
Unemployment rate
Chart 2.08 – Unemployment rate Percent
Monthly Average 1.40
1.83 1.20
1.51
1.49 1.38
1.00
1.38
2015
0.80
1.04 0.84 0.68
0.66
0.60
2014
0.72 0.40
Unemployment rate calculated from labor Force Survey conducted and compiled by the National Statistical Office (NSO). Unemployment rate equals unemployed persons divided by total labor force. Unemployed persons is defined as persons with the age of 15 years and over who during the week in which the survey is conducted, do not work, have no job, business enterprise or farm of their own. Persons in this category include those who are looking for a job, applying for a job or waiting to be called to work during the past 30 days prior to the interview date and those who are not looking for work during the past 30 days prior to the interview date, but are otherwise available for work during the 7 days prior to the interview date. Total labor force comprises current labor force and seasonally inactive labor force.
Latest development Unemployment rate increased slightly in May but is still below 1%.
0.20
0.00 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg 12-Avg 13-Avg 14-Avg
J F M A M J J A S O N D © ChartingASEAN™
Source: National Statistical Office, Bank of Thailand
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
28
Thailand’s unemployment rate is lowest comparing to other leading economies Chart 2.09 – Unemployment rate Latest, percent Thailand ‐ May Singapore ‐ Q1 Malaysia ‐ Apr Hong Kong ‐ May Japan ‐ May Vietnam ‐ 2014
0.9 1.8 3.0
Unemployment rates in the world
3.2
A comparison of unemployment rates across different countries (economies) compiled by The Economist magazine.
3.3 3.4
Taiwan ‐ May
3.8
Latest development
South Korea ‐ May
3.8
Thailand’s unemployment rate is the lowest among leading economies. Euro area still has the highest unemployment rate, followed by India.
China ‐ Q1 India ‐ 2013 US ‐ May Russia ‐ May Indonesia ‐ Q1
4.1 4.9 5.5 5.6 5.8
Pakistan ‐ 2014
6.0
Australia ‐ May
6.0
Philippines ‐ Q2 Brazil ‐ May Euro Area ‐ May
6.4 6.7 11.1 © ChartingASEAN™
Source: The Economist
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
29
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
30
No change in interest rates in the market in June
Chart 3.01a – BOT’s policy rate
Chart 3.01b – BIBOR overnight rate 2.50%
2.50%
2.25%
2.25%
Interest rates
Jul-14
2.00%
2.00%
1.75%
1.75%
1.50% Jun-15
1.50% Jun-15
Chart 3.01c – Saving deposit rate*
Jul-14
Chart 3.01d – Commercial bank MLR*
Chart A shows the Bank of Thailand’s policy rate (1-day repo rate) over the last 12 months. Chart B shows the Inter bank overnight rate over the last 12 months. Chart C shows the minimum and maximum of the saving deposit rate over the last 12 months. Chart D shows the minimum and maximum of commercial bank’s MLR over the last 12 months.
Latest development
10.00%
10.00%
Max 7.50%
No change in interest rates in the market in June.
7.50%
Min Max
5.00%
5.00%
2.50%
2.50%
Min Jul-14
0.00% Jun-15
Jul-14
Note: (*) All Commercial Banks registered in Thailand, excluding foreign branches
Source: Bank of Thailand
0.00% Jun-15 © ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
31
Government spending in the first 5 months of 2015 increased 9%
Chart – Monthly cumulative Fiscal expenditure Billion Baht 2500
Government Spending 2000
The current government is trying to boost the economy by fiscal spending. In the first 5 months of 2015, government spending increased 9% from the same period last year. While the effectiveness of such program is still in doubt, we see bigger spending from the government in the calendar year of 2015.
2014
1500
1000
500
2015 0
D
J
F
M
Source: Bank of Thailand; ChartingAsean analysis
A
M
J
J
A
S
O
N
D
www.ChartingAsean.com
© ChartingASEAN™ This is a licensed product and is not to be photocopied
32
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
33
Businesses turned optimistic in May while Industries went more pessimistic Chart 1.18a – Business Sentiment Index* 100
Chart 1.18b – Thai Industries Sentiment Index** 200
Better
Better
50 49.0
49.0
49.4
100
52.4
50.3 92.7
45.2
Worse
91.1
88.9
87.7
86.2
85.4
Worse
Business and Thai Industries Sentiment Indices Chart A shows Business Sentiment Index has been compiled with BOT survey data of 1,500 businesses. Index = 50 indicates that business sentiment remains stable. Index > 50 indicates that business sentiment has improved. Index < 50 indicates that business sentiment has worsened. Chart B shows Thai Industries Sentiment Index, from The Federation of Thai Industries survey of more than 1,000 industrial enterprises. Index = 100 indicates that industries sentiment remains stable. Index > 100 indicates that industries sentiment has improved. Index < 100 indicates that industries sentiment has worsened.
