NESDB's Press Conference on Gross Domestic Product (GDP) : Q1/2000 On June 19th, 2000, Mr. Sansern Wongcha-um, NESDB's Secretary-General and executives gave a press conference on "Gross Domestic Product (GDP) : Q1/2000 at the Dej Snitwongse Conference Room. Mr. Sansern Wongcha-um stated that the Thai economy in the first quarter of 2000 measured by GDP continued to expand from the same quarter of last year at a growth rate of 5.2 percent, less than the rate of 6.5 percent of the last quarter of last year. The production sector expanded at a higher rate than the same quarter of last year due to an increase in the non-agricultural sector. The manufacturing and the services sectors grew in response to the expansion in both domestic and export demands. However, the financial intermediation and the agricultural sectors were still on a decline. The expenditure side continued to increase especially the government expenditure. Gross fixed capital formation increased at a very high rate, particularly on machinery and transport equipment. Investment in construction was seen a positive sign of expansion for the first time in this quarter since the start of the economic crisis. Household expenditure in this quarter continuously increased from last year. Export also grew at a very high rate, together with a sharp increase in imports. Expanding Sectors The manufacturing sector expanded at 9.5 percent. The main expanding sub-sectors continued to be modern and those related to exporting industries. Construction : This sector expanded by 1.1 percent due to the increase in the private constructionby 3.7 percent. Whereas, the government construction grew only 0.1 percent owing to the decline in the budget for investment. Wholesale and Retail Trade : The trading quantity in this quarter rose by 3.2 percent as a result of the expansion in the sectors of manufacturing, mining and quarrying and import. Thansportation and Communication in the first quarter this year expanded by 5.6 percent. Freight transportation expanded by 5.0 percent in line with the expansion of the manufacturing sector but it grew at a lower rate at 1.0 percent because of a decrease in the number of foreing tourists. Telecommunication still expanded 10.0 percent as a result of higher numbers of local services. Electricity, gas and water supply : A 9.9 percent expasion of this sector came from 9.0, 10.0 and 14.0 percent increase in the electricity, water supply and gas separating plants, respectively. The expansion in hotel and restaurant sector slowed down to the rate of 2.9 percent. Mining and quarrying expanded by 13.8 percent following the expansion of natural gas and crude oil. Contracting Sectors. Agriculture : This sector declined by 1.6 percent due to a reduction in production of agriculture and forestry by 0.3 percent and a drop of crop production by 2.2 percent. Livestock production grew by 9.8 percent due to a price incentive of the previous year to expand cattle, buffaloes, swine, hens, hen's eggs and raw milk. The fisheries production continued to decline by 8 percent from the previous quarter due to the damage of shrimp production and high diesel prices which led to a decline in the fisheries activites. Financial intermediation declined by 4.3 percent but it is better than a 21.4 percent drop in the previous quarter. The cause of the up turn in this sector was an increase in the net interest received by most financial institutions. Domestic Consumption Expenditure Household consumption expenditure expanded by 5.0 percent. The factors that stimulated the expenditure were the continuing increases in overall economic situation, low consumer price index as well as the declining in the interest rates. The main expanding expenditure was on the agriculture, food products, household equipment and transport equipment with the continuing expansion of 54.5 percent. Government Consumption Expenditure : In the first quarter of 2000, there was a record of Government Consumption Expenditure at Bt. 130 billion. At constant prices, Government Consumption Expenditure rose by 11.8 percent due to the deficit monetary policy and the economic stimulus package initiated by the government. Gross Fixed Capital Formation (GFCF) increased by 17.7 percent as a result of an expansion in both private and public investment by 14.6 percent and 22.0 percent, respectively. The private investment sharply increased due to the expansion in machinery investment which contributed the highest share at 77.6 percent in the total investment. The construction investment with a share of 22.4 percent showed a positive sign for the first time since the economic crisis in 1997, increasing by 3.5 percent. Additionally, government investment increased sharply by 22.0 percent. Export of goods and serveces : The real export value of goods and services in this quarter still expanded by 25.1 percent from the same quarter of last year. The export value of goods alone increased by36.1 percent due to the expansion on the export of manufacturing goods which contributed a share of 84.9 percent in the total exports. The real export value of services in this quarter declined by 6.1 percent compared to the same quarter of last year. This is due to the fact that there was a decline in the revenue received from international tourists and other serveces. Import of goods and services : The real import value of goods and services jumped by 33.8 percent. Import of goods alone sharply rose by 39.3 percent. The main import items, with a share of 51.9 percent, continued to be capital goods with an increasing rate, at current maret prices, of 47.7 percent. Moreover, imports of raw materials, consumer goods and petroleum products at current market prices rose by 36.1, 21.0 and 116.1 percent, respectively. Similarly, expenditure on real import of services also increased due to expenditure on transport services and travel abroad. Current account There was a surplus on the goods account by Bt. 80,352 million as a result of a continuing expansion of export. However, most expot goods required imported technology and raw materials, there was a high import value of raw materials and capital goods. On the import services, there was also a surplus of Bt. 55,807 million. In effect, the current account of this quarter revealed a surplus of Bt. 136,159 million, a slight decline from Bt. 173,895 million from the same quarter of last year. The GDP implicit deflators revealed a positive sign at 0.2 percent for the first time in this quarter afer a long decline