SUNDAY, April 14, 2024

August indicators show Thai economy recovering

August indicators show Thai economy recovering

Economic indicators for August show significant improvement from July but suggest the economy is still contracting, according to the Finance Ministry.

Releasing its monthly economic report on Monday, the ministry’s Fiscal Policy Office predicted the economic situation would get better in the third quarter after a sharp contraction of 12.2 per cent in the second quarter. 

Reopening the country to tourists would also boost the recovery, said fiscal policy adviser Wuttipong Jittungsakul, referring to a plan to allow foreign travellers back into Thailand next month. Before the Covid-19 travel ban, Thailand welcomed 6.7 million foreign tourists this year.

August’s revenue from value added tax (VAT), an indicator of private consumption, fell 3.8 per cent year on year – but far less than the 11.6 per cent drop in July. Car sales rose 14.8 per cent from July, but contracted 35.5 per cent year on year. Motorcycle registration dropped 2.5 per cent year on year, compared to 5.8 per cent contraction in July.

Farmers’ income increased for the second month in a row, by 9.2 per cent, up from 3.8 per cent in July. The consumer confidence index rose for the fourth consecutive month, to 51. Effective control of Covid-19, relaxation of restrictions, and implementation of aid packages had helped boost consumer spending. The fiscal Policy Office predicted the economic situation in the third quarter (July-September) would be better than the second quarter, he said.

Private investment also improved slightly, with imports of capital goods and commercial cars increasing 1.5 per cent and 13.1 per cent respectively from July. They dropped year-on-year, but at a decelerating rate of 11.5 and 0.5 per cent.

Cement sales in August rose 2.7 per cent year on year but were flat compared to sales in July. However the property sector remained on a downward trajectory, with tax revenue from real estate transactions dropping 6.9 per cent from July and 14.1 per cent year on year.

Exports in dollar terms contracted 7.9 per cent in August, better than the 11.4 per cent contraction in July.

Budget disbursement rose 9.2 per cent year on year in August with a monthly increase of 3.3 per cent.

Meanwhile, Pisit Puapan, executive director of the Finance Ministry’s Macroeconomic Policy Bureau, said economic indicators in August pointed to recovery in all four regions of the country.