Latest development
0
0 Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
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
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
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
Businesses turned optimistic once again in May 2015. Business Sentiment Index went up above 50, indicating that businesses turned optimistic. Thai Industries Sentiment Index went down and stayed below the cut off level, indicating that industries were more pessimistic.
© ChartingASEAN™
Source: Bank of Thailand, The Federation of Thai Industries
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
34
Consumer Confidence improved slightly in May
Chart 1.17 – Consumer Confidence Index Overall
100
On job
100
On future income
100
Consumer Confidence Index
Better
Better
50
Better
50 Worse
Prepared by Ministry of Commerce through monthly consumer survey nationwide. 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.
50 Worse
Worse
Latest development Consumer Confidence improved slightly in May, but was still below the cut off level.
0
0 Nov-14
Jan-15
Mar-15
May-15
0 Nov-14
Jan-15
Mar-15
May-15
Nov-14
Jan-15
Mar-15
May-15
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
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
35
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
36
BOT revised down 2015 growth heavily in June
Chart 1.03a – Real GDP growth projections
Chart 1.03b – Real GDP growth projections
For 2015, Annual percentage change
For 2016, Annual percentage change 6.00
6.00
5.50
5.50
5.00
5.00 The Economist poll
4.50
NESDB
The Economist poll
4.00
4.00
FPO
BOT
BOT
Jan-15
Feb-15
4.50
Mar-15
Apr-15
May-15
3.50
3.50
3.00
3.00
2.50
2.50
2.00
2.00
Jun-15
Forecast as of, month ending
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Real GDP growth projections Real GDP growth projections from Bank of Thailand, National Economic and Social Development Board (NESDB), Fiscal Policy Office (FPO) and the weekly poll conducted by the Economist magazine. The charts also show growth projections as of past dates, which highlight any significant change in projections from each of the forecasters. The changes in projections normally reflect the economic outlook as seen by each forecaster.
Growth projections for the Thai economy BOT revised down its projected growth for 2015 to 3%. Consensus growth forecast is now 3.0-3.8% for 2015 and 4.1-4.2% for 2016.
Jun-15
Forecast as of, month ending © ChartingASEAN™
Source: NESDB, Fiscal Policy Office, Bank of Thailand, The Economist
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
37
Growth for Thailand is projected to be around the middle of the pack Chart 1.04a – Real GDP growth projections
Chart 1.04b – Real GDP growth projections
2015, Annual % change, as of Jun 30th
2016, Annual % change, as of Jun 30th 2015
India China Philippines Vietnam Pakistan Malaysia Indonesia Taiwan Thailand Singapore South Korea Australia Hong Kong US Euro Area Japan Brazil Russia
2015
India China 6.9 6.6 Philippines Vietnam 6.2 Malaysia 5.7 Indonesia 5.5 Pakistan 5.0 Thailand 3.8 South Korea 3.8 Singapore 3.1 Australia 3.1 Taiwan 2.5 US 2.4 Hong Kong 2.3 Euro Area 1.5 Japan 0.8 Brazil Russia 7.6
-1.1 -3.6
8.0 6.8 6.4 6.4 5.6 5.6 4.7 4.2 3.5
International real GDP growth projections Real GDP growth projection consensus for major economies in the world as a result of a weekly survey by the Economist magazine. It offers a good comparison across economies in the world.
Growth outlook for the Thai economy According to the Economist poll, Thailand’s GDP growth is expected to be 3.8% for 2015 and 4.2% for 2016, around the middle when compared to other major and emerging economies.
