monthly brief on thailand's economy
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ÂTRANSCRIPT
สรุปสภาวะเศรษฐกิจไทย
Monthly Economic Brief for Executives
31 July 2012
Charting Thailand’s Economy® | Monthly Economic Brief for Executives | www.ChartingThailandEconomy.com
www.ChartingThailandEconomy.com
About Charting Thailand’s Economy
Charting Thailand’s Economy® is a subscription‐only magazine providing monthly economic brief for executives.
We believe that following and understanding the economy should be exhaustive yet easy for everyone. Yet in reality it is so hard to make sense of all the information (news, opinions, etc.) presented to us.
This is where we come in and offer an easy way to follow the Thai economy. Our report includes test results (economic indicators) and summary. All the data used in our charts are from official sources, but we try to present them in a way that make sense and easy to understand.
We hope you like us, and if you do and want to learn more about the economy, visit our website at www.ChartingThailandEconomy.com
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For busy business people, this is an easy and very objective way of keeping up with the economy. If you are really busy, we also provide executive summary. You might also use this as your macro economic ‘desk reference’.
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For students and self‐learners, this is a great educational tool for you to further your understandings of the economy.
Editor’s talk
Dear readers,
We have been in e‐magazine format for 6 months already and I am proud to announce that we are starting the paper format with this issue. I also think that it’s a good time to recap why we exist at all, starting from our mission and the methodology that we believe will save you time in following the economy.
For our regular check on the health of the Thai economy, June saw another set back in production sectors especially in Manufacturing. Private consumption and investment, which grew impressively so far this year, also cooled down. Export situation has not improved.
Looking forward, Business and Industrial confidences are less optimistic. Concerns over budget and balance of payment deficits are still there.
We hope you enjoy our new way of helping you making sense of all economic data. See you again next month.
Saroj KhongkhaprasertsinManaging [email protected] Thailand’s Economy belongs to Chart Maker Co., Ltd.
Registered No. 0135555002491Address: 19 Moo 11, Lamlukka rd., Lamlukka sub‐district , Lamlukka district Pathumthani 12150, ThailandTel: +662 987 0919, Fax: +662 987 0917, Email: [email protected]
2
Data
Information
Interpretations
Under-standing
Our way to save you time in following the economy
Currentproblems
Our way to solve them
• Many experts’ insights, not sure whose to believe
• Produce your own insights from a good understanding
• Multiple sources • One source, one stop
• Information over load
• Only those that matter are selected
• Visual graphic presentation
• Explanations here and there
• Exhaustive and fact-based explanations
3
OVERVIEW OF THAILAND’S ECONOMIC INDICATORS
MonthlyHealth checkOn the economy
GDP& Real sector
Wealth distribution
Monetary sector Fiscal sector External
sector
• Economic structure• Growth projections• Historical growth• Production side indicators
• Expenditure side indicators
• Leading indicators
• Income distribution (GINI)
• Poverty line• Per Capita income• Unemployment• Household wealth
• Interest rates• Bank’s loan and deposit
• Bank’s capital ratio• Bank’s NPL• Stock markets• Inflation
• Budget balance• Public debt
• Balance of Payment• Current Account• Trade balance• Export • Import• External debt• International reserves
• Foreign Direct Investment
• Exchange rates• Tourists
4
How is the economy? How is my daughter?
She recovered quite well from the accident and will continue her development this year. Medicines and supplementary food
worked well.
She’s still growing disproportionately compared to other kids.
She’s quite healthy, only a little concern on her high sugar level.
The economy recovered strongly and quicker than expected. Monetary and Fiscal policy have been promoting growth well.
Income distribution, although improving, is still below international standard.
Overall Economic stability is good. Low inflation, stable exchange rate, but budget
deficit is still worrying.
Why we call this
A Monthly Health check on the economy
5
OUR ONLY MISSION:
Saving you time, in following the economy
“Charting Thailand's Economy provides a complete 360 degree viewpoint of the Thai economy and is
extremely easy to follow. I would highly recommend it to anyone interested in Thailand's economy”
Mr Gancanapol Van CompernolleDirector, L.V. Technology Plc.
"Simple, Understandable, & Practical"Mr Sivakorn SrisuwanCEO, Pan Asia Insurance Brokers Co., Ltd.
"It's exactly what I'm looking for to update on Thai economy in a few minutes. Really save my time.“
Ms Pikun Phitya‐isarakulFund Manager, Phillips Securities (Thailand) Plc.
6
www.ChartingThailandEconomy.com7
Executive summary
GrowthReal GDP in 1Q/2012, grew 0.3% y‐o‐y or 12.6% q‐o‐q despite manufacturing having not fully recovered from the flood damage. The strong growth was driven mainly by the service sector on the production side and Investment on the expenditure side.
Another set back in Real sector’s recovery in June especially for Manufacturing production. Private consumption and Private Investment also cooled down but the current level is still higher than a year ago. Property sector shows signs of improvement .
Export situation has not got better as there is only 0.5% growth in the first half of 2012 while Import grew 12.7%. FDI, on the other hand, grew 112% in the first 5 months of 2012 compared to the same period last year. BOI’s net application grew 66% in the first half of 2012, with Japan as the biggest source. Lastly a good sign from tourism, a 8% increase in tourist arrivals in the first half of 2012.
Looking forward, both Fiscal and Monetary policies are pro‐growth. Government spending in the first half of 2012 has increased substantially with compensation for flood victims and new investments among the extra items.
Policy rate is still at 3%, a rather low level. Bank’s loan continued to increase in May, reacting positively to the policy rate cuts earlier this year. Both Business and Industrial sentiments dropped slightly in June, but their respective levels are still considered healthy.Consumers are less pessimistic.
The consensus projection is still between 5.7‐6.0% for 2012 and between 4.7‐5.8% for 2013
Employment and wealth distributionThailand’ unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
Thailand’s per capita income was at USD 4,420 in 2011, ranked83th in the world. An average Thai is slightly poorer than an average Chinese but more than three times richer than an average Indian. Income distribution in Thailand is among the worst in Asia but the trend has been slightly improving. Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
StabilityPrice stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July. This is very low by historical and international standards.
Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Budget deficit for Thailand is still expected to be ‐2.3% of GDP. Public debt as percentage of GDP increased slightly this year due mainly to direct government debt. Majority of the public debt is domestic based.
Thai Baht depreciated slightly against a basket of key currencies in July . Balance of Payment deficit in the first half of 2012 due largely to deteriorating Trade Balance. External debt increased slightly this year but capability to repay is not a concern as debt service ratio continued to decline and international reserves is at healthy level.
