Indicators show economic slowdown in 2013: BOT
Play
Thailand's economic activities softened in 2013, with key economic indicators showing contraction from the previous year.
According to the Bank of Thailand, while the tourism sector expanded robustly and was a key driver of the economy in 2013, private consumption was subdued after accelerating during the year earlier. Some businesses postponed their investment pending improvement in economic and political prospect.
Merchandise exports only slowly picked up owing to shortages of raw materials and given constraints in production technology in certain industries to meet changes in global preferences. Fiscal impetus was softened as a result of the lower-than-usual disbursement of capital expenditure.
The unemployment rate remained low. The slowing in readings of inflation was in line with energy prices and the economic slowdown.
The current account registered a deficit owing mainly to gold imports and repatriation of profits and dividends, while the capital account posted a surplus given financial institutions’ overseas borrowing and foreign direct investment. Overall, the balance of payment recorded a deficit.
In December alone, the manufacturing production and private-sector spending were held down by weak sentiments among businesses and households in light of ongoing economic slowdown and domestic political protests. On the external front, tourism growth was moderating following the enforcement of China’s new tourism law.
In the month, the Manufacturing Production Index (MPI) dropped by 6.1 per cent on year. First, automobile production, which had expanded at a robust pace during the prior year, continued to decline despite an increase in export orders. Second, beer production fell, given elevated levels of inventories, and
also in line with lower demand attributable in part to the new excise tax rates effective in September. Third, frozen shrimp production continued to be restrained by the ongoing outbreak of disease.
The Private Investment index (PII) contracted 8.1 per cent on year, given that most businesses had already accelerated their investment earlier and some businesses decided to postpone investment amid current economic and political uncertainties.
The Private Consumption Index (PCI) fell 0.2 per cent as spending on durable goods - automobiles in particular - continued to contract in light of last year’s high level and given a decline in new orders. Meanwhile, spending on nondurable goods, such as food and beverages, moderated to a slower pace.
The tourism sector expanded at a slower pace after the enforcement of China’s new tourism law since October 2013 and amid domestic political unrest. This month’s tourist arrivals were recorded at 2.6 million, up 6.7 per cent compared with 11.9 per cent in the previous month.
While imports registered US$16.28 billion, down 9.3 per cent, exports rose by 1.8 per cent to $18.23 billion in line with improving global demand.
