For 2009, private investment declined by 12.8 percent as a result of the 14.8 percent contraction of investment in machinery and equipment and 5.4 percent investment in construction.
Export value and volume have improved as the global economy recovered. In the last quarter of 2009, the export value in US dollars increased for the first time in 12 months by 12.2 percent, compared to an average reduction of 21.2 percent during the first nine months. The export volume and price rose by 4.4 and 6.9 percent respectively which was the result of the global economic recovery. In addition, this increase was supported by a low base effect (lower price in 2008 as a result of the US financial crisis). As a result of an appreciation of the Thai baht, export value in the fourth quarter climbed up by 2.8 percent while the export price grew by 2.0 percent in terms of Thai baht. Nonetheless, for 2009, export value, price and volume shrank 13.9, 0.3 and 14.2 percent consecutively.
- Agricultural commodities: export volume and price increased. In the fourth quarter, the export volume and price rose by 6.5 and 28.7 percent respectively, which attributed to an increase in agricultural export value by 35.4 percent. The hiking export price was the result of (i) a significant improvement in global demand; (ii) a decline in export volume of agricultural products in some export-competing countries as the natural disasters entailed great damages; and (iii) a low base effect (low level of export volume during the same period last year). Agricultural products which recorded an increase in export volume were (i) rice, increased by 24.1 percent, which was a result of rice production of Thailand’s major exportcompeting countries, China and India, being affected by natural disasters that effectively leading to higher global demand for Thai rice and (ii) cassava, increased by 180.1 percent, as a result of its being the main alternative ingredient for ethanol production instead of the use of molasses which experienced a continual increase in price. Besides, a strong recovery of China, Thailand’s major trading partner, also generated a high demand for Thai cassava.
- Manufacturing products: export volume and value increased after a long contraction since the fourth quarter last year. The export value rose by 10.4 percent with an increase in volume and price by 5.7 and 4.4 percent respectively. Many major exported commodities experienced an expansion such as rubber products, printed matters, papers and products, beauty or make-up preparations, soap and preparations for skincare, pharmaceutical products / medical instruments and appliance, computer and electrical appliances. However, classified by product group, export value of high-technology products and resource-based products increased by 14.3 and 8.2 percent consecutively. Whereas, export of labor-intensive products experienced a drop in value of 14.5 percent owing to a decline in the value of unwrought gold (For 2009, the export of unwrought gold was accounted for 34 percent of labor-intensive export products).
- Electronics and electrical appliances: export value of electronics and electrical appliances in the fourth quarter rose by 16.3 and 16.0 percent respectively. This increase was supported by an improvement in major trading partners’ economic condition together with a low base effect (low level of export volume during the same period last year) resulting from financial economic crisis. Major products which recorded an increase in export value included computer and parts, electronic integrated circuits, radiobroadcast receivers, television receiver and parts thereof, air conditioner and parts thereof, and refrigerators and parts thereof. On the other hand, product that recorded the value reduction was telecommunication equipments, which were mainly exported to developed countries such as Japan and USA whose economic recovery remain fragile. In contrast, the export of hard disk, mainly to ASEAN countries and China, has expanded.
- Vehicles, parts and accessories: export value increased by 7.4 percent, fueled by the improvement in world economic conditions. Particularly, the benefits of the recovery of vehicle industry have already been enjoyed by small and medium vehicle parts manufacturers, as can be observed from rising employment and market values in most of these markets (accounting for 53.4 percent of total export value), when compared to the first three quarters which had witnessed consistent declines.
- Food Products (excluding sugar): export value slightly accelerated by 2.6 percent, including an increase in canned, frozen and processed vegetables and fruits by 4.0 percent and canned, frozen, and processed shrimps rose by 11.9 percent. Conversely, products which recorded a decrease in export value include canned, frozen, and processed seafood (excluding shrimps) and frozen and processed chickens. Similarly, the export of frozen food has also experienced difficulty, partly due to high cost of production when compared to those of the neighboring countries.
- Export market expanded in both major markets and other markets: major markets which have seen improvement in export value include USA and ASEAN rose by 4.5 and 18.3 percent respectively, while Japan and EU (15) have witnessed a decline of 2.6 and 1.8 percent consecutively. Regarding to new markets, