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Briefing on Thailand's economic outlook on a monthly basis
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ISSN: 2286-6132
ChartingThailand’sEconomy
MONTHLY
September2015
DISCLAIMERAll Rights Reserved.No part of this publication may be reproduced without the prior permission of theChartingASEAN™.The facts of this report are believed to be correct at the time of publication but caguaranteed. Please note that the findings, conclusions and recommendations thatChartingASEAN™ delivers will be based on information gathered in good faith fromprimary and secondary sources, whose accuracy we are not always in a position toAs such ChartingASEAN™ can accept no liability whatever for actions taken basedinformation that may subsequently prove to be incorrect.
ASK THE EDITORChartingASEAN™ team consists of editors, analysts, and researchers. For any quescomments about this report, you can contact the chief editor directly [email protected].
Charting Thailand’s Economy Monthly Brief, SeptembPublication Date: September 3rd, 2015Number of pages: 69
About This ReportThis report is designed to chart out the economic outlook of Thailand on a monthly basis. It is ideal for corporate management, investors as well as anyone interested in the second largest economy in ASEAN.
2
e publisher,
annot betm botho guarantee.on any
stions and
ber 2015
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
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• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
5
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Slower pace of growth in 2Q15
Chart 1.05 – Historical Real GDP growth rateAnnual growth, percent
Source: NESDB; ChartingAsean analysis
7.2%
6.3%
4.2%
5.0%5.4%
1.7%
-0.7%
7.5%
0.8%
7.3%
2.8%
0.9%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Note: (*) Cumulative Annual Growth Rate
Real GDP growthThis chart gives the long-term perspective of the historical GDP growth of Thailand. It also gives the latest annual growth during the last four quarters. It shows the real growth, which already excludes the effect from inflation. GDP calculations are prepared by Office of The National Economic and Social Development Board and released quarterly.
Historical growth for the Thai economyThe cumulative annual growth rate between 2003-2014 was 3.4%. During the last 10 years, only one year (2009) that registered a negative growth. Growth in 2010 and 2012 were exceptionally high, representing the V-shape recovery from the global sub-prime debt and the country’s flood crisis respectively. Thailand GDP grew only 2.8% in 2Q15.
0.9% 1.0%
2.1%
3.0%2.8%
2Q14 3Q14 4Q14 1Q15 2Q15
6© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Last 5 Quarters
Service was the main driver in 2Q15, while agmanufacturing were the main drags on the ec
Chart 1.06a – Real growth by sector, 2Q15Year on Year percentage change
Source: NESDB; ChartingAsean analysis
18.7
17.3
8.6
8.6
6.3
5.5
5.5
3.7
2.8
2.7
2.5
2.2
1.3
-0.7
-1.6
-3.9
-6.3
Hotel&Res
Construction
Financial
Transport
Other social
Health&Social
Private HH
Trading
GDP
Utilities
RealEstate
Education
PublicAdmin
Manufacture
Fishing
Mining
Agriculture
Chart 1.06bContribution
GDP
Transport
Hotel&Res
Financial
Trading
Construction
RealEstate
Other social
Utilities
Health&Social
Education
PublicAdmin
Private HH
Fishing
Mining
Manufacture
Agriculture
Stat diff
Source of Growth – Production sideChart A shows the real growth rate of value added from each production sector. Chart B shows each sector’s contribution to the overall GDP growth. The contribution from each sector must add up to the overall growth. GDP calculations are prepared by Office of The National Economic and Social Development Board and released quarterly.
Most contributing sectors for the Thai economy in 2Q15Chart A says that Hotel & Restaurant have grown most from 2Q14 to 2Q15, while Agriculture dropped the most. Chart B looks at the contributions to total growth from all sectors. Most sectors contributed positively to 2Q15 growth, except Agriculture, Manufacturing and Mining.
griculture andconomy
b – Sectoral contributions, 2Q15s to total Real GDP growth
2.8
0.8
0.8
0.6
0.5
0.5
0.2
0.1
0.1
0.1
0.1
0.1
0.0
0.0
-0.1
-0.2
-0.3
-0.57© ChartingASEAN™
www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Tourism was by far the main driver of growth
Chart 1.08a – Real growth by expenditure, 2Q15Year on Year percentage change
25.1
4.6
2.8
2.5
1.9
1.5
-0.2
-0.3
-4.0
X (services)
G
GDP
I (capital)
I
C
M (services)
M (goods)
X (goods)
Chart 1.08b – ExContributions to t
GDP
X (services)
Discrpncy
C
G
I (capital)
M (goods)
M (services)
I (Inventory)
X (goods)
Source: NESDB; ChartingAsean analysis
Note: (*) C = Private consumption, I = Investment which includes I (capital) = Capital formation and I (inventory) = Chang G = Government consumption, X = Export of goods and services, M = Import of goods and services
Source of Growth – Expenditure sideChart A shows the real growth rate of each expenditure. Chart B shows each expenditure’s contribution to the overall GDP growth. The contribution from each sector must add up to the overall GDP growth. GDP calculations are prepared by Office of The National Economic and Social Development Board and released quarterly.
Growth drivers for the Thai economy in 2Q15Chart A shows that Tourism (X of services) grew the most in 2Q15. Chart B shows that it also contributed the most to the overall growth in 2Q15. Decreasing in export of goods was the main drag on the overall growth.
in 2Q15
xpenditure Contributions, 2Q15otal Real GDP growth
2.8
3.3
3.0
0.8
0.8
0.6
0.1
0.0
-0.2
-2.5
e in inventory 8© ChartingASEAN™
www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
MPI Beyond TrainingBusiness Simulation andExperiential LearningContact Us:Tel: 02 168 7245 7, 098 248 2585www.BeyondTraining.co.thFacebook: MPI Beyond [email protected]
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
10
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Manufacturing production continues to lag be
Chart 1.10 – Manufacturing Production Index(2000=100)
Source: The Office of Industrial Economics
152.1161.1
174.6182.9
170.0
194.2
177.6 181.6 175.7167.7
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
M2
Manufacturing Production Index (MPI)Manufacturing Production Index is a composite index calculated by the Office of Industrial Economics, Ministry of Industry. The composite includes all industries and weighted by their value added. The year 2000 is used as the base year and the figure is released monthly.
Latest developmentManufacturing production decreased more 5% year-on-year in July 2015, continuing to lag behind last year’s level.
ehind last year’s level
Monthly Average
11© ChartingASEAN™www.ChartingThailandEconomy.com
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
J F M A M J J A S O N D
2014
2015
Copyright © ChartingASEAN™. All rights reserved.
Most sectors had their production decreased
Chart 1.11a – Y on Y change in MPI by sectorJuly 2015, percent
Source: The Office of Industrial Economics; ChartingAsean analysis
29.29.6
6.13.73.02.12.0
-0.2-2.4-2.5-2.8
-4.3-4.6-5.7-5.8-6.5-6.9-7.7
-11.0-17.8
-27.6
PetroleumChemicalVehiclesPaper
Metal productsFood & Bev
TobaccoFurnitureApparel
Rubber&PlasticMachineries
MineralWood productsPrecision instru
LeatherElectricalTextiles
Basic MatTransport Equip
ElectronicOffice automate
Chart 1.11b –July 2015, perc
-
ChemicalElectricalElectronicVehicles
Metal productsApparel
Precision instruFood & Bev
PaperLeather
FurnitureRubber&Plastic
Basic MatPetroleum
MineralTextiles
Wood productsOffice automate
MachineriesTobacco
Transport Equip
MPI by sectorsChart A shows the year-on-year change in Manufacturing Production Index (MPI) by sector, that is comparing the MPI for the latest month with the MPI for the same month of the previous year. Chart B shows the month-on-month change in MPI by sector, that is comparing the MPI for the latest month with the MPI for the previous month.
