130331 Eng emag by Ake Saroj

Monthly Economic Brief April 2013 issue

Executive summary Growth Real GDP in 4Q/2012, grew 18.9% yͲoͲy, a massive level, thanks to last year low base; while the growth for the whole year of 2012 was 6.4%, higher than the consensus projections. On the expenditure side, the growth was driven by all key expenditures. On the production side, the growth was driven by the resurgence of Manufacturing.

Confidence in private s Businesses were more more pessimistic and C pessimistic.

The Economist poll rev 2013 ; consensus proje 4.4Ͳ5.0% for 2013 and

A slow down in Manufacturing and Agriculture production in February. Private consumption and investment continue their strong growth in 2013, even with a dip in February

Employment and wea Unemployment rate in January to 0.83%, still unemployment level a emerging economies.

Export decreased 0.1% in the first 2 months of 2013, with “Other export” the main drag. Decrease in export to Japan, Middle East and Rest of the World. On the other hand, Import grew at a whopping rate of 17.5%. Tourist arrivals grew at an impressive 19% in the period.

Thailand’s per capita in 4,420 in 2011, ranked average Thai is slightly average Chinese but m richer than an average Income distribution is but there has been ove the past two decades, Bangkok. Poverty head have declined over the

Looking forward, both Fiscal and Monetary policies are proͲgrowth. Policy rate remains at 2.75%, a rather low level, while other interest rates in the market hardly change in March.

sector was a mixed one. e optimistic, Industries Consumers less

vised down theirs for ection is now between 4.6Ͳ4.8% for 2014.

alth distribution ncreased slightly in the lowest among major and

ncome was at USD 83rd in the world. An y poorer than an more than three times e Indian. Thailand’s among the worst in Asia erall improvement over except for only in dcount and poverty rate e last decade.

Stability Head line inflation dropped to 2.7% in March, while Core inflation dropped to 1.2%, a rather low level by historical and international standards. Banking system is quite stable. Bank’s capital ratio dropped slightly to 15.8% in January, still a rather high level. Total system’s NPL decreased in amount and as percent to total loan in 2012. Budget deficit for the first 2 months of 2013 improved significantly compared to same period last year. Public debt as percentage of GDP increased slightly in January 2013 due mainly to direct government debt, but the current level of 44% is not yet dangerous. Majority of the public debt is domestic based. Balance of Payment in the first 2 months of 2013 is positive thanks to improvement in net service income. External debt increased slightly but capability to repay is not a concern as debt service ratio remained low and international reserves is at healthy level. Thai Baht continued to appreciate fast against a basket of key currencies in March .

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CONTENT

Executive summary

Growth

Income distribution

Stability

• Real GDP in 4Q/2012, grew 18.9% y growth for the whole year of 2012 Ͳ On the expenditure side, th Ͳ On the production side, the • A slow down in Manufacturing and • Private consumption and investme • Export has been decreasing, while • Monetary and Fiscal policies are sti • Businesses were more optimistic, I • The Economist poll revised down th 5.0% for 2013 and 4.6Ͳ4.8% for 201

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

• Head line inflation dropped to 2.7% low level by historical and internati • Banking system is quite stable. Ban system’s NPL decreased in amount • Budget deficit for the first 2 month last year. Public debt is increasing b • Balance of Payment so far this year dangerous. THB continued to appre

yͲoͲy, a massive level, thanks to last year low base; while the was 6.4%, higher than the consensus projections. he growth was driven by all key expenditures e growth was driven by the resurgence of Manufacturing Agriculture production in February nt continue their strong growth, even with a dip in February Import growing. Tourist arrivals grew strongly. ill proͲgrowth ndustries more pessimistic and Consumers less pessimistic heirs for 2013 ; consensus projection is now between 4.4Ͳ 14

Page 4

9 15 21 29 31 34

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

% in March, while Core inflation dropped to 1.2%, a rather ional standards nk’s capital ratio dropped slightly to 15.8% in January. Total t and as percent to total loan in 2012. hs of 2013 improved significantly compared to same period but not too worrying just yet. r is positive. External debt has been increasing but still not eciate in March.

54 60 67

2012 ended impressively with the significantly higher than consensu Chart 1.05 â&#x20AC;&#x201C; Historical Real GDP growth rate Annual growth, percent

7.1%

CAGR* 2001Í˛2012 = 4.3%

5.3%

6.3% 4.6%

2.2%

5.1% 5.0%

2.5

2001 2002 2003 2004 2005 2006 2007 200

Note: (*) Cumulative Annual Growth Rate Source: NESDB; CTE analysis

e real growth of 6.4%, us projections

18.9%

7.8% 6.4% 4.4% 3.0%

0.1%

0.4%

-2.3%

08 2009 2010 2011 2012

1Q12 2Q12 3Q12 4Q12

4 www.ChartingThailandEconomy.com

Manufacturing recovery compare behind impressive 4Q12 GDP grow Chart 1.06a – Real growth by sector, 4Q12 YearͲonͲYear percentage change 18.9

GDP

Manufacture 25.4

Hotel&Res 15.3

Other social

14.1

Construction Utilities

13.2

Transport

12.8 11.9

Mining

9.9

Financial Education

8.7

RealEstate

8.0

Trading

7.6

PublicAdmin

4.6

Health&Social

4.6

Agriculture

2.2

Private HH

1.6

Fishing

-5.8

Source: NESDB; CTE analysis

ed to 4Q11 was the real reason wth

7.4

Chart 1.06b â&#x20AC;&#x201C; Sectoral contributions, 4Q12 Contributions to total Real GDP growth 18.9

GDP 12.8

Manufacture Transport

1.3

Hotel&Res

1.1

Trading

1.1

Utilities

0.5

Financial

0.5

Other social

0.3

RealEstate

0.3

Construction

0.3

Mining

0.3

Education

0.2

Agriculture

0.2

PublicAdmin

0.1

Health&Social

0.1

Private HH

0.0

Fishing

-0.1

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Manufacturing recovery was the GDP growth Chart 1.07a – Real growth by sector, 2012 YearͲonͲYear percentage change 6.4

GDP

11.5

Hotel&Res 9.6

Utilities Transport

8.0

Construction

7.8 7.4

Mining

7.0

Manufacture

6.6

Financial Trading

5.2

Education

5.0

Health&Social

4.6

Agriculture

4.4

Other social

4.1

RealEstate

3.9

PublicAdmin

3.6

Private HH Fishing -3.0 Source: NESDB; CTE analysis

2.3

main reason for impressive 2012

Chart 1.07b â&#x20AC;&#x201C; Sectoral contributions, 2012 Contributions to total Real GDP growth 6.4

GDP 2.7

Manufacture Transport

0.8

Trading

0.7

Hotel&Res

0.5

Utilities

0.3

Agriculture

0.3

Financial

0.3

Construction

0.2

Mining

0.2

RealEstate

0.2

Education

0.1

PublicAdmin

0.1

Other social

0.1

Health&Social

0.1

Private HH

0.0

Fishing

0.0

6 www.ChartingThailandEconomy.com

Export contributed the most to to

Chart 1.08a – Real growth by expenditure, 4Q YearͲonͲYear percentage change GDP

18.9

19.0

ͲM

14.7

12.2

12.1

Source: NESDB; CTE analysis

otal real GDP growth in 4Q12

Q12 Chart 1.08b – Expenditure Contributions, 4Q12

8.2

Contributions to total Real GDP growth GDP

18.9

13.6

6.7

6.2

1.2

Discrpncy

ͲM

0.1

-8.9

7 www.ChartingThailandEconomy.com

For the whole year of 2012, grow domestic demand (I and C)

