Thursday, July 09, 2020

Private investment, exports expected to drive growth next year

Dec 27. 2019
Economic indicators in November pointed to an economic slowdown.
Economic indicators in November pointed to an economic slowdown.
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By The Nation

Economic indicators in November pointed to an economic slowdown, but private investment and exports are expected to be the growth drivers next year, according to the Fiscal Policy Office.

Overall household consumption grew during the month, pushing up the government’s value added tax collection by 3.7 per cent, said Wuthipong Chittangsakul, deputy of director general of the Fiscal Policy Office, on Thursday (December 26).

Real income of farmers rose by 1.8 per cent year on year. However, consumers remained cautious on spending as evidenced by a 16.4 per cent plunge in new car sales and 6.8 per cent fall in registrations of new motorcycles. The Consumer Confidence index dropped to 57.9 in November amid consumers' concerns on falling exports and the global economic slowdown.

Private investment remained weak as seen in the 11.2 per cent drop in machinery imports. Commercial car sales plunged 16.1 per cent as the collection of property transaction taxes fell 6.3 per cent. Cement sales decreased 2.2 per cent while the construction material price index dropped 3.1 per cent year on year due to the declining prices of steel and steel products.

The Fiscal Policy Office, however, predicted that private investment would expand 4.6 per cent next year as government spending on infrastructure projects will attract private investment.

Thailand’s exports in dollar term fell 7.4 per cent while imports plunged 13.8 per cent, resulting in trade surplus of US$ 548.8 million.

However, an easing of trade tensions is expected to boost the global economy next year, following the Phase One trade agreement between US and China. Based on this assumption, the Fiscal Policy Office predicted exports next year will rise 2.6 per cent, compared to an estimated contraction of 2.5 per cent this year, Wuthipong said. 

In November, the tourism sector remained on the path of expansion with the number of tourist arrivals up 5.9 per cent to 3.36 million, largely due to a 18.3 per cent increase in Chinese tourists. The numbers of Travellers from Taiwan, India and Russia also rose.

Total revenue from foreign tourists' spending is estimated at Bt166.9 billion this year, up 3 per cent year on year.

Agricultural production fell 2.7 per cent in November and industrial production index dropped 8.3 per cent to 96.8 compared to November last year. 

However, the Thai Industries sentiment index rose to 92.3 due to rising orders.

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