Drop in domestic consumption, foreign demand weakening Thai economy

[snoop1130]

Drop in domestic consumption, foreign demand weakening Thai economy

By THE NATION

 

Don Nakornthab, BOT's senior director for Economic and Policy Department

 

The Thai economy in June weakened from the previous month due mainly to a drop in domestic and external demand, a central bank report on the economic and monetary conditions for the month of June and the second quarter showed.

 

Indicators for private consumption expanded at a slower pace in almost all categories, while indicators for private investment contracted. Public spending also shrank in both current and capital expenditures. The value of exports continued to contract, in line with a drop in merchandise import and manufacturing, though the tourism sector rebounded thanks to a rise in Indian tourists. However, the number of tourists from China continued to contract. 

 

The Bank of Thailand put the moderate expansion in private consumption indicators to a drop in the purchase of durable goods and a decline in domestic vehicle sales and a lower number of newly registered motorcycles. 

 

The fundamental factors supporting overall purchasing power appeared softer, mainly due to a softer increase in non-farming income, though income from agriculture showed a favourable expansion. 

 

However, the improvement in farm income was mainly put down to the rise rubber and pineapple prices, while the price of other main crops continued to fall. This reflects a disparity in the benefits gained from a rise in farm income consistent with the Consumer Confidence Index, which has continued to drop. 

 

Private investment indicators tightened from the same period last year, while spending in construction also dropped due to a reduction in permitted construction area, except for manufacturing purposes, while the sale of construction materials expanded. Investment in machinery and equipment also contracted in all categories. After seasonal adjustment, private investment indicators dropped slightly from the previous month from both investment in construction and in machinery and equipment.

 

Public spending, excluding transfers, contracted from the same period last year from both current and capital expenditures. Current spending contracted mainly from the use of goods and services, while compensation for civil servants rose slightly. Capital spending contracted due to a reduction in the budgets allocated to provincial clusters, and a contraction in the disbursement of funds due to constraints on investment efficiency after the reassessment and realignment of investment projects under the 20-year National Strategy Framework.

 

The value of merchandise exports contracted by 2.1 per cent from the same period last year, and excluding gold, the value of merchandise exports dropped by 9.1 per cent. This continual contraction can be attributed to a weaker global demand owing to slower economic growth in a number of major trading economies, protectionist policies resulting from the US-China trade war, continued downturn in the electronic cycle and a fall in global crude oil prices. The contraction was mainly due to a drop in the export of petroleum-related products in terms of both price and export volume; electronic products, especially hard-disk drive and integrated circuits; agricultural products, especially rice; and agro-manufacturing products, especially rubber-based products and sugar. However, export in some categories continued to expand such as automotive and parts, particularly commercial vehicles and car tyres.

 

The value of merchandise imports contracted by 9.6 per cent from the same period last year, and excluding gold, the value of merchandise imports declined by 10.5 per cent. The contraction was attributed to a decline in the import of raw and intermediate goods, particularly crude oil in terms of both price and import volume, partly due to the shutdown of oil refineries for maintenance, and imports of electronic parts, in line with the continued contraction in exports of such products; import of capital goods excluding aircrafts, ships, floating structures, and locomotives, particularly telecommunication equipment, and machinery used in manufacturing, consistent with the slowdown in private investment; import of consumer goods especially non-durable goods following a drop in the price of tuna from the same period last year; and automotive and parts consistent with the contraction of automotive production and domestic car sales. The value of imports showed a solid reduction from last month, contributing to an increase in trade surplus. 

 

Meanwhile, the number of foreign arrivals rebounded by 0.9 per cent from the same period last year, mainly due to a continual expansion in the number of Indian tourists, who partly benefited from the exemption of visa-on-arrival fee. However, the number of Chinese tourists continued to contract as a result of the slowdown in Chinese economy and stronger competition from neighbouring countries. Moreover, the number of Malaysian tourists reduced from last year owing to an acceleration after the Malaysian 2018 general election. After seasonal adjustment, the number of foreign tourists rose from the previous month, mainly due to the return of Chinese visitors to the North after the air-pollution problem was cleared. 

On the stability front, headline inflation decelerated to 0.87 per cent from 1.15 per cent last month, due mainly to the decelerated core inflation, coupled with a fall in domestic retail petroleum prices. However, fresh food prices accelerated from a rise in fruit and pork prices.

 

Source: https://www.nationthailand.com/business/30373984

 

-- © Copyright The Nation Thailand  2019-07-31

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[RotBenz8888]

39 minutes ago, snoop1130 said:

Moreover, the number of Malaysian tourists reduced from last year owing to an acceleration after the Malaysian 2018 general election.

Aray na krap?