Chart 1.09a – Real growth by expenditure, 20 YearͲonͲYear percentage change GDP

6.4

17.0

7.4

6.6

ͲM

6.2

2.9

Source: NESDB; CTE analysis

wth was driven mainly by

012 Chart 1.09b – Expenditure Contributions, 2012 Contributions to total Real GDP growth GDP

6.4

3.7

3.4

2.2

0.7

Discrpncy

ͲM

0.0

-3.7

8 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

A slow down in Manufacturing pr

Chart 1.11 â&#x20AC;&#x201C; Manufacturing Production Index (2000=100) CAGR

4.1% 190.1 172.4 159.5

179.1 166.3

149.9 137.6 123.9

2003 2004 2005 2006 2007 2008 2009 2010 Source: The Office of Industrial Economics

roduction in February

Monthly Average 250.0

172.9

177.2

200.0

2012

2013 150.0

100.0

MͲoͲM Ͳ3.5% YͲoͲY Ͳ1.2%

50.0

0.0

2011 2012

J F M A M J J A S O N D

10 www.ChartingThailandEconomy.com

The slowdown happened in most

Chart 1.12a – YͲonͲY change in MPI by sector February 2013, percent 39.1

Vehicles Tobacco

9.9

Machineries

9.5

Textiles

3.2

Furniture

2.1

Leather

1.9

Electrical

1.1

Mineral

-0.6

Rubber&Plastic

-1.4

Electronic

-4.9

Basic Mat

-5.4

Chemical

-6.9

Food & Bev

-7.4

Metal products

-9.4

Office automate

-9.6

Paper

-10.9

Wood products

-12.0

Petroleum

-13.4

Precision instru

-17.5

Apparel

-18.1

Transport Equip

-18.2

Source: The Office of Industrial Economics; CTE analysis

t sectors

Chart 1.12b – MͲonͲM change in MPI by sector February 2013, percent -4.8 7.8 -1.8 -3.0 4.3 -7.4 -13.7 -0.4 -1.2 -3.7 2.2 -12.0 -11.1 3.7 3.5 -9.3 -10.8 -4.7 -14.5 -1.1 -5.8

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Capacity utilization rate decrease instrument and Vehicles still runn Chart 1.13a â&#x20AC;&#x201C; Overall Capacity Utilization Rate Percent

68.4

69.0

67.0 63.5

Oct-12

Nov-12

Dec-12

62.9

Jan-13

Source: The Office of Industrial Economics

Feb-13

ed in February, Precision ning over normal capacities Chart 1.13b â&#x20AC;&#x201C; Capacity utilization rate by sector February 2013, percent Vehicles Precision instru Chemical Machineries Mineral Petroleum Electrical Rubber&Plastic Transport Equip Paper Office automate Metal products Basic Mat Food & Bev Electronic Tobacco Textiles Apparel Furniture Leather Wood products

103.4 101.5 79.6 75.7 72.1 70.6 68.2 66.7 63.6 63.3 62.6 57.8 52.4 52.3 49.2 47.9 39.6 36.6 32.9 30.1 18.5

12 www.ChartingThailandEconomy.com

Thailand is one of the countries w a year ago

Chart 1.14 – Manufacturing Production Index Latest, percent change on year ago Indonesia Ͳ Jan China Ͳ Feb South Korea Ͳ Jan Brazil Ͳ Jan Australia Ͳ Q4 Malaysia Ͳ Jan US Ͳ Feb India Ͳ Jan Hong Kong Ͳ Q4 Pakistan Ͳ Dec Thailand Ͳ Feb Euro Area Ͳ Jan Russia Ͳ Feb -5.8

Japan Ͳ Jan -11.4

Taiwan Ͳ Feb Singapore Ͳ Feb Source: The Economist

-16.5

whose latest MPI decreased from

x 11.5 9.9 7.3 5.6 4.8 4.5 2.5 2.4 1.3 0.8 -1.2 -1.3 -2.3

13 www.ChartingThailandEconomy.com

A little dip in Agriculture producti

Chart 1.10 â&#x20AC;&#x201C; Agriculture production index (2005=100) CAGR

3.4%

106.1

113.3 112.3 109.3 110.9

100.0

2003 2004 2005 2006 2007 2008 2009 2010

Source: Office of Agricultural Economics, Ministry of Agriculture a

ion in February

Monthly Average 250.0

YͲoͲY Ͳ0.2%

129.4

122.8

200.0

MͲoͲM Ͳ9.5% 150.0

100.0

2013

2012

50.0

0.0

2011 2012

J F M A M J J A S O N D

14 nd Cooperatives

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CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Private consumption continues it with a dip in February

Chart 1.15 â&#x20AC;&#x201C; Composite Private Consumption I (2000=100) CAGR

3.2%

111.2

117.8

126.2 121.9 124.3

130.7

134.3 127.3

03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 1

Note: (*) seasonally adjusted Source: Bank of Thailand

s strong growth into 2013, even

Index* Monthly Average 160.0

147.1

155.0

139.2

11-Avg 12-Avg

150.0

2013

2012 145.0

140.0

MͲoͲM Ͳ0.5%

135.0

YͲoͲY

3.3% 130.0

J F M A M J J A S O N D

16 www.ChartingThailandEconomy.com

Most consumption expenditures year even with a dip in February Chart 1.16a – YͲonͲY change First 2 months of 2013 vs 2012, percent 102.5

Passenger Car (Unit) 26.1

Commercial Car (Unit) Real import of consumer goods (2000 prices, US$)

17.1

Real VAT (2000 prices, baht)

11.3

Motocycle (Unit)

10.1

Diesel (litre)

5.3

Benzene & Gasohol (litre)

3.8

HH electricity (kilowatt/hour)

3.1

NGV (kg.) N.A. LPG (litre) N.A. Source: Bank of Thailand; CTE analysis

grew impressively so far this

Chart 1.16b – MͲonͲM change Feb vs Jan 2013, percent 4.5 -7.1 -9.5 1.2 0.8 -2.8 0.0 -3.1

N.A. N.A. 17 www.ChartingThailandEconomy.com

Private Investment still growing t February Chart 1.17 â&#x20AC;&#x201C; Private Investment Index (2000=100)

CAGR

6.8%

173.4 176.1 176.1 156.8

192.6

183.3 160.6

133.7

03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 1

Source: Bank of Thailand

his year, even with a dip in

Monthly Average 300.0

2013 250.0

2012 241.5 200.0

209.7

11-Avg 12-Avg

150.0

100.0

MͲoͲM Ͳ2.4%

YͲoͲY

9.5% 50.0

0.0

J F M A M J J A S O N D

18 www.ChartingThailandEconomy.com

All key private investment expend far this year Chart 1.18a – YͲonͲY change First 2 months of 2013 vs 2012, percent