CONTENT
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
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52
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71
Thailand waking up from the flood crisis
Chart 1.05 – Historical Real GDP growth rateAnnual growth, percent
Source: NESDB; CTE analysis
4.8%
2.2%
5.3%
7.1%6.3%
4.6%5.1% 5.0%
2.5%
-2.3%
7.8%
0.1% 0.3%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q12 2Q12 3Q12 4Q12
CAGR* 2000‐2011
= 3.9%
Note: (*) Cumulative Annual Growth Ratewww.ChartingThailandEconomy.com
9
Trading, Transport, Utilities among others have contributed positively to 1Q12 GDP growth
Chart 1.06a – Real growth by sector, 1Q12Year‐on‐Year percentage change
Source: NESDB; CTE analysis
0.3
9.1
6.5
5.2
4.1
3.9
3.8
2.5
2.3
0.8
0.7
-0.3
-1.0
-1.3
-2.0
-2.4
-4.2
GDP
Utilities
Financial
Hotel&Res
Trading
Agriculture
Transport
Health&Social
Education
Construction
PublicAdmin
Other social
Private HH
RealEstate
Mining
Fishing
Manufacture
Chart 1.06b – Sectoral contributions, 1Q12Contributions to total Real GDP growth
www.ChartingThailandEconomy.com
0.3
0.6
0.4
0.3
0.3
0.3
0.2
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-1.7
GDP
Trading
Transport
Utilities
Agriculture
Financial
Hotel&Res
Education
Health&Social
PublicAdmin
Construction
Private HH
Other social
Fishing
Mining
RealEstate
Manufacture10
Investment and Private consumption have been key growth engines in 1Q12
Chart 1.08a – Real growth by expenditure, 1Q12Year‐on‐Year percentage change
0.3
20.5
4.5
2.7
-1.6
-3.2
GDP
I
‐M
C
G
X
Chart 1.08b – Expenditure Contributions, 1Q12Contributions to total Real GDP growth
0.3
4.0
1.3
-0.1
-0.2
-2.3
-2.4
GDP
I
C
G
Discrpncy
X
‐M
Source: NESDB; CTE analysis www.ChartingThailandEconomy.com11
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
12
Agriculture production dropped in June from the month before but increased strongly compared to last year
Chart 1.10 – Agriculture production index (2005=100)
Source: Office of Agricultural Economics, Ministry of Agriculture and Cooperatives
100.0
106.7
110.2111.8
113.1112.0
116.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
www.ChartingThailandEconomy.com
CAGR2.5%
0.0
50.0
100.0
150.0
200.0
250.0
J F M A M J J A S O N D
Monthly Average
2011
2012
M‐o‐M‐5.8%
Y‐o‐Y7.0%
13
Big set back for MPI in June
Chart 1.11 – Manufacturing Production Index (2000=100)
Source: The Office of Industrial Economics www.ChartingThailandEconomy.com
109.9
123.9
137.6149.9
159.5172.4
179.1166.3
190.1
172.6
2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.0
50.0
100.0
150.0
200.0
250.0
J F M A M J J A S O N D
Monthly Average
2012
M‐o‐M‐3.5%
Y‐o‐Y‐9.6%
2011
CAGR5.1%
14
Set back from prior month in most sector MPIs
Chart 1.12a – Y‐on‐Y change in MPI by sectorJune 2012, percent
Source: The Office of Industrial Economics; CTE analysis
40.316.7
15.012.4
10.06.05.04.44.3
1.50.7
-1.1-2.4-3.1
-8.9-12.1
-16.5-16.6
-23.3-31.4
-39.8
VehiclesTobaccoElectricalBasic Mat
Wood productsMachineries
ChemicalMineral
Food & BevFurniture
Precision instruPetroleum
PaperRubber&PlasticTransport EquipMetal products
ApparelTextilesLeather
OAElectronic
Chart 1.12b – M‐on‐M change in MPI by sectorJune 2012, percent
0.77.4
-3.62.7
-6.9-3.4
-7.2-4.9
-9.52.2
-0.6-8.4
0.2-0.6
-2.5-13.7
-0.34.7
-2.0-1.6
-10.4
www.ChartingThailandEconomy.com15
Slight drop in Capacity utilization rate with some industries running over normal capacity
Source: The Office of Industrial Economics
58.362.4
67.2
61.1
74.3 72.4
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12
Chart 1.13a – Overall Capacity Utilization RatePercent
Chart 1.13b – Capacity utilization rate by sectorJune 2012, percent
139.8113.8
107.190.8
84.779.0
72.672.571.069.7
65.962.6
58.055.3
49.244.843.541.5
35.332.5
20.7
ElectronicPrecision instru
VehiclesMachineries
Transport EquipChemicalElectrical
PetroleumMineralPaper
Rubber&PlasticOA
Food & BevMetal products
Basic MatApparelTobaccoTextiles
FurnitureLeather
Wood products
www.ChartingThailandEconomy.com16
Thailand ranks lowest in the latest round industrial production growth
Chart 1.14 – Manufacturing Production IndexLatest, percent change on year ago
Source: The Economist
9.5
8.4
7.6
7.6
6.0
4.7
4.7
3.0
2.6
2.4
2.0
-1.7
-2.0
-2.6
-4.3
-9.6
China ‐ Jun
Taiwan ‐ Feb
Singapore ‐ Jun
Malaysia ‐ May
Japan ‐ May
US ‐ Jun
Australia ‐ Q1
Indonesia ‐ May
South Korea ‐ May
India ‐ May
Russia ‐ Jun
Hong Kong ‐ Q1
Pakistan ‐ Apr
Euro Area ‐ May
Brazil ‐ May
Thailand ‐ Jun
www.ChartingThailandEconomy.com17
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
18
Despite a little set back compared to last month, Private consumptions continued its impressive growth from last year
Chart 1.15 – Composite Private Consumption Index* (2000=100)
Source: Bank of Thailand www.ChartingThailandEconomy.comNote: (*) seasonally adjusted
105.9111.4
118.1 121.9 124.1 126.0130.5 127.1
134.1138.9
02-Avg 03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg125.0
130.0
135.0
140.0
145.0
150.0
155.0
J F M A M J J A S O N D
Monthly Average
2012
M‐o‐M‐2.5%
Y‐o‐Y4.4%
2011
CAGR3.1%
19
Strong recovery in consumptions across the board so far this year despite a little set back in June
Chart 1.16a – Y‐on‐Y changeFirst 6 months of 2012 vs 2011, percent
Source: Bank of Thailand; CTE analysis
46.2
30.5
19.0
17.7
14.5
12.1
7.8
7.1
2.6
1.5
Commercial Car (Unit)
Passenger Car (Unit)
NGV (kg.)