3.2 2.9 2.8 2.8 2.1 1.8 1.6 1.1 0.4
© ChartingASEAN™
Source: The Economist
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
38
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
39
Thai economy is still in deflation state in June
Chart 3.07a – Y‐o‐Y change in CPI
Chart 3.07b – Y‐o‐Y change in CPI by product
Percent
June 2015, percent Veg & fruit
2.00%
1.50%
1.00%
Core* 0.50%
0.00%
-0.50%
3.1
Tobacco & alcohol
2.1
Food away from home
1.9 0.9
Seasoning
0.8
Recreation & Education
0.7
Prepared food at home
0.6
Non alcoholic beverage
0.6
Latest development
Housing & furnishing
0.5
Apparel and footware
0.5
In June 2015, Core inflation increased slightly but is still below 1% while Headline was still in the deflation zone.
0.0
Meat
Head line -1.50%
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15
-1.3
Eggs & milk
-3.4
Transport & Commu Energy
-6.1 -13.9
Note: (*) exclude raw food and energy
Source: Bureau of Trade and Economic Indices; ChartingAsean analysis
CPI is the general price level of goods and services purchased by consumers. Prepared by Bureau of Trade and Economic Indices, Ministry of Commerce. Available in various definitions and by product groups. Change in CPI is normally used as main indicator for inflation.
Medical care
Rice -1.00%
Consumer Price Index
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
40
Along with Taiwan and Singapore, Thailand is in deflation state Chart 3.08 – Consumer Price Index Annual percentage change
Latest
Russia ‐ May
2015* 15.8
Brazil ‐ May
15.3
8.5
Indonesia ‐ May
7.9
7.1
India ‐ May
6.0
5.0
Pakistan ‐ May
3.2
Hong Kong ‐ May
3.1
Malaysia ‐ May
5.4
2.6
1.6
Australia ‐ Q1
1.3
China ‐ May
1.2
Vietnam ‐ Jun
1.0
Japan ‐ May
0.5
South Korea ‐ May
0.5
2.6 1.7
0.6 1.1 0.2
US ‐ May
0.0
0.4
Taiwan ‐ May Thailand ‐ Jun
-0.7 -1.1
Along with Taiwan and Singapore, Thailand is in deflation state.
3.2
0.2
-0.4
Latest development
1.4
Euro Area ‐ Jun
Singapore ‐ May
Change in Consumer Price Index across major economies in the world. Also the projected CPI change for the full year by the Economist poll.
3.2
2.1
Philippines ‐ May
Inflation in the world
4.2
0.4 0.4 1.1
Note: (*) The Economist Poll
Source: The Economist
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
41
Deep 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
Jun 2015, percent
3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0%
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15
Energy Crop Metal Pulp & paper Non‐metallic mineral Transport equip Forestry Forestry Wood Textile Leather & footware Other manu goods Food Chemical Electrical equip Basic metals Fishing Livestocks Rubber & plastic Petroleum products -23.9
3.9 1.3 0.8
Producer Price Index
0.4
Inflation at the producer level is measured by a change in Producer Price Index. Prepared by Bureau of Trade and Economic Indices, Ministry of Commerce. The chart shows the changes of the overall PPI and also the PPI of each industry.
0.2 0.1 0.0 0.0 -0.1
Latest development
-0.3
Producer price level dropped from a year ago, resulting in deflation. In June, the PPI dropped 3.7% from a year ago. PPI of Petroleum products dropped the most at 23.9%.
-0.7 -0.9 -1.0 -2.1 -2.9 -3.4 -3.6 -3.7 -4.3
© ChartingASEAN™
Source: Bureau of Trade and Economic Indices; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
42
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
43
Bank’s loan recovered slightly in April Chart 3.02a – Commercial Banks’ Loan THB billion 11,400 11,200
Bank’s Loan and Loan-to-deposit ratio
11,000 10,800 10,600 May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
M-o-M
Y-o-Y
+0.6%
+4.7%
Feb-15
Mar-15
Apr-15
Chart 3.02b – Commercial Banks’ Loan/Deposit* ratio
Commercial banks take deposits and give out loans. Chart A shows the outstanding loan by commercial banks in Thailand. Chart B shows the commercial banks’ loan to deposit ratio, a liquidity indicators in the banking system.
Latest development
Percent 100% 97.8%
98.3%
97.7%
97.8%
Bank’s loan recovered and increased 0.6% in April 2015. Liquidity in the system remained abundant with Loan-to-Deposit ratio at 94.5%.
