Consumer confidence, hike in investments to spur Thai economy in Q4

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GDP
Consumer confidence, hike in investments to spur Thai economy in Q4
The Nation

BANGKOK: -- The Thai economy is expected to see consistent expansion this quarter in light of increasing consumer confidence after the sharp rise in the government's domestic public investment, Fiscal Policy Office (FPO) director-general Krisda Chinavicharana said.

Krisda, who is spokesman for the Finance Ministry, said at a press conference yesterday that consumer confidence in October rose for the first time in 10 months to 62.2 thanks to the short-term economic stimulus measures and the drop in retail fuel prices.

Last month, the economy was driven mainly by this year's Bt40-billion stimulus for small projects, public agencies' training, approved accrued budget and state investment, Krisda said.

He believes gross domestic product will grow by 2.8 per cent this year, as expected. If there were no other negative factors, GDP growth could be 3 per cent thanks to the increase in public investment, particularly infrastructure mega-projects and private-sector investment, in spite of an estimated 5.4-per-cent contraction in exports.

Next year is expected to see 3.8-per-cent GDP growth, likely driven by more investment in infrastructure and water-management projects, acceleration of budget disbursement and more private investment.

In October, despite a 4.8-per-cent rise year on year in value-added tax from domestic spending, at constant prices VAT contracted 4.1 per cent in total because of a 15-per-cent shrinkage in imports. Motorcycle sales also shrank 6.5 per cent year on year because of low prices of agricultural products and a decline in purchasing power.

Private investment last month remained steady, reflecting lower year-on-year contraction at 4.6 per cent in taxes on property transactions and a 0.3-per-cent contraction in cement sales.

On the fiscal front, public investment rose sharply, reflecting a 58.7-per-cent surge year on year in the government's investment spending to Bt23.5 billion in October. The government during the month faced a budget deficit of Bt218.1 billion, meaning fiscal stimulus for the Thai economy.

The Thai Industries Sentiment Index (TISI) in October increased for the second consecutive month to 84.7 amid improvement in purchase orders from the previous month.

The number of foreign tourists inched up by 1 per cent year on year in October, reflecting less impact from the Bangkok bombing in August.

The agricultural production index last month shrank by 4.8 per cent year on year, however, after seasonal effects rose 5.4 per cent month on month on the back of increased production of tapioca, corn and husbandry.

October exports continued to shrink by 8.1 per cent year on year under the impact of global economic conditions, economic slowdowns in trading partners, currency volatility and falling global oil prices.

Given the drop in the prices of fuel, electricity and meat, last month's headline inflation was in negative territory at 0.8 per cent, while core inflation, excluding energy and fresh food, stayed at 1 per cent.

Krisda said the stand-off between Russia and Turkey was not expected to affect oil prices in the short term. The FPO forecast next year's oil price at US$53 per barrel.

Thailand's public debt stood at 43.3 per cent of the GDP, and international reserves at the end of last month were $158.3 billion, about 2.8 times the size of short-term external debts.

Source: http://www.nationmultimedia.com/business/Consumer-confidence-hike-in-investments-to-spur-Th-30273783.html


-- The Nation 2015-11-27

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Mass Chinese tourism, is the only thing holding up the Thai economy!