LPG (litre)
HH electricity (kilowatt/hour)
Real VAT (2000 prices, baht)
Real import of consumer goods(2000 prices, US$)
Diesel (litre)
Motocycle (Unit)
Benzene & Gasohol (litre)
Chart 1.16b – M‐on‐M changeJun vs May 2012, percent
4.7
3.9
0.0
1.0
-5.7
-6.3
-18.4
5.6
-13.6
1.6
www.ChartingThailandEconomy.com20
Private Investment is stronger than ever
Chart 1.17 – Private Investment Index (2000=100)
Source: Bank of Thailand www.ChartingThailandEconomy.com
118.3132.4
154.4169.6 172.2 171.9 178.0
156.6
186.4202.2
02-Avg 03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg0.0
50.0
100.0
150.0
200.0
250.0
300.0
J F M A M J J A S O N D
Monthly Average
2012
M‐o‐M0.0%
Y‐o‐Y18.3%
2011
CAGR6.1%
21
Impressive Private Investment growth across the board in the first 6 months of this year
Chart 1.18a – Y‐on‐Y changeFirst 6 months of 2012 vs 2011, percent
Source: Bank of Thailand; CTE analysis
25.3
19.6
6.2
4.6
4.5
Domestic commercial carsales (unit)
Import of Capital Goods(2000 prices, Baht)
Construction Area permitted(sqm)
Domestic Machinery sales*(2000 prices, Baht)
Domestic Cement sales (ton)
Chart 1.18b – M‐on‐M changeJun vs May 2012, percent
2.9
-1.2
-1.7
7.1
3.3
Note: (*) figures are 1‐month delayedwww.ChartingThailandEconomy.com
22
Improvements in Property indicators in May
Chart 1.19a – Y‐on‐Y changeFirst 5 months of 2012 vs 2011, percent
Source: Bank of Thailand; CTE analysis
66.5
12.4
-0.6
-11.8
Condo unit registered
New housing unit
Value of land transaction
Constr. Area in municipal
Chart 1.19b – M‐on‐M changeMay vs Apr 2012, percent
26.8
-62.7
33.8
-17.0
www.ChartingThailandEconomy.com23
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
24
FDI grows 112% in the first 5 months of 2012
Chart 5.14 – Foreign Direct InvestmentMillion USD
Source: BOT
8,048
9,460
11,331
8,547
4,853
9,690 9,511
05FY 06FY 07FY 08FY 09FY 10FY 11FY-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
J F M A M J J A S O N D
www.ChartingThailandEconomy.com
Monthly cumulative FDI
2011
2012
25
BOI’s net application for the first 6 months of 2012 grew 66%
Chart 5.15 – BOI net application of foreign direct investment*Billion Baht
Source: Board of Investment
297
351
236
396
167
278
08FY 09FY 10FY 11FY 2011/6M 2012/6M
Note: (*) Foreign investment (foreign equity>=10%)
www.ChartingThailandEconomy.com26
Japan has been the biggest source of FDI for Thailand
Chart 5.16 – BOI net application of FDI* breakdown by country groupPercent of total
Source: Board of Investment; CTE analysis
35%22%
44% 49%63%
23%
27%
17% 7%
0%15%
12%
6%8%
11%6%
12%6%
7%
6%3% 10% 3%2%
3%
20% 17%23% 27%
17%
08FY 09FY 10FY 11FY 2012/6M
Europe
Japan
ASEAN
ANIEs USA
Others
Note: (*) Foreign investment (foreign equity>=10%)(**) ANIEs: Taiwan, Hong Kong, South Korea
www.ChartingThailandEconomy.com27
Tourist arrivals increased 8% y‐o‐y for the first 6 months of 2012
Chart 5.18 – International Tourist ArrivalsMillion visits
Source: Department of Tourism
10.810.0
11.7 11.5
13.814.5 14.6 14.1
15.9
19.1
02FY 03FY 04FY 05FY 06FY 07FY 08FY 09FY 10FY 11FY
www.ChartingThailandEconomy.com
0.0
5.0
10.0
15.0
20.0
25.0
J F M A M J J A S O N D
20112012
Monthly cumulative
CAGR6.5%
28
More European tourists so far this year
Chart 5.19 – International Tourist Arrivals breakdown by country of nationalityPercent of total
Source: Department of Tourism; CTE analysis
52.6 52.1 50.0 51.2 54.1 52.3
27.0 27.3 28.7 27.9 25.9 28.3
6.4 6.2 6.0 5.3 5.0 5.2
14.0 14.3 15.3 15.6 15.0 14.2
07FY 08FY 09FY 10FY 11FY 2012/6M
East Asia
Europe
Americas
Rest of world
www.ChartingThailandEconomy.com29
Worsened trade balance so far in 2012
Source: Bank of Thailand; CTE analysis
432
-111
593
320
-77
-363
07FY 08FY 09FY 10FY 11FY 12/6MO
Chart 5.03 – Trade balance* decompositionBillion Baht
5,3025,851
5,1956,176
6,897
3,466
07FY 08FY 09FY 10FY 11FY 12/6MO
4,8705,962
4,6025,857
6,974
3,829
07FY 08FY 09FY 10FY 11FY 12/6MO
Export**
Import***─
Note: (*) Not equal to the one in Balance of Payment decomposition due to few adjustments(**) Excluding Electricity and aircraft export, adjustment for Balance of payment and exchange rate conversion
(***) Excluding Electricity and military import, adjustment for Balance of payment and exchange rate conversion
www.ChartingThailandEconomy.com30
Slow growth in Export after 6 months in 2012
Chart 5.05a – YTD annual change in Export in BahtFirst 6 months of 2012 vs 2011, percent
Source: Bank of Thailand; CTE analysis
0.577.7
39.535.4
19.317.9
14.010.710.5
7.56.65.64.84.8
0.2-0.5-0.8-1.2
-3.8-13.4-15.1-16.5
-20.1-22.4
-39.4
Total exportRe‐exportsPetroleum
MiningAutomotive
ForestryToiletries
Agro productsPhoto instruMachineryJewelleryAircraftsFishery
ChemicalsElectronics
MetalElectrical
Petro‐chemicalFurnitureApparels
Optical instruFootware
Other exportAgriculture
Other manufacturing
Chart 5.05b – Sectoral contributionsContributions to total export growth
www.ChartingThailandEconomy.com
0.52.0
1.71.3
0.50.30.20.20.10.10.10.10.10.00.0
0.00.00.0
-0.1-0.1-0.2
-0.5-0.7
-2.2-2.4
Total exportAutomotivePetroleum
Agro productsMachinery
