- Imports accelerated both in value and volume terms. Import value grew at a remarkably rate of 34.5 percent, compared to 6.6 percent in the fourth quarter of last year and average growth rate of 9.6 percent in 2007. The price and volume rose by 15.6 percent and 16.3 percent, respectively, attributable to growth in all import categories in particular oil imports of which price and volume picked up significantly. According to the latest data available, imports in April continued to expand by 44.4 percent, and imports in the first 4 months of 2008 consequently increased by an average 37.1 percent.
- The strong import growth in raw materials was seen in gems and jewelry, iron, steel and products, crops and yields, fertilizer and pesticide, and chemicals. Meanwhile, a rise in import of capital goods was contributed mainly by an increase in import of computer and parts, machinery and parts, electrical machinery and parts and scientific equipments. The imported consumer goods which increased strongly included electrical appliances, cloths, shoes, watches and parts, and milk and dairy products, for instance. An increase in fuel and lubricant imports was due primarily to the import of crude oil of which price rose remarkably.
- Term of trade deteriorated. Import prices in US dollar term increased by 15.6 percent, a faster pace than 9.9 percent increase of export prices. This led terms of trade to deteriorate consecutively from the latter half of 2007, jeopardizing national income and rendering trade account vulnerable.
- Trade balance registered a deficit of 109 million US dollars (or 3,834 million baht). Nevertheless, service balance recorded a large surplus as a result of increases in tourist receipts, remittance of investment earnings, as well as private and state enterprise transfers. Accordingly, current account in the first quarter registered a surplus of 3,068 million US dollars (99,657 million baht), which was equivalent to 4.3 percent of GDP.
- Trade balance registered a deficit of 109 million US dollars (or 3,834 million baht). Nevertheless, service balance recorded a large surplus as a result of increases in tourist receipts, remittance of investment earnings, as well as private and state enterprise transfers. Accordingly, current account in the first quarterregistered a surplus of 3,068 million US dollars (99,657 million baht), which was equivalent to 4.3 percent of GDP
- Production side: Better expansion with broad base
- Agricultural sector expanded by 3.5 percent in the first quarter of 2008, slightly picked up from 2.9 percent in the fourth quarter of 2007. Production of major agricultural products hich increased included corn, cassava, sugar cane, palm and rubber. Crop prices significantly increased, especially the prices of energy crops, cereal and grain, and food crops. Greater demand for alternative energy sources especially from energy crops, and supply constraint of grain have underpinned uch price movement. Price rises while production continued to expand supported farm income growth of 21.1 percent.
- Industrial Sector expanded continuously by 9.7 percent, slightly picked up from 8.0 percent in the fourth quarter of 2007. The said expansion derived from greater growth of export-oriented industries and domestic-used manufacturing such as the manufacturing of petroleum products, bicycle, and passenger car. Supporting factors for the solid growth were increasing demand for energy-saving ar, higher farm income, and innovation that support manufacturing of E20-alternativeenergy cars for market. Relating to the exportoriented industries, the strong expansion was seen in canned sea food products, HDD roducts, air conditioners, and washing machines. The expansion was considered as a result of more efforts placed on branding for export, and expansion of made-to-order business to serve foreign orders. However, he leather product manufacturing contracted further, and has led some manufacturers to switch from being producers to importers for trading instead. In overall, in this quarter, the capacity utilization rate was at 76.3 percent, compared to 74.6 percent in the first quarter of 2007.
- Construction sector in the first quarter of 2008 expanded by only 1.1 percent, slowed down from 5.2 percent in the fourth quarter of 2007 and 2.1 percent. The slowdown was the result of the deceleration of government construction. However, private investment in construction expanded, especially commerce building construction. Dampening factor for construction has been a continuous increase in prices of construction, especially higher price of steel marked by 37.0 percent jump.
- Hotel and restaurant sector expanded by 8.8 percent in the first quarter of 2008, slightly picked up from 7.2 percent in the fourth quarter of 2007, and 4.9 percent growth for the whole year of 2007. The expansion was in accordance with better performance of tourism, especially reflected in the 13.3 ercent rise in number of foreign tourists while the rate of occupancy marked at 68.6 percent. The rise supported a solid increase in tourism income by 27.8 percent in this quarter. Considering by nationality, the number of tourists from European and American countries, as well as China increased impressively. These are groups of tourists who have spent increasingly during their stay in Thailand.
- Financial sector grew by 9.1 percent in the first quarter of 2008, slightly picked up from 8.7 percent in the fourth quarter of 2007 and 5.7 percent for the year. The expansion was generated by loan expansion for business sector, smaller reserve requirement after completion of the requirement to conform with International Accounting Standards (IAS 39) since the end of 2007, and higher interest pread receipts.
