Economic Condition in the first quarter of 2008 by sectors:
- Household consumption expanded more strongly, supporting a continuing expansion. In the first quarter of 2008, household expenditures expanded by 2.6 percent, accelerated from 1.6 percent in the fourth quarter of 2007. This noticeable improvement was underpinned by higher farmers’ income, upward adjustment of government officers’ salary and minimum wage, a lower real loan rate, and restoring of consumer confidence since November 2007. But constrained by accelerating inflation rate, recovery of household expenditures had not yet been full-fledged
The expansion on household expenditures was driven by an increase in spending on durable goods, semi-durable goods and food expenditure at 10.9, 3.3 and 3.4 percent respectively. However, the remarkable growth in durable goods expenditures was based on the significantly contraction of 7.5 percent in last year, impacted by an enormous decrease on consumer confidence. However, the consumption on goods and services declined by 2.7 percent, reflecting the consumer caution on their spending for luxury and indulgence. Hence, in spite of rapidly increase in total private consumption which favorably supported the economic growth, the expansion was still fragile.
- Private investment continually recovered, in particular investment in machinery and equipment - private investment expanded by 6.5 percent, noticeably accelerated from 3.9 percent in the previous quarter and merely 0.5 percent in 2007, partly due to low real loan interest rate and near-full production capacity utilization in various industries such as beverage, paper, petrochemical product, tire, hard disk drive, integrated circuit, washing machine and airconditioner etc. In addition, there are some other supporting factors such as the improvement in investor sentiments as political uncertainty subsided. This strong recovery is also explained by the low base effect as the investment contracted in the first quarter of last year led by weak investor sentiments.
Investment in machinery and equipment expanded at 8.3 percent, as was reflected in the 20.0 percent increase in capital imports (in year 2000 price). The imports of electrical machinery, agricultural machinery, computer parts and equipment exhibited strong growth. Commercial sales also showed an impressive growth of 7.5 percent, after its average reduction of 5.9 percent in year 2007. Private investment in construction expanded slightly by 0.4 percent from its contraction of 8.5 percent in the fourth quarter of 2007, attributed to the acceleration on investment in commercial building construction, industrial plants construction and other constructions which increased by 14.3, 5.9 and 8.8 percent respectively, suggesting further investment in machinery and equipment imports in the future. On the other hand, housing construction remained weak at a new drop of 5.2 percent, caused by a decline in regional housing construction (which equal 70 percent of total housing construction). Due to higher spending on necessity led by inflation surge and rising prices of construction materials, some consumers have postponed their decision on housing purchase. Moreover, it is expected that home buyers are still waiting for the new tax package and generous lending offered by the Government Housing Bank to be in effect.
Total capacity utilization
----------- 2007 ----------- 208
(%) Year H1 Q3 Q4 Q1
Capacity Utilization 74.6 74.1 73.9 76.3 76.3
Beverage 81.6 81.4 76.5 86.8 87.2
Pulp and paper products 91.0 90.3 91.2 92.2 88.7
Chemical products 95.9 90.4 101.0 101.8 92.1
Petroleum products 88.2 87.5 90.8 87.1 87.2
Construction materials 78.4 78.4 80.6 76.1 79.7
Vehicles and equipment 72.6 68.9 75.7 76.9 78.0
Electronic products 79.3 72.2 81.5 91.1 80.9
Exports <30% of production 79.8 78.8 81.0 80.5 81.8
Exports 30 — 60% of production 69.6 71.4 65.9 69.7 81.0
Exports >60% of production 71.1 70.0 69.7 74.6 67.6
Source: Bank of Thailand
- Export growth remained solid while export volumes had a tendency of slowdown. In the first quarter of 2008, export value in US dollar terms accelerated notably at 21.1 percent growth and export volumes slowed down from 14.3 percent growth in the fourth quarter of 2007 to 10.2 percent while export price rose by 9.9 percent, comparable to that in the previous quarter. According to the latest data, export growth remained strong with an increasing value of 27.0 percent in April, resulting in 23.0 percent growth of export value during the first 4 months this year. However, in baht terms, export value and price increased at smaller rates of 10.3 and 0.1 percent respectively. April saw export value growth 13.9 percent, and resulted in 11.6 percent growth for the first 4 months.