[rkidlad]

Don’t worry. A man with zero qualifications and experience in this field is now heading Thailand’s economic team. 

 

 

[NCC1701A]

a lot of these stories just today.

[metisdead]

An off topic post has been removed. 

[NightSky]

if the first domino is encouraged a little bit the economy might just do this..

 

 

 

Edited July 31, 2019 by NightSky

[Fex Bluse]

70% of the article is about tourism. 

 

With so much of the Thai economy depending on foreigners, one would expect the Thais to treat foreigners well. 

 

Tourism has been propping up the weak Thai economy for decades. 

[NightSky]

16 minutes ago, Fex Bluse said:

70% of the article is about tourism. 

 

With so much of the Thai economy depending on foreigners, one would expect the Thais to treat foreigners well. 

 

Tourism has been propping up the weak Thai economy for decades. 

I think most Thais do treat us well its just the rules from above that don't offer a warm fuzzy feeling right now..

 

I even think immigration officials are pee'd off with all the additional work put on them.

 

I honestly think that despite all the groaning..

 

[sammieuk1]

I would say the wine consumption is at an all time low to non existent now well mine is just to add my little bit to the money grabbers woes and long may it continue ????

[CeeGee]

Eight paragraphs on how everything is down,,,,,,,,,, and then BANG

After seasonal adjustment, the number of foreign tourists rose from the previous month, mainly due to the return of Chinese visitors to the North after the air-pollution problem was cleared. 

Does that means although tourist numbers are down,they are not down as much as before.

 

This guy is not related to George Orwell is he?  1984 Doublespeak

[rwill]

The Thai's where I live are almost all complaining about wages being lowered and prices going up.  Of course public spending will go down when this happens.

[thaiguzzi]

11 hours ago, Fex Bluse said:

70% of the article is about tourism. 

 

With so much of the Thai economy depending on foreigners, one would expect the Thais to treat foreigners well. 

 

Tourism has been propping up the weak Thai economy for decades. 

Absolute rubbish.

Expat self importance again spouting hogwash.

[Eric Loh]

To improve domestic consumption I recommend an increase in minimum wage to 450B, reduce VAT to 5%, reduce tax for personal income, subsidize all form of public transport, reduce interest rate, debt moratorium, free school uniforms, subsidize school books and free UHC. To pay for all these, cut the number of generals, reduce the defence budget, abolish conscription and increase taxes for the wealthy.

[FarFlungFalang]

14 hours ago, snoop1130 said:

The Thai economy in June weakened from the previous month due mainly to a drop in domestic and external demand,

In other words in all areas of demand.

[LazySlipper]

No mention of the Thai baht as a reason for the problems above.  Maybe the Thais are the new falang tourists somewhere in the world seeing how the bht is so strong the Thais are travelling more, as a result they are spreading the bht.

[Fex Bluse]

12 hours ago, NightSky said:

I think most Thais do treat us well its just the rules from above that don't offer a warm fuzzy feeling right now..

 

I even think immigration officials are pee'd off with all the additional work put on them.

 

I honestly think that despite all the groaning..

 

Hello

Unfortunately I cannot agree.

I have watched the xenophobia rise and rise and I never hear about or see ANY Thais backing the rights of foreigners.

Smiles are worthless when expats are having their lives upended at a whim.

I am still convinced hatred of foreigners is commonplace.

[RichardColeman]

16 hours ago, snoop1130 said:

while compensation for civil servants rose slightly

Hmmmmmm !

[Cake Monster]

Time has come for the credit limits on Sonchai,s and Noi,s Credit Cards to be increased

[JulesMad]

17 hours ago, rkidlad said:

Don’t worry. A man with zero qualifications and experience in this field is now heading Thailand’s economic team. 

 

 

Hey, if usa can do it with zero qualifications and even lesser experience, then Thailand can do for sure

[FarFlungFalang]

4 hours ago, Fex Bluse said:

Smiles are worthless when expats are having their lives upended at a whim.

Had my life upended yesterday doing my border run at Chong Mek whilst trying my stamp out and stamp in without going to Laos,the IO was about to stamp but did a flick through my passport and noticed no relevant Lao visa so I had to spend an extra 20 mins doing the Lao visa only to get back to be greeted by the boss who has spent time in Oz and likes to have a chat and share a joke and make sure my run goes smoothly but too late this time as I had already done the Lao visa next time I plan on asking the boss about the law regarding have to actually enter Lao rather than just "leave Thailand" as the law state without any mention of the need to enter another country.

[NightSky]

9 hours ago, Fex Bluse said:

Hello

Unfortunately I cannot agree.

I have watched the xenophobia rise and rise and I never hear about or see ANY Thais backing the rights of foreigners.