- Economic stability: Unemployment rate remains low but inflationary pressure has mounted while urrent account recording smaller surplus.
- Inflation rate rose rapidly. In the first quarter of 2008, headline inflation was 5.0 percent higher than 2.9 percent in the forth quarter of previous year, mainly due to jump in prices of ood and non-alcoholic beverages as well as transportation and communication cost which increased at accelerating rates of 6.8 and 9.2 percent respectively. Substantial increases were seen in food category such as cooking oil, meats, rice and flour, fruits and vegetables eggs and dairy products. In the category of transportation and communication, fuel prices were significantly lifted up by 26.8 percent.
Core inflation continued to accelerate. In the first quarter, core inflation was 1.5 percent compared with 1.1 percent in the forth quarter of 2007. This was mainly due to higher prices of various products such as food ingredients and processed food, construction materials and transportation fares
Producer price index, in the first quarter, continued to rise by 10.8 percent increasing from 7 percent of the previous quarter. In addition, the price index went up in all categories. Raw materials, intermediate goods and final goods increased by 16.5 13.8 and 9 percent respectively. The strong increase in prices of raw material category was mainly accounted by the up surge of food prices such as rice and starch products (noodles) as a result of a huge increase in price of paddy rice. Chicken price as well as prices of other major agricultural products also went up. The rises in producer price index suggest further pressures will be passed to consumer prices, and thus higher cost of living for all walks of life. That said high inflation rate is still anticipated in the remaining months.
Employment growth (%YOY)
------------- 2007 -------------- 2008
Avg. Q1 Q2 Q3 Q4 Q1*
Employment 1.6 1.8 0.7 2.1 1.7 1.3
Agriculture 1.0 2.8 -0.5 1.2 0.6 0.5
Non-Agriculture 2.0 1.2 1.5 2.9 2.5 1.8
Manufacturing 2.1 0.2 1.3 5.4 1.7 0.4
Construction -0.1 1.6 1.5 -4.9 1.0 -2.0
Hotel and Restaurant 3.0 4.3 2.0 4.0 1.8 1.9
Unemployment rate 1.4 1.6 1.6 1.2 1.1 1.6
Source: NSO
* Monthly Average
- The average employment in the first quarter of 2008. There were 35.78 million people employed in the first quarter which increased by 1.3 percent from the same period last year. Numbers of employment in agricultural sector were 12.48 million people, increased by 0.5 percent. Numbers of employment in non-agricultural sector were 23.30 million people with an increasing rate of 1.8 percent. The higher rate of employment was witnessed in industrial and hotel and restaurant sector, with an increasing rate of 0.4 and 1.9 percent, respectively. The increases were in accordance with the tourism revitalization. For construction sector, its employment rate reduced by 2.0 percent in response to slowdown in its growth. The unemployment rate was as low as 1.6 percent. In the first quarter of 2008, insured persons were marked at 8.82 million people, increased by 1.3 percent comparing with the same period last year. However, some indicators depicted that the sound economy growth did not fully generated employment as expected because the growth sectors were concentrated more in the capital-intensive industries. This was implied from the proportion of the unemployed to new job-applicants which remained at 0.88 times, as compared to 0.80 times in the first quarter of 2007
Fiscal balance remained in deficit in response to budget deficit policy. In the second quarter of fiscal year 2008 (January — March 2008), the total of government revenue was 295,782.07 million baht, decreased by 2.2 percent compared to the same quarter of the last fiscal year, whereas the government expenditure was 402,207.49 millions baht, decreased by 8.0 percent. Therefore, budget balance recorded a deficit of 106,425.42 millions baht, decreased by 28,539.48 millions baht, or dropped by 21.1 percent from the same period of the last fiscal year. Including a surplus of the non-budget balance of 46,684.14 million baht, budget cash balance before borrowings was 57,741 million baht, decreased 68,793 million baht, or declined by 54.4 from the same quarter of the last fiscal year.
During the first half of the fiscal year 2008 (October 2007 — March 2008), budget balance recorded deficit of 168,133.88 million baht. Combining with a deficit of the non-budget balance of 5,254.02 million baht, cash balance registered a deficit before borrowings around 173,387.40 million baht. Comparing with deficit target of fiscal year 2008 of 165,000 million baht, deficit during the first half of the year has already surpassed the target around 8,387.4 million baht. Government bonds and T-bills in total of 85.447 million baht, together with the withdrawal of treasury cash balance of 87,939.52 million baht, have been issued finance the deficit budget.