Export of Agriculture
---------------- 2007 -------------- ---2008---
(%YOY) Year Q1 Q2 Q3 Q4 Q1 Apr
Rice Value 34.3 13.7 40.0 17.0 59.4 108.1 137.6
Price 9.5 17.3 10.1 7.3 4.2 13.6 46.6
Quantity 22.7 -2.9 27.0 7.7 53.2 82.7 62.1
Rubber Value 4.5 5.0 2.8 -6.4 17.9 33.6 32.5
Price 7.1 8.1 4.9 -7.2 27.0 33.8 25.5
Quantity -3.0 -2.6 -2.0 0.6 -7.3 0.0 5.6
Cassava Value 23.2 51.8 34.6 -0.9 13.1 13.5 41.3
Price 24.6 -5.6 8.1 40.7 55.8 58.9 44.9
Quantity 3.8 61.1 24.4 -29.7 -27.4 -29.3 -2.5
Corn Value 48.7 71.1 50.3 296.3 -9.5 229.7 9.7
Price -7.0 29.3 -10.0 -41.5 38.5 15.0 32.3
Quantity 22.7 53.4 38.4 395.3 -34.4 181.1 -17.0
- Export of agricultural commodity continued its growth as a result of the rapid increase in its export price and its accelerating export volume. Export of agricultural commodity grew significantly by 48.5 percent, compared to 28.8 percent growth in the last quarter of 2007 with its increasing volume and price of 15.3 and 26.5 percent respectively. Major agricultural exports which recorded strong expansions are rice and corn while the export price profited from the rapid increase in global commodity prices. Consequently, all the major agricultural exports experienced high price surges, including rice, corn, tapioca and rubber.
- Export volume of manufacturing products substantially slowed down in spite of a strong expansion. Export volume of manufacturing products has continued on a decelerating trend, increasing by 11.8 percent, slowed down from 18.0 percent in the fourth quarter of 2007. Nevertheless, its export price rose by 7.8 percent, producing an escalating export value of manufacturing products in the first quarter with 20.5 percent growth. Main drivers of manufacturing exports were airconditioner and parts, refrigerators and parts, computers and parts, vehicle and parts, gems and jewelry, plastic, rubber products, paper products and toiletry products. On the contrary, integrated circuit, shoes and furniture experienced a sharp drop in export value. Meanwhile value of metal products export slowed down.
Key export markets
--------------- 2007 -------------- ---- 2008 ----
(%YOY) Year Q1 Q2 Q3 Q4 Q1 Ratio
Major Market 11.2 12.3 12.9 2.7 17.7 11.7 51.3
US -1.2 1.9 -1.7 -9.1 5.3 7.1 11.7
Japan 10.6 15.5 12.3 3.0 12.2 6.1 11.3
EU (15) 15.6 22.2 24.0 10.4 7.7 11.7 12.8
Asean (5) 20.1 11.6 18.8 8.3 42.2 20.3 15.6
Other Market 25.8 24.0 24.7 23.1 30.6 32.0 48.7
Hong Kong 21.2 6.1 8.6 28.6 39.4 46.3 6.1
Taiwan -1.4 32.4 -4.7 -22.3 -5.4 -26.7 1.7
South Korea 11.1 14.1 13.7 5.2 12.1 13.9 1.9
Middle East 29.1 20.2 31.4 31.8 32.2 23.9 5.0
India 47.2 64.2 61.6 56.7 17.2 24.4 1.7
China 26.5 20.1 34.9 25.9 25.5 34.2 9.9
Source: MOC
- Main export market has a tendency of softening but others markets continued to expand well. Volume of Thai exports to EU and U.S.A. increased by 11.7 and 7.1 percent respectively, while volume of exports to Japan and ASEAN (5) tend to slow down with 6.1 and 20.3 percent growth as compared to 12.2 and 41.8 percent growth in the fourth quarter of 2007. Exports to the US market continuously increase in two consecutive quarters, partly due to low base in last year export when it was affected by sub-prime problem in the U.S. economy. Export products to the U.S. market such as computers and parts, rubber, and yarn and man-made filament increased in the first quarter. In addition, export to other markets continued to grow satisfactorily, for instance, exports to India (24.4 percent growth) China (34.2 percent growth), South Asia (25.5 percent growth), Africa (64.8 percent increase) Indochina (4) (58.4 percent rise).