Domestic commercial car sales (unit)

77.1

Domestic Machinery sales* (2000 prices, Baht)

39.2

Import of Capital Goods (2000 prices, Baht)

14.9

Domestic Cement sales (ton)

14.6

Construction Area permitted (sqm)

1.4

Note: (*) figures are 1Ͳmonth delayed Source: Bank of Thailand; CTE analysis

ditures had impressive growth so

Chart 1.18b – MͲonͲM change Feb vs Jan 2013, percent

2.5

2.7

-6.6

0.4

-1.3

19 www.ChartingThailandEconomy.com

Property picked up strongly in Jan but dropped significantly from De Chart 1.19a – YͲonͲY change Jan 2013 vs 2012, percent

289.4

Condo unit registered

Value of land transaction

Constr. Area in municipal

New housing unit

56.8

23.3

12.9

Source: Bank of Thailand; CTE analysis

nuary compared to a year ago ecember 2012 Chart 1.19b – MͲonͲM change Jan 2013 vs Dec 2012, percent

-35.8

-26.9

-15.5

-63.0

20 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Export decreased 0.1% in the first export” the main drag

Chart 5.05a – YTD annual change in Export in First 2 months of 2013 vs that of 2012, percent Total export Metal Optical instru Automotive Chemicals Electronics Electrical PetroͲchemical Photo instru Furniture Other manufacturing Forestry Toiletries Apparels Machinery Agriculture Footware Agro products Petroleum Fishery Aircrafts Jewellery Mining Other export ReͲexports

-0.1 72 24.7 13.1 11.9 11.0 10.1 9.7 8.5 6.2 4.5 2.3 2.0 0.0 -1.2 -3.5 -4.9 -6.0 -14.1 -18.2 -20.1 -25.7 -27.2 -85.5 -99.9

Source: Bank of Thailand; CTE analysis

t 2 months of 2013, with “Other Baht Chart 5.05b – Sectoral contributions

Contributions to total export growth Total export Metal Automotive Electronics PetroͲchemical Electrical Chemicals Optical instru Other manufacturing Photo instru Furniture Toiletries Forestry Apparels ReͲexports Footware Machinery Fishery Mining Agriculture Aircrafts Agro products Petroleum Jewellery Other export

-0.1 2.8 1.6 1.3 0.5 0.5 0.4 0.2 0.2 0.1 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 -0.2 -0.3 -0.3 -0.3 -0.8 -0.9 -0.9 -3.9

22 www.ChartingThailandEconomy.com

Decrease in export to Japan, Midd months of this year Chart 5.07a – Export by country Percent of total export in THB term

᪛ 7.1 (Trilli

100% =

᪛ 5.9

᪛ 5.2

᪛ 6.1

᪛ 6.7

Middle East

5.4

5.7

5.0

4.7

5.1

13.2

11.9

11.3

10.9

9.5

11.3

10.3

10.5

10.7

10.2

11.7

11.1

11.3

12.7

12.2 18.4

18.1

17.4

18.1

21.0

Japan NAFTA Rest of the world

16.6

East Asia exͲJapan

18.3

20.1

20.4

ASEAN

22.5

21.3

23.0

24.3

24.7

08FY

09FY

10FY

11FY

12FY

Source: Bank of Thailand; CTE analysis

dle East and ROW in the first 2

Chart 5.07b â&#x20AC;&#x201C; Change in Export In THB term, First 2 months of 2013 vs 2012

ion) 4.8%

East Asia ex Japan

3.8%

NAFTA

2.5%

ASEAN

0.0%

Japan

-1.2%

Middle East

-2.8%

Rest of the world

-7.5%

23 www.ChartingThailandEconomy.com

Others import has contributed m 2013

Chart 5.09a – YTD annual change in Import in First 2 months of 2013 vs 2012, percent

Total import

17.5

108.3

Others

Consumer goods

13.7

Intermediate Ͳ Fuel

9.3

Capital goods

9.2

Intermediate Ͳ Non fuel

3.5

Source: Bank of Thailand; CTE analysis

ost to import growth so far in

n Baht Chart 5.09b – Sectoral contributions Contributions to total import growth

17.5

Total import

11.1

Others

Capital goods

2.2

Intermediate Ͳ Fuel

1.6

Intermediate Ͳ Non fuel

1.4

Consumer goods

1.2

24 www.ChartingThailandEconomy.com

Others import has gained more sh

Chart 5.08 – Import by economic classificatio Percent of total import in Baht term Ѯ 6.0

Ѯ 4.6

Ѯ 5.9

Others

8.0

7.8

10.2

Capital goods

19.3

22.3

20.9

Intermediate – NonͲFuel

44.8

43.0

44.0

Intermediate Ͳ Fuel

20.7

18.6

17.4

Consumer goods

7.1

8.3

7.5

08FY

09FY

10FY

100% =

Source: Bank of Thailand; CTE analysis

hare this year

Ѯ 7.0

Ѯ 7.7

12.4

10.9

21.3

24.6

Ѯ 1.3

(Trillion)

18.2

22.3

40.0

37.6

18.9

19.1

16.2

7.5

7.8

8.2

11FY

12FY

13/2MO

35.0

25 www.ChartingThailandEconomy.com

FDI went negative in January 201

Chart 5.14 â&#x20AC;&#x201C; Foreign Direct Investment Million USD 11,331

9,460

9,112 8,547 7,778

4,853

06FY

07FY

(*) Preliminary figures

Source: BOT

08FY

09FY

10FY

11FY

Monthly cumulative FDI* 10,000 9,000

2012

8,000

8,617

12FY

7,000 6,000 5,000 4,000 3,000 2,000 1,000 0

2013

-1,000

F M A M J

A S O N D

26 www.ChartingThailandEconomy.com

Tourist arrivals increased 19% in t

Chart 5.18 â&#x20AC;&#x201C; International Tourist Arrivals Million visits

CAGR

8.4%

15.9 13.8 10.8

11.7

14.5

14.1

11.5

10.0

03FY 04FY 05FY 06FY 07FY 08FY 09FY 10FY Source: Department of Tourism

the first 2 months of 2013

Monthly cumulative 25.0

22.3 19.2

Y 11FY 12FY

20.0

2012

15.0

10.0

5.0

2013 0.0

J F M A M J J A S O N D

27 www.ChartingThailandEconomy.com

China accounted for almost half o arrivals so far this year Chart 5.19a International Tourist Arrivals by country of nationality Percent of total Rest of world

14.3

15.3

15.6

14.7

13.9

Americas

6.2

6.0

5.3

5.0

4.8

26.5

25.2

Europe

27.3

East Asia

28.7

27.9

52.1

50.0

51.2

53.8

56.1

08FY

09FY

10FY

11FY

12FY

Source: Department of Tourism; CTE analysis

of the total increase in tourist

Chart 5.19b 10 Highest Change in International Tourist Arrivals by country of nationality First 2 months of 2013 vs 2012, Thousands