MiningJewelleryChemicalsToiletries
Photo instruForestryAircraftsFishery
ElectronicsRe‐exports
MetalFurnitureElectrical
Petro‐chemicalFootware
Optical instruApparels
Other exportOther manufacturing
Agriculture31
Middle East, ASEAN and NAFTA are the best performing export markets so far this year
Chart 5.07a – Export by countryPercent of total export in Baht term
Source: Bank of Thailand; CTE analysis
22.5 21.3 22.7 23.7
18.3 20.1 21.2 22.9
16.6 18.4 18.0 16.9
12.7 12.2 11.6 10.911.3 10.3 10.4 10.5
13.2 11.9 11.2 10.65.4 5.7 4.9 4.5
08FY 09FY 10FY 11FY
ASEAN
NAFTA
East Asiaex‐Japan
EU
Japan
Middle East
Rest of the world
100% = (Trillion)฿ 5.9 ฿ 5.2 ฿ 6.2 ฿ 6.9
www.ChartingThailandEconomy.com
10.9%
10.9%
6.4%
-1.3%
-1.7%
-7.4%
-10.5%
Middle East
ASEAN
NAFTA
Rest of the world
Japan
East Asia ex Japan
EU
Chart 5.07b – Change in ExportFirst 6 months of 2012 vs those of 2011
32
Capital goods has contributed most to import growth so far this year
Chart 5.09a – YTD annual change in Import in BahtFirst 6 months of 2012 vs 2011, percent
Source: Bank of Thailand; CTE analysis
12.7
25.9
23.3
21.0
16.8
-0.3
Total import
Others
Capital goods
Intermediate ‐ Fuel
Consumer goods
Intermediate ‐ Non fuel
Chart 5.09b – Sectoral contributionsContributions to total import growth
12.7
5.1
3.9
2.6
1.2
-0.1
Total import
Capital goods
Intermediate ‐ Fuel
Others
Consumer goods
Intermediate ‐ Non fuel
www.ChartingThailandEconomy.com33
Capital goods have gained its importance in overall import so far this year
Chart 5.08 – Import by economic classificationPercent of total import in Baht term
Source: Bank of Thailand; CTE analysis
7.0 7.1 8.3 7.5 7.5 7.6
18.4 20.7 18.6 17.4 18.8 19.9
47.5 44.8 43.0 44.0 40.0 37.6
20.4 19.3 22.3 20.9 21.3 23.8
6.7 8.0 7.8 10.2 12.4 11.1
07FY 08FY 09FY 10FY 11FY 12/6MO
Others
Capital goods
Consumer goods
100% = (Trillion)฿ 4.9 ฿ 6.0 ฿ 4.6 ฿ 5.8 ฿ 7.0
Intermediate ‐ Fuel
www.ChartingThailandEconomy.com
Intermediate –Non‐Fuel
฿ 3.8
34
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
35
Policy rate was held at 3.0% in July
Chart 3.01a – BOT’s policy rate
Source: Bank of Thailand
2.7%2.8%2.9%3.0%3.1%3.2%3.3%3.4%3.5%3.6%
Aug-11 Jul-12
Chart 3.01b – Inter bank overnight rate
2.7%2.8%2.9%3.0%3.1%3.2%3.3%3.4%3.5%3.6%
Jul-11 Jun-12
Chart 3.01c – Saving deposit rate
0.3%0.4%0.5%0.6%0.7%0.8%0.9%1.0%
Jul-11 Jun-12
Chart 3.01d – Commercial bank MLR
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
Jul-11 Jun-12
Max
Min Min
Max
www.ChartingThailandEconomy.com36
Bank’s loan continued to increase as well as the L/D ratio
Chart 3.02b – Commercial Banks’ Loan/Deposit* ratioPercent
Source: Bank of Thailand
88.9%86.7% 87.5%
89.6% 88.7% 89.3% 89.8% 89.5% 89.5% 90.2% 91.7% 92.7%
75%
80%
85%
90%
95%
100%
Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12
www.ChartingThailandEconomy.com
Chart 3.02a – Commercial Banks’ LoanTHB billion
7,000
7,500
8,000
8,500
9,000
Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12
M‐o‐M1.2%
Y‐o‐Y14.6%
37
22% increase in fiscal expenditure in the first half of 2012 compared to the same period last year
Source: Bank of Thailand; CTE analysis www.ChartingThailandEconomy.com
Chart – Monthly cumulative Fiscal expenditure
Billion Baht
0
500
1000
1500
2000
2500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
20112012
38
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
39
Drops in business confidences in June
Source: Bank of Thailand, The Federation of Thai Industries
Chart 1.21a – Business Sentiment Index*
Note: (*) Below is the interpretation of the index:Index = 50 indicates that business sentiment remains stableIndex > 50 indicates that business sentiment has improvedIndex < 50 indicates that business sentiment has worsened
Chart 1.21b – Thai Industries Sentiment Index**
www.ChartingThailandEconomy.com
50.8 52.7 55.5
47.753.8 51.5
0
50
100
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12
Better
Worse
99.6 100.9 102.1 104.0 106.0 102.7
0
100
200
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12
Better
Worse
Note: (*) Below is the interpretation of the index:Index = 100 indicates that industries sentiment remains stableIndex > 100 indicates that industries sentiment has improvedIndex < 100 indicates that industries sentiment has worsened
40
Improving consumer confidence in June
Source: The Center for Economic and Business Forecasting, UTCC
Chart 1.20a – Consumer Confidence Index
Note: (*) The index ranges from 0 to 200100 means consumer confidence is equal to those of the prior monthOver 100 means consumer confidence is better than those of the prior monthUnder 100 means consumer confidence is worse than those of the prior month
www.ChartingThailandEconomy.com
0
100
200
Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12
Better
On future income
Worse
On job
Overall
41
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
42
No change in GDP growth projection consensus
Chart 1.03a – Real GDP growth projectionsFor 2012, Annual percentage change
Source: NESDB, Fiscal Policy Office, Bank of Thailand, The Economist