(Continue to).../-Imports accelerated both in..
- Household consumption expanded more strongly, supporting a continuing expansion. In the first quarter of 2008, household expenditures expanded by 2.6 percent, accelerated from 1.6 percent in the fourth quarter of 2007. This noticeable improvement was underpinned by higher farmers’ income, upward adjustment of government officers’ salary and minimum wage, a lower real loan rate, and restoring of consumer confidence since November 2007. But constrained by accelerating inflation rate, recovery of household expenditures had not yet been full-fledged
The expansion on household expenditures was driven by an increase in spending on durable goods, semi-durable goods and food expenditure at 10.9, 3.3 and 3.4 percent respectively. However, the remarkable growth in durable goods expenditures was based on the significantly contraction of 7.5 percent in last year, impacted by an enormous decrease on consumer confidence. However, the consumption on goods and services declined by 2.7 percent, reflecting the consumer caution on their spending for luxury and indulgence. Hence, in spite of rapidly increase in total private consumption which favorably supported the economic growth, the expansion was still fragile.
- Private investment continually recovered, in particular investment in machinery and equipment - private investment expanded by 6.5 percent, noticeably accelerated from 3.9 percent in the previous quarter and merely 0.5 percent in 2007, partly due to low real loan interest rate and near-full production capacity utilization in various industries such as beverage, paper, petrochemical product, tire, hard disk drive, integrated circuit, washing machine and airconditioner etc. In addition, there are some other supporting factors such as the improvement in investor sentiments as political uncertainty subsided. This strong recovery is also explained by the low base effect as the investment contracted in the first quarter of last year led by weak investor sentiments.
Investment in machinery and equipment expanded at 8.3 percent, as was reflected in the 20.0 percent increase in capital imports (in year 2000 price). The imports of electrical machinery, agricultural machinery, computer parts and equipment exhibited strong growth. Commercial sales also showed an impressive growth of 7.5 percent, after its average reduction of 5.9 percent in year 2007. Private investment in construction expanded slightly by 0.4 percent from its contraction of 8.5 percent in the fourth quarter of 2007, attributed to the acceleration on investment in commercial building construction, industrial plants construction and other constructions which increased by 14.3, 5.9 and 8.8 percent respectively, suggesting further investment in machinery and equipment imports in the future. On the other hand, housing construction remained weak at a new drop of 5.2 percent, caused by a decline in regional housing construction (which equal 70 percent of total housing construction). Due to higher spending on necessity led by inflation surge and rising prices of construction materials, some consumers have postponed their decision on housing purchase. Moreover, it is expected that home buyers are still waiting for the new tax package and generous lending offered by the Government Housing Bank to be in effect.
Total capacity utilization
----------- 2007 ----------- 208
(%) Year H1 Q3 Q4 Q1
Capacity Utilization 74.6 74.1 73.9 76.3 76.3
Beverage 81.6 81.4 76.5 86.8 87.2
Pulp and paper products 91.0 90.3 91.2 92.2 88.7
Chemical products 95.9 90.4 101.0 101.8 92.1
Petroleum products 88.2 87.5 90.8 87.1 87.2
Construction materials 78.4 78.4 80.6 76.1 79.7
Vehicles and equipment 72.6 68.9 75.7 76.9 78.0
Electronic products 79.3 72.2 81.5 91.1 80.9
Exports <30% of production 79.8 78.8 81.0 80.5 81.8
Exports 30 — 60% of production 69.6 71.4 65.9 69.7 81.0
Exports >60% of production 71.1 70.0 69.7 74.6 67.6
Source: Bank of Thailand
- Export growth remained solid while export volumes had a tendency of slowdown. In the first quarter of 2008, export value in US dollar terms accelerated notably at 21.1 percent growth and export volumes slowed down from 14.3 percent growth in the fourth quarter of 2007 to 10.2 percent while export price rose by 9.9 percent, comparable to that in the previous quarter. According to the latest data, export growth remained strong with an increasing value of 27.0 percent in April, resulting in 23.0 percent growth of export value during the first 4 months this year. However, in baht terms, export value and price increased at smaller rates of 10.3 and 0.1 percent respectively. April saw export value growth 13.9 percent, and resulted in 11.6 percent growth for the first 4 months.