344.3

China 71.7

Russia Japan

% of total change

56.1

48% 10% 8%

Malaysia

48.1

Korea

44.6

Singapore

40.7

India

26.0

Hong Kong

23.9

Taiwan

20.0

Indonesia

18.5

28 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Policy rate remains at 2.75% whil moved in March Chart 3.01a – BOT’s policy rate 3.10% 3.00% 2.90% 2.80% 2.70% Apr-12

2.60% Mar-13

Chart 3.01c – Saving deposit rate* 10.00% 7.50% 5.00% Max

2.50%

Min Apr-12

0.00% Mar-13

Note: (*) All Commercial Banks registered in Thailand, excluding foreign bra

Source: Bank of Thailand

e other interest rates rarely

Chart 3.01b â&#x20AC;&#x201C; BIBOR overnight rate 3.10% 3.00% 2.90% 2.80% 2.70% 2.60% Mar-13

Apr-12

Chart 3.01d â&#x20AC;&#x201C; Commercial bank MLR* Max

10.00% 7.50%

Min

5.00% 2.50%

Apr-12

anches

0.00% Mar-13

30 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Businesses were more optimistic pessimistic in February Chart 1.21a â&#x20AC;&#x201C; Business Sentiment Index* 100

Better

49.9

52.1

52.0

50.6

51.1

51.2

Worse

0 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13

Note: (*) Below is the interpretation of the index: Index = 50 indicates that business sentiment remains stable Index > 50 indicates that business sentiment has improved Index < 50 indicates that business sentiment has worsened Source: Bank of Thailand, The Federation of Thai Industries

while Industries were more

Chart 1.21b â&#x20AC;&#x201C; Thai Industries Sentiment Index** 200

Better

100

94.1

93.0

95.2

98.8

97.3

95.5

Worse

0 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13

Note: (*) Below is the interpretation of the index: Index = 100 indicates that industries sentiment remains stable Index > 100 indicates that industries sentiment has improved Index < 100 indicates that industries sentiment has worsened

32 www.ChartingThailandEconomy.com

Consumers were optimistic on th pessimistic on job and over all in Chart 1.20a â&#x20AC;&#x201C; Consumer Confidence Index 200

Better

100

On future incom

Worse

0 Mar-12

Apr-12 May-12 Jun-12

Jul-12

Aug-12

Note: (*) The index ranges from 0 to 200 100 means consumer confidence is equal to those of the prior m Over 100 means consumer confidence is better than those of th Under 100 means consumer confidence is worse than those of t

Source: The Center for Economic and Business Forecasting, UTC

e future income and less February

On job Overall

Sep-12

Oct-12

month he prior month the prior month

Nov-12 Dec-12

Jan-13

Feb-13

33 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Consensus growth for 2013 is bet

Chart 1.03a â&#x20AC;&#x201C; Real GDP growth projections For 2013, Annual percentage change 6.00

5.50

FPO 5.00

NESDB

BOT 4.50

The Economist poll

4.00

3.50

3.00 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13

Forecast as of, month ending

Source: NESDB, Fiscal Policy Office, Bank of Thailand, The Econo

tween 4.4Ͳ5.0%

omist

Chart 1.03b – Real GDP growth projections For 2014, Annual percentage change 6.00

5.50

BOT The Economist poll

5.00

4.50

4.00

3.50

3.00 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13

Forecast as of, month ending 35 www.ChartingThailandEconomy.com

Thailandâ&#x20AC;&#x2122;s growth projections are major economies

Chart 1.04a â&#x20AC;&#x201C; Real GDP growth projections 2013, Annual % change, as of Mar 30th 2013 China India

6.5

Indonesia

6.4 4.6

Malaysia

4.4

Thailand Brazil

3.5

Pakistan

3.4

Russia

3.3

Hong Kong

3.2

Taiwan

3.2

South Korea

2.8

Australia

2.8 2.3

Singapore

2.0

US Japan Euro Area -0.2

Source: The Economist

1.0

e relatively high compared to

Chart 1.04b â&#x20AC;&#x201C; Real GDP growth projections 2014, Annual % change, as of Mar 30th 2013 8.5

7.8 7.3 6.5 5.3 4.6 3.8 3.6 3.7 4.0 3.9 3.8 3.1 3.7 2.6 1.4 0.8 36 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Unemployment rate increased to

Chart 2.08 â&#x20AC;&#x201C; Unemployment rate Percent

2.16

2.07 1.83 1.51

1.49 1.38

1.38

1.04

03-Avg 04-Avg 05-Avg 06-Avg 07-Avg 08-Avg 09-Avg 10-Avg 1

Source: National Statistical Office, Bank of Thailand

0.83% in January

Monthly Average 1.20

1.00

0.80

2013 2012

0.60

0.40

0.68

0.66

11-Avg 12-Avg

0.20

0.00

J F M A M J J A S O N D

38 www.ChartingThailandEconomy.com

Thailand’s unemployment rate is leading economies Chart 2.09 – Unemployment rate Latest, percent Thailand Ͳ Jan

0.8

Singapore Ͳ Q4

1.8

Malaysia Ͳ Jan

3.3

Hong Kong Ͳ Feb

3.4

South Korea Ͳ Feb

4.0

China Ͳ Q4

4.1

Japan Ͳ Jan

4.2

Taiwan Ͳ Feb

4.2

Brazil Ͳ Jan

Australia Ͳ Feb

Russia Ͳ Feb Pakistan Ͳ 2011 Indonesia Ͳ Q3 US Ͳ Feb India Ͳ 2012 Euro Area Ͳ Jan Source: The Economist

lowest comparing to other

5.4

5.4 5.8 6.0 6.1 7.7 9.9 11.9

39 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Overall improvement in income d for only in Bangkok Chart 2.01 â&#x20AC;&#x201C; Thailandâ&#x20AC;&#x2122;s GINI coefficient 0.55

Overall 0.50

South

0.45

0.40

0.35

0.30

'88

'90

'92

'94

'96

'98

Note: (*) The Gini coefficient is a measure of inequality of a distribution o It is defined as a ratio with values between 0 and 1 Here, 0 corresponds to perfect income equality (i.e. everyone has and 1 corresponds to perfect income inequality (i.e. one person Therefore, the lower the ratio the better the income distribution

Source: National Statistics Office, NESDB

distribution in Thailand, except

North East North Central Bangkok

'00

'02

'04

'06

'07

'09

'11

of income.

the same income) n has all the income, while everyone else has zero income). n.

www.ChartingThailandEconomy.com

Slight improvement of income dis top and the bottom 20% Chart 2.02 â&#x20AC;&#x201C; Quintile by income Percent of total income

Top 20% Bottom 20%

11.9

13.3

14.9

14.1

13.5

Top 20%

54.4

57.0

59.0

57.2

56.5

Second 20%

20.6

19.5

18.9

19.7

19.9

Third 20%

12.4

11.7

11.1

11.7

11.8

Forth 20%

8.1

7.5

7.4

7.6

Bottom 20%

4.6

4.3

7.1 4.0

4.1

4.2

1988

1990

1992

1994

1996

Source: National Statistics Office, NESDB

stribution when compared the

13.1

14.6

13.4

12.2

14.4

12.8

11.8

11.1

56.1

57.5

56.0

54.7

56.0

54.6

54.1

54.2

19.8

20.1

20.3

20.2

20.5

20.4

19.5

12.0

11.5

12.1

12.5

12.2

12.6

12.7

12.8

7.8

7.7

8.0

7.7

8.0

8.3

8.6

4.3

7.3 4.0

4.2

4.5

3.9

4.3

4.6

4.9

1998

2000

2002

2004

2006

2007

2009

2011 42

www.ChartingThailandEconomy.com

Data from World Bank suggests th Thailand is not as bad as in Malay Chart 2.03 â&#x20AC;&#x201C; Income equality in the world