Chart 1.03b – Real GDP growth projectionsFor 2013, Annual percentage change
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12
Forecast as of, month ending
BOTFPO
The Economist pollNESDB
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12
Forecast as of, month ending
BOT
The Economist poll
www.ChartingThailandEconomy.com43
Thailand’s growth for 2012 is expected to be behind only China and India
Chart 1.04a – Real GDP growth projections2012, Annual % change, as of July 28th 2012
Source: The Economist
Chart 1.04b – Real GDP growth projections2013, Annual % change, as of July 28th 2012
8.57.4
4.76.5
5.43.3
3.93.2
4.24.0
4.84.6
1.52.1
4.20.4
8.26.6
6.05.9
4.44.2
3.83.3
3.13.0
2.82.6
2.32.12.0
-0.4
China
India
Thailand
Indonesia
Malaysia
Pakistan
Russia
Australia
Singapore
South Korea
Taiwan
Hong Kong
Japan
US
Brazil
Euro Area
www.ChartingThailandEconomy.com44
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
45
Unemployment dropped slightly in May
Chart 2.7 – Unemployment ratePercent
Source: National Statistical Office, Bank of Thailand
2.42.2 2.1
1.81.5 1.4 1.4 1.5
1.00.7
02-Avg 03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg
0.420.52
0.68 0.75
0.56
0.82
0.43
0.810.66 0.73
0.97 0.92
Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12
www.ChartingThailandEconomy.com46
Thailand’s unemployment rate is lowest comparing to other leading economies
Chart 2.8 – Unemployment rateLatest, percent
Source: The Economist
0.9
2.1
3.0
3.2
3.2
4.1
4.2
4.4
5.2
5.4
5.8
6.0
6.3
8.2
9.8
11.1
Thailand ‐ May
Singapore ‐ Q1
Malaysia ‐ May
South Korea ‐ Jun
Hong Kong ‐ Jun
China ‐ Q2
Taiwan ‐ Jun
Japan ‐ May
Australia ‐ Jun
Russia ‐ Jun
Brazil ‐ May
Pakistan ‐ 2011
Indonesia ‐ Q1
US ‐ Jun
India ‐ 2011
Euro Area ‐ May
www.ChartingThailandEconomy.com47
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
48
Slight improvement in Thailand’s income distribution since 2007
Chart 2.1 – Thailand’s GINI coefficient
Source: National Statistics Office, NESDB
0.520 0.513 0.507 0.522 0.507 0.4930.515 0.499 0.485
1994 1996 1998 2000 2002 2004 2006 2007 2009
Note: (*) The Gini coefficient is a measure of inequality of a distribution of income. It is defined as a ratio with values between 0 and 1
Here, 0 corresponds to perfect income equality (i.e. everyone has the same income) and 1 corresponds to perfect income inequality (i.e. one person has all the income, while everyone else has zero income).Therefore, the lower the ratio the better the income distribution.
www.ChartingThailandEconomy.com49
Not much has changed for income (in)equality in Thailand
Chart 2.2 – Quintile by incomePercent of total income
Source: National Statistics Office, NESDB www.ChartingThailandEconomy.com
4.6 4.3 4.0 4.1 4.2 4.3 4.0 4.2 4.5 4.0 4.4 4.88.1 7.5 7.1 7.4 7.6 7.8 7.3 7.7 8.0 7.7 8.0 8.4
12.4 11.7 11.1 11.7 11.8 12.0 11.5 12.1 12.4 12.1 12.4 12.6
20.6 19.5 18.9 19.7 19.9 19.8 19.8 20.1 20.2 20.0 20.2 20.1
54.4 57.0 59.0 57.2 56.5 56.1 57.5 55.9 54.9 56.1 54.9 54.2
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2007 2009
Top 20%
Bottom 20%
Second 20%
Third 20%
Forth 20%
11.9Top 20% Bottom 20%
13.3 14.9 14.1 13.5 13.1 14.6 13.2 12.1 13.9 12.5 11.3
50
Data from World Bank suggests that income equality problem in Thailand is not as bad as in Malaysia or China
Chart 2.3 – Income equality in the worldRatio of the share of national income going to the richest 20% to the share of the poorest 20%Latest, selected countries
Source: The World Bank; CTE analysis
29.727.8
26.725.3
21.820.6
20.119.6
18.818.0
17.317.1
16.614.514.314.0
13.513.513.3
12.512.2
11.511.311.311.3
HondurasBolivia
ComorosSouth Africa
NamibiaBrazil
ColombiaGuatemalaSeychelles
Central African RepublicParaguayPanamaZambia
Costa RicaEl SalvadorSwaziland
ChilePeruQatar
EcuadorNigeria
Venezuela, RBMexico
MalaysiaDominican Republic
www.ChartingThailandEconomy.com
11.311.0
9.68.3
7.97.37.17.06.96.86.86.76.6
6.26.15.95.9
5.15.04.94.7
4.44.24.0
3.6
ArgentinaKenyaChina
PhilippinesTurkey
Russian FederationThailand
Iran, Islamic Rep.Sri LankaBhutan
MaldivesLithuaniaMalawi
MongoliaCambodiaLao PDRVietnam
IndonesiaNepalIndia
BangladeshEgypt, Arab Rep.
PakistanAfghanistan
Slovak Republic51
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
52
Poverty reduction, according to figures from NESDB, seems to have been working over the past 7 years
Source: NESDB
1,3861,443
1,579 1,5861,678
2006 2007 2008 2009 2010
Chart 2.4a – Thailand Poverty LineBaht/ month/ person
Chart 2.4b – Number of poor peopleMillion
6.105.40 5.80
5.30 5.08
2006 2007 2008 2009 2010
Chart 2.4c – Poor people Percentage of total population
9.6%8.5% 9.0% 8.1% 7.8%
2006 2007 2008 2009 2010
www.ChartingThailandEconomy.com53
Many countries in Asia and especially ASEAN, still have majority of their populations earning less than $2.00 a day
Chart 2.5 – Poverty in the world, selected countriesPoverty headcount ratio at $2 a day (PPP) (% of population), Latest
Source: The World Bank
95.292.6
84.577.676.5
72.868.7
66.060.2
57.353.3
46.143.4
41.531.3
29.829.829.1
21.415.8
Congo, Dem. Rep.
