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Macroeconomic Conditions For the First 6 Months of 2003

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Macroeconomic Conditions For the First 6 Months of 2003 by M.R. Pridiyathorn Devakula Governor of the Bank of Thailand 19 August 2003 Contributions to GDP Growth (%y ... – PowerPoint PPT presentation

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Title: Macroeconomic Conditions For the First 6 Months of 2003


1
Macroeconomic ConditionsFor the First 6 Months
of 2003
by M.R. Pridiyathorn Devakula Governor of the
Bank of Thailand 19 August 2003
2
Gross Domestic Product (1988 prices)

2000 4.6
2001 1.9
1999 4.4
2002 5.3
6.7
6.2
5.8
5.1
3.9
2.1
1.5
Source NESDB
Macroeconomics Team tel. 0-2283-5651
16/06/03
3
Contributions to GDP Growth (y-o-y)

Private consumption
Government consumption
Private Investment
Government Investment
Net Exports GS
GDP
Source NESDB, additional calculations done by
Macroeconomics Team Note Change in
inventories and statistical discrepancies, which
could be significant, are not included and hence
account for the difference between GDP and the
sum of shown components
4
Q2 Assessment from BOT Indicators
5
Demand Side
6
Private Consumption Index
Private consumption continued to expand despite
some deceleration in Q2 due to SARS and a more
moderate growth of passenger car sales.
DY-o-Y
Economic Indicators Team Tel. 0-2283-5648
31 Jul 2003
7
Business Sentiment Index
Investor and consumer confidence proved resilient.
gt50 improving
Jun 03 49.5
BSI
Source BOT survey
Consumer Confidence Index
gt 100 improving
Jun 03 95.9
Source The University of the Thai Chamber of
Commerce
8
Investment activities recently picked up as
uncertainties from the Iraqi war and SARS faded
away
2002 Jan03 Feb03 Mar-03 Apr-03 May-03 Jun-03
PII (MA3) 53.8 51.9 51.8 52.2 54.5 55.6
- Equipment (MA3) 55.4 53.8 53.7 54.0 56.0 56.8
- Construction (MA3) 48.6 45.8 45.7 46.6 49.9 51.6
1995 100
Equipment (3-m ma)
PII (3-m ma)
Construction (3-m ma)
Source Bank of Thailand Economic Indicators Team
28 July 2003
9
Private Investment Index
But the year-on-year growth rate of PII slowed
down, partly due to base effect.
DY-o-Y
Economic Indicators Team Tel. 0-2283-5648
31 Jul 2003
10
Net Profit (Loss) of Non-bank Listed Companies
Bn baht
Annual
Bn baht
Quarterly
7 Aug 2003
Source Stock Exchange of Thailand
11
Government Position
Billion baht
D y-o-y
32.9
Expenditure (LHS)
Revenue (LHS)
13.2
8.8
Cash balance (RHS)
Source Comptroller General Department
Public Finance Team Tel. 283-5628
25 Mar. 03
12
Budgetary balance and Non-budgetary balance
Billion baht
Cash balance
Non-budgetary balance
32.9
Budgetary balance
Source Comptroller General Department
Public Finance Team Tel. 283-5628
08 Aug 03
13
Export Growth (US term)
Export expanded favourably both in value and
quantity terms.
May 2003 6.5 Bn (13.5) Jun 2003 6.5 Bn
(15.0)
Y-o-Y 2002 2003 2003 2003 2003 2003 2003
Y-o-Y 2002 Q1 Q2 H1 May Jun
Agriculture 7.5 36.4 25.5 31.0 24.0 25.2
Fishery -19.3 10.0 8.2 9.1 14.4 -4.3
Manufacturing 6.3 20.5 16.2 18.3 12.8 13.8
- Labor -1.4 9.2 2.1 5.5 -1.4 -3.8
- High tech 6.9 21.0 17.5 19.2 12.2 15.3
- Resource 5.1 11.7 15.2 13.5 16.9 17.1
Total 5.7 21.3 16.8 19.0 13.5 15.0
Price -7.2 5.8 6.7 6.3 5.8 5.8
Quantity 13.9 14.7 9.5 12.0 7.3 8.6
BOP Analysis Team 29 Jul 03 (0-2283-5625)