97.2% 96.4%
95.7%
95.7% 94.9%
94.8%
94.5%
94.5%
Jan-15
Feb-15
Mar-15
Apr-15
95%
90% May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
© ChartingASEAN™
Source: Bank of Thailand
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
44
Gross NPL continued to rise in both absolute value and percentage of total loan in the 1Q15 Chart 3.03a – Total Financial Institutions’ Gross NPLs Outstanding Billion Baht
Non-performing loan 458
07YE
401
08YE
380
09YE
317
270
256
267
278
10YE
11YE
12YE
13YE
14YE
299
2015/Q1 2015/Q2 2015/Q3
Gross NPLs: the outstanding amount of loans classified as substandard, doubtful, doubtful of loss, and loss. The chart shows Gross Non-performing loan from all Financial Institutions in Thailand, both in the absolute and percentage of total terms.
Chart 3.03b – Total Financial Institutions’ Gross NPLs Outstanding
Latest development
Percentage of Total Loans
Gross NPL continued to rise in 1Q15. The absolute value increased from THB 278 billion to THB 299 billion or 2.16% to 2.29% of the total loan.
7.31% 5.29%
4.85% 3.60%
07YE
08YE
09YE
10YE
2.75%
11YE
2.26%
2.16%
2.16%
12YE
13YE
14YE
2.29%
2015/Q1 2015/Q2 2015/Q3 © ChartingASEAN™
Source: Bank of Thailand
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
45
Banks’ capital ratio increased slightly in April and remained high
Chart 3.04 – Capital ratio of all commercial banks* % of risk assets, at year end
Month End 17.5%
15.8%
16.2%
16.1%
14.9%
17.0%
14.8% 14.0%
13.9%
Capital ratio of all commercial banks
15.7%
13.3%
2015 2014
12.4%
16.5%
16.0%
Capital funds of commercial banks mean stockholders’ equity. Risk assets mean summary of all risk-weighted assets including contingent liabilities converted into assets and weighted by risk ratio. The higher the ratio the safer and more stability in the banking system.
Latest development Banks’ capital ratio increased slightly to 16.8% in April and remained high.
15.5%
15.0%
14.5% 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 © ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
46
Thailand’s real interest rate is close to zero Chart 3.05 – Real interest rates Percent, as of July 1st 2015
─
3M risk‐free interest rates Brazil
14.0
Russia
7.0
Indonesia
7.0
Vietnam
3.7
China
3.2
-1.9 2.3
5.4
2.8
4.2
1.0
6.0
5.0
Malaysia
6.1 15.3
7.7
Pakistan
Real interest rates
7.9
13.4
India
=
Expected 2015 inflation*
1.8
3.2
1.1
2.6
1.8
1.4
Australia
2.4
Philippines
2.0
South Korea
1.6
1.1
0.5
Thailand
1.4
1.1
0.3
Taiwan
0.9
0.7
1.7 2.6
-0.6
0.4
0.4
US
0.3
0.4
-0.1
Japan
0.1
0.6
-0.5
0.0
3.2
0.2
Latest development There are quite a few countries with negative real interest rates. Countries with negative real interest rates seems to have low nominal interest rates to begin with. Thailand’s real interest rate is close to zero.
-2.8
-0.2
Note: (*) The Economist Poll
Source: The Economist
Chart shows one way to calculate real interest rates across different currencies and economies in the world. Today’s Real interest rates = Nominal interest rates (represented here by 3-month risk free interest rates) – expected inflation.
0.5
Hong Kong
Euro Area
Real interest rates in the world
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
47
SET index increased slightly in June despite another big round of foreign sell out Chart 3.06a – Monthly performance of SET index
Chart 3.06c – Change since Dec 31st 2014
Percent change from prior month, at month end
Percent, as of Jun 24th 2015 China (SSEB, $ terms)
5.6%
64.5%
China (SSEA) 1.4%
0.4%
0.6%
-2.0% -5.1%
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Chart 3.06b – Cumulative net foreign fund flow SET & MAI, Billion Baht, Month end 0.0 -5.0 -10.0 -15.0
44.9%
Japan (Nikkei 225)
19.6%
France (CAC 40)
18.1%
Stock market performance
Germany (DAX)
17.0%
HK (Hang Seng)
16.1%
Euro Area (FTSE Euro 100)
15.4%
Chart A shows the monthly performance of the SET index. Chart B shows the performance, change in the index level, of key stock markets in the world, since the end of last year.
S Korea (KOSPI)
8.9%
US (NAScomp)
8.2%
Pakistan (KSE)
Latest development
6.8%
Australia (All Ord.)