- Public Debt At the end of February 2008, public debt stood at 3.33 trillion baht, increased from the outstanding of public debt at the end of the year. This is mainly because of an increase in direct government debt especially domestic debt to balance the deficit budget as well as an increase of FIDF’s debt of non-guaranteed by the government. However, ration of public debt to GDP slightly deceased to 36.35 percent, down 37.97 percent at the end of the December 2007.
(Continue to).../- Financial conditions:..
- The strong import growth in raw materials was seen in gems and jewelry, iron, steel and products, crops and yields, fertilizer and pesticide, and chemicals. Meanwhile, a rise in import of capital goods was contributed mainly by an increase in import of computer and parts, machinery and parts, electrical machinery and parts and scientific equipments. The imported consumer goods which increased strongly included electrical appliances, cloths, shoes, watches and parts, and milk and dairy products, for instance. An increase in fuel and lubricant imports was due primarily to the import of crude oil of which price rose remarkably.
- Term of trade deteriorated. Import prices in US dollar term increased by 15.6 percent, a faster pace than 9.9 percent increase of export prices. This led terms of trade to deteriorate consecutively from the latter half of 2007, jeopardizing national income and rendering trade account vulnerable.
- Trade balance registered a deficit of 109 million US dollars (or 3,834 million baht). Nevertheless, service balance recorded a large surplus as a result of increases in tourist receipts, remittance of investment earnings, as well as private and state enterprise transfers. Accordingly, current account in the first quarter registered a surplus of 3,068 million US dollars (99,657 million baht), which was equivalent to 4.3 percent of GDP.
- Trade balance registered a deficit of 109 million US dollars (or 3,834 million baht). Nevertheless, service balance recorded a large surplus as a result of increases in tourist receipts, remittance of investment earnings, as well as private and state enterprise transfers. Accordingly, current account in the first quarterregistered a surplus of 3,068 million US dollars (99,657 million baht), which was equivalent to 4.3 percent of GDP
- Production side: Better expansion with broad base
- Agricultural sector expanded by 3.5 percent in the first quarter of 2008, slightly picked up from 2.9 percent in the fourth quarter of 2007. Production of major agricultural products hich increased included corn, cassava, sugar cane, palm and rubber. Crop prices significantly increased, especially the prices of energy crops, cereal and grain, and food crops. Greater demand for alternative energy sources especially from energy crops, and supply constraint of grain have underpinned uch price movement. Price rises while production continued to expand supported farm income growth of 21.1 percent.
- Industrial Sector expanded continuously by 9.7 percent, slightly picked up from 8.0 percent in the fourth quarter of 2007. The said expansion derived from greater growth of export-oriented industries and domestic-used manufacturing such as the manufacturing of petroleum products, bicycle, and passenger car. Supporting factors for the solid growth were increasing demand for energy-saving ar, higher farm income, and innovation that support manufacturing of E20-alternativeenergy cars for market. Relating to the exportoriented industries, the strong expansion was seen in canned sea food products, HDD roducts, air conditioners, and washing machines. The expansion was considered as a result of more efforts placed on branding for export, and expansion of made-to-order business to serve foreign orders. However, he leather product manufacturing contracted further, and has led some manufacturers to switch from being producers to importers for trading instead. In overall, in this quarter, the capacity utilization rate was at 76.3 percent, compared to 74.6 percent in the first quarter of 2007.
- Construction sector in the first quarter of 2008 expanded by only 1.1 percent, slowed down from 5.2 percent in the fourth quarter of 2007 and 2.1 percent. The slowdown was the result of the deceleration of government construction. However, private investment in construction expanded, especially commerce building construction. Dampening factor for construction has been a continuous increase in prices of construction, especially higher price of steel marked by 37.0 percent jump.
- Hotel and restaurant sector expanded by 8.8 percent in the first quarter of 2008, slightly picked up from 7.2 percent in the fourth quarter of 2007, and 4.9 percent growth for the whole year of 2007. The expansion was in accordance with better performance of tourism, especially reflected in the 13.3 ercent rise in number of foreign tourists while the rate of occupancy marked at 68.6 percent. The rise supported a solid increase in tourism income by 27.8 percent in this quarter. Considering by nationality, the number of tourists from European and American countries, as well as China increased impressively. These are groups of tourists who have spent increasingly during their stay in Thailand.
- Financial sector grew by 9.1 percent in the first quarter of 2008, slightly picked up from 8.7 percent in the fourth quarter of 2007 and 5.7 percent for the year. The expansion was generated by loan expansion for business sector, smaller reserve requirement after completion of the requirement to conform with International Accounting Standards (IAS 39) since the end of 2007, and higher interest pread receipts.
- Economic stability: Unemployment rate remains low but inflationary pressure has mounted while urrent account recording smaller surplus.
