The Office of the National Economic and Social Development Board (NESDB) presented the Report on Thai Economic Developments in 1999 and Outlook for 2000 to the Economic Minister Committee meeting No.1/2000 on January 10th, 2000 and its summary are as follows.
1.Overall Thai Economic Developments in 1999
After experiencing a sharp contraction in 1998, Thai Economy headed toward recovery path in 1999, both in terms of growth and stability. Various economic indicators, including inflation rate, exchange rate, and international reserves, showed continuing signs of stability throughout 1999. Meanwhile the signs of economic recovery, observed since the early of 1999, became clearer in the latter half of the year. Thai economy is estimated to have expanded by 4.1 percent in 1999, contributed by both external and domestic demand. On the demand side, private consumption is estimated to have expanded by 4.0 percent, resulting mainly from various government measures, including, for example, value-added tax reduction, income tax exemption for the net income not exceeding 50,000 baht, oil tax cut, and accommondating dating monetary policay. Private investment, however, remained sluggish with an expected meager growth of 0.8 percent. Export value in US. dollar terms rose by 7.0 percent. While import value in US$ grew by 15.8 percent, accelerating in line with an increasing export and the economic recovery. However, 1999 still recorded trade surplus, but at a lower level compared to that in 1998. Combining with net service receipts and transfer account, the current account was in surplus for anothe year. Trade and current account surplus stood at 7.8 and 9.4 percent of GDP respectively.
On the supply front, indicators showed a broadbased recovery as the agricultural, manufacturing and service sectors expanded in line with export and the recovery in the domestic demand. Although the contractions continued in financial and construction sectors, they were less severe compared to those in 1998. The international reserve reached 32-34 billion US$, accounted for 7-8 months of import value.
After reaching an alarming rate of 8.1 percent in 1998, the average inflation rate in 1999 was as low as 0.3 percent thanks to stable exchange rates, declining world commodity prices, while domestic demand recovery was mild. Meanwhile the exchange rate was stable at about 38 baht/US$.
Factors contributing to the economic recovery in 1999 The contribution factors to the 1999 recovery are as follows: (1) The export sector performed much better than expected at the beginning of the year. The 1999 export value of 56.6 billion US$ increased by 7.0 percent from the previous year. (2) The government expenditure from both budgetary and non-budgetary sources helped stimulate demestic demand. (3) Manufacturing industries improved continuously in line with an improving domestic demand and increasing export-oriented manufacturing industries such as vehicles and parts, galvanized iron sheet, electronics, cement, and beverages, etc. (4) Tourism continued to be a supporting sector for Thai economy in 1999. The number of foreign tourists destined their trips in Thailand rose by 10.3 percent in the first eleven months of 1999, compared to the same period of last year.
Factors remained weak Although 1999 saw improving signs in private consumption expenditure, private investment remained sluggish throughout the year. As such, the domestic demand has yet to be fully recovered, particularly private investment, which is a crucial impetus for sustainable growth. It is, however, worth noting that the contraction in private investment was much less severe than in 1998. The remaining problems have yet to be resolved in other to accelerate the economic recovery include unemplyment problem, excess capacity in manufacturing sector and large share of non-performing loan (NPL) in the financial sector.
Regional Economic Performance in 1999 The overall economic situation in all regions, but the south, was firly in line with the recovery underway at the national level. However, the signs of economic recovery in the Southern region were mixed. Regarding the situation in most regions, despite the decline in farm prices in 1999, the favorable weather condition was a supportive factor for agricultural outputs. The expansion of manufacturing sector was contributed by an increasing export and growing demestic demand. Meanwhile, as at the national level, the stability has gained momentum. This is largely attributed to stable exchange rate, low interest rates, and low regional inflation rate.
--Development News Bulletin, National Economic and Social Development Board, Volume 15, No. 2 : February 2000--
1.Overall Thai Economic Developments in 1999
After experiencing a sharp contraction in 1998, Thai Economy headed toward recovery path in 1999, both in terms of growth and stability. Various economic indicators, including inflation rate, exchange rate, and international reserves, showed continuing signs of stability throughout 1999. Meanwhile the signs of economic recovery, observed since the early of 1999, became clearer in the latter half of the year. Thai economy is estimated to have expanded by 4.1 percent in 1999, contributed by both external and domestic demand. On the demand side, private consumption is estimated to have expanded by 4.0 percent, resulting mainly from various government measures, including, for example, value-added tax reduction, income tax exemption for the net income not exceeding 50,000 baht, oil tax cut, and accommondating dating monetary policay. Private investment, however, remained sluggish with an expected meager growth of 0.8 percent. Export value in US. dollar terms rose by 7.0 percent. While import value in US$ grew by 15.8 percent, accelerating in line with an increasing export and the economic recovery. However, 1999 still recorded trade surplus, but at a lower level compared to that in 1998. Combining with net service receipts and transfer account, the current account was in surplus for anothe year. Trade and current account surplus stood at 7.8 and 9.4 percent of GDP respectively.
On the supply front, indicators showed a broadbased recovery as the agricultural, manufacturing and service sectors expanded in line with export and the recovery in the domestic demand. Although the contractions continued in financial and construction sectors, they were less severe compared to those in 1998. The international reserve reached 32-34 billion US$, accounted for 7-8 months of import value.
After reaching an alarming rate of 8.1 percent in 1998, the average inflation rate in 1999 was as low as 0.3 percent thanks to stable exchange rates, declining world commodity prices, while domestic demand recovery was mild. Meanwhile the exchange rate was stable at about 38 baht/US$.
Factors contributing to the economic recovery in 1999 The contribution factors to the 1999 recovery are as follows: (1) The export sector performed much better than expected at the beginning of the year. The 1999 export value of 56.6 billion US$ increased by 7.0 percent from the previous year. (2) The government expenditure from both budgetary and non-budgetary sources helped stimulate demestic demand. (3) Manufacturing industries improved continuously in line with an improving domestic demand and increasing export-oriented manufacturing industries such as vehicles and parts, galvanized iron sheet, electronics, cement, and beverages, etc. (4) Tourism continued to be a supporting sector for Thai economy in 1999. The number of foreign tourists destined their trips in Thailand rose by 10.3 percent in the first eleven months of 1999, compared to the same period of last year.
Factors remained weak Although 1999 saw improving signs in private consumption expenditure, private investment remained sluggish throughout the year. As such, the domestic demand has yet to be fully recovered, particularly private investment, which is a crucial impetus for sustainable growth. It is, however, worth noting that the contraction in private investment was much less severe than in 1998. The remaining problems have yet to be resolved in other to accelerate the economic recovery include unemplyment problem, excess capacity in manufacturing sector and large share of non-performing loan (NPL) in the financial sector.
Regional Economic Performance in 1999 The overall economic situation in all regions, but the south, was firly in line with the recovery underway at the national level. However, the signs of economic recovery in the Southern region were mixed. Regarding the situation in most regions, despite the decline in farm prices in 1999, the favorable weather condition was a supportive factor for agricultural outputs. The expansion of manufacturing sector was contributed by an increasing export and growing demestic demand. Meanwhile, as at the national level, the stability has gained momentum. This is largely attributed to stable exchange rate, low interest rates, and low regional inflation rate.
--Development News Bulletin, National Economic and Social Development Board, Volume 15, No. 2 : February 2000--