Madagascar
Nigeria
Ethiopia
Bangladesh
Timor‐Leste
India
Lao PDR
Pakistan
Nepal
Cambodia
Indonesia
Vietnam
Philippines
South Africa
China
Bhutan
Sri Lanka
Iraq
Colombia
www.ChartingThailandEconomy.com
15.412.912.7
10.88.0
5.24.6
4.22.72.31.91.70.40.40.30.20.10.10.10.1
Egypt, Arab Rep.
Venezuela, RB
Peru
Brazil
Iran, Islamic Rep.
Mexico
Thailand
Turkey
Chile
Malaysia
Argentina
Romania
Bulgaria
Hungary
Montenegro
Poland
Slovak Republic
Slovenia
Croatia
Russian Federation54
An average Thai is slightly poorer than an average Chinese but more than three times richer than an average Indian
Chart 2.6 – GNI per capita, selected countries2011, Atlas method (current US$)
Source: The World Bank
88,89080,440
78,13076,380
60,39053,230
49,73048,45048,42048,300
46,16045,56045,18043,98042,93042,420
40,76038,58037,780
35,33035,16035,020
30,99028,930
25,030
NorwayQatar
LuxembourgSwitzerland
DenmarkSweden
NetherlandsUnited States
FinlandAustriaBelgiumCanadaJapan
GermanySingapore
FranceUnited Arab Emirates
IrelandUnited Kingdom
ItalyHong Kong SAR, China
IcelandSpainIsrael
Greece
18,52012,730
10,72010,4109,740
9,2408,420
6,9606,110
4,9304,420
4,1403,1202,940
2,6402,6002,580
2,2102,070
1,4101,2001,2601,130
830770
Czech RepublicHungary
BrazilTurkey
ArgentinaMexico
MalaysiaSouth Africa
ColombiaChina
ThailandEcuadorUkraine
IndonesiaIraq
Egypt, Arab Rep.Sri Lanka
PhilippinesBhutanIndia
NigeriaVietnamLao PDR
CambodiaBangladesh
Rank (from 166)
12345678910111213141516171819202122232425
293646474951536569788385100103108109110113115122124127130139142
Rank
www.ChartingThailandEconomy.com55
Increasing trend in household income, expenditure and debt, but debt service year has reduced from the recent peak in 2004
Source: National Statistic Office survey; CTE analysis
14,96317,787 18,660
20,90323,544
2004 2006 2007 2009 2011
Chart 2.9a – Monthly income per householdAverage, Baht
Chart 2.9c – Debt per householdAverage, Baht
104,571116,585 116,681
134,699 136,562
2004 2006 2007 2009 2011
Chart 2.9d – Debt service year*
3.32.8
2.3 2.42.0
2004 2006 2007 2009 2011
12,29714,311 14,500
16,20517,861
2004 2006 2007 2009 2011
Chart 2.9b – Monthly expenditure per householdAverage, Baht
Note: (*) Avg. debt / (annual income – annual expenditure)
www.ChartingThailandEconomy.com56
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
57
Core inflation is low and decreasing while headline inflation increased slightly driven mainly by Eggs & Milk
Source: Bureau of Trade and Economic Indices; CTE analysis
Chart 3.07a – Y‐o‐Y change in CPIPercent
Chart 3.07b – Y‐o‐Y change in CPI by productJuly 2012, percent
Note: (*) exclude raw food and energywww.ChartingThailandEconomy.com
3.4% 3.4%
2.5% 2.5% 2.6%2.8%2.8% 2.8%
2.1%1.9% 1.9% 1.8%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12
21.5
5.8
4.7
3.5
2.9
2.5
2.3
1.1
1.1
0.6
0.6
0.5
-0.1
-1.4
Eggs & milk
HH consumer food
Seasoning
Non HH consumer food
Non alcoholic beverage
Clothing
Rice
Tobacco & alcohol
Housing & furnishing
Recreation & Education
Veg & fruit
Transport & Commu
Medical care
Meat
Head line
Core*
58
Thailand’s inflation is rather on the lower side, compared to other countries
Chart 3.08 – Consumer Price IndexAnnual percentage change
Source: The Economist
11.3
10.0
5.3
4.9
4.5
4.3
3.7
2.8
2.4
2.2
2.2
1.8
1.7
1.6
1.2
0.2
Pakistan ‐ Jun
India ‐ Jun
Singapore ‐ Jun
Brazil ‐ Jun
Indonesia ‐ Jun
Russia ‐ Jun
Hong Kong ‐ Jun
Thailand ‐ Jul
Euro Area ‐ Jun
China ‐ Jun
South Korea ‐ Jun
Taiwan ‐ Jun
US ‐ Jun
Malaysia ‐ Jun
Australia ‐ Q2
Japan ‐ May
10.0
8.4
4.4
5.2
4.4
5.0
4.2
3.0
2.4
3.6
2.8
2.0
2.1
1.9
2.1
0.2
Latest 2012*
Note: (*) The Economist Pollwww.ChartingThailandEconomy.com
59
Stable prices in Producer level
Source: Bureau of Trade and Economic Indices; CTE analysis
Chart 3.09a – Y‐o‐Y change in PPIPercent
Chart 3.09b – Y‐o‐Y change in PPI by productJuly 2012, percent
www.ChartingThailandEconomy.com
1.8% 1.8%
0.8%
1.2%
-0.4%
0.7%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12
8.26.9
4.42.82.4
1.51.11.00.60.5
-0.2-0.4-0.6-1.0
-1.8-1.9-2.0
-5.6-9.6
-14.1
CropForestry
Other manu goodsFood
MechineryTextile
Transport equipPulp & paper
WoodLeather & footware
Electrical equipMetal
Basic metalsNon‐metallic mineral
ChemicalEnergy
Petroluem productsFishing
LivestocksRubber & plastic
60
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
61
Banks’ capital ratio dropped in May
Source: Bank of Thailand
15.4% 15.4%
15.8% 15.7%
15.3% 15.3%15.1% 15.2%
15.4%
15.2%15.3%
15.1%
14.6%14.8%15.0%15.2%15.4%15.6%15.8%16.0%
Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12
www.ChartingThailandEconomy.com
Chart 3.04 – Capital ratio of all commercial banks% of risk assets
13.7% 14.0% 13.0% 14.2% 14.5% 15.4% 14.1%16.1% 16.2% 15.1%
0.0%
5.0%
10.0%
15.0%
20.0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
62
Gross NPL decreased in 2Q12
Chart 3.03a – Total Financial Institutions’ Gross NPLs OutstandingBillion Baht
Source: Bank of Thailand
592477 445 458
401 380317
269 274 266
04YE 05YE 06YE 07YE 08YE 09YE 10YE 11YE 2012/Q1 2012/Q2 2012/Q3
10.73%
8.16% 7.47% 7.31%5.29% 4.85%
3.60% 2.74% 2.68% 2.55%
04YE 05YE 06YE 07YE 08YE 09YE 10YE 11YE 2012/Q1 2012/Q2 2012/Q3
Chart 3.03b – Total Financial Institutions’ Gross NPLs OutstandingPercentage of Total Loans
www.ChartingThailandEconomy.com63
Another profitable month for the Thai stock market
Chart 3.06b – Change since Dec 31st 2011Percent, as of July 25th 2012
Source: SET, The Economist; CTE analysis
28.3%15.9%
13.0%9.9%
9.0%8.3%
6.8%6.4%
4.7%3.3%
2.7%2.4%
1.0%-1.1%-1.3%-1.3%
-2.5%-2.9%-3.1%
-4.5%
Pakistan (KSE)
Thailand (SET)
Singapore (STI)
US (NAScomp)
India (BSE)
Germany (DAX)
Malaysia (KLSE)
US (S&P 500)
Indonesia (JSX)
US (DJIA)
China (SSEB, $ terms)
HK (Hang Seng)
Australia (All Ord.)