Source Constructed from data of Customs
Department
14
Export Growth (YoY)
Nevertheless, the growth of export value
decelerated slightly from May 2003 onwards due
to base effect.
BOP Analysis Team 29 Mar 03 (0-2283-5625)
15
Thailand continued to benefit from a diversified
export structure
Jan Jun 03 D Share Contribution
Rubber 100.7 3.5 2.1
Integrated circuits and parts 38.1 5.4 1.8
Vehicle parts and accessories 39.8 4.9 1.6
Base metal products 40.0 3.5 1.2
Plastic products 28.4 4.2 1.1
Chemical products 66.6 1.9 0.9
Electronic appliance 9.6 8.1 0.8
Petroleum products 27.4 1.8 0.5
Computer and parts 4.1 9.7 0.5
Rubber products 24.5 1.9 0.4
Canned seafood 17.2 2.3 0.4
Telecommunication equipments 32.7 1.3 0.4
Garments 7.1 3.4 0.3
Furniture and parts 14.0 1.4 0.2
Rice 7.2 2.0 0.2
Summation 23.1 55.3 12.3
Total Exports (Custom basis) 18.9 100.0 18.9
Source Customs Department
The Balance of Payments Team, 4 Aug 03
16
and expanding regional markets.
2003 2003 2003 2003 2003 2003
Destination 2002 Q1 Q2 H1 May Jun
USA 1.7 7.4 -0.1 3.4 -0.9 -8.1
ASEAN 7.3 20.0 16.5 18.1 17.8 11.0
EU -3.2 23.7 12.6 18.1 11.3 6.0
Japan -0.6 20.3 12.2 16.1 10.0 12.3
Hong Kong 11.4 30.5 5.9 17.1 0.2 9.0
China 23.7 88.6 74.5 81.3 65.0 79.1
Taiwan 2.2 17.1 45.8 31.4 35.0 55.8
All 5.3 22.1 15.8 18.9 14.1 12.3
Source Customs Department Custom basis
BOP Analysis Team 30 Jul 03 Tel. 283 -
5625
17
Current Account
Despite an overall deficit in the service account
due to the impact of SARS, the current account
remained in surplus on the back of a strong trade
surplus. Nevertheless, signs of recovery in the
tourism industry and hence the service account
already emerged.
Mil. US
Jun 03 797
BOP Analysis Team 1 Aug 03 (0-2283-5625)
18
Number of tourists and occupancy rate have
recovered.
2002 Q1-03 Q2-03 Apr-03 May-03 Jun-03
Occupancy rate () 60.6 65.4 41.4 43.1 38.5 42.9
No. of tourists (000) 10,799 2,850 1,457 468 400 589
y-o-y 7.3 -1.6 -40.0 -44.8 -50.4 -23.8
Thousand Persons
y-o-y
11- Sep
y-o-y (LHS)
SARS
No.of tourists (RHS)
Source Tourism Authority of Thailand
Sectoral Studies 2 Team Tel. 283-5643
25/06/03
19
Services Income Transfers
2003
Millions of US
2002
Jun/p
Q1
Q2
May
H1
Receipts
18,673
3,432
8,209
1,232
4,778
1,118
7,903
1,001
- Tourism (in)
3,091
404
2,090
267
1,974
469
- InvestIncome
874
159
405
187
- Private
392
120
209
25
89
43
316
1,582
349
- Public
665
134
143
1,192
1,358
15,079
3,837
Payments
7,380
3,543
3,303
650
- Tourism (out)
1,350
250
700
194
4,695
1,524
- Invest Income
2,470
440
946
573
1,343
- Private Interest
294
606
137
312
63
2,199
1,001
- Private Profit Dividend
1,402
233
401
439
1,047
190
- Public
390
47
200
65
617
199
Transfers
396
61
197
54
TOTAL
4,211
-206
1,225
101
1,431
-185
Source BOT and constructed from data of Tourism
Authority of Thailand BOP Analysis Team Tel.
0-2283-6882 ,0-2283-5625 Last update 23 Jul 03
20
Net Capital Flow
Millions of USD 2002P 2002P 2002P 2002P 2003P 2003P 2003P
Millions of USD 2002P H1 Q3 Q4 Q1 Apr May
Private Sector -5,434 -3,482 -192 -1,760 -2,705 8 -1,663
- FDI 1,139 688 -210 661 316 -87 260
Non-bank 970 555 -246 661 315 -90 260
- Portfolio -2,043 -653 -309 -1,081 -552 80 -3
- Loans -3,844 -2,019 -977 -848 -717 -353 54
Bank -1,618 -552 -650 -416 -418 -391 -74
Non-bank -2,226 -1,467 -327 -432 -299 38 128
- Other Bank Assets 4,333 1,298 2,216 819 -736 363 -678