5.3%
UK (FTSE 100)
4.2%
US (S&P 500)
2.4%
Thailand (SET)
1.4%
Taiwan (TWI)
1.0%
US (DJIA)
0.8%
India (BSE)
0.8%
SET index increased 0.6% in June, despite another big round of foreign sell out. Most ASEAN markets underperformed other major markets so far in 2015.
Singapore (STI) -0.4% Malaysia (KLSE) -1.7%
-20.0 J-15
F-15 M-15 A-15 M-15 J-15
J-15
A-15 S-15 O-15 N-15 D-15
Indonesia (JSX) -5.2% © ChartingASEAN™
Source: SET, The Economist; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
48
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
49
Higher government deficit as percentage of GDP in 2014
Chart 4.1 – Government budget and cash balance as percentage of nominal GDP Budget balance vs GDP
Percent
Overall Cash balances are the sum of budget and non budget cash balances. Budget cash balances are the government revenues net of the government expenditures. Non budget cash balances include changes in governmental agencies’ deposit accounts and net positions of government’s revolving funds. The chart shows both Overall Cash balances and Budget cash balances as percentage of nominal GDP.
Budget cash balance Overall Cash balance (including non-budgetary deficit/ surplus)
1.4%
1.1%
Latest development
-0.3%
-0.5%-0.6%
-0.7% -1.1%-1.1%
-0.9%
-1.7% -2.0%
-2.0% -2.2% -2.6% -3.6% -4.1%
-4.0% -4.4%
05FY
06FY
07FY
08FY
09FY
-2.4%-2.5%
10FY
11FY
12FY
13FY
Government budget and cash balances have been in deficit in 7 of the last 10 years. The magnitude of the deficits in the past 5 years have been huge. The worst deficits in relative to GDP were in 2009 (calendar year), with budget deficit of 4%. Huge government budget deficit in 2012, only slightly better than in 2009. Higher budget and cash deficit as percentage of GDP in 2014.
14FY © ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
50
Higher budget deficit in the first 5 months of 2015, compared to same period in 2014 Chart 4.2 – Government budget balance Billion Baht Monthly cumulative Budget balance (Billion Baht) 2,075
Revenue 1,241
1,751 1,390
1,455
1,498
2,158
Budget balance
50.0
Budget balances are the government revenues net of the government expenditures. The left chart shows government revenue, government expenditure and budget balance (line). The right chart shows monthly cumulative of budget balance of the last two years.
2,076
1,902 0.0
1,484 -50.0
Budget balance
-36
110 -174
-75
-100
-100.0
-27
-364
-414
-267
Latest development
-296
2014 -150.0
2015 -1,277
-200.0
-1,280 -1,629
Expenditure
-1,598 -1,849
-1,825
-250.0
-1,930 -2,489
-2,424
-2,371
Government budget balances have been in deficit in 9 of the last 10 years. The magnitude of the deficits in the past 5 years have been huge. The worst deficits in absolute term were in 2012 (calendar year), with budget deficit of 414 Billion Baht. In 2014, Budget deficit increased from 2013. Higher budget deficit in the first 5 months of 2015, compared to same period in 2014.
-300.0
-350.0
05FY 06FY 07FY 08FY 09FY 10FY 11FY 12FY 13FY 14FY
J F M A M J J A S O N D © ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
51
Huge budget and cash deficit already in the first 5 months of 2015
Chart 4.3 – Government cash balance Billion Baht Budget cash balance Overall Cash balance (including non-budgetary deficit/ surplus)
Budget and Cash balance Overall Cash balances are the sum of budget and non budget cash balances. Budget cash balances are the government revenues net of the government expenditures. Non budget cash balances include changes in governmental agencies’ deposit accounts and net positions of government’s revolving funds. The chart shows both Overall Cash balances and Budget cash balances in absolute term.
110 88
-27
-36 -45 -75
-95
-100 -96
Latest development
-144 -169
-174
-191 -242 -266
-267 -296 -305
2012 saw the biggest budget and cash deficit in THB term. Apart from 2010, Budget cash balance and Overall cash balance are typically in line with each other. Huge budget and cash deficit already in the first 5 months of 2015.