Smiles are worthless when expats are having their lives upended at a whim.

I am still convinced hatred of foreigners is commonplace.

I think the majority of Thais are not aware of the crackdowns and immigration laws that foreigners have to adhere to, they are probably too busy trying to avoid the crackdowns imposes on them too (road traffic cameras, land encroachment, business regulations) etc. I think most Thai are out to earn a Baht and they would welcome you as a customer

 

yes all the hassles and fall in currency exchange does cause bitterness if it causes discomfort but the average Thai has no idea what you read on Thaivisa every day. 

Edited August 1, 2019 by NightSky

[NightSky]

6 hours ago, FarFlungFalang said:

Had my life upended yesterday doing my border run at Chong Mek whilst trying my stamp out and stamp in without going to Laos,the IO was about to stamp but did a flick through my passport and noticed no relevant Lao visa so I had to spend an extra 20 mins doing the Lao visa only to get back to be greeted by the boss who has spent time in Oz and likes to have a chat and share a joke and make sure my run goes smoothly but too late this time as I had already done the Lao visa next time I plan on asking the boss about the law regarding have to actually enter Lao rather than just "leave Thailand" as the law state without any mention of the need to enter another country.

I could be wrong but I beleive a stamp/visa at the land borders is always required to show you have exited Thailand and entered another country.

Edited August 1, 2019 by NightSky

[FarFlungFalang]

22 minutes ago, NightSky said:

I could be wrong but I beleive a stamp/visa into another country is always required to show you have exited Thailand and entered another country.

If you could find and post anything that refers to this it would be great as I've read the english version of the immigration act and that only mentions that one must leave Thailand and states nothing about having to enter another country.I know many people including immigration officials assume that one needs to enter another country but unless it is stated in the written law then I'm seeing it as a legal loop hole to avoid the unnecessary one page Lao visa stamp and the 1500/1300 baht fee(at Chong Mek the visa fee is 1300 and Mukdahan it's 1500).

   I've done this exit/entry without going into Laos many times and it's worked with about 5 times out of 6 on average.So I know it's not "always required" and I treat it as if it's up to the IO to interoperate the law.

  The only thing consistent about laws around here is their inconsistency.   

Edited August 1, 2019 by FarFlungFalang
Correction

[Fex Bluse]

22 hours ago, CeeGee said:

Eight paragraphs on how everything is down,,,,,,,,,, and then BANG

After seasonal adjustment, the number of foreign tourists rose from the previous month, mainly due to the return of Chinese visitors to the North after the air-pollution problem was cleared. 

Does that means although tourist numbers are down,they are not down as much as before.

 

This guy is not related to George Orwell is he?  1984 Doublespeak

They are unable to criticize themselves without talking up themselves for balance. China same same. 

[marcusarelus]

22 hours ago, Fex Bluse said:

70% of the article is about tourism. 

 

With so much of the Thai economy depending on foreigners, one would expect the Thais to treat foreigners well. 

 

Tourism has been propping up the weak Thai economy for decades. 

Oh you are not telling the truth again.  Looks more like 20% of the article.

 

But who cares tourism dollars are good dollars as they bring new money into Thailand and not just circulate old money.

 

I used to live in Florida and they treat tourists very badly.  I suspect most places do.  Mexico and Canada are on the list of top 25 countries that hate Americans.

 

The Thai economy in June weakened from the previous month due mainly to a drop in domestic and external demand, a central bank report on the economic and monetary conditions for the month of June and the second quarter showed.

 

Indicators for private consumption expanded at a slower pace in almost all categories, while indicators for private investment contracted. Public spending also shrank in both current and capital expenditures. The value of exports continued to contract, in line with a drop in merchandise import and manufacturing, though the tourism sector rebounded thanks to a rise in Indian tourists. However, the number of tourists from China continued to contract. 

 

The Bank of Thailand put the moderate expansion in private consumption indicators to a drop in the purchase of durable goods and a decline in domestic vehicle sales and a lower number of newly registered motorcycles. 

 

The fundamental factors supporting overall purchasing power appeared softer, mainly due to a softer increase in non-farming income, though income from agriculture showed a favourable expansion. 

 

However, the improvement in farm income was mainly put down to the rise rubber and pineapple prices, while the price of other main crops continued to fall. This reflects a disparity in the benefits gained from a rise in farm income consistent with the Consumer Confidence Index, which has continued to drop. 

 

Private investment indicators tightened from the same period last year, while spending in construction also dropped due to a reduction in permitted construction area, except for manufacturing purposes, while the sale of construction materials expanded. Investment in machinery and equipment also contracted in all categories. After seasonal adjustment, private investment indicators dropped slightly from the previous month from both investment in construction and in machinery and equipment.