- Other -5,019 -2,796 -912 -1,311 -1,016 5 -1,296
Govt SE -2,585 -583 -1,688 -314 -190 -200 -220
BOT 4,032 3,351 65 616 -1,533 -8 1,184
Total Capital Flow -3,987 -714 -1,815 -1,458 -4,428 -200 -699
Source Data constructed from F.T. forms
Balance of Payments Analysis Team Tel. 0-2283-6726
21
Balance of Payments
Billion of baht 2003 2003 2003 2003 2003 2003
Billion of baht 2002 Q1 Q2 H1 May Jun
Trade Balance 3.4 1.1 1.4 2.5 0.6 0.7
Exports 66.8 18.2 18.9 37.0 6.5 6.5
(Y-o-Y) (5.7) (21.3) (16.8) (19.0) (13.5) (15.0)
Imports 63.4 17.1 17.4 34.5 5.9 5.8
(Y-o-Y) (4.4) (19.2) (12.1) (15.5) (13.2) (9.7)
Services Transfer 4.2 1.4 -0.2 1.2 -0.2 0.1
Current A/C 7.6 2.5 1.2 3.7 0.4 0.8
Net Capital Movement -3.1 -4.4 -0.7
Private -4.7 -2.7 -1.7
Public1/ 1.6 -1.7 1.0
Overall Balance 4.2 -2.1 1.0 -1.1 -0.1 0.9
Reserves 38.9 37.6 39.3 39.3 38.9 39.3
Note Including BOT
BOP Analysis Team 29 Jul 03 (0-2283-5625)
Source Compiled by Bank of Thailand
22
Supply Side
23
Farm income continued to rise strongly and was a
support factor toprivate consumption,
particularly motorcycle and commercial car sales.
Farm Income
D (Y-O-Y) 2002 2003
D (Y-O-Y) 2002 Q1 Q2 H1 May Jun
Farm IncomeProduction Price 11.7 0.8 10.9 18.7 34.5 25.1 35.8 22.1 3.5 15.3 8.1 14.4 4.2 14.7 16.7 15.7 18.8 17.1
Sectoral Analysis Team 2 Tel. 283-5643 29/07/03
24
Manufacturing Production Index (YoY)
Manufacturing production continued to expand
buoyantly.
Sectoral Studies 1 Tel.0-2283-5646 1/8/03
25
Capacity Utilization
Capacity utilization trended upward except in
June when there were temporary factory shutdowns
for maintenance in the tobacco, wire rod and
upstream petrochemical industries.
Cap U (sa, 3-m ma)
Jun 67.1
Jun 64.8
Cap U
Note Cap U is constructed from survey data of
36 industrial categories which altogether
represent 44.5 of the valued added in the
manufacturing sector.
Source BOT Survey
Sectoral Studies 1 Team Tel. 0-2283-5646 1/8/03
26
Capacity Utilization
UNIT
Weight 1995 Average 1995-1996 2002 Year 2003 2003 2003 2003 2003
Weight 1995 Average 1995-1996 2002 Year Q1 Q2 H1 May JunP
Vehicles Petroleum Electronics Beverages Food Construction Iron Steel Tobacco Others 10.2 7.2 6.4 5.5 3.5 2.4 2.1 1.9 5.3 74.5 89.5 65.9 82.6 40.3 88.0 64.7 79.7 78.9 54.6 76.2 59.7 50.5 45.1 56.9 60.6 53.8 71.5 65.5 78.9 59.6 54.2 82.2 56.1 61.7 56.8 78.8 66.9 78.9 67.0 55.4 49.2 58.9 60.2 51.9 78.5 66.2 78.9 63.3 54.8 65.7 57.5 61.0 54.4 78.7 68.9 80.6 70.8 56.4 46.1 64.1 65.1 63.4 80.3 71.7 78.3 67.6 50.7 40.0 58.0 54.8 42.4 75.9
Total(36 Pro.) 44.5 75.0 59.9 67.2 66.0 66.6 68.4 64.8
Note P Preliminary Source Constructed from
BOT survey
Sectoral Studies 1 Team Tel.0-2283-5646 29/7/03
27
Going forward, industries with high capacity
utilization rates are likely to expand investment
...
Top-10 Capacity Utilization Rates in Jun 2003
UNIT
1/8/03
Sectoral Studies 1 Team Tel.0-2283-5646
Source Constructed from BOT survey
28
Capacity Utilization and Private Investment Index
as Private Investment Index (PII) and capacity
utilization have always been highly correlated.
Index
Per cent
Cap U excluding liquor (SA)
PII (LHS)
Correlation 0.96
Note Cap U is constructed from survey data of
36 industrial categories which altogether
represent 44.5 of the valued added in the
manufacturing sector.
Source BOT Survey
29
Economic Stability
30
Internal Stability
Inflation

