External factors weigh down Thai economy in Q3
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Thailand's economy continued to be weighed down in the third quarter this year by the weakening global economy, according to latest data by Bank of Thailand (BOT).
Mathee Supapongse, senior director at BOT's Macroeconomic and Monetary Policy department said that manufacturing production in export-oriented industries exhibited a continued contraction, in tandem with deteriorating exports in these industries.
The export sector should stage recovery in the second quarter of next year, he said.
In the first nine months of this year, Thailand's exports declined by 1.13 per cent compared to the same period last year.
On the other hand, production in domestic-oriented industries, the tourism sector, and private spending continued to expand. This helped allow Thailand to register economic growth of 3.3 per cent in the third quarter, with growth momentum being expected to continue in the fourth quarter, the central bank said.
Regarding overall economic stability, the unemployment rate remained at a low level while headline inflation rose largely as a result of a base effect from energy prices.
Methee added that the global economic slowdown continued to weigh on merchandise exports. Even though overall export value decreased slightly by 0.1 per cent year-on-year in September, export value of goods excluding gold exports declined by 7.9 per cent with contraction in almost all product categories.
Exports of agricultural products contracted from declining rubber prices and declining rice export quantity as a result of higher price relative to competitors.
Meanwhile, exports of manufacturing products contracted particularly exports of electronics and food products.
Nevertheless, exports of steel, metal, and automobile especially commercial cars exhibited favorable growth.
Meanwhile, imports decreased by 7.2 per cent mainly from declining imports of gold and raw material and intermediate goods used in export-oriented industries.
Deteriorating exports led to a continued decline in manufacturing production as the
Manufacturing Production Index (MPI) decreased by 13.7 per cent following contracted production in export-oriented industries, especially hard disk drive, integrated circuit and parts, apparels, and electrical appliances.
Meanwhile, production in industries which produced for both domestic and foreign markets registered a substantial growth, especially accelerated automobile production to accommodate backlog orders.
Agricultural production expanded by 8.9 per cent thanks to increased production of rice rubber, oil palm and livestock. However, agricultural price remained contracted by 11 per cent following declining rubber prices as a result of weakening global demand and last year’s high base effect.
In addition, price of swine, chicken and egg decreased from over supply to the market. This led to a contraction in farm income of 3.1 per cent.
Having this trend, Thailand's export will recover in the second quarter next year while witnessing positive economic growth in many countries, Methee added.