Ratio of the share of national income going to the richest 20% Latest, selected countries Honduras Bolivia Comoros South Africa Namibia Brazil Colombia Guatemala Seychelles Central African Republic Paraguay Panama Zambia Costa Rica El Salvador Swaziland Chile Peru Qatar Ecuador Nigeria Venezuela, RB Mexico Malaysia Dominican Republic

2 26. 25.3 21.8 20.6 20.1 19.6 18.8 18.0 17.3 17.1 16.6 14.5 14.3 14.0 13.5 13.5 13.3 12.5 12.2 11.5 11.3 11.3 11.3

Source: The World Bank; CTE analysis

hat income equality problem in ysia or China

% to the share of the poorest 20%

29.7 27.8 .7

Argentina Kenya China Philippines Turkey Russian Federation Thailand Iran, Islamic Rep. Sri Lanka Bhutan Maldives Lithuania Malawi Mongolia Cambodia Lao PDR Vietnam Indonesia Nepal India Bangladesh Egypt, Arab Rep. Pakistan Afghanistan Slovak Republic

11.3 11.0 9.6 8.3 7.9 7.3 7.1 7.0 6.9 6.8 6.8 6.7 6.6 6.2 6.1 5.9 5.9 5.1 5.0 4.9 4.7 4.4 4.2 4.0 3.6

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Except for only Bangkok, poverty have declined over the last decad Chart 2.04a

Chart 2.04b

Thailand Poverty Line

Number of poor pe

Baht/ month/ person

Million

3,500

3,000 20 2,500 15

2,000

1,500

1,000 5 500

0 '01

'03

'05

'07

'09

Legend color:

'11

Overall

'01

'03

Bangkok

'05

Centr

Note: Before 2006, poverty survey was normally conducted every 2 years. For the mi

Source: NESDB

headcount and poverty rate de Chart 2.04c

eople

Percent of Poor people Percentage of total population 60%

50%

40%

30%

20%

10%

0% '07

ral

'09

North

'11

'01

'03

North East

South

'05

'07

ssing year, we use the average value between the prior and later years

'09

'11

www.ChartingThailandEconomy.com

Many countries in Asia and espec of their populations earning less t

Chart 2.05 â&#x20AC;&#x201C; Poverty in the world, selected co

Poverty headcount ratio at $2 a day (PPP) (% of population), L Congo, Dem. Rep. Madagascar Nigeria Ethiopia Bangladesh TimorÍ˛Leste India

Lao PDR 60.2

Pakistan

57.3

Nepal

53.3

Cambodia 46.1

Indonesia

43.4

Vietnam

41.5

Philippines 31.3

South Africa China

29.8

Bhutan

29.8

Sri Lanka

29.1

Iraq Colombia Source: The World Bank

21.4 15.8

cially ASEAN, still have majority than $2.00 a day

ountries

Latest 95.2 92.6 84.5 77.6 76.5 72.8 68.7

66.0

15.4

Egypt, Arab Rep. Venezuela, RB

12.9

Peru

12.7 10.8

Brazil

8.0

Iran, Islamic Rep. Mexico

5.2

Thailand

4.6

Turkey

4.2

Chile

2.7

Malaysia

2.3

Argentina

1.9

Romania

1.7

Bulgaria

0.4

Hungary

0.4

Montenegro

0.3

Poland

0.2

Slovak Republic

0.1

Slovenia

0.1

Croatia

0.1

Russian Federation

0.1

www.ChartingThailandEconomy.com

An average Thai is slightly poorer more than three times richer than

Chart 2.06 â&#x20AC;&#x201C; GNI per capita, selected countrie 2011, Atlas method (current US$) Norway (1) Qatar (2) Luxembourg (3) Switzerland (4) Denmark (5) Sweden (6) Netherlands (7) US (8) Finland (9) Austria (10) Belgium (11) Canada (12) Japan (13) Germany (14) Singapore (15) France (16) UAE (17) Ireland (18) UK (19) Italy (20) Hong Kong (21) Iceland (22) Spain (23) Israel (24) Greece (25)

Source: The World Bank

60,390 53,230 49,730 48,450 48,420 48,300 46,160 45,560 45,180 43,980 42,930 42,420 40,760 38,580 37,780 35,330 35,160 35,020 30,990 28,930 25,030

r than an average Chinese but n an average Indian

( ) = World rank 88,890 80,440 78,130

76,380

Czech Republic (29) Hungary (36) Brazil (46) Turkey (47) Argentina (49) Mexico (51) Malaysia (53) South Africa (65) Colombia (69) China (78) Thailand (83) Ecuador (85) Ukraine (100) Indonesia (103) Iraq (108) Egypt (109) Sri Lanka (110) Philippines (113) Bhutan (115) India (122) Vietnam (124) Nigeria (127) Lao PDR (130) Cambodia (139) Bangladesh (142)

18,520 12,730 10,720 10,410 9,740 9,240 8,420 6,960 6,110 4,930 4,420 4,140 3,120 2,940 2,640 2,600 2,580 2,210 2,070 1,410 1,260 1,200 1,130 830 770 47

www.ChartingThailandEconomy.com

Using Purchasing Power Parity, Th to 81st, with GNI per capita almos

Chart 2.07 â&#x20AC;&#x201C; GNI per capita, selected countrie 2011, PPP (current international $) Qatar (1) Luxembourg (2) Norway (3) Singapore (4) Switzerland (5) Hong Kong (6) US (7) UAE (8) Netherlands (9) Sweden (10) Austria (11) Denmark (12) Germany (13) Canada (14) Belgium (15) Australia (16) Finland (17) UK (18) France (19) Japan (20) Ireland (21) Italy (22) Spain (23) Iceland (24) Korea, Rep. (25)

Source: The World Bank

64,260 61,460 59,380 52,570 52,350 48,820 47,890 43,140 42,200 42,050 41,900 40,230 39,660 39,190 38,110 37,670 36,010 35,910 35,330 34,180 32,400 31,400 31,020 30,370

hailandâ&#x20AC;&#x2122;s rank improved slightly st the same as China

( ) = World rank 86,440

Israel (26) Greece (30) Saudi Arabia (31) Czech Republic (33) Russia (36) Croatia (40) Turkey (44) Malaysia (47) Mexico (48) Mauritius (55) Brazil (63) South Africa (68) China (80) Thailand (81) Bhutan (92) Sri Lanka (93) Indonesia (102) Philippines (106) India (112) Vietnam (116) Lao PDR (119) Cambodia (126) Bangladesh (132) Nepal (145) Ethiopia (150)