Jul 03 Headline 1.8 Core 0.1
Unemployment
Jun-01 Jun-02 Jun-03
thousand persons 807 641 719
rate 2.4 1.9 2.1
Thousand persons
Rate ()
2001
2002
2003
2003
31
Public Debt
GDP
57.6
56.6
54.2
53.5
54.2
54.2
50.5
Source Public Debt Management Office
Public Finance Team Tel. 283-5628
08 Aug 03
32
External Stability
Current Account
Million USD
Exchange Rate
B/
Jun 797
31 July 03 41.98
(SA)
25 bsp R/P cut(21 Jan)
25 bsp R/P cut(19 Nov)
50 bsp R/P cut(27 Jun)
Reserves / Short-term Debt
External Debt
Billion USD
3.3
55.3
0.7
May
33
Monetary Sector
34
Movements of Major Currencies (Jul. 2000 Jul.
2003)
USD/EURO
July
118.66
JPY/USD
1.14
BAHT/ USD
41.78
Source The Bank of Thailand
Monetary Policy Analysis and Strategy Division
Tel. 0-2283-5621
35
INTEREST RATES
p.a.
MLR
5.7
Nominal 12-m Time Deposit
1.25
14-day R/P
1.06
Last Update 13 Aug 2003
Source The Bank of Thailand
Monetary Policy Analysis and Strategy Division
Tel. 0-2283-5621
36
GROWTH RATE OF BANKS DEPOSITS AND CLAIMS ON
PRIVATE SECTOR
yoy
Credits extended by commercial banks, finance
companies, and credit foncier companies
Deposits
7.3
3.3
1.2
Jun 03 p/
Claims on private sector (adding back debt
write-off and transferred loan)
claims (adding back debt write-off and
transferred loan)
Sources BOT reports and surveys, Financial
Institution Policy Group Note Including
Thanachart Bank
Last Update 29 Jul 2003
Monetary Policy Analysis and Strategy Division
Tel. 0-2283-5621
37
Credits of Commercial Bank Classified by
Sectors(change from the same period last year)
May
May
38
Total NPL (Commercial banksFinance companies)
Bn bath
Source Corporate Debt Restructuring Group
18 Aug 2003
39
Total NPL classified by debtors
Bn bath
Dec 2002
Mar 2003
Source Corporate Debt Restructuring Group
7 Aug 2003
40
Economic Outlook
41
Economic Outlook for the Rest of the Year
  • Support factors
  • Gradual increase in capacity utilization is
    likely to raise investment activities going
    forward
  • Continued expansion in employment
  • Sound internal and external stabilities
  • Low interest rates and improvement in commercial
    bank lending
  • Rising farm income
  • Government measures, e.g., SME measures, housing
    projects for low income people, etc.
  • Risk factors
  • Regional terrorist threats may delay the full
    recovery of tourism
  • Weak US dollar affects the competitiveness of
    Thai exports
  • Fragile recovery of G3
  • Rising oil prices

42
Forecast Summary
2002 2003 2004
GDP Growth (old) 5.2 4.5 5.5 (3.5 4.5) 5.0 6.0 (4.5 6.0)
Core Inflation (old) 0.4 0.0 0.5 (0.0 1.0) 0.0 1.0 (1.0 2.0)
Headline Inflation (old) 0.7 1.0 2.0 (1.0 2.0) 1.0 2.0 (1.0 2.0)
( ) April 2003 Inflation Report
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