Latest developmentMost sectors had their production decreased from a year ago.
from a year ago
– M on M change in MPI by sectorcent
13.310.0
8.88.5
7.65.8
5.13.22.92.62.62.01.6
0.4-3.2-3.4
-8.4-10.3-10.5
-12.214.1
12© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Higher capacity utilization rate in July
Source: The Office of Industrial Economics
Chart 1.12a – Overall Capacity Utilization RatePercent
Chart 1.12b –July 2015, perce
Rubber&PlasticElectronicTextiles
Wood productsElectricalFurnitureBasic Mat
Metal productsLeather
Office automateFood & Bev
Precision instruPaper
ChemicalVehicles
Transport EquipMachineries
MineralPetroleumTobaccoApparel
50%
52%
54%
56%
58%
60%
62%
64%
66%
68%
70%
Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15
Normal
Seasonally adjusted
Capacity Utilization rateCapacity utilization rate is a composite index of the capacity utilization rate of all major industries. The index is prepared by the Office of Industrial Economics, Ministry of Industry and released monthly. Chart A shows the composite Capacity Utilization rate in the last 6 months. Chart B shows the Capacity Utilization rate of the last month by industries.
Latest developmentSeasonally adjusted Capacity utilization rate has stabilized at 58.7% in July. Rubber and Plastic has the highest utilization rate at 89 while Apparel has the lowest at 26%.
Capacity utilization rate by sectornt
89%83%
80%79%
78%74%
69%68%
66%64%
59%49%
48%47%
46%45%
43%42%
39%31%
26%
13© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Thailand’s MPI negative growth of 5% was ththe list
Chart 1.13 – Manufacturing Production IndexLatest, percent change on year ago
Source: The Economist
2
1.3
1.2
1.2
-1.6
-3.0
-3.2
-3.6
-4.6
-5.3
-6.1
Vietnam Aug
China Jul
Indonesia Jun
Malaysia Jun
Pakistan Jun
India Jun
Australia Q1
Japan Jun
US Jul
Euro Area Jun
South Korea Jun
Hong Kong Q1
Taiwan Jul
Brazil Jun
Philippines Jun
Russia Jul
Thailand Jul
Singapore Jul
Change in MPI in the worldYear-on-year change in Manufacturing Production Index from the latest period across major economies. The chart shows the current state of manufacturing production in the world. The figures are compiled by The Economist magazine.
Latest development7 out of 18 major economies had negative MPI growth during the last period reported. Thailand’s negative growth of -5% was the second lowest on the list.
he second lowest on
9.0
6.0
5.8
4.4
3.9
3.8
2.8
2.3
14© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
15
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Private consumption in overall is lagging behidespite big surge in tourist spending
Chart 1.14a – Composite Private Consumption Index(2010=100)
Source: Bank of Thailand
Non re
Se
Non du
Semi du
Composite
Du
ChaJul 2
80.0
85.0
90.0
95.0
100.0
105.0
110.0
115.0
120.0
125.0
J F M A M J J A S O N D
2014
2015
Composite Private Consumption IndexA composite index representing private consumption conditions. It comprises of 5 components including Non-durables Index, Semi-durables Index, Durables Index, Services Index, and Non-residents expenditure Index. Prepared by the Bank of Thailand using 2010 as the base year and is released monthly and each component was seasonally adjusted. Chart A shows the Composite Index movement over the latest 2 years. Chart B shows the annual change of each component.
Latest developmentPrivate consumption in overall is lagging behind last year’s level despite big surge in tourist spending.
nd last year’s level
16© ChartingASEAN™www.ChartingThailandEconomy.com
53.1
8.6
4.0
0.1
-2.1
-13.0
sident
ervices
rables
rables
Index
rables
rt 1.14b – Y on Y change015 vs 2014, percent
Copyright © ChartingASEAN™. All rights reserved.
Private Investment started to pick up and hasyear’s level
Chart 1.15a – Private Investment Index(2010=100)
Source: Bank of Thailand
ChaJun 2
Domestic M(2010
Cp
Constructio
Import(201
DomesticSa114.0
115.0
116.0
117.0
118.0
119.0
120.0
121.0
J F M A M J J A S O N D
2014
2015
Note: (*) figures are 1 month delayed
Composite Private Investment IndexA composite index representing private investment conditions. It is constructed from 5 components including Construction Area Permitted in Municipal Zone (9-month moving average), Construction Material Sales Index (3-month moving average), Imports of Capital Goods at 2010 Prices, Domestic Machinery Sales at 2010 Prices, Domestic Car Sales Index for investment (3-month moving average.). The index is prepared by the Bank of Thailand, using 2010 as the base year. Chart A shows the Composite Index movement over the latest 2 years. Chart B shows the annual change of each component.
Latest developmentPrivate Investment started to pick up and has been above last year’s level.
s been above last
17
rt 1.15b – Y on Y change2015 vs 2014, percent
13.8
0.5
0.4
-0.2
-6.0
-12.8
Machinery sales*prices, Baht)
Composite Index
onstruction Areapermitted (sqm)
on Material SalesIndex
of Capital Goods0 prices, Baht)
c Commercial Carales Index
© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
FDI value increased 57% in the first 6 months
Chart 5.14 – Foreign Direct InvestmentMillion USD
Source: BOT
8,547
4,853
9,112
2,474
12,899
14,416
12,728
08FY 09FY 10FY 11FY 12FY 13FY 14FY
(*) Preliminary figures
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Foreign Direct InvestmentForeign direct investment (FDI) reflects the lasting interests of Non-residents of an economy in a resident entity. A direct investor may invest in equity capital, lending to affiliates, or reinvested earnings. Investment in equity is treated as a direct investment when the direct investors own 10 per cent or more of the voting shares for an enterprise or the equivalent for an unincorporated enterprise. Data is compiled by BOT. The left chart shows the annual figures. The right chart shows the cumulative monthly figures for the current year and the year before.
Latest developmentFDI value increased 57% in the first 6 months of 2015.
of 2015
Monthly cumulative FDI*
J F M A M J J A S O N D
2014
2015
18© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
BOI’s net application almost doubled in 2014,months of 2015, it has almost been wiped ou
Chart 5.15 – BOI net application of foreign direct investment*Billion Baht
Source: Board of Investment
236
396
648
525
1,023
10FY 11FY 12FY 13FY 14FY
Note: (*) Foreign investment (foreign equity>=10%)
BOI net applicationValue is derived from total investment of all projects which have foreign equity participation (shown by registered capital amount) of one particular nation or the sum of all foreign registered capital from more than two nations of at least 10%. The chart shows the value of BOI net application for projects defined as FDI.
Latest developmentBOI’s net application almost doubled in 2014, but for the first 5 months of 2015, it has almost been wiped out, registering only THB 14 billion.
, but for the first 5t
230
14
2014/5M 2015/5M
19© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
FDI from Japan, the biggest source, has declin
Chart 5.16 – BOI net application of FDI* breakdown by countryPercent of total
Source: Board of Investment; ChartingAsean analysis
49%58% 54%
29
7%
10%7%
17
8%
7%10%
10
7%
10%6%
7%
2%
4%
2%
13
27%
11%21% 25
11FY 12FY 13FY 14F
Europe
Japan
ASEANANIEsUSA
Others
Note: (*) Foreign investment (foreign equity>=10%)(**) ANIEs: Taiwan, Hong Kong, South Korea
BOI net application by countryBOI net application of foreign direct investment projects breakdown by country. FDI from Japan, the biggest source, has declined sharply in 2014.
ned sharply in 2014
group
9%38%
7%5%
0%2%
% 21%
3% 1%
5%34%
FY 2015/5M
20© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Property indicators have largely declined so fa
Chart 1.16a – Y on Y changeFirst 6 months of 2015 vs those of 2014, percent
Source: Bank of Thailand; ChartingAsean analysis
13.0
-2.9
-9.1
-10.8
Condo unit registered
New housing unit
Constr. Area in municipal
Value of land transaction
Chart 1.16b –Jun vs May 201
-19.5
-38.2
Key property indicatorsChart A compares key property indicators during this year to the current month to those in the same period of the previous year. Chart B compares key property indicators in the current month to those of the previous month.