since the economic crisis. Similarly, the Consumer Price Index (CPI) and the Wholesale Price Inpex (WPI) slightly rose at 0.8 and 2.0 precent, respectively. Mr. Sansern Wongcha-um added that Thailand has participated in the Special Data Dissemination Standard (SDDS) of International Monetary Fund (IMF) in August 1996. Out of 182 member countries, 47 countries participated in SDDS project which aimed at dissiminating information in 5 categories; namely, production, finance, monetary, international information and population in 17 sectons. The dissimination guidelines are under the IMF rules and regulations. In this regard, the Bank of Thailand coordinated with concerned agencies; namely, NESDB, National Statistical Office, Ministry of Commerce and Ministry of Finance in order to develop information system and speedily disseminate it in line with standard set by the IMF. Thailand had successfully disseminated the information in every sector by mid 1999. In May 17, 2000 Thailand was the 21st of 47 countries to pass the IMF's condition. Gross Domestic Product (Percentage Change from Same Quarter of Previous Year at 1999 Prices) GDP by Sectors Unit : Percentage Change__________________________________________________________________________________________________________________ 1997 1998 1999 1998 1999 2000 _____________________________________________________________ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 __________________________________________________________________________________________________________________Agriculture 0.6 -1.3 4.0 -1.3 -8.0 -2.7 3.4 5.4 7.1 9.4 -1.6 -1.6 Manufacturing 0.8 -10.5 11.3 -11.2 -13.0 -13.7 -3.6 4.7 9.0 16.9 15.1 9.5Construction -26.7 -38.8 -8.7 -28.7 -43.9 -43.1 -37.4 -26.7 -11.8 2.8 2.6 1.1Wholesale & Retail Trade -3.7 -13.7 5.5 -11.5 -17.9 -15.3 -9.7 6.4 4.4 5.5 5.7 3.2Transportation 4.4 -9.4 4.0 -3.5 -14.4 -13.9 -5.5 0.7 8.5 3.5 3.9 5.6Hotel and Restaurants -2.0 -5.4 6.9 -8.6 -13.3 -2.8 4.3 6.9 4.5 7.8 8.0 2.9Financial Intermediation -12.2 -23.3 -32.0 -8.6 -22.3 -19.9 -41.1 -41.7 -38.2 -22.3 -21.4 -4.3Others 5.7 0.6 2.9 5.0 -0.7 -1.2 -0.3 0.5 0.0 5.0 6.0 5.8 GDP -1.7 -10.2 4.2 -7.5 -13.7 -12.8 -6.8 0.2 2.5 7.8 6.5 5.2_____________________________________________________________________________________________________________ Expenditure at 1999 Prices Unit : Percentage Change________________________________________________________________________________________________________ 1997 1998 1999 1998 1999 2000 _____________________________________________________ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1________________________________________________________________________________________________________Private Consumption Expenditure -1.1 -12.3 2.9 -12.3 -17.1 -13.7 -5.4 -3.2 1.6 6.4 7.4 5.0 Government Consumption -3.0 1.9 2.8 -8.4 -7.8 9.2 14.0 0.8 11.0 -7.1 9.6 11.8 Expenditure Gross Fixed Capital Formation -21.7 -44.2 -4.8 -38.7 -49.8 -47.8 -39.3 -27.5 1.1 5.5 7.0 17.7 Exports 8.4 6.7 8.9 15.0 8.9 5.7 -1.2 -1.8 7.6 13.2 16.5 25.1 Less : Imports -11.4 -22.3 19.6 -27.1 -28.4 -21.9 -10.1 8.3 23.3 21.1 25.1 33.8 ________________________________________________________________________________________________________Environmental Development in the Ninth Plan On the Environment Day (June 5 th, 2000) Mr. Santi Bang-or, Deputy Secretary-General of NESDB, stated in the discussion on "Environment in the Ninth National Economic and Social Development Plan : for whom, how and to who" organized by the United Nations at the Queen Sirikit National Convention Centre, that during the Ninth Plan period the people's consciousness and particpation in natural resource conservation and rehabilitation management should be greatly considered. Deputy Secretary-General further said that the Office of the NESDB has been concerned about the enviromental issues by setting up environmental strategies in several development Plans. The past economic prosperity, however, has been generated at the expense of the natural endowment. Development and natural conservation management should be in harmony. Obviously, the underdeveloped countries ignored significance of environmental cost in order to have lower cost of production. During the Ninth Plan period (2002-2006), environment will be of great consideration through speedily creating quality, balance and long-term effectiveness in development. Furthermore, the majority of people's consciousness on the enviromental effects, participation in management and awareness in local problems solving through enviromental law enforcement should be considered. Moreover, the environmental cos will be included in the public sector's development project investment. The Improvement of Local Financial Management Systme Project Recently, Mr. Utis Kaotien, Assistant Secretary-General of NESDB, stated in the discussion on The improvement of Local Financial Management System at Prince Palace Hotel, Mahanak, that, in order to support prosperity decentralization, NESDB, together with Fiscal Plicy Office Ministry of Finance and Department of local Administration Ministry of Interior, launch The Improvement of Local Financial Management System Project by using the budget of Miyazawa Plan. The project is divided in 2 parts in the first part Ministry of Interior will hold trainging courses on financial management for local officials. In the second part, Information Processing Institute for Education and Development Thammasat University together with Faculty of Political Science Chuylalongkorn University and Consulting Center National Instiute of Development Administration (NIDA) will set local financial data system and perform policy research The project procedure contains 3 sections; 1. To develop data and information and initiate local financial database. 2. To perform policy research in many aspects, in order to support prosperity decentralization. 3. To study specific subjects which the government agencies pay special attention on. The Assistant Secretary-General continued that for freedom in self-development of local people, local government agencies have to increase their ability in every way. The local financial management, in particular must be efficient transparent and flexible However the goverment should be the supporter for the effective prosperity decentralization. Meanwhile, the cooperation of media in information distribution for people is also needed. Development News Bulletin, National Economic and Social Development Board, Volume 15,No. 7 : July 2000 End.-SS-