-364 -401
-414 -466
05FY
06FY
07FY
08FY
09FY
10FY
11FY
12FY
13FY
14FY
'15/5mo © ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
52
Thailand’s budget deficit is expected to be around 2% of GDP
Chart 4.4 – Government Budget balance as percentage of GDP 2015*, percent South Korea Hong Kong
0.5 -0.1
Singapore Taiwan
Consensus projection of Government budget balance as percentage of GDP across major countries in the world for the current year. The data is compiled by the Economist poll.
-0.7 -1.2
Indonesia Philippines
-1.9 -1.9
Thailand Euro Area
-2.0
Latest development
-2.1
Australia US
Most governments in the world are expected to have budget deficits in 2013, except South Korea, Hong Kong, Singapore and Russia. The magnitude of the expected budget deficits are greatest in US and Japan, the leading economies in the world. Thailand budget deficit is expected to be around 2% of GDP.
-2.3 -2.5
Russia China
-2.6 -2.7
India Vietnam
-4.1 -4.2
Malaysia Pakistan Brazil Japan
Budget balance in the world
-4.2 -5.1 -5.5 -6.9
Note: (*) The Economist Poll
Source: The Economist
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
53
A slight increase in Public debt so far in 2015
Chart 4.5a – Composition of Public debt
Chart 4.5b – Composition of Public debt
THB Trillion
As percentage of nominal GDP 45%
7.0
40%
6.0
5.0
Public debt from State Enterprises
Public debt from State Enterprises
35% 30%
4.0
Bond to Compensate FIDF's Loss & Prefunding debt
Bond to Compensate FIDF's Loss & Prefunding debt
3.0
25% 20% 15%
2.0 10%
Direct Government debt
Direct Government debt
1.0
5%
0.0
Composition of Public debt Public debt includes direct government debt, Bond to Compensate FIDF's Loss, Debt Prefunding, Non-Financial State Enterprise Debt, Special Financial Institutions Guaranteed Debt, and others. Chart A shows the level of debt in THB. Chart B shows the level as percentage of nominal GDP.
Latest development Public debt as percentage of GDP increased significantly since 2009 then dropped slightly in 2011 before increasing again. Public debt increased in absolute term and relative to GDP in 2012 and 2013, due largely to direct government debt. A slight increase in Public debt so far in 2015, at THB 5.69 trillion, or 43% of GDP. Majority of the public debt is domestic based.
0%
2011
2012
2013
2014
Apr-15
8%
8%
7%
7%
6%
2011
2012
2013
2014
Apr-15
External debt as percent of total © ChartingASEAN™
Source: Public Debt Management Office
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
54
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
Public debt in the world Public debt as percentage of nominal GDP, data is compiled by CIA.
Latest development High public debt ratio in most developed countries. Thailand’s public debt ratio, at 46% of GDP in 2013, is below international rule of thumb of 60%. Japan has the highest public debt level compared to GDP, at 226%. Majority of countries with high public debt level comes from Europe, leading by Greece, Italy, Portugal, Iceland and Ireland.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
55
CONTENT SUMMARY
Growth
• 3% GDP growth in 1Q15 is a welcoming sign for the much maligned economy • Investment and Tourism contributed the most to the overall growth in 1Q15 • Most production sectors contributed positively to 1Q15 growth, except Agriculture and Public admin. • Manufacturing production decreased more than 7% year‐on‐year in May • Private consumption and Private Investment continued to decline • Import declined faster than Export. Tourist arrivals grew from last year’s low base. • Unemployment increased slightly • Policy interest rate remains on the downward trend to boost growth • Businesses turned optimistic once again • Consensus growth forecast is now 3.0‐3.8% for 2015 and 4.1‐4.2% for 2016
Stability
• Thai economy is still in deflation state in June, with both CPI and PPI lowered than they were a year ago • Bank’s loan continued to recover in April. Bank’s capital ratio increased and remained high. NPL increased. Liquidity improved. • Higher budget deficit in the first 5 months of 2015, compared to same period in 2014, Public debt also increased but not too worrying yet • Positive Balance of Payment so far in 2015, thanks to trade surplus. External debt has been decreasing. THB appreciated slightly in June, the first time in 3 months following policy interest rate cuts.