27,110 25,100 24,700 24,370 20,560 18,760 16,940 15,650 15,390 14,330 11,420 10,710 8,390 8,360 5,570 5,520 4,500 4,140 3,590 3,250 2,580 2,230 1,940 1,260 1,110 48

www.ChartingThailandEconomy.com

Increasing trend in household inc debt service year has reduced fro Chart 2.10a â&#x20AC;&#x201C; Monthly income per household Average, Baht

14,963

2004

17,787

18,660

2006

2007

20,903

2009

23,236

2011

Chart 2.10b â&#x20AC;&#x201C; Monthly expenditure per househ Average, Baht

12,297

2004

14,311

14,500

2006

2007

16,205

2009

Source: National Statistic Office survey; CTE analysis

17,403

2011

come, expenditure and debt, but om the recent peak in 2004

hold

Chart 2.10c – Debt per household Average, Baht

104,571

2004

116,585

116,681

2006

2007

134,699

134,900

2009

2011

Chart 2.10d – Debt service year* 3.3 2.8 2.3

2.4 1.9

2004

2006

2007

2009

2011

Note: (*) Avg. debt / (annual income – annual expenditure)

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Both Head line and Core inflation

Chart 3.07a – YͲoͲY change in CPI Percent 4.00% 3.50%

Head line

3.00% 2.50% 2.00% 1.50%

Core*

1.00% 0.50% 0.00% Oct-12

Nov-12 Dec-12

Jan-13

Feb-13

Mar-13

Note: (*) exclude raw food and energy

Source: Bureau of Trade and Economic Indices; CTE analysis

n decreased in March

Chart 3.07b – YͲoͲY change in CPI by product March 2013, percent 9.0

Veg & fruit 7.6

Tobacco & alcohol 6.6

Meat

6.2

Energy 3.1

Housing & furnishing Prepared food at home

2.0

Non alcoholic beverage

1.9

Eggs & milk

1.8 1.4

Transport & Commu Medical care

1.1

Food away from home

1.0

Recreation & Education

0.7

Rice

0.6

Apparel and footware

0.5

Seasoning

0.5

51 www.ChartingThailandEconomy.com

Apart from India and Pakistan an inflation in leading economies see Chart 3.08 – Consumer Price Index Annual percentage change

Latest

India Ͳ Feb Pakistan Ͳ Feb Russia Ͳ Feb Brazil Ͳ Feb

5.3

Indonesia Ͳ Feb

4.9

Singapore Ͳ Feb

4.4

Hong Kong Ͳ Feb China Ͳ Feb

3.2

Taiwan Ͳ Feb

3.0 2.7

Thailand Ͳ Mar Australia Ͳ Q4

2.2

US Ͳ Feb

2.0

Euro Area Ͳ Feb

1.8

Malaysia Ͳ Feb

1.5

South Korea Ͳ Feb

1.4

Japan Ͳ Jan Note: (*) The Economist Poll Source: The Economist

-0.3

d to certain extent Russia, ems to be manageable 2013* 10.9

8.8

7.4

7.7

7.3

6.3

6.1 5.5

3 3.8 4.3 4.3 1.5 3.1 2.6 1.8 1.9 2.2 2.3 0.1

52 www.ChartingThailandEconomy.com

Deflation at Producer level, with

Chart 3.09a – YͲoͲY change in PPI Percent 3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

-0.5% Oct-12

Nov-12 Dec-12

Jan-13

Feb-13

Mar-13

Source: Bureau of Trade and Economic Indices; CTE analysis

March PPI lower than a year ago

Chart 3.09b – YͲoͲY change in PPI by product March 2013, percent Livestocks Fishing Food Metal Mechinery Leather & footware Wood Transport equip NonͲmetallic mineral Chemical Pulp & paper Electrical equip Forestry Forestry Crop Basic metals Other manu goods Petroluem products Rubber & plastic Energy

14.9 12.8 4.0 3.5 2.5 2.5 2.0 1.6 1.3 1.2 1.0 0.1 0.0 0.0 -1.3 -2.2 -2.6 -6.5 -9.7 -9.8

53 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Bank’s loan continued to increase unchanged in January Chart 3.02a – Commercial Banks’ Loan THB billion 10,000 9,500 9,000 8,500 8,000 Feb-12

Mar-12

Apr-12

May-12

Jun-12

Chart 3.02b – Commercial Banks’ Loan/Depos Percent 100% 95% 90%

89.6%

90.2%

92.8%

92.4%

Apr-12 May-12 Jun-12

91.7%

85% 80% Feb-12 Mar-12

Source: Bank of Thailand

e while liquidity in the system

MͲoͲM

0.5% YͲoͲY

13.6%

ul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

92.2%

93.1%

Jan-13

it* ratio

91.9%

Jul-12

90.8%

91.4%

Aug-12 Sep-12

91.1%

93.1%

Oct-12 Nov-12 Dec-12 Jan-13

55 www.ChartingThailandEconomy.com

Gross NPL decreased in both the loan in 2012

Chart 3.03a – Total Financial Institutions’ Gros Billion Baht 592 477

05YE

06YE

445

458

07YE

08YE

401

09YE

380

10Y

Chart 3.03b – Total Financial Institutions’ Gros Percentage of Total Loans

10.73% 8.16%

05YE

06YE

Source: Bank of Thailand

7.47%

07YE

7.31%

08YE

5.29%

4.85

09YE

10Y

amount and percentage of total

ss NPLs Outstanding

317

11YE

269

12YE

2013/Q1 2013/Q2 2013/Q3

ss NPLs Outstanding

3.60%

11YE

2.74%

12YE

2013/Q1 2013/Q2 2013/Q3 56 www.ChartingThailandEconomy.com

Banksâ&#x20AC;&#x2122; capital ratio dropped to 15

Chart 3.04 â&#x20AC;&#x201C; Capital ratio of all commercial ba % of risk assets, at year end

15.8%

16.1%

14.9% 13.4%

13.3%

1 14.0%

13.9%

12.4%

2003

2004

2005

2006

2007

2008

2009

2010

Note: (*) All Commercial Banks registered in Thailand, excluding foreign bra

Source: Bank of Thailand

5.8% in January 2013

nks* Month End 16.5%

16.2%

14.8%

16.0%

2013

15.5%

2012

15.0%

14.5%

2011

anches

2012

14.0%

J F M A M J J A S O N D

57 www.ChartingThailandEconomy.com

Thailand is one of the many coun rates Chart 3.05 – Real interest rates Percent, as of Mar 30th 2013

൞

3M riskͲfree interest rates

9.5

Pakistan 8.1

India

7.4

Russia

7.1

Brazil 4.9

Indonesia 3.9

China Malaysia

3.2

Australia

3.2 2.8

South Korea

2.5

Thailand Taiwan Hong Kong

0.9 0.5

0.3

Singapore

0.3

Euro Area

0.2

Japan

0.2

Note: (*) The Economist Poll

Source: The Economist

tries with negative real interest

Expected 2013 inflation*

Real interest rates

7.7

1.8 8.8

-0.7

6.3

1.1

6.1

1.0

5.5

-0.6

4.3

-0.4

2.2

1.0

2.6

0.6

2.3

0.5

3.1

-0.6

1.5

-0.6 4.3

-3.8

1.8

-1.5 3.8

1.9 0.1

-3.5 -1.7 0.1

www.ChartingThailandEconomy.com

SET increased slightly in March w flow Chart 3.06a â&#x20AC;&#x201C; Monthly performance of SET index Percent change from prior month, at month end