 

Public spending, excluding transfers, contracted from the same period last year from both current and capital expenditures. Current spending contracted mainly from the use of goods and services, while compensation for civil servants rose slightly. Capital spending contracted due to a reduction in the budgets allocated to provincial clusters, and a contraction in the disbursement of funds due to constraints on investment efficiency after the reassessment and realignment of investment projects under the 20-year National Strategy Framework.

 

The value of merchandise exports contracted by 2.1 per cent from the same period last year, and excluding gold, the value of merchandise exports dropped by 9.1 per cent. This continual contraction can be attributed to a weaker global demand owing to slower economic growth in a number of major trading economies, protectionist policies resulting from the US-China trade war, continued downturn in the electronic cycle and a fall in global crude oil prices. The contraction was mainly due to a drop in the export of petroleum-related products in terms of both price and export volume; electronic products, especially hard-disk drive and integrated circuits; agricultural products, especially rice; and agro-manufacturing products, especially rubber-based products and sugar. However, export in some categories continued to expand such as automotive and parts, particularly commercial vehicles and car tyres.

 

The value of merchandise imports contracted by 9.6 per cent from the same period last year, and excluding gold, the value of merchandise imports declined by 10.5 per cent. The contraction was attributed to a decline in the import of raw and intermediate goods, particularly crude oil in terms of both price and import volume, partly due to the shutdown of oil refineries for maintenance, and imports of electronic parts, in line with the continued contraction in exports of such products; import of capital goods excluding aircrafts, ships, floating structures, and locomotives, particularly telecommunication equipment, and machinery used in manufacturing, consistent with the slowdown in private investment; import of consumer goods especially non-durable goods following a drop in the price of tuna from the same period last year; and automotive and parts consistent with the contraction of automotive production and domestic car sales. The value of imports showed a solid reduction from last month, contributing to an increase in trade surplus. 

 

Meanwhile, the number of foreign arrivals rebounded by 0.9 per cent from the same period last year, mainly due to a continual expansion in the number of Indian tourists, who partly benefited from the exemption of visa-on-arrival fee. However, the number of Chinese tourists continued to contract as a result of the slowdown in Chinese economy and stronger competition from neighbouring countries. Moreover, the number of Malaysian tourists reduced from last year owing to an acceleration after the Malaysian 2018 general election. After seasonal adjustment, the number of foreign tourists rose from the previous month, mainly due to the return of Chinese visitors to the North after the air-pollution problem was cleared. 

On the stability front, headline inflation decelerated to 0.87 per cent from 1.15 per cent last month, due mainly to the decelerated core inflation, coupled with a fall in domestic retail petroleum prices. However, fresh food prices accelerated from a rise in fruit and pork prices

[Fex Bluse]

7 minutes ago, marcusarelus said:

I used to live in Florida and they treat tourists very badly.  I suspect most places do. 

I wonder which other countries are mostly dirt poor and rely on tourism and tourism related trade (like the sex trade) for up 30+% of its GDP while it's government bangs on about tourism as if it's the most important economic sector 

 

and yet

 

the same tourists are regularly murdered, beaten, inexplicably fall off high balconies, are run down on the roads, are electrocuted, have no legal representation, and receive in return lots of Potemkin plastic smiles. 

[CNXexpat]

19 minutes ago, Fex Bluse said:

for up 30+% of its GDP

It´s between 15 and 20%.

[Fex Bluse]

Just now, CNXexpat said:

It´s between 15 and 20%.

Few years back I saw a Thai researcher put the sex trade at 10% or so. Which, with the up to 20% for non sex trade tourism, puts the number at 30.

 

Who knows. 

 

Whatever it is, it's important enough to be at or near the top of every economic discussion here. 

 

Yet they treat tourists the way they do. 

[CNXexpat]

35 minutes ago, Fex Bluse said:

Few years back I saw a Thai researcher put the sex trade at 10% or so. Which, with the up to 20% for non sex trade tourism, puts the number at 30.

 

Who knows. 

 

Whatever it is, it's important enough to be at or near the top of every economic discussion here. 

 

Yet they treat tourists the way they do. 

Sex business is for sure not 10%. Also a huge part of it is made by Thais, so it has nothing to do with tourism.
The tourism with foreigners is 12% of the GDP.
https://www.bangkokpost.com/business/1619182/record-38-27m-tourists-in-2018-41m-expected-in-2019

[DrTuner]

On 7/31/2019 at 9:07 PM, NCC1701A said:

a lot of these stories just today.

Tomorrow must be the all-in Friday Honest Taxi Festival then.