Is the ‘Thai economy’ breath still good?

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Is the breath of “Thai economy” still good? After a new coronavirus crisis, the COVID vaccine will be a new hope for businesses. Can the Thai economy or not?

As I had previously learned to readers that the author did not believe that the Thai economy would be too bad after the new outbreak. But will not soar either Although many economies have skyrocketed after widespread distribution of vaccines.

On the past monday The National Economic and Social Development Council (NESDB) announced Thai economic growth (GDP) for the fourth quarter and year 2020, as well as revising the economic forecast this year. Which further reinforces the view of the author (But there are some issues that the author disagrees) therefore asks for permission to expand the message here.

This started with a 4.2% contraction in GDP per year (or a 1.3% growth compared to the previous quarter) Adjusted for seasonality), which continued to recover from the third quarter’s contraction -6.4% per year, the authors admit that this figure is better than previously expected to shrink by -6%. When the new outbreak strikes in the second half of December, that means momentum. The Thai economy has continued to recover well.

If considering the spending side It was found that the economic recovery in this quarter was mainly a result of inventory. It means that the manufacturing sector has recovered more than spending. Make the inventory increase (With inventory contributing 4.9% to the economy)

The increased inventories included computers, automobiles, plastics, jewelery and rice. Which looks at the nature of the majority, it is likely to be products for export Indicates that the manufacturers view that exports will recover in the next phase and therefore accelerate production. This was in line with the declining export and import direction. While considering the consumption and investment in the country There are also fewer signs of recovery or contractions. Indicating that the economy has gradually recovered, although not for serious noticeable

butThe severe economic contraction included Service sector shrinking by more than -75% According to foreign tourists who enter Thailand only about 3,000 people a month, from about 3-4 million people per month in the last quarter. As a result of the closure of the country and not allowing foreigners to enter the country without detention. This strong contraction in tourism was the main drag on the Thai economy in recent times.

The image thus reflected in the tourism-related service sector such as hotels, restaurants and transportation which continued to contract. While the sector is involved in manufacturing such as agriculture, industrial telecommunication (ICT) and wholesale and retail. Improved Which corresponds to the spending economy

Although the service sector is still affected by COVID. But what is interesting about this quarter’s economic numbers are 3 points. Is

(1) Farm income continued to expand approximately 12% per year due to the increase in agricultural prices such as rubber, oil palm, and from the increase in production such as rice, corn, chicken eggs and cassava. Thus helping to support the income of the people in the provinces

(2) Manufacturing production continued to recover. Especially the production of important industries such as automotive, electronics, electric motors, electrical appliances And furniture Which is an export product

(3) The volume and value of imports continued to improve in all categories. Consumption of raw materials, intermediate goods and capital goods, which increased imports indicates a demand for production for export and / or domestic use in the future.

These images are in line with the big picture of the world where global demand is starting to return as the economy conditions. Causing the demand for more products Both commodities and industrial products Especially electronics used to work from home

When looking forward Some of the interesting points from this report of the NESDB are: Downgrade the Thai economy forecast this yearFrom 3.5-4.5% (4% average) to 2.5-3.5% (3% average), which is mainly the result of 4 factors which are

(1) The new outbreak in December – January has reduced tourists. The NESDB lowered the forecast of tourists from 5 million to 3.2 million, resulting in a decrease in tourist income from 4.9 hundred billion baht to 3.2 billion baht (2) the baht appreciation from 30.7 to 30.0 baht per dollar.

(3) Dubai crude oil price from 46 to 53 baht per dollar and (4) the world trade assumption from growing 5.0% to 6.7% following the global economic recovery. And increase the government disbursement according to Loan Act And infrastructure investment budget to be disbursed more

Various factors slowed down the economy and consumption. But exports and inflation rose. Where compared with the author’s estimate It will be found that the GDP and export value of goods Growth was similar to 3% and 6%, but the authors gave higher private consumption at almost 4% (about 3.7%), while the NES gave 2%. Private investment the author gave 2% but NESDB gave 4%. On the tourist side, the author gave 5 million people (for the second half of the year), but the NESDB gave 3.2 million people (for Q4)

In short, When compared to government agencies The authors still believe consumption will likely expand better than many expected. From the new round of stimulus measures and pent-up demand after the epidemic subsided. While exports of goods grew well on the back of the world demand.

The things that must be watched are

(1) Will the number of patients worldwide drop significantly? Because if reduced, it will help to open the country faster

(2) When will the government allow a Vaccine Passport (or the permission of vaccinated tourists to enter the country without quarantine)?

(3) Will a stronger global economy increase the demand for export products?

(4) Is the disbursement of government measures performed well? And are there any additional stimulus measures?

(5) Will the monetary policy be further eased? After the Bank of Thailand (BOT) more relaxed monetary policy at present (BOT reduces liquidity absorption Causing the money supply in the system to increase by 300 billion baht in the second half of 2020), which the authors think this may be a sign that The BOT indirectly supports the economy

Thai economy is getting stronger But how strong will it be Only sky can answer

(This article is the personal opinion of the author. Not involved With the agency that is affiliated with)

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