CONSUMPTION, INVESTMENT LEAD ECONOMIC RECOVERY

Valueadded tax collections, a key indicator of consumption, rose 11.3 per cent year on year last month, Somchai Sujjapongse, directorgeneral of the Fiscal Policy Office, said yesterday.
It was the fourth consecutive month of expansion after negative growth of 1 per cent in November due to the massive floods last year.
Car sales dropped only 3.3 per cent last month year on year compared to slides of 9.8 and 4 per cent in January and February respectively.
 Figures showed that consumption continued to expand from previous months, said Somchai. Consumption is an important indicator as the consumption to economy ratio is as high as 52 per cent, he added.
 Private investment also showed signs of recovery as sales of commercial cars rose 36.7 per cent last month. The Industrial Confidence Index last month rose to 102.1, compared to 100.9 in February, rising for the fourth month in row, pointing to more private investment, said Somchai.
The import of capital goods expanded 16.2 per cent year on year last month, leading to an expansion of 11 per cent in the first quarter as firms imported machine and raw materials for postflood resumption of production.
The number of tourist arrivals also rose 12 per cent to 1.91 million last month, he said.
Exports are expected to rise in May and June following a contraction of 6.5 per cent last month, as the ministry expects most of the manufacturing would fully recover from the floods, he said.
He, however, said that rice exports sharply dropped due to the impact of the floods and the uncompetitive price resulting from the government’s pledging scheme. Other agricultural commodities such as rubber also face limited demand in the global market.
“We’ll closely watch the impact on the real income of farmers due to the falling price of farm products, which may affect consumption,” said Somchai.
The real income of farmers dropped by 11.7 per cent last month from a drop of 9.8 in January and 4 per cent in February.