Japan (Nikkei 225)
Taiwan (TWI)
UK (FTSE 100)
France (CAC 40)
China (SSEA)
S Korea (KOSPI)
Euro Area (FTSE Euro 100)
www.ChartingThailandEconomy.com
Chart 3.06a – Monthly performance of SET indexPercent change from prior month, at month end
7.1%
3.1%2.7%
-7.1%
2.7% 2.3%
Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12
64
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
65
Improvement in budget deficit in June, but still 174 billion worse off than the same period last year
Chart 4.2 – Government budget balanceBillion Baht
Source: Bank of Thailand; CTE analysis
8771,013 1,109
1,2411,390 1,455 1,498 1,484
1,7511,902
-956 -996-1,109
-1,277 -1,280
-1,629 -1,598-1,849 -1,825 -1,930
-79 16 0 -36110
-174 -100-364
-75 -28
02FY 03FY 04FY 05FY 06FY 07FY 08FY 09FY 10FY 11FY
www.ChartingThailandEconomy.com
Revenue
Expenditure
Budgetbalance
-400.0
-350.0
-300.0
-250.0
-200.0
-150.0
-100.0
-50.0
0.0
50.0
100.0
J F M A M J J A S O N D
Monthly cumulative Budget balance
2011
2012
66
Apart from 2010, there were not much differences between budget and cash balance
Chart 4.3 – Government cash balanceBillion Baht
Source: Bank of Thailand; CTE analysis
-79
16 0
-36
110
-174
-100
-364
-75-28
-148
-77
24 8
-45
88
-144
-96
-401
-266
-96
-179
02FY 03FY 04FY 05FY 06FY 07FY 08FY 09FY 10FY 11FY '12/6mo
www.ChartingThailandEconomy.com
Budget cash balanceOverall Cash balance (including non-budgetary deficit/ surplus)
67
With a few exceptions, most governments in the world will register huge budget deficit in 2012
Chart 4.4 – Government Budget balance as percentage of GDP2012*, percent
Source: The Economist
1.9
1.0
0.1
-0.7
-0.8
-2.2
-2.3
-2.3
-2.8
-3.4
-3.5
-5.2
-5.5
-6.1
-7.6
-9.3
South Korea
Hong Kong
Singapore
Australia
Russia
Indonesia
China
Thailand
Brazil
Taiwan
Euro Area
Malaysia
India
Pakistan
US
Japan
Note: (*) The Economist Poll www.ChartingThailandEconomy.com
68
Public debt increased in absolute and relative to GDP this year, due mainly to direct government debt
Source: Public Debt Management Office
Chart 4.5a – Composition of Public debt THB Trillion
www.ChartingThailandEconomy.com
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2008 2009 2010 2011 May-12
Chart 4.5b – Composition of Public debt As percentage of nominal GDP
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2008 2009 2010 2011 May-12
Direct Government debtDirect Government debt
Bond to Compensate FIDF's Loss & Prefunding debt
Bond to Compensate FIDF's Loss & Prefunding debt
Public debt from State Enterprises
Public debt from State Enterprises
12% 10% 8% 8% 7%External debtas percent of total
69
Thailand’s public debt is not high compared to international standard
Chart 4.6 – Public debt in the worldPercentage of GDP, 2011 or latest
Source: CIA fact book www.ChartingThailandEconomy.com
231208
165137
130120118
107103
10086868483828079
7574726968
646160
1 Zimbabwe2 Japan
4 Greece5 Lebanon6 Iceland
9 Italy10 Singapore
11 Ireland13 Portugal15 Belgium
17 Egypt18 France20 Canada21 Hungary22 Germany
23 UK24 Bhutan28 Bahrain29 Israel
30 Austria32 United States
33 Spain38 Netherlands
40 Jordan42 Pakistan
57545452524948
4444434241383737363534333025121099
44 Vietnam47 Brazil
48 Malaysia49 Switzerland
51 India53 Philippines
56 Norway67 UAE
69 China72 Argentina
73 Turkey78 Thailand82 Mexico86 Sweden
87 Bangladesh91 South Africa
93 Taiwan95 New Zealand96 Korea, South
100 Australia108 Indonesia
121 Iran122 Hong Kong
123 Saudi Arabia126 Russia
Int’l rule of thumb<60% of GDP
70
Executive summary
Growth
Income distribution
Stability
• Thai economy recovered faster than expected with 1Q12 GDP growth of 0.3% Y-o-Y.• Another set back in Real sector’s recovery in June especially for Manufacturing
production.• Private consumption and Private Investment also cooled down but the current level is
still higher than a year ago. Property sector shows signs of improvement.• High FDI and tourist growth, but Export situation has not improved.• Both Fiscal and Monetary policies are pro-growth. • Latest round of surveys show Businesses and Industries being less optimistic, and
Consumers less pessimistic. • The consensus projection is still between 5.7-6.0% for 2012 and between 4.7-5.8% for
2013
• Thailand’s unemployment rate decreased slightly in May 2012 to 0.92%, the lowest among major and emerging economies.
• Thailand’s Income distribution is among the worst in Asia but has been improving in the past 5 years.
• Absolute Poverty reduction seems to be working over the past six years as number of poor people decreasing and current level is low by international standard.
