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Yuanta Research Center |
Nov
1, 2000
|
| Economic Report for the Month of September |
Overall, economic activity continued to stabilize in September. The manufacturing sector improved a bit after slowing down the previous two months. Private consumption expanded at the slower rate than the same period last year, while the trend for private investment was still down. One key engine that still drives the economy is the export-manufacturing sector. However, the declining trade surplus concerns us.
- Manufacturing production increased by 2% yoy. However, if we exclude liquor output, the growth rate would have been 10.5%. The sectors that recorded strong growth were tobacco, electronic & electrical appliances, iron & steel and jewelry & ornaments. The sectors that experienced declining production include beverages and construction materials.
- Private consumption expanded at a slower rate in September than the previous month. However, the growth rate for the first nine months remained virtually the same as last year. Part of this slowdown can be attributed to higher oil prices. Car sales in September fell 15.5% yoy, a sharp drop-off from the 35% growth rate recorded in the first nine months of this year. Motorcycle sales for the month was up only 9.5%. This compares to the 44.8% average growth rate in motorcycle sales in the nine-month period. Another key indicator of consumer spending – imports of consumer goods – grew at a relatively slow rate of 18% yoy.
- Private investment continues to trend down even from its current low base. There remains very little incentive to invest in new plant and equipment given the decelerating domestic consumption and the current low capacity utilization rate. Commercial car sales rose only 0.4% yoy, a very sharp slowdown the 28% average growth rate in the first nine months. Cement sales contracted by 5.9%. Imports of capital goods were up 30.3%, but most of this is going into products for the export market.
- Export value and import value grew 20% and 24.3% yoy, respectively. Thailand recorded a trade surplus of $602mn in September. After including a small deficit in the service and transfer accounts, the current account surplus was $578mn. Due to continuing strong net outflow of capital, Thailand’s balance of payments shrank to a surplus of only $16mn from $350mn the previous month. As of 29 September, the country’s international reserves stood at $32.2bn.
- Liquidity was high in September, leading to another round of interest rate cuts. Deposits increased, while overall credit decreased as bad debt of Bt229bn was transferred to AMCs. If we exclude these transfers and write-offs, outstanding credit was up only slightly from August.
There are a number of risk factors that could further slow down economic activity going into next year, particularly 1) persistently high oil prices, 2) slow recovery of the financial and banking sectors, 3) economic turmoil in regional countries and the related weakness in regional currencies, 5) local political uncertainty following the late December or early January general election, 6) continuing strong capital outflows, especially after the government begins to repay the $13bn IMF loan starting this month.
Signs that the economic recovery is beginning to stall should not come as a surprise to the market, as many economists have revised down their GDP projections for this year to 4-5%. We are projecting full-year economic growth of 4.2-4.5%, a significant slowdown from the 5.9% expansion recorded in the first half of this year.
Monthly Economic Indicator
|
Jan |
Feb |
Mar |
Apr |
May |
Jun |
July |
Aug |
Sep |
Avg |
|
|
Manufacturing Production index, SA |
108.1 |
111.8 |
111.8 |
109.9 |
110.2 |
109.6 |
108.3 |
110.1 |
115.3 |
111 |
|
Manufacturing Production index (%) |
8.4 |
10.3 |
9.7 |
3.6 |
5.1 |
1.5 |
-1.3 |
-2.3 |
2 |
4 |
|
Industrial Capacity Utilization (%) |
54.5 |
55.6 |
61.6 |
51.1 |
54.8 |
56.4 |
54.5 |
55 |
57.9 |
56 |
| Private Consumption Indicators | ||||||||||
|
- Retail Sales (%) |
20.6 |
25.2 |
28.4 |
20.8 |
24.8 |
13.9 |
11.9 |
n.a. |
n.a. |
21 |
|
- Passenger Car Sales (%) |
187.2 |
63.2 |
78.9 |
58.5 |
55.2 |
6.4 |
24.1 |
1.3 |
-15.5 |
35 |
|
- MotocycleSales (%) |
71.5 |
58.4 |
76.5 |
47.4 |
67.8 |
21.4 |
45.6 |
24.7 |
9.5 |
45 |
|
- Import of Consumer Goods (%) |
14.7 |
28.7 |
7.3 |
31.5 |
33.6 |
14.1 |
30.9 |
21.8 |
18.2 |
22 |
| Private Investment Indicators | ||||||||||
|
- Commercial Car Sales (%) |
27.6 |
24.2 |
50.5 |
42.4 |
51.9 |
22.8 |
18.5 |
28.2 |
0.4 |
28 |
|
- Import of Capital Goods (%) |
24.9 |
28.2 |
16.6 |
24.7 |
35.8 |
14.7 |
29.6 |
34.1 |
30.3 |
26 |
|
- Cement Sales (%) |
-4.4 |
3.1 |
6.7 |
1.9 |
8.3 |
-6.6 |
-16.8 |
-11.1 |
-5.9 |
-3 |
| External Accounts (US$, m) | ||||||||||
|
- Export |
5,246 |
5,349 |
5,628 |
5,095 |
5,170 |
5,469 |
5,997 |
6074 |
5941 |
5552 |
|
%chg |
31.9 |
31.1 |
21.4 |
16.5 |
13.4 |
15.1 |
22.7 |
24.9 |
20 |
22 |
|
- Import |
4,053 |
5,538 |
4,708 |
4,713 |
4,662 |
5,429 |
5,351 |
5812 |
5339 |
5067 |
|
%chg |
27.1 |
76.2 |
27.7 |
28 |
29.6 |
26.7 |
36.6 |
41.2 |
24.3 |
34 |
|
- Trade Balance |
1193 |
-189 |
920 |
382 |
511 |
41 |
646 |
262 |
602 |
485 |
|
- Current Account Balance |
1,703 |
373 |
1,118 |
551 |
781 |
155 |
1,094 |
556 |
578 |
768 |
|
- Net Capital Flow |
-3069 |
-1195 |
-712 |
-867 |
-1199 |
-626 |
-588 |
-325 |
n.a. |
-1073 |
|
- Balance of Payment |
-1794 |
-437 |
73 |
-75 |
-281 |
-29 |
8 |
350 |
16 |
-241 |
|
- Official Reserves (US$,bn) |
32.6 |
32 |
32.3 |
32.2 |
31.9 |
32.1 |
31.9 |
32.2 |
32.2 |
|
| Monetary Statistics | ||||||||||
|
- Commercial bank deposits (YOY%) |
0.7 |
-0.6 |
-0.8 |
-0.7 |
-1 |
0 |
0.7 |
1.4 |
1.5 |
0 |
|
- Commercial bank credit (YOY%) |
-4.4 |
-4.7 |
-4.8 |
-4 |
-3.5 |
-7.5 |
-7.1 |
-7 |
-11.9 |
-6 |
|
- NPLs % of total loans |
38.64 |
38.11 |
37.25 |
36.47 |
35.47 |
32.01 |
31.28 |
31.24 |
22.78 |
|
Analyst : Surachai P. (surachai.p@yuanta.co.th)