Reading This Report This report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
56
Positive Balance of Payment so far in 2015, thanks to trade surplus Trade Balance (F.O.B)
Balance of payment decomposition
29.8
Chart 5.01 – Balance of Payment decomposition
24.6
Billion USD
17.0
10FY
31.3
11FY
13.3 6.0
6.7
12FY
13FY
14FY
15/5mo
Net service income & transfer -1.9
5.9
5.3
+
-8.1
-7.5
-9.1
-10.4
11FY
12FY
13FY
14FY
-19.7
1.2 10FY
-1.2
Net Capital Movement + errors and omissions
-5.0 10FY
11FY
12FY
13FY
14FY
15/5mo
15/5mo
21.3
Latest development
6.7
10FY
11FY
Positive Balance of Payment so far in 2015 of USD 5.9 billion, thanks to trade surplus. -2.6
-7.7
-15.4 12FY
Balance of Payments is a summary of economic transactions between residents and nonresidents that takes place during a specific time period. Balance of Payments include Trade balance, Net services income & transfers, Capital and financial account and Net errors & omissions. Trade balance refers to net export (export less import) of goods. Net Services are the net result of foreign trade related to services, defined as the net export (export less import) of services. Income consists of compensation of employees, investment income, and donation and grant. Capital Account encompasses receipts and payments pertaining to (1) transfers in cash or in kind, and (2) acquisition and disposal of non-produced, non-financial assets. Financial Account refers to net flows of financial transactions between residents and nonresidents. Net errors & omissions reflects the discrepancy between the overall balance and the sum of each sub-account of the balance of payments.
13FY
14FY
-5.5
15/5mo
© ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
57
Strong Asian export engines reflecting in huge current account surplus Chart 5.02 – Current Account balance As % of 2015 GDP*
Last 12 months, USD Billion
Singapore ‐ Q1
21.5%
Taiwan ‐ Q1
66.3
12.7%
South Korea ‐ Apr
72.4
6.6%
Russia ‐ Q1
4.3%
Philippines ‐ Mar
3.9%
Malaysia ‐ Q1
98.5 57.1 14.5
3.4%
11.3
China ‐ Q1
2.8%
Vietnam ‐ 2013
2.7%
9.5
Hong Kong ‐ Q1
2.7%
6.1
Euro Area ‐ Apr
2.3%
Thailand ‐ Q1
2.3%
Japan ‐ Apr -0.6%
India ‐ Q1
-0.9%
US ‐ Q1
-2.4%
Indonesia ‐ Q2
-3.0%
Australia ‐ Q3
-3.1%
Brazil ‐ May
288.2
-4.1%
16.1 77.4 -2.0
Countries that are expected to have huge Current Account surplus are mostly from Emerging Asian economies. US is still expected to be net spenders. Thailand’s Current Account balance in 2015 is expected to be 2.3% of GDP.
-27.5 -406.4 -25.2 -41.9 -95.7
Note: (*) The Economist Poll
Source: The Economist
Current Account represents the net sum of trade in goods and services, primary income and secondary income. The left chart shows the consensus projection of 2012 Current Account Balance as percentage of GDP by the Economist poll. The right chart shows last 12-month Current Account Balance of major economies in the world, in absolute dollar term
Latest development 302.8
1.9%
Pakistan ‐ Q1
Current Account Balance
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
58
External debt decreased slightly so far in 2015
Chart 5.10a – External Debt Level Billion USD External Debt
69.0
74.4
76.1
75.3
06YE
07YE
08YE
09YE
100.6
104.3
10YE
11YE
130.7
139.9
140.7
138.0
12YE
13YE
14YE
15/1Q
Chart 5.10b – External Debt as % of GDP
External debt refers to the remaining outstanding portion of liabilities (excluding equity) which residents have over nonresidents of an economy. Prepared by the Bank of Thailand and released quarterly. Chart A shows external debt level in USD term. Chart B shows external debt level as percentage of GDP.
Latest development External debt level decreased slightly to USD 138 Billion at the end of 1Q15. External debt as percentage of GDP decreased slightly to 33.7%.
38.5%
06YE
35.4%
07YE
31.4%
28.8%
08YE
09YE
35.2%
33.7%
10YE
11YE
38.0%
38.2%
12YE
13YE
34.5%
33.7%
14YE
15/1Q
© ChartingASEAN™
Source: Bank of Thailand
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
59
External debt structure has continued to shift toward more long‐ term debt 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
Long term Short term
External debt composition 16%
20%
18%
18%
18% 45%
44%
43%
40%
39%
Breakdown of external debt. Chart A shows the external debt breakdown by borrowers. Chart B shows the external debt breakdown by maturity.