• Price stability is maintained with Head line inflation at 2.8% and Core inflation at 1.8% in July.
• Banking system is quite healthy. Bank’s capital ratio is at 15.1% in May. Total system’s NPL decreased to 2.55% in 2Q12.
• Fiscal stability is still worrying as budget deficits in the first half of 2012 is THB 174 billion worse off than the same period last year. Public debt is increasing but not too worrying just yet.
• Balance of Payment deficit is also worrying. THB depreciated slightly in July. External debt has been increasing but still not dangerous.
71
Balance of Payment deficit so far in 2012 due largely to deteriorating Trade Balance
Source: Bank of Thailand; CTE analysis
586
812 825
987
35
-19
07FY 08FY 09FY 10FY 11FY 12/6mo
Chart 5.01 – Balance of Payment decompositionBillion Baht 917
576
1,1201,015
714
84
07FY 08FY 09FY 10FY 11FY 12/6mo
-377-508
-366
-587
-351 -142
07FY 08FY 09FY 10FY 11FY 12/6mo
47
744
70
559
-328
39
07FY 08FY 09FY 10FY 11FY 12/6mo
Trade Balance (F.O.B)
Net service income & transfer
Net Capital Movement + errors and omissions
+
www.ChartingThailandEconomy.com72
Strong Asian export engines reflecting in huge current account surplus
Chart 5.02 – Current Account balance
Source: The Economist
17.9%
9.4%
7.3%
7.0%
4.5%
2.3%
1.7%
1.5%
0.0%
-0.5%
-1.4%
-2.8%
-3.2%
-3.2%
-3.5%
-3.7%
Singapore ‐ Q1
Malaysia ‐ Q1
Taiwan ‐ Q1
Hong Kong ‐ Q1
Russia ‐ Q2
China ‐ Q1
South Korea ‐ May
Japan ‐ May
Euro Area ‐ May
Thailand ‐ Q1
Indonesia ‐ Q1
Brazil ‐ Jun
US ‐ Q1
Pakistan ‐ Q2
Australia ‐ Q1
India ‐ Q1
53.2
29.7
41.9
8.3
104.6
196.4
28.3
90.7
41.8
6.5
-3.8
-51.8
-483.2
-4.5
-38.9
-78.2
Last 12 months, USD BillionAs % of 2012 GDP*
Note: (*) The Economist Pollwww.ChartingThailandEconomy.com
73
External debt level increased in both absolute and relative to GDP terms
Chart 5.10a – External Debt LevelBillion USD
Source: Bank of Thailand
0
40
80
120
160
03YE 04YE 05YE 06YE 07YE 08YE 09YE 10YE 11YE 12/1Q
40.3% 40.9% 37.0% 38.5% 35.4% 31.4% 28.8%35.2% 34.2% 37.4%
03YE 04YE 05YE 06YE 07YE 08YE 09YE 10YE 11YE 12/1Q
Chart 5.10b – External Debt as % of GDP
www.ChartingThailandEconomy.com74
More public debt and more short‐term debt in external debt composition so far in 2012
Source: Bank of Thailand
96% 92% 87% 85% 83%
4% 8% 13% 15% 17%
08YE 09YE 10YE 11YE 12/1Q
Chart 5.11a – External debt breakdown Private vs Public
Chart 5.11b – External debt breakdownLong‐Term vs Short‐Term
Private Public = General Government and Monetary Authorities
56% 56%50% 54% 50%
44% 44%50% 46% 50%
08YE 09YE 10YE 11YE 12/1Q
Long termShort term
www.ChartingThailandEconomy.com75
Capability to repay external debt is not yet a concern as debt service ratio continued to decline and reserves at healthy level
Source: Bank of Thailand; CTE analysis
257%
330%
418%
340%360%
300%
07YE 08YE 09YE 10YE 11YE 12/1Q
Chart 5.12a – International reserves As % of ST external debt
Chart 5.12b – Debt service ratio*Percent
Note: (*) Debt service payment / Export of goods and services
10.3%
7.7%7.3%
3.7% 3.7% 3.9%
07FY 08FY 09FY 10FY 11FY 12/1Q
www.ChartingThailandEconomy.com76
International reserves decreased slightly this year but the current level is still considered excessive
Chart 5.13a – International reserves levelBillion USD
Source: Bank of Thailand; CTE analysis
42.1 49.8 52.167.0
87.5111.0
138.4
172.1 175.1 174.7
03YE 04YE 05YE 06YE 07YE 08YE 09YE 10YE 11YE Jun-12
6.7 6.45.3 6.2
7.5 7.4
12.411.3
9.2 8.7
03YE 04YE 05YE 06YE 07YE 08YE 09YE 10YE 11YE Jun-12
Chart 5.13b – International reserves as number of months of import*
Note: (*) For the last period using average monthly import value during the last 12 months
www.ChartingThailandEconomy.com77
Slight depreciation of THB in July
Source: Bank of Thailand; CTE analysis
98.098.599.099.5100.0100.5101.0101.5102.0102.5103.0
Aug-11 Jul-12
Chart 5.17a – Nominal Effective Exchange Rate 2007=100
Chart 5.17b – Y‐o‐Y change in FX rate*Percentage change, as of July 31st 2012
7.1
7.1
6.1
5.5
2.6
2.0
1.9
1.6
0.0
-0.2
-1.8
-3.4
-6.3
-9.0
-16.8
CNY ‐ 5.0388
PHP ‐ 0.766
USD ‐ 31.7196
JPY ‐ 40.7956
SGD ‐ 25.594
GBP ‐ 49.9919
TWD ‐ 1.0568
AUD ‐ 33.4926
VND ‐ 0.0015
MYR ‐ 10.1984
KRW ‐ 0.0279
IDR ‐ 3.6599
MXN ‐ 2.3908
EUR ‐ 39.0415
INR ‐ 0.6034
Note: (*) Positive numbers mean the Baht has been depreciated against those currencies, the opposite applies to negative numbers
USD = US$, GBP = Pound Sterling, EUR = Euro, JPY = Yen (per 100), CNY = Yuan Renminbi, SGD = Singapore $, MYR = Malaysia Ringgit, PHP = Philippines Peso, IDR = Indonesia Rupiah (per 1,000), INR = India Rupee,KRW = Korea Won, TWD = Taiwan $, VND = Vietnam Dong, MXN = Mexico Peso, AUD = Australia $
Baht appreciates Baht depreciates
www.ChartingThailandEconomy.com78
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