5.1% 0.0%

1.9%

Oct-12

Nov-12

5.9% 4.6% 1.3%

Dec-12

Jan-13

Feb-13

Mar-13

Chart 3.06b â&#x20AC;&#x201C; Cumulative net foreign fund flow SET & MAI, Billion Baht, Month end 20.0 15.0

10.0 5.0 0.0 -5.0

J-13

F-13 M-13 A-13 M-13 J-13

J-13

A-13 S-13 O-13 N-13 D-13

Source: SET, The Economist; CTE analysis

with the return of foreign fund Chart 3.06c â&#x20AC;&#x201C; Change since Dec 31st 2012 Percent, as of Mar 26th 2013 20.0%

Japan (Nikkei 225) 12.2%

Indonesia (JSX) US (DJIA)

11.1%

Thailand (SET)

10.9%

US (S&P 500)

9.6%

China (SSEB, $ terms)

9.3% 8.5%

UK (FTSE 100)

7.7%

US (NAScomp)

6.4%

Australia (All Ord.)

5.7%

Pakistan (KSE) Singapore (STI)

3.8%

Germany (DAX)

3.5%

France (CAC 40)

3.0%

Taiwan (TWI)

2.0%

Euro Area (FTSE Euro 100)

1.9% 1.2%

China (SSEA) S Korea (KOSPI)

-0.7%

HK (Hang Seng)

-1.5%

Malaysia (KLSE)

-2.1%

India (BSE) -3.7%

59 www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Huge government budget deficit r slightly better than in 2009

Chart 4.1 â&#x20AC;&#x201C; Government budget and cash bala Percent

Budget cash balance Overall Cash balance (including non-budgetary deficit/ surp

1.4% 0.3% 0.4%

1.1%

0.0% 0.1% -0.5%-0.6%

-1.7 -2.0%

03FY

04FY

05FY

Source: Bank of Thailand; CTE analysis

06FY

07FY

relative to GDP in 2012, only

ance as percentage of nominal GDP

plus)

-0.3% -0.7%

-1.1%-1.1%

-1.3%

7% -2.6% -3.6% -3.9%

-4.0% -4.4%

08FY

09FY

10FY

11FY

12FY 61

www.ChartingThailandEconomy.com

Budget deficit for the first 2 mont significantly compared to same p Chart 4.2 â&#x20AC;&#x201C; Government budget balance Billion Baht

Revenue 1,013

1,109

Budget balance -996

-1,109

1,241

-36

-1,277

1,390

1,455

1,498

-174

-100

-1,629

-1,598

1,484

110 -364

-1,280

Expenditure

-1,849

-1

03FY 04FY 05FY 06FY 07FY 08FY 09FY 1 Source: Bank of Thailand; CTE analysis

ths of 2013 improved eriod last year

Monthly cumulative Budget balance 0.0 ,751

1,902

2,078 -50.0

2013

-100.0 -150.0

-75

-28 -411

-200.0

2012

-250.0 -300.0

1,825

-1,930

-350.0 -2,489

-400.0 -450.0

0FY 11FY 12FY

J F M A M J J A S O N D

62 www.ChartingThailandEconomy.com

Apart from 2010 and 2011, there between budget and cash balance Chart 4.3 â&#x20AC;&#x201C; Government cash balance Billion Baht

Budget cash balance Overall Cash balance (including non-budgetary deficit/ surp

110 16 24

8 -36 -45

-1 -144 -174

03FY

04FY

05FY

Source: Bank of Thailand; CTE analysis

06FY

07FY

were not much differences e

plus)

-28

-75

00 -96

-53 -52 -137

-264

-364 -401

-411 -446

08FY

09FY

10FY

11FY

12FY

'13/2mo

63 www.ChartingThailandEconomy.com

Thailand budget deficit in 2013 is GDP

Chart 4.4 â&#x20AC;&#x201C; Government Budget balance as pe 2013*, percent South Korea Hong Kong Singapore Russia Australia Indonesia Taiwan Brazil China Euro Area Thailand Malaysia India

-5.

US -6.4

Pakistan Japan Note: (*) The Economist Poll

Source: The Economist

-9.0

expected to be around 2.9% of

ercentage of GDP 2.6 2.3 0.7 -0.5 -0.7 -1.4 -1.7 -1.9 -2.0 -2.8 -2.9 -4.1 -5.0 4

64 www.ChartingThailandEconomy.com

A slight increase in Public debt in

Chart 4.5a â&#x20AC;&#x201C; Composition of Public debt THB Trillion 6.0

5.0

4.0

Public debt from State Enterprises

3.0 Bond to Compensate FIDF's Loss & Prefunding debt 2.0

1.0 Direct Government debt 0.0 2009 10%

2010

2011

Source: Public Debt Management Office

2012

Jan-13

Ext as

January 2013

Chart 4.5b â&#x20AC;&#x201C; Composition of Public debt As percentage of nominal GDP 50% 45% 40%

Public debt from State Enterprises

35% 30% 25%

Bond to Compensate FIDF's Loss & Prefunding debt

20% 15% 10%

Direct Government debt

5% 0%

2009

ternal debt percent of total

2010

2011

2012

Jan-13

65 www.ChartingThailandEconomy.com

Thailand’s public debt is not high standard Chart 4.6 – Public debt in the world Percentage of GDP, 2012 or latest 1 Japan 2 Zimbabwe 3 Greece 6 Lebanon 8 Italy 9 Portugal 10 Iceland 12 Ireland 14 Singapore 15 Belgium 18 France 19 United Kingdom 20 Egypt 21 Canada 22 Spain 25 Hungary 27 Germany 28 Sri Lanka 31 Malta 33 Israel 35 United States 37 Morocco 39 Netherlands 41 Croatia 43 Bhutan

219 203 161 128 126 120 119 118 107 101 89 89 85 84 83 81 81 79 77 74 74 72 69 66 64

Source: CIA fact book; Public Debt Management Office for Thailand’s dat

compared to international

Intâ&#x20AC;&#x2122;l rule of thumb <60% of GDP 52 Bahrain 53 Malaysia 54 Brazil 58 Switzerland 60 India 61 Philippines 64 Venezuela 66 Vietnam 67 Laos 69 Thailand 74 Denmark 79 Czech Republic 81 South Africa 84 New Zealand 85 Argentina 87 Turkey 92 Taiwan 95 China 100 Mexico 106 Korea, South 109 Bangladesh 113 Hong Kong 119 Australia 121 Indonesia 139 Russia

56 56 55 52 52 51 49 48 48 44 45 44 43 42 42 40 39 39 35 34 32 30 27 25 11

www.ChartingThailandEconomy.com

CONTENT

Executive summary

Growth

Income distribution

Stability

• Unemployment rate increased sligh other countries • Thailand’s Income distribution is am improvement over the past two de • Except for only Bangkok, poverty h decade

htly to 0.83% in January, still a very low level compared to

mong the worst in Asia but there has been overall ecades, except for only in Bangkok eadcount and poverty rate have declined over the last