- Inflation rate rose rapidly. In the first quarter of 2008, headline inflation was 5.0 percent higher than 2.9 percent in the forth quarter of previous year, mainly due to jump in prices of ood and non-alcoholic beverages as well as transportation and communication cost which increased at accelerating rates of 6.8 and 9.2 percent respectively. Substantial increases were seen in food category such as cooking oil, meats, rice and flour, fruits and vegetables eggs and dairy products. In the category of transportation and communication, fuel prices were significantly lifted up by 26.8 percent.
Core inflation continued to accelerate. In the first quarter, core inflation was 1.5 percent compared with 1.1 percent in the forth quarter of 2007. This was mainly due to higher prices of various products such as food ingredients and processed food, construction materials and transportation fares
Producer price index, in the first quarter, continued to rise by 10.8 percent increasing from 7 percent of the previous quarter. In addition, the price index went up in all categories. Raw materials, intermediate goods and final goods increased by 16.5 13.8 and 9 percent respectively. The strong increase in prices of raw material category was mainly accounted by the up surge of food prices such as rice and starch products (noodles) as a result of a huge increase in price of paddy rice. Chicken price as well as prices of other major agricultural products also went up. The rises in producer price index suggest further pressures will be passed to consumer prices, and thus higher cost of living for all walks of life. That said high inflation rate is still anticipated in the remaining months.
Employment growth (%YOY)
------------- 2007 -------------- 2008
Avg. Q1 Q2 Q3 Q4 Q1*
Employment 1.6 1.8 0.7 2.1 1.7 1.3
Agriculture 1.0 2.8 -0.5 1.2 0.6 0.5
Non-Agriculture 2.0 1.2 1.5 2.9 2.5 1.8
Manufacturing 2.1 0.2 1.3 5.4 1.7 0.4
Construction -0.1 1.6 1.5 -4.9 1.0 -2.0
Hotel and Restaurant 3.0 4.3 2.0 4.0 1.8 1.9
Unemployment rate 1.4 1.6 1.6 1.2 1.1 1.6
Source: NSO
* Monthly Average
- The average employment in the first quarter of 2008. There were 35.78 million people employed in the first quarter which increased by 1.3 percent from the same period last year. Numbers of employment in agricultural sector were 12.48 million people, increased by 0.5 percent. Numbers of employment in non-agricultural sector were 23.30 million people with an increasing rate of 1.8 percent. The higher rate of employment was witnessed in industrial and hotel and restaurant sector, with an increasing rate of 0.4 and 1.9 percent, respectively. The increases were in accordance with the tourism revitalization. For construction sector, its employment rate reduced by 2.0 percent in response to slowdown in its growth. The unemployment rate was as low as 1.6 percent. In the first quarter of 2008, insured persons were marked at 8.82 million people, increased by 1.3 percent comparing with the same period last year. However, some indicators depicted that the sound economy growth did not fully generated employment as expected because the growth sectors were concentrated more in the capital-intensive industries. This was implied from the proportion of the unemployed to new job-applicants which remained at 0.88 times, as compared to 0.80 times in the first quarter of 2007
Fiscal balance remained in deficit in response to budget deficit policy. In the second quarter of fiscal year 2008 (January — March 2008), the total of government revenue was 295,782.07 million baht, decreased by 2.2 percent compared to the same quarter of the last fiscal year, whereas the government expenditure was 402,207.49 millions baht, decreased by 8.0 percent. Therefore, budget balance recorded a deficit of 106,425.42 millions baht, decreased by 28,539.48 millions baht, or dropped by 21.1 percent from the same period of the last fiscal year. Including a surplus of the non-budget balance of 46,684.14 million baht, budget cash balance before borrowings was 57,741 million baht, decreased 68,793 million baht, or declined by 54.4 from the same quarter of the last fiscal year.
During the first half of the fiscal year 2008 (October 2007 — March 2008), budget balance recorded deficit of 168,133.88 million baht. Combining with a deficit of the non-budget balance of 5,254.02 million baht, cash balance registered a deficit before borrowings around 173,387.40 million baht. Comparing with deficit target of fiscal year 2008 of 165,000 million baht, deficit during the first half of the year has already surpassed the target around 8,387.4 million baht. Government bonds and T-bills in total of 85.447 million baht, together with the withdrawal of treasury cash balance of 87,939.52 million baht, have been issued finance the deficit budget.
- Public Debt At the end of February 2008, public debt stood at 3.33 trillion baht, increased from the outstanding of public debt at the end of the year. This is mainly because of an increase in direct government debt especially domestic debt to balance the deficit budget as well as an increase of FIDF’s debt of non-guaranteed by the government. However, ration of public debt to GDP slightly deceased to 36.35 percent, down 37.97 percent at the end of the December 2007.
(Continue to).../- Financial conditions:..