Latest developmentProperty indicators have largely declined so far this year.
ar this year
– M on M change15, percent
5.6
17.2
21© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
22
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Improved trade balance so far in 2015 is the cdeclining more than export
Source: Bank of Thailand; ChartingAsean analysis
Chart 5.03a – Trade balance* in THBFirst 7 months, Billion Baht
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
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Export Import Tradebalance
2014
2015
– = -20
0
20
40
60
80
100
120
140
Expo
Chart 5.0First 7 month
-7.4% -4.7%-3.4%
Trade balanceForeign trade statistics refer to transactions involving movements of goods out of or into the Kingdom of Thailand over a specific time period. It is not equal to the one shown on the Balance of Payment chart due to a few adjustments. The charts show the breakdown of Trade Balance into Export and Import.
Latest developmentImproved trade balance in both THB and USD terms in the first 7 months of 2015. This is the case of import declining more than export.
case of import
ort Import Trade balance– =
3b – Trade balance* in USDhs, Billion USD
% -8.6%
23© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Export declined 3.4% in the first 4 months of 2Petroleum, Chemicals and Agriculture the ma
Chart 5.05a – YTD annual change in Export in BahtFirst 7 months of 2015 vs those of 2014, percent
Source: Bank of Thailand; ChartingAsean analysis
-3.412.4
6.43.72.92.52.4
0.90.20.1
-0.5-3.5
-5.9-6.7-6.7-7.0
-8.9-9.0-9.6
-14.3-14.4
-19.2-20.3
-27.7-52.0
Total exportOptical instru
JewelleryPhoto instruMachinery
Other manufacturingAutomotive
ForestryMetal
ElectricalElectronics
Agro productsApparelsFootware
AgricultureToiletriesFurnitureAircrafts
Petro chemicalOther export
FisheryPetroleumChemicalsRe exports
Mining
Chart 5.05bContributions t
Total exportAutomotiveMachineryJewellery
Optical instruOther manufacturing
Photo instruMetal
ForestryElectricalFootware
Re exportsFurniture
ElectronicsToiletriesAircraftsFishery
ApparelsMining
Other exportAgro products
AgriculturePetro chemical
ChemicalsPetroleum
YTD change in Export by productThe left chart shows the year-to-date change in Baht term of export value by product group. The right chart shows each group’s contribution to the total export growth.
Latest developmentExport, in THB, decreased 3.4% in the first 7 months of 2015. The increase in Automotive and Machinery export were the growth drivers while Petroleum, Chemicals and Agriculture were the main drags to total export growth.
2015, withain drags
b – Sectoral contributionsto total export growth
-3.40.3
0.20.20.10.10.00.00.00.0
0.00.00.0
-0.1-0.1-0.1-0.1-0.2-0.3-0.3
-0.4-0.5-0.6
-0.8-0.9
24© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
NAFTA is the only growing markets for Thai ex
Chart 5.07a – Export by countryPercent of total export in THB term
Source: Bank of Thailand; ChartingAsean analysis
23.0 24.3 24.6 25.9 26.1
20.4 21.0 21.0 21.2 20.3
11.7 11.1 11.4 11.5 12.0
11.3 10.9 9.5 9.8 10.3
10.5 10.7 10.2 9.7 9.65.0 4.7 5.1 5.1 5.2
18.1 17.4 18.1 16.7 16.5
10FY 11FY 12FY 13FY 14FY
ASEAN
NAFTA
East Asiaex Japan
EU
Japan
Middle East
Rest ofthe world
100% = (Trillion)
Rest of
East Asi
M
ChartIn THB t
6.1 6.7 7.1 6.9 7.3
Export destinationsThe left chart shows Export value (in Baht term) broken down by country of destination. The right chart shows change in export value to each destination.
Latest developmentNAFTA is the only growing markets for Thai export in the first 6 months of 2015. Middle East was the hardest hit market with export declining 14% from a year ago.
xport so far in 2015
7.2%
-3.3%
-3.5%
-5.7%
-6.2%
-7.0%
-13.8%
NAFTA
ASEAN
f the world
Japan
EU
a ex Japan
Middle East
t 5.07b – Change in Exportterm, First 7 months of 2015 vs those of 2014
25© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Big decrease in Import so far in 2015 due maifuel import
Chart 5.09a – YTD annual change in Import in BahtFirst 7 months of 2015 vs those of 2014, percent
Source: Bank of Thailand; ChartingAsean analysis
Chart 5.09bContributions t
-7.4
7.7
5.0
-0.2
-4.2
-33.3
Total import
Others
Consumer goods
Intermediate Non fuel
Capital goods
Intermediate Fuel
Total imp
Oth
Consumer goo
Intermediate Non f
Capital goo
Intermediate F
YTD change in Import by product classThe left chart shows the year-to-date change (in Baht term) of import value by product group. The right chart shows each group’s contribution to the total import growth.
Latest developmentImport has decreased 7% in the first 7 months of 2015, due mainly to the decrease in Fuel import.
nly to decrease in
b – Sectoral contributionsto total import growth
-7.4
0.6
0.4
-0.1
-1.0
-7.3
ort
ers
ods
uel
ods
uel
26© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Intermediate goods has gained more share th
Chart 5.08 – Import by economic classificationPercent of total import in Baht term
Source: Bank of Thailand; ChartingAsean analysis
7.5 7.5 7.8 8.0
17.4 18.9 18.9 20.8
44.0 40.0 37.5 35.7
20.9 21.3 24.4 23.3
10.2 12.4 11.4 12.2
10FY 11FY 12FY 13FY
Others
Capital goods
Consumer goods
100% = 5.9 7.0
Intermediate Fuel
Intermediate –Non Fuel
7.8 7.7
Import compositionImport value (in Baht term) breakdown by economic classification into Consumer goods, Intermediate goods, Capital goods and Others.
Latest developmentIntermediate is the major class in Thailand’s import, implying major portion of import is for reproduction. It has gained more share so far this year.
his year
8.7 9.6
20.8 15.8
38.3 40.7
24.2 25.1
8.1 8.8
14FY 15/7MO
(Trillion)7.4
27© ChartingASEAN™www.ChartingThailandEconomy.com
4.0
Copyright © ChartingASEAN™. All rights reserved.
10.011.7 11.5
14.5 14.115.9
19.2
22.4
26.524.8
05FY 06FY 07FY 08FY 09FY 10FY 11FY 12FY 13FY 14FY
Tourist arrivals bounced back in the 7 monthsfrom last year’s level
Chart 5.18 – International Tourist ArrivalsMillion visits
Source: Department of Tourism
CAGR10.6%
Tourist arrivalsNumber of the international tourist arrivals into Thailand. Prepared by Department of Tourism using data from Immigration Bureau, Police Department.
Latest developmentTourist arrivals bounced back in the 7 months, increasing 30% from last year’s level.
s, increasing 30%
Monthly arrivalsMillion visits
28© ChartingASEAN™www.ChartingThailandEconomy.com
0.0
0.5
1.0
1.5
2.0
2.5
3.0
J F M A M J J A S O N D
2014
2015
Copyright © ChartingASEAN™. All rights reserved.
China and Malaysia have been the two highesfor tourists in 2015
Chart 5.19aInternational Tourist Arrivalsby country of nationalityPercent of total
Source: Department of Tourism; ChartingAsean analysis
51.2 53.8 56.0 59.9 58.8
27.9 26.5 25.323.8 24.8
5.3 5.0 4.8 4.4 4.515.6 14.7 13.8 11.9 11.9
10FY 11FY 12FY 13FY 14FY
EastAsia
Europe
Americas
Rest ofworld
Chart 5.19b10 Highest Chanby country of nFirst 7 months of 2
191.8
155.2
141.6
131.6
131.3
112.1
95.2
57.6
China
Malaysia
Hong Kong
Taiwan
Korea
Vietnam
Singapore
Japan
India
USA
Tourist arrivals by nationalityChart A shows the composition of international tourist arrivals by their nationalities grouped by region. Chart B shows the top 10 highest change in arrivals by country and the percent of total arrival change.