Positive Balance of Payments in t largely to net service income

Chart 5.01 â&#x20AC;&#x201C; Balance of Payment decompositio Billion USD

31.3 24.7

24.1

1.2 08FY

09FY

10FY

11FY

Source: Bank of Thailand; CTE analysis

5.3 12FY

2.7 13/2mo

he first 2 months of 2013 due Trade Balance (F.O.B)

32.6

29.8

17.3

17.0

8.3 -2.2

08FY

09FY

10FY

11FY

12FY

13/2mo

Net service income & transfer 1.6

-15.2

-10.7

08FY

09FY

-19.7

10FY

-11.1

-5.6

11FY

12FY

13/2mo

Net Capital Movement + errors and omissions 22.5

21.3 2.2

2.5

3.3

12FY

13/2mo

-4.7 08FY

09FY

10FY

11FY

68 www.ChartingThailandEconomy.com

Strong Asian export engines refle surplus Chart 5.02 – Current Account balance As % of 2013 GDP* Singapore Ͳ Q4

10.

Taiwan Ͳ Q4 6.6%

Hong Kong Ͳ Q4

6.2%

Malaysia Ͳ Q4

4.4%

South Korea Ͳ Jan Russia Ͳ Q4

1.9%

China Ͳ Q4

1.8%

Thailand Ͳ Q4

1.6%

Euro Area Ͳ Jan

1.2%

Japan Ͳ Jan

0.9%

Pakistan Ͳ Q4

-1.5%

US Ͳ Q4

-2.6%

Indonesia Ͳ Q4

-2.9%

Brazil Ͳ Feb

-3.4%

Australia Ͳ Q4

-3.8%

India Ͳ Q3

-4.1%

Note: (*) The Economist Poll

Source: The Economist; actual figures for Thailand from Bank of T

ecting in huge current account

Last 12 months, USD Billion 51.4

19.5%

49.6

.2%

Thailand and NESDB

2.9 19.5 46.4 81.2 213.8 2.7 153.2 60.8 -2.0 -475.0 -24.2 -63.5 -56.5 -80.6

69 www.ChartingThailandEconomy.com

Negative trade balance so far in 2 export Chart 5.03 â&#x20AC;&#x201C; Trade balance* decomposition Billion Baht

593

257

-111 -229

-275

-647 8FY

9FY

10FY

11FY

12FY

13/2MO

Note: (*) Not equal to the one in Balance of Payment decomposition due to few (**) Excluding Electricity and aircraft export, adjustment for Balance of p (***) Excluding Electricity and military import, adjustment for Balance of p

Source: Bank of Thailand; CTE analysis

2013 as import grew faster than

Export**

5,851

6,113

6,708

7,091

5,195

1,084 8FY

Í˛

9FY

10FY

11FY

12FY

13/2MO

Import***

6,983 5,962

7,739

5,857 4,602 1,313

8FY

9FY

w adjustments ayment and exchange rate conversion payment and exchange rate conversion

10FY

11FY

12FY

13/2MO

70 www.ChartingThailandEconomy.com

External debt level increased in b terms Chart 5.10a – External Debt Level Billion USD 160 120 80 40 0 03YE

04YE

05YE

06YE

07Y

Chart 5.10b – External Debt as % of GDP

40.3%

40.9%

03YE

04YE

Source: Bank of Thailand

37.0%

38.5%

05YE

06YE

35.4%

07YE

both absolute and relative to GDP

08YE

09YE

31.4%

28.8%

08YE

09YE

10YE

11YE

35.2%

33.7%

10YE

11YE

12/4Q

38.9%

12/4Q

71 www.ChartingThailandEconomy.com

More public debt and more longͲ composition in 2012 Chart 5.11a – External debt breakdown Private vs Public Private Public = General Government and Monetary Authorities

96%

08YE

92%

09YE

Source: Bank of Thailand

13%

15%

20%

87%

85%

80%

10YE

11YE

12/4Q

term debt in external debt

Chart 5.11b – External debt breakdown LongͲTerm vs ShortͲTerm Long term Short term

44%

56%

08YE

09YE

50%

10YE

46%

45%

54%

55%

11YE

12/4Q

72 www.ChartingThailandEconomy.com

Capability to repay external debt concern as debt service ratio is lo Chart 5.12a â&#x20AC;&#x201C; International reserves As % of ST external debt 418% 372% 340%

330%

299% 257%

07YE

08YE

09YE

10YE

11YE

12/4Q

Note: (*) Debt service payment / Export of goods and services

Source: Bank of Thailand; CTE analysis

deteriorated but not yet a ow and reserves at healthy level Chart 5.12b â&#x20AC;&#x201C; Debt service ratio* Percent

10.3%

7.7%

07FY

08FY

7.3%

09FY

3.7%

3.8%

4.0%

10FY

11FY

12/4Q

73 www.ChartingThailandEconomy.com

Net International reserves decrea considered excessive Chart 5.13a â&#x20AC;&#x201C; International reserves level* At the end of period, Billion USD

54.4

55.9

2004

2005

106.5

118.0

2007

2008

73.9

2006

Chart 5.13b â&#x20AC;&#x201C; International reserves as numbe

9.1 6.9

2004

5.7

2005

6.9

2006

2007

7.9

2008

Note: (*) Including Net Forward position (**) For the last period using average monthly import value during

Source: Bank of Thailand; CTE analysis

ased slightly in February but still

191.7

206.4

205.8

202.4

2011

2012

Feb-13

10.0

9.5

2012

Feb-13

154.1

2009

2010

er of months of import** 13.8

12.6 10.8

2009

the last 12 months

2010

2011

74 www.ChartingThailandEconomy.com

THB appreciated another 2% in M

Chart 5.17a – Nominal Effective Exchange Rate 2007=100

112.0

Baht appreciates

110.0

108.0

106.0

MͲoͲM

2.0%

104.0

102.0

100.0

YͲoͲY

7.4%

Baht depreciates Mar-12

Jun-12

Sep-12

Dec-12

98.0 96.0 Mar-13

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 $

Source: Bank of Thailand; CTE analysis

March

Chart 5.17b – YͲoͲY change in FX rate* Percentage change in avg. selling rate as of March 29th 2013 0.0

PHP Ͳ 0.7301 -1.5

MXN Ͳ 2.3833

-2.9

KRW Ͳ 0.0264 CNY Ͳ 4.7947

-3.7

SGD Ͳ 23.8598

-3.7

AUD Ͳ 30.7933

-4.9

USD Ͳ 29.4476

-5.0

MYR Ͳ 9.6376

-5.7

TWD Ͳ 0.9858

-5.9 -6.7

VND Ͳ 0.0014 EUR Ͳ 37.8586 GBP Ͳ 44.8895 INR Ͳ 0.5799 IDR Ͳ 3.2113

-8.7 -9.6 -10.0 -10.3

JPY Ͳ 31.4463 -17.1 Baht appreciates

Baht depreciates 75