Export of Agriculture
---------------- 2007 -------------- ---2008---
(%YOY) Year Q1 Q2 Q3 Q4 Q1 Apr
Rice Value 34.3 13.7 40.0 17.0 59.4 108.1 137.6
Price 9.5 17.3 10.1 7.3 4.2 13.6 46.6
Quantity 22.7 -2.9 27.0 7.7 53.2 82.7 62.1
Rubber Value 4.5 5.0 2.8 -6.4 17.9 33.6 32.5
Price 7.1 8.1 4.9 -7.2 27.0 33.8 25.5
Quantity -3.0 -2.6 -2.0 0.6 -7.3 0.0 5.6
Cassava Value 23.2 51.8 34.6 -0.9 13.1 13.5 41.3
Price 24.6 -5.6 8.1 40.7 55.8 58.9 44.9
Quantity 3.8 61.1 24.4 -29.7 -27.4 -29.3 -2.5
Corn Value 48.7 71.1 50.3 296.3 -9.5 229.7 9.7
Price -7.0 29.3 -10.0 -41.5 38.5 15.0 32.3
Quantity 22.7 53.4 38.4 395.3 -34.4 181.1 -17.0
- Export of agricultural commodity continued its growth as a result of the rapid increase in its export price and its accelerating export volume. Export of agricultural commodity grew significantly by 48.5 percent, compared to 28.8 percent growth in the last quarter of 2007 with its increasing volume and price of 15.3 and 26.5 percent respectively. Major agricultural exports which recorded strong expansions are rice and corn while the export price profited from the rapid increase in global commodity prices. Consequently, all the major agricultural exports experienced high price surges, including rice, corn, tapioca and rubber.
- Export volume of manufacturing products substantially slowed down in spite of a strong expansion. Export volume of manufacturing products has continued on a decelerating trend, increasing by 11.8 percent, slowed down from 18.0 percent in the fourth quarter of 2007. Nevertheless, its export price rose by 7.8 percent, producing an escalating export value of manufacturing products in the first quarter with 20.5 percent growth. Main drivers of manufacturing exports were airconditioner and parts, refrigerators and parts, computers and parts, vehicle and parts, gems and jewelry, plastic, rubber products, paper products and toiletry products. On the contrary, integrated circuit, shoes and furniture experienced a sharp drop in export value. Meanwhile value of metal products export slowed down.
Key export markets
--------------- 2007 -------------- ---- 2008 ----
(%YOY) Year Q1 Q2 Q3 Q4 Q1 Ratio
Major Market 11.2 12.3 12.9 2.7 17.7 11.7 51.3
US -1.2 1.9 -1.7 -9.1 5.3 7.1 11.7
Japan 10.6 15.5 12.3 3.0 12.2 6.1 11.3
EU (15) 15.6 22.2 24.0 10.4 7.7 11.7 12.8
Asean (5) 20.1 11.6 18.8 8.3 42.2 20.3 15.6
Other Market 25.8 24.0 24.7 23.1 30.6 32.0 48.7
Hong Kong 21.2 6.1 8.6 28.6 39.4 46.3 6.1
Taiwan -1.4 32.4 -4.7 -22.3 -5.4 -26.7 1.7
South Korea 11.1 14.1 13.7 5.2 12.1 13.9 1.9
Middle East 29.1 20.2 31.4 31.8 32.2 23.9 5.0
India 47.2 64.2 61.6 56.7 17.2 24.4 1.7
China 26.5 20.1 34.9 25.9 25.5 34.2 9.9
Source: MOC
- Main export market has a tendency of softening but others markets continued to expand well. Volume of Thai exports to EU and U.S.A. increased by 11.7 and 7.1 percent respectively, while volume of exports to Japan and ASEAN (5) tend to slow down with 6.1 and 20.3 percent growth as compared to 12.2 and 41.8 percent growth in the fourth quarter of 2007. Exports to the US market continuously increase in two consecutive quarters, partly due to low base in last year export when it was affected by sub-prime problem in the U.S. economy. Export products to the U.S. market such as computers and parts, rubber, and yarn and man-made filament increased in the first quarter. In addition, export to other markets continued to grow satisfactorily, for instance, exports to India (24.4 percent growth) China (34.2 percent growth), South Asia (25.5 percent growth), Africa (64.8 percent increase) Indochina (4) (58.4 percent rise).
(Continue to).../-Imports accelerated both in..