Latest developmentStructure of tourist nationalities has changed a bit over the years. East Asia has been the largest group in the last six years and the figure is increasing every year. China and Malaysia have been the two highest growing markets for tourists in 2015.
st growing markets
nge in International Tourist Arrivalsationality2015 vs those of 2014, Thousands
2,458.2
765.8
8
29© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
30
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Unemployment rate decreased to 0.8% in Jun
Chart 2.08 – Unemployment ratePercent
Source: National Statistical Office, Bank of Thailand
1.83
1.51
1.38 1.381.49
1.04
0.68 0.660.72
0.84
05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 11-Avg 12-Avg 13-Avg 14-Avg0
0
0
0
0
1
1
1
M
Unemployment rateUnemployment rate calculated from labor Force Survey conducted and compiled by the National Statistical Office (NSO). Unemployment rate equals unemployed persons divided by total labor force. Unemployed persons is defined as persons with the age of 15 years and over who during the week in which the survey is conducted, do not work, have no job, business enterprise or farm of their own. Persons in this category include those who are looking for a job, applying for a job or waiting to be called to work during the past 30 days prior to the interview date and those who are not looking for work during the past 30 days prior to the interview date, but are otherwise available for work during the 7 days prior to the interview date. Total labor force comprises current labor force and seasonally inactive labor force.
Latest developmentUnemployment rate decreased to 0.8% in June.
ne
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
J F M A M J J A S O N D
Monthly Average
2014
2015
31© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Thailand’s unemployment rate is lowest compleading economies
Chart 2.09 – Unemployment rateLatest, percent
Source: The Economist
0.8
2.0
3.1
3.3
3.3
3.4
3.7
3.7
4.0
4.9
5.3
5.3
5.8
6.0
6.3
6.4
7
Thailand Jun
Singapore Q2
Malaysia Jun
Hong Kong Jul
Japan Jul
Vietnam 2014
Taiwan Jul
South Korea Jul
China Q2
India 2013
US Jul
Russia Jul
Indonesia Q1
Pakistan 2014
Australia Jul
Philippines Q2
Brazil Jul
Euro Area Jun
Unemployment rates in the worldA comparison of unemployment rates across different countries (economies) compiled by The Economist magazine.
Latest developmentThailand’s unemployment rate is the lowest among leading economies. Euro area still has the highest unemployment rate, followed by Brazil.
paring to other
7.5
11.1
32© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
33
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
No change in interest rates in the market in A
Chart 3.01a – BOT’s policy rate
Source: Bank of Thailand
Chart 3.01b – BI
Chart 3.01c – Saving deposit rate* Chart 3.01d – Co
Note: (*) All Commercial Banks registered in Thailand, excluding foreign branches
1.25%
1.50%
1.75%
2.00%
2.25%
2.50%
Sep-14 Aug-15
0.00%
2.50%
5.00%
7.50%
10.00%
Sep-14 Aug-15 Sep-14
Max
Min
Sep-14
Interest ratesChart A shows the Bank of Thailand’s policy rate (1-day repo rate) over the last 12 months. Chart B shows the Inter bank overnight rate over the last 12 months. Chart C shows the minimum and maximum of the saving deposit rate over the last 12 months. Chart D shows the minimum and maximum of commercial bank’s MLR over the last 12 months.
Latest developmentNo change in interest rates in the market in August. It’s worth noting that the BOT’s policy rate is at 1.50%, which is quite low. This could limit the option to further stimulate growth through monetary policy (by lowering interest rate further).
August
BOR overnight rate
ommercial bank MLR*
34© ChartingASEAN™www.ChartingThailandEconomy.com
0.00%
2.50%
5.00%
7.50%
10.00%
Aug-15
Min
Max
1.25%
1.50%
1.75%
2.00%
2.25%
2.50%
Aug-15
Copyright © ChartingASEAN™. All rights reserved.
Government spending in the first 7 months of
Source: Bank of Thailand; ChartingAsean analysis
Chart – Monthly cumulative Fiscal expenditureBillion Baht
0
500
1000
1500
2000
2500
D J F M A M J J A
2015
Government SpendingThe current government is trying to boost the economy by fiscal spending. In the first 7 months of 2015, government spending increased 12% from the same period last year. While the effectiveness of such program is still in doubt, we see bigger spending from the government in the calendar year of 2015.
f 2015 increased 12%
35
S O N D
2014
© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
36
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Businesses and Industries were more pessimi
Source: Bank of Thailand, The Federation of Thai Industries
Chart 1.18a – 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 1.18b – T
Note: (*) Below is thIndex = 100Index > 100Index < 100
49.452.4
45.250.3 49.1
46.4
0
50
100
Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15
Better
Worse
88.9 87
0
100
200
Feb-15 Mar
Better
Worse
Business and Thai Industries Sentiment IndicesChart A shows Business Sentiment Index has been compiled with BOT survey data of 1,500 businesses. Index = 50 indicates that business sentiment remains stable. Index > 50 indicates that business sentiment has improved. Index < 50 indicates that business sentiment has worsened. Chart B shows Thai Industries Sentiment Index, from The Federation of Thai Industries survey of more than 1,000 industrial enterprises. Index = 100 indicates that industries sentiment remains stable. Index > 100 indicates that industries sentiment has improved. Index < 100 indicates that industries sentiment has worsened.
Latest developmentBusinesses and Industries were more pessimistic in July 2015. Business Sentiment Index dropped to 46.4 and the Thai Industries Sentiment Index dropped to 83.0.
istic in July
Thai Industries Sentiment Index**
he interpretation of the index:0 indicates that industries sentiment remains stable0 indicates that industries sentiment has improved0 indicates that industries sentiment has worsened
37© ChartingASEAN™www.ChartingThailandEconomy.com
7.7 86.2 85.4 84.0 83.0
r-15 Apr-15 May-15 Jun-15 Jul-15
Copyright © ChartingASEAN™. All rights reserved.
Consumer Confidence nosedived in July
Source: Ministry of Commerce
Chart 1.17 – Consumer Confidence Index
Note: (*) The index ranges from 0 to 10050 means consumer confidence is equal to those of the prior monthOver 50 means consumer confidence is better than those of the prior monthUnder 50 means consumer confidence is worse than those of the prior month
0
50
100
Jan-15 Mar-15 May-15 Jul-150
50
100
Jan-15 Mar-15 May-15 Jul-15
Overall On job
Better
Worse
Better
Worse
Consumer Confidence IndexPrepared by Ministry of Commerce through monthly consumer survey nationwide. The index ranges from 0 to 100. 50 means consumer confidence is equal to those of the prior month. Over 50 means consumer confidence is better than those of the prior month. Under 50 means consumer confidence is worse than those of the prior month.
Latest developmentConsumer Confidence nosedived in July with overall Consumer confidence index dropping deep to 33.7.
38© ChartingASEAN™www.ChartingThailandEconomy.com
0
50
100
Jan-15 Mar-15 May-15 Jul-15
On future income
Better
Worse
Copyright © ChartingASEAN™. All rights reserved.
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
39
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
GDP growth projections are likely to be revisethe Bangkok bomb
Chart 1.03a – Real GDP growth projectionsFor 2015, Annual percentage change
Source: NESDB, Fiscal Policy Office, Bank of Thailand, The Economist
Chart 1.03b –For 2016, Annu
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
J-15 F-15 M-15 A-15 M-15 J-15 J-15 A-15
Forecast as of, month ending
BOT
FPOThe Economist
poll
NESDB
ForecaJ-15 F-15 M-1
Real GDP growth projectionsReal GDP growth projections from Bank of Thailand, National Economic and Social Development Board (NESDB), Fiscal Policy Office (FPO) and the weekly poll conducted by the Economist magazine. The charts also show growth projections as of past dates, which highlight any significant change in projections from each of the forecasters. The changes in projections normally reflect the economic outlook as seen by each forecaster.