Latest development External debt structure has continued to shift toward more long-term debt, which lowers the risk of not having enough foreign exchange to service external debt. 84%
11YE
80%
12YE
82%
13YE
82%
14YE
82%
15/1Q
55%
56%
57%
60%
61%
11YE
12YE
13YE
14YE
15/1Q
© ChartingASEAN™
Source: Bank of Thailand
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
60
Capability to repay external debt improved slightly so far in 2015
Chart 5.12a – International reserves
Chart 5.12b – Debt service ratio*
As % of ST external debt
Percent External Debt repayment capability
370% 340% 312%
4.7%
4.7% 279%
277%
292%
4.2%
4.9%
4.0%
3.4%
A look at the country’s capabilities of servicing the external debt. Chart A shows the country’s international reserves as percentage of short-term external debt. Chart B shows the external debt service ratio (Debt service payment / Export of goods and services).
Latest development International reserves (as % of ST external debt) is still at healthy level (292%). Debt service ratio increased to 4.9% in 1Q15. All in all, capability to repay external debt is not yet a concern at the moment.
10YE
11YE
12YE
13YE
14YE
15/1Q
10FY
11FY
12FY
13FY
14FY
15/1Q
Note: (*) Debt service payment / Export of goods and services
Source: Bank of Thailand; ChartingAsean analysis
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
61
Net International reserves decreased slightly in 2015 but still considered excessive Chart 5.13a – International reserves level* At the end of period, Billion USD
73.9
2006
106.5
118.0
2007
2008
International reserves
154.1
2009
191.7
206.4
205.8
190.2
180.2
177.7
2010
2011
2012
2013
2014
May-15
Chart 5.13b – International reserves as number of months of import**
International reserve assets refer to external assets that are held or controlled by central bank and are readily available for immediate uses, for instance, in financing payment imbalances or in implementing exchange rate policy. The figures also include the net forward position (future assets/liabilities arising from currency forward contracts between BOT and the market). Chart A shows international reserves level in US$ term. Chart B shows as number of months that it can finance import.
Latest development 13.8
12.6 10.8
9.1 6.9
2006
2007
9.9
7.9
2008
2009
2010
2011
2012
9.1
9.5
9.7
2013
2014
May-15
Note: (*) Including Net Forward position (**) For the last period using average monthly import value during the last 12 months
Source: Bank of Thailand; ChartingAsean analysis
International reserves in US$ term have been decreasing since its peak in 2011. So far in 2015, the reserves decreased slightly but the number of months that it can finance import remained at 9.7 months, which is considered excessive.
© ChartingASEAN™
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
62
THB appreciated slightly in June
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 Jun 30th 2015 AUD ‐ 26.2787 114.0
Baht appreciates
112.0 110.0 108.0
M‐o‐M
+0.5% Y‐o‐Y +6.2%
Baht depreciates Jun-14
Sep-14
Dec-14
Mar-15
17.4
EUR ‐ 38.1199
17.0
MXN ‐ 2.1625
16.3
JPY ‐ 27.8603
16.0
106.0
MYR ‐ 9.1086
104.0
IDR ‐ 2.6829
102.0
KRW ‐ 0.0303
100.0
GBP ‐ 53.5119
3.9
98.0
SGD ‐ 25.3266
3.6
96.0 Jun-15
INR ‐ 0.5627
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 $
12.9 8.8 5.9
-0.6
TWD ‐ 1.0987
-0.8
USD ‐ 33.9266
-3.9
CNY ‐ 5.5025
-3.9
VND ‐ 0.0016
Nominal Effective Exchange Rate (NEER) has been constructed from the weighted average of bilateral exchange rates of the baht vis-à-vis Thailand’s 23 major trading partners and trade competitors. The weight of each currency varies according to how important the country is as a trading partner and trade competitor. An increase in NEER refers to an appreciation. Chart B shows the year-on-year change of average selling rates of selected currencies.
Latest development Nominal Effective Exchange Rate increased 0.5% in June, the first rise following policy interest rate cuts. Over the last 12 months THB still appreciated 6.2% against key currencies.
2.5
PHP ‐ 0.7615
Exchange rates
-6.3
Baht depreciates
Baht appreciates © ChartingASEAN™
Source: Bank of Thailand; ChartingAsean analysis
www.ChartingAsean.com
This is a licensed product and is not to be photocopied
63