Growth projections for the Thai economyFPO revised down its projected growth for 2015 to 3.0%. Consensus growth forecast is now 3.0-3.5% for 2015 and 4.1% for 2016.
ed down further after
– Real GDP growth projectionsual percentage change
Copyright © ChartingASEAN™. All rights reserved.40© ChartingASEAN™
www.ChartingThailandEconomy.com
ast as of, month ending
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
15 A-15 M-15 J-15 J-15 A-15
BOT
The Economist poll
Growth for Thailand is projected to be aroundpack
Chart 1.04a – Real GDP growth projections2015, Annual % change, as of Aug 31st 2015
Source: The Economist
Chart 1.042016, Annual
7.66.9
6.66.3
5.75.5
4.93.53.4
3.12.8
2.42.42.3
1.40.9
-1.7-3.6
IndiaChina
PhilippinesVietnamPakistanMalaysiaIndonesiaThailandTaiwan
SingaporeSouth Korea
AustraliaUS
Hong KongEuro Area
JapanBrazilRussia
0.60.4
IndiaChina
VietnamPhilippinesMalaysiaIndonesiaPakistanThailand
South KoreaSingaporeAustraliaTaiwan
USHong KongEuro Area
JapanBrazilRussia
International real GDP growth projectionsReal GDP growth projection consensus for major economies in the world as a result of a weekly survey by the Economist magazine. It offers a good comparison across economies in the world.
Growth outlook for the Thai economyAccording to the Economist poll, Thailand’s GDP growth is expected to be 3.5% for 2015 and 4.1% for 2016, around the middle when compared to other major and emerging economies.
d the middle of the
4b – Real GDP growth projections% change, as of Aug 31st 2015
Copyright © ChartingASEAN™. All rights reserved.
7.86.7
6.56.4
5.65.5
4.74.1
3.33.2
2.82.72.7
2.11.7
1.66
41© ChartingASEAN™www.ChartingThailandEconomy.com
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
42
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Thai economy is still in deflation state in Augu
Source: Bureau of Trade and Economic Indices; ChartingAsean analysis
Chart 3.07a – Y o Y change in CPIPercent
Chart 3.07b –Aug 2015, percent
Note: (*) exclude raw food and energy
Veg
Tobacco & a
Food away from
Recreation & Edu
Medic
Prepared food at
Apparel and foo
Sea
Housing & furn
Non alcoholic bev
Eggs
Transport & C-1.50%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15
Head line
Core*
Consumer Price IndexCPI is the general price level of goods and services purchased by consumers. Prepared by Bureau of Trade and Economic Indices, Ministry of Commerce. Available in various definitions and by product groups. Change in CPI is normally used as main indicator for inflation.
Latest developmentIn August 2015, Core inflation was slightly lower while Headline CPI was still lower than a year ago, suggesting a deflation.
ust
Y o Y change in CPI by product
8.5
2.0
1.8
1.3
0.7
0.7
0.5
0.3
0.3
0.3
0.3
-0.7
-2.6
-7.6
-17.0
& fruit
alcohol
m home
ucation
al care
t home
otware
Rice
soning
nishing
verage
Meat
& milk
Commu
Energy
43© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Along with Taiwan and Singapore, Thailand is
Chart 3.08 – Consumer Price IndexAnnual percentage change
Source: The Economist
Latest
Note: (*) The Economist Poll
1.
1.
1.0
0.7
0.2
0.4
0.4
0.2
0.8
15.6
9.6
7.2
3.8
3.3
2.5
1.8
1.6
1.5
0.8
0.7
0.6
0.3
0.2
0.2
-0.4
-0.7
-1.2
Russia Jul
Brazil Jul
Indonesia Aug
India Jul
Malaysia Jul
Hong Kong Jul
Pakistan Jul
China Jul
Australia Q2
Philippines Jul
South Korea Aug
Vietnam Aug
Japan Jul
Euro Area Aug
US Jul
Singapore Jul
Taiwan Jul
Thailand Aug
Inflation in the worldChange in Consumer Price Index across major economies in the world. Also the projected CPI change for the full year by the Economist poll.
Latest developmentAlong with Taiwan and Singapore, Thailand is in deflation state.
s in deflation state
2015*
14.8
8.7
6.3
5.4
2.6
3.1
4.1
5
.7
2.6
2.8
44© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Deep deflation at the producer level
Source: Bureau of Trade and Economic Indices; ChartingAsean analysis
Chart 3.09a – Y o Y change in PPIPercent
Chart 3.09b –Aug 2015, perce
CPulp & pa
TexNon metallic min
MechinMechinFore
Leather & footwW
Other manu goMF
EneElectrical eq
ChemLivesto
Basic meRubber & pla
FishPetroleum prod
-6.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15
Producer Price IndexInflation at the producer level is measured by a change in Producer Price Index. Prepared by Bureau of Trade and Economic Indices, Ministry of Commerce. The chart shows the changes of the overall PPI and also the PPI of each industry.
Latest developmentProducer price level dropped from a year ago, resulting in deflation. In August, the PPI dropped 3.8% from a year ago. PPI of Petroleum products dropped 30.6%.
Y o Y change in PPI by productent
5.9
1.5
0.4
0.3
0.1
0.1
0.0
-0.1
-0.1
-0.2
-0.4
-0.5
-1.1
-2.2
-3.5
-3.8
-4.1
-4.4
-5.4
-30.6
CropaperxtileneralneryneryestrywareWoodoodsMetalFoodergyquipmicalocksetalsastichingucts
45© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
46
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Bank’s loan is still growing and liquidity is slig
Chart 3.02b – Commercial Banks’ Loan/Deposit* ratioPercent
Source: Bank of Thailand
Chart 3.02a – Commercial Banks’ LoanTHB billion
97.7% 97.8%97.2%
96.4%95.7% 95.7%
94.9% 94.8%
90%
95%
100%
Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15
10,600
10,800
11,000
11,200
11,400
11,600
Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15
Bank’s Loan and Loan-to-deposit ratioCommercial banks take deposits and give out loans. Chart A shows the outstanding loan by commercial banks in Thailand. Chart B shows the commercial banks’ loan to deposit ratio, a liquidity indicators in the banking system.
Latest developmentBank’s loan increased 0.5% in June 2015. Liquidity in the system remained abundant despite the Loan-to-Deposit ratio increasing to 96.5%.
ghtly squeezed
47© ChartingASEAN™www.ChartingThailandEconomy.com
94.5% 94.5%95.4%
96.5%
5 Mar-15 Apr-15 May-15 Jun-15
Mar-15 Apr-15 May-15 Jun-15
Y-o-Y+4.6%
M-o-M+0.5%
Copyright © ChartingASEAN™. All rights reserved.
Gross NPL continued to rise in both absolute vpercentage of total loan in the 2Q15
Chart 3.03a – Total Financial Institutions’ Gross NPLs OutstandinBillion Baht
Source: Bank of Thailand
458 401 380 317 270 256 267 2
07YE 08YE 09YE 10YE 11YE 12YE 13YE 14
7.31%
5.29% 4.85%3.60%
2.75% 2.26% 2.16% 2.
07YE 08YE 09YE 10YE 11YE 12YE 13YE 14
Chart 3.03b – Total Financial Institutions’ Gross NPLs OutstandinPercentage of Total Loans
Non-performing loanGross NPLs: the outstanding amount of loans classified as substandard, doubtful, doubtful of loss, and loss. The chart shows Gross Non-performing loan from all Financial Institutions in Thailand, both in the absolute and percentage of total terms.
Latest developmentGross NPL continued to rise in 2Q15. The absolute value increased from THB 299 billion to THB 312 billion or 2.29% to 2.38% of the total loan.
value and
ng
278 299 312
4YE 2015/Q1 2015/Q2 2015/Q3
16% 2.29% 2.38%
4YE 2015/Q1 2015/Q2 2015/Q3
ng
48© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Banks’ capital ratio decreased slightly in Junehigh
Source: Bank of Thailand
Chart 3.04 – Capital ratio of all commercial banks*% of risk assets, at year end
Note: (*) All Commercial Banks registered in Thailand, excluding foreign branches
12.4%13.3%
13.9%14.9%
14.0%
15.8% 16.1%
14.8%
16.2%15.7%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Capital ratio of all commercial banksCapital funds of commercial banks mean stockholders’ equity. Risk assets mean summary of all risk-weighted assets including contingent liabilities converted into assets and weighted by risk ratio. The higher the ratio the safer and more stability in the banking system.
Latest developmentBanks’ capital ratio decreased slightly to 16.6% in June but still remained high.
but still remained
14.5%
15.0%
15.5%
16.0%
16.5%
17.0%
17.5%
J F M A M J J A S O N D
Month End
2014
2015
49© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Thailand’s real interest rate is around 1%
Chart 3.05 – Real interest ratesPercent, as of Aug 31st 2015
Source: The Economist
3M risk free interest rates Expected 2015 inflat
Note: (*) The Economist Poll
14.2
12.5
7.5
7.4
7.0
4.6
3.7
3.1
2.3
1.8
1.7
1.6
0.9
0.4
0.3
0.1
0.0
Brazil
Russia
Indonesia
India
Pakistan
Vietnam
Malaysia
China
Australia
Philippines
Thailand
South Korea
Taiwan
Hong Kong
US
Japan
Euro Area
8.7
6.3
5.4
4.1
2.8
2.6
1.5
1.7
2.6
0.8
1.0
0.2
3.1
0.4
0.7
0.2
Real interest rates in the worldChart shows one way to calculate real interest rates across different currencies and economies in the world. Today’s Real interest rates = Nominal interest rates (represented here by 3-month risk free interest rates) – expected inflation.
Latest developmentThere are quite a few countries with negative real interest rates. Countries with negative real interest rates seems to have low nominal interest rates to begin with. Thailand’s real interest rate is around 1%.
tion* Real interest rates=
50© ChartingASEAN™www.ChartingThailandEconomy.com
5.5
-2.3
1.2
2.0
2.9
1.8
1.1
1.6
0.6
-0.8
0.9
0.6
0.7
-2.7
-0.1
-0.6
-0.2
14.8
Copyright © ChartingASEAN™. All rights reserved.
SET index decreased 4% in August amid anothforeign sell out
Chart 3.06cPercent, as of Au
Source: SET, The Economist; ChartingAsean analysis
France (CAC 40)
Japan (Nikkei 225)
Pakistan (KSE)
Germany (DAX)
Euro Area (FTSE Euro 100)
China (SSEB, $ terms)
US (NAScomp)
S Korea (KOSPI)
Australia (All Ord.)
US (S&P 500)
India (BSE)
US (DJIA)
UK (FTSE 100)
China (SSEA)
Malaysia (KLSE)
HK (Hang Seng)
Thailand (SET)
Singapore (STI)
Taiwan (TWI)
Indonesia (JSX)
Chart 3.06a – Monthly performance of SET indexPercent change from prior month, at month end
-5.1%
1.4%
-2.0%
0.6%
-4.3% -4.0%
Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15
Chart 3.06b – Cumulative net foreign fund flowSET & MAI, Billion Baht, Month end
-100.0
-80.0
-60.0
-40.0
-20.0
0.0
J-15 F-15 M-15 A-15 M-15 J-15 J-15 A-15 S-15 O-15 N-15 D-15
Stock market performanceChart A shows the monthly performance of the SET index. Chart B shows the performance, change in the index level, of key stock markets in the world, since the end of last year.
Latest developmentSET index decreased 4% in August amid another round of big foreign sell out. Along with other markets in the region and the world, SET has declined heavily year-to-date.
her round of big
– Change since Dec 31st 2014ug 26th 2015
5.3%
5.3%
4.4%
2.0%
1.8%
-0.8%
-0.8%
-1.1%
-3.9%
-5.8%
-6.5%
-8.6%
-8.9%
-9.5%
-10.3%
-10.7%
-11.9%
-14.6%
-17.1%
-18.9%51© ChartingASEAN™
www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
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Capturing The Vietnam
Contact InformationFinAdvice Department – Private FundTel 02-635-1700 ext. 757, 771, [email protected] , [email protected]
m Growth Opportunity
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
53
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Higher government deficit as percentage of G
Chart 4.1 – Government budget and cash balance as percentagePercent
Source: Bank of Thailand; ChartingAsean analysis
-0.5%
1.4%
-2.0%
-1.1%
-4.0%
-0.7%-0.3%
-0.6%
1.1%
-1.7%
-1.1%
-4.4%
-2.6%
-0.9%
05FY 06FY 07FY 08FY 09FY 10FY 11FY
Budget cash balanceOverall Cash balance (including non-budgetary deficit/ surplus)
Budget balance vs GDPOverall Cash balances are the sum of budget and non budget cash balances. Budget cash balances are the government revenues net of the government expenditures. Non budget cash balances include changes in governmental agencies’ deposit accounts and net positions of government’s revolving funds. The chart shows both Overall Cash balances and Budget cash balances as percentage of nominal GDP.
Latest developmentGovernment budget and cash balances have been in deficit in 7 of the last 10 years. The magnitude of the deficits in the past 5 years have been huge. The worst deficits in relative to GDP were in 2009 (calendar year), with budget deficit of 4%. Huge government budget deficit in 2012, only slightly better than in 2009. Higher budget and cash deficit as percentage of GDP in 2014.
GDP in 2014
of nominal GDP
-3.6%
-2.2% -2.4%
-4.1%
-2.0%-2.5%
12FY 13FY 14FY
54© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Budget deficit in 2015 has so far doubled thos
Chart 4.2 – Government budget balanceBillion Baht
Source: Bank of Thailand; ChartingAsean analysis
1,2411,390 1,455 1,498 1,484
1,7511,902
2,075 2,158 2,076
-1,277 -1,280
-1,629 -1,598-1,849 -1,825 -1,930
-2,489 -2,424 -2,371
-36110
-174 -100-364
-75 -27
-414-267 -296
05FY 06FY 07FY 08FY 09FY 10FY 11FY 12FY 13FY 14FY
Revenue
Expenditure
Budgetbalance
Budget balanceBudget balances are the government revenues net of the government expenditures. The left chart shows government revenue, government expenditure and budget balance (line). The right chart shows monthly cumulative of budget balance of the last two years.
Latest developmentGovernment budget balances have been in deficit in 9 of the last 10 years. The magnitude of the deficits in the past 5 years have been huge. The worst deficits in absolute term were in 2012 (calendar year), with budget deficit of 414 Billion Baht. In 2014, Budget deficit increased from 2013. Budget deficit in 2015 has so far doubled those of last year.
se of last year
Monthly cumulative Budget balance(Billion Baht)
55© ChartingASEAN™www.ChartingThailandEconomy.com
-350.0
-300.0
-250.0
-200.0
-150.0
-100.0
-50.0
0.0
50.0
J F M A M J J A S O N D
2014
2015
Copyright © ChartingASEAN™. All rights reserved.
Sizable budget and cash deficit in the first 7 m
Chart 4.3 – Government cash balanceBillion Baht
Source: Bank of Thailand; ChartingAsean analysis
-36
110
-174
-100
-364
-75
-27
-414
-45
88
-144
-96
-401
-266
-95
-4
05FY 06FY 07FY 08FY 09FY 10FY 11FY 12FY
Budget cash balanceOverall Cash balance (including non-budgetary deficit/ surplus)
Budget and Cash balanceOverall Cash balances are the sum of budget and non budget cash balances. Budget cash balances are the government revenues net of the government expenditures. Non budget cash balances include changes in governmental agencies’ deposit accounts and net positions of government’s revolving funds. The chart shows both Overall Cash balances and Budget cash balances in absolute term.
Latest development2012 saw the biggest budget and cash deficit in THB term. Apart from 2010, Budget cash balance and Overall cash balance are typically in line with each other. Sizable budget and cash deficit in the first 7 months.
months
-267-296
-97
466
-242
-305
-148
Y 13FY 14FY '15/7mo56© ChartingASEAN™
www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Thailand’s budget deficit is expected to be aro
Chart 4.4 – Government Budget balance as percentage of GDP2015*, percent
Source: The Economist
-1.9
-2.0
-2.0
-2.1
-2.4
-2.6
-2.7
-2.8
-4.1
-4.1
-4.2
-5.1
-5.8
-6.8
South KoreaHong KongSingapore
TaiwanPhilippinesIndonesiaThailand
Euro AreaAustralia
USChinaRussiaIndia
MalaysiaVietnamPakistan
BrazilJapan
Note: (*) The Economist Poll
Budget balance in the worldConsensus projection of Government budget balance as percentage of GDP across major countries in the world for the current year. The data is compiled by the Economist poll.
Latest developmentMost governments in the world are expected to have budget deficits in 2013, except South Korea, Hong Kong, Singapore and Russia. The magnitude of the expected budget deficits are greatest in US and Japan, the leading economies in the world. Thailand budget deficit is expected to be around 2% of GDP.
ound 2% of GDP
0.4
0.0
-0.7
-1.1
57© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
A slight increase in Public debt so far in 2015
Source: Public Debt Management Office
Chart 4.5a – Composition of Public debtTHB Trillion
Chart 4.5b –As percentage
8% 8% 7% 7% 6%External debtas percent of total
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2011 2012 2013 2014 Jun-15 2011 2012
Direct Government debt
Bond to Compensate FIDF's Loss& Prefunding debt
Public debt fromState Enterprises
Composition of Public debtPublic debt includes direct government debt, Bond to Compensate FIDF's Loss, Debt Prefunding, Non-Financial State Enterprise Debt, Special Financial Institutions Guaranteed Debt, and others. Chart A shows the level of debt in THB. Chart B shows the level as percentage of nominal GDP.
Latest developmentPublic debt as percentage of GDP increased significantly since 2009 then dropped slightly in 2011 before increasing again. Public debt increased in absolute term and relative to GDP in 2012 and 2013, due largely to direct government debt. A slight increase in Public debt so far in 2015, at THB 5.7 trillion, or 42% of GDP. Majority of the public debt is domestic based.
– Composition of Public debte of nominal GDP
58© ChartingASEAN™www.ChartingThailandEconomy.com
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2 2013 2014 Jun-15
Direct Government debt
Bond to Compensate FIDF's Loss& Prefunding debt
Public debt fromState Enterprises
Copyright © ChartingASEAN™. All rights reserved.
Thailand’s public debt is not high compared tostandard
Chart 4.6 – Public debt in the worldPercentage of GDP, 2014 est.
Source: CIA fact book
228181
175142
134132131
119119
110107
1021011019896949494939290898786
1 Japan2 Zimbabwe
3 Greece4 Lebanon
5 Italy6 Jamaica7 Portugal8 Cyprus9 Ireland
10 Grenada11 Singapore12 Belgium13 Eritrea
14 Barbados15 Spain
16 France17 Iceland18 Egypt
19 Puerto rico20 Canada21 Bhutan22 Jordan
23 Antigua and barbuda24 UK
25 Cabo verde
39 United40 C43
48 Ur50 Pa
5663 Ma
6771 Th
72 Philip7
80 Vie93 M96 Sw
101 Arg103 South105 Hong
108 T126
129 N133 Indo
137147149 N
164 Saudi
Public debt in the worldPublic debt as percentage of nominal GDP, data is compiled by CIA.
Latest developmentHigh public debt ratio in most developed countries. Thailand’s public debt ratio, at 49% of GDP in 2014, is below international rule of thumb of 60%. Japan has the highest public debt level compared to GDP, at 228%. Majority of countries with high public debt level comes from Europe, leading by Greece, Italy, Portugal and Ireland.
o international
7170676564
59545149484646
4140383737373030242213122
statesCroatia3 Israelruguayakistan6 Brazilalaysia7 Indiahailandppines8 LaosetnamMexicowedenentinaKoreag kongTurkeyNepalorwayonesia7 ChinaRussiaNigeriaarabia
Int’l rule ofthumb<60% ofGDP
59© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
• Thailand GDP grew only 2.8% in 2Q15, a rather slow pace co• Tourism was by far the main driver of growth on the• Service was the main driver, while agriculture and ma
drags• Manufacturing production continues to lag behind last year’• Private consumption lags behind last year’s level while and P• Import declined faster than Export. Tourist arrivals grew imp• Unemployment decreased and stayed below 1%• Policy interest rate remains on the downward trend to boost• Businesses, Industries as well as Consumers were more pess• Consensus growth forecast is now 3.0 3.5% for 2015 and 4.1
• Thai economy is still in deflation state in August, with both Cthey were a year ago
• Bank’s loan is still growing, although slowly, and liquidity is scapital ratio decreased but still remained high. NPL increased
• Budget deficit in 2015 has so far doubled those of last year. Pbut not too worrying yet
• Positive Balance of Payment so far in 2015, thanks to trade sbeen decreasing. THB depreciated more than 1% in August.
CONTENT SUMMARY
Grow
thS
tability
Reading This ReportThis report is designed to be read like a corporate presentation. Readers can easily follow the content point by point with detailed charts for each point. Explanation for chart(s) is provided on the right side bar of each page.
60
ompared to last quarterexpenditure sideanufacturing were the main
s levelPrivate Investment recoveredpressively.
t growthsimistic in July1% for 2016
CPI and PPI lowered than
lightly squeezed. Bank’sd.Public debt also increased
surplus. External debt has
Copyright © ChartingASEAN™. All rights reserved.© ChartingASEAN™www.ChartingThailandEconomy.com
Positive Balance of Payment so far in 2015, thsurplus
Source: Bank of Thailand; ChartingAsean analysis
Chart 5.01 – Balance of Payment decompositionBillion USD
Trade Bala
Net service
Net Capita
+
31.3
1.25.3
-5.0-1.2
5.6
10FY 11FY 12FY 13FY 14FY 15/7mo
29.8
10FY 1
-19.7
10FY 1
21.3
10FY 1
Balance of payment decompositionBalance of Payments is a summary of economic transactions between residents and nonresidents that takes place during a specific time period. Balance of Payments include Trade balance, Net services income & transfers, Capital and financial account and Net errors & omissions. Trade balance refers to net export (export less import) of goods. Net Services are the net result of foreign trade related to services, defined as the net export (export less import) of services. Income consists of compensation of employees, investment income, and donation and grant. Capital Account encompasses receipts and payments pertaining to (1) transfers in cash or in kind, and (2) acquisition and disposal of non-produced, non-financial assets. Financial Account refers to net flows of financial transactions between residents and nonresidents. Net errors & omissions reflects the discrepancy between the overall balance and the sum of each sub-account of the balance of payments.
Latest developmentPositive Balance of Payment so far in 2015 of USD 5.6 billion, thanks to trade surplus.
hanks to trade
nce (F.O.B)
e income & transfer
l Movement + errors and omissions
61© ChartingASEAN™www.ChartingThailandEconomy.com
17.0
6.0 6.7
24.618.0
11FY 12FY 13FY 14FY 15/7mo
-8.1 -7.5 -9.1 -10.4-3.5
11FY 12FY 13FY 14FY 15/7mo
-7.7
6.7
-2.6-15.4 -8.9
11FY 12FY 13FY 14FY 15/7mo
Copyright © ChartingASEAN™. All rights reserved.
Strong Asian export engines reflecting in hugesurplus
Chart 5.02 – Current Account balance
Source: The Economist
21.3%
12.8%
7.6%
5.0%
4.1%
3.4%
3.0%
2.8%
2.7%
2.6%
2.5%
2.4%
-0.6%
-1.2%
-2.6%
-2.6%
-3.1%
-4.1%
Singapore Q2
Taiwan Q2
South Korea Jun
Russia Q2
Philippines Mar
Malaysia Q2
China Q2
Hong Kong Q1
Vietnam 2013
Japan Jun
Euro Area Jun
Thailand Q1
Pakistan Q2
India Q1
US Q1
Indonesia Q2
Australia Q1
Brazil Jul
-406.4
As % of 2015 GDP*
Note: (*) The Economist Poll
Current Account BalanceCurrent Account represents the net sum of trade in goods and services, primary income and secondary income. The left chart shows the consensus projection of 2012 Current Account Balance as percentage of GDP by the Economist poll. The right chart shows last 12-month Current Account Balance of major economies in the world, in absolute dollar term
Latest developmentCountries that are expected to have huge Current Account surplus are mostly from Emerging Asian economies. US is still expected to be net spenders. Thailand’s Current Account balance in 2015 is expected to be 2.4% of GDP.
e current account
69.5
72.8
102.2
68.7
14.5
8.8
291.4
5.9
9.5
97.1
317.6
16.1
-2.2
-27.5
-21.6
-41.9
-89.4
Last 12 months, USD Billion
62© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
External debt decreased slightly so far in 2015
Chart 5.10a – External Debt LevelBillion USD
Source: Bank of Thailand
69.0 74.4 76.1 75.3100.6 104.3
130.
06YE 07YE 08YE 09YE 10YE 11YE 12YE
38.5% 35.4% 31.4% 28.8%35.2% 33.7%
38.0%
06YE 07YE 08YE 09YE 10YE 11YE 12YE
Chart 5.10b – External Debt as % of GDP
External DebtExternal debt refers to the remaining outstanding portion of liabilities (excluding equity) which residents have over nonresidents of an economy. Prepared by the Bank of Thailand and released quarterly. Chart A shows external debt level in USD term. Chart B shows external debt level as percentage of GDP.
Latest developmentExternal debt level decreased slightly to USD 138 Billion at the end of 1Q15. External debt as percentage of GDP decreased slightly to 33.7%.
5
7 139.9 140.7 138.0
E 13YE 14YE 15/1Q
% 38.2% 34.5% 33.7%
E 13YE 14YE 15/1Q
63© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
External debt structure has continued to shiftterm debt
Source: Bank of Thailand
84% 80% 82% 82% 82%
16% 20% 18% 18% 18%
11YE 12YE 13YE 14YE 15/1Q
Chart 5.11a – External debt breakdownPrivate vs Public
Chart 5.11b – ELong Term vs Sho
PrivatePublic = General Government and Monetary Authorities
55% 56%
45% 44%
11YE 12Y
Long termShort term
External debt compositionBreakdown of external debt. Chart A shows the external debt breakdown by borrowers. Chart B shows the external debt breakdown by maturity.
Latest developmentExternal debt structure has continued to shift toward more long-term debt, which lowers the risk of not having enough foreign exchange to service external debt.
t toward more long
External debt breakdownort Term
% 57% 60% 61%
% 43% 40% 39%
YE 13YE 14YE 15/1Q
64© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Source: Bank of Thailand; ChartingAsean analysis
340%370%
312%
279% 277%292%
10YE 11YE 12YE 13YE 14YE 15/1Q
Chart 5.12a – International reservesAs % of ST external debt
Chart 5.12b – DPercent
Note: (*) Debt service payment / Export of goods and services
4.7%
3.4%
10FY 11FY
Capability to repay external debt improved sl
External Debt repayment capabilityA look at the country’s capabilities of servicing the external debt. Chart A shows the country’s international reserves as percentage of short-term external debt. Chart B shows the external debt service ratio (Debt service payment / Export of goods and services).
Latest developmentInternational reserves (as % of ST external debt) is still at healthy level (292%). Debt service ratio increased to 4.9% in 1Q15. All in all, capability to repay external debt is not yet a concern at the moment.
Debt service ratio*
4.2%4.0%
4.7% 4.9%
12FY 13FY 14FY 15/1Q
ightly so far in 2015
65© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Net International reserves decreased slightlyconsidered excessive
Chart 5.13a – International reserves level*At the end of period, Billion USD
Source: Bank of Thailand; ChartingAsean analysis
6.99.1
7.9
13.812.6
10.8 9.9
2006 2007 2008 2009 2010 2011 2012
Chart 5.13b – International reserves as number of months of im
Note: (*) Including Net Forward position(**) For the last period using average monthly import value during the last 12 months
73.9 106.5 118.0 154.1191.7 206.4 205.8
2006 2007 2008 2009 2010 2011 2012
International reservesInternational reserve assets refer to external assets that are held or controlled by central bank and are readily available for immediate uses, for instance, in financing payment imbalances or in implementing exchange rate policy. The figures also include the net forward position (future assets/liabilities arising from currency forward contracts between BOT and the market). Chart A shows international reserves level in US$ term. Chart B shows as number of months that it can finance import.
Latest developmentInternational reserves in US$ term have been decreasing since its peak in 2011. So far in 2015, the reserves decreased slightly but the number of months that it can finance import remained at 9.7 months, which is considered excessive.
in 2015 but still
9.1 9.5 9.7
2 2013 2014 Jul-15
port**
8 190.2 180.2 174.6
2 2013 2014 Jul-15
66© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
THB depreciated 1.4% in August
Source: Bank of Thailand; ChartingAsean analysis
Chart 5.17a – Nominal Effective Exchange Rate2007=100
Chart 5.17b –Percentage change
MYR 8.7172
AUD 26.0602
MXN 2.1507
IDR 2.7164
EUR 40.6272
JPY 29.908
KRW 0.0305
SGD 25.6825
INR 0.5759
TWD 1.1134
GBP 55.7311
PHP 0.7816
VND 0.0016
CNY 5.6752
USD 36.0277
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 $
100.0
102.0
104.0
106.0
108.0
110.0
112.0
114.0
Aug-14 Nov-14 Feb-15 May-15 Aug-15
M o M1.4%
Y o Y+2.0%
Baht appreciates
Baht depreciates
Exchange ratesNominal Effective Exchange Rate (NEER) has been constructed from the weighted average of bilateral exchange rates of the baht vis-à-vis Thailand’s 23 major trading partners and trade competitors. The weight of each currency varies according to how important the country is as a trading partner and trade competitor. An increase in NEER refers to an appreciation. Chart B shows the year-on-year change of average selling rates of selected currencies.
Latest developmentNominal Effective Exchange Rate decreased 1.4% in August. Over the last 12 months THB appreciated 2% against key currencies.
Y o Y change in FX rate*in avg. selling rate as of Aug 31st 2015
18.1
15.7
14.0
8.5
4.4
4.0
3.6
0.6
-1.9
-3.6
-4.3
-4.7
-6.3
-7.3
-10.9
67© ChartingASEAN™www.ChartingThailandEconomy.comCopyright © ChartingASEAN™. All rights reserved.
Baht depreciates Baht appreciates
© ChartingASEAN™ All Rights Reserved. No part of this publication may be reproduced,
without the prior permission of the publisher, ChartingASEAN™. The facts of this report are believed to be correct at the time of publication but
cannot be guaranteed. Please note that the findings, conclusions and recommendations that ChartingASEAN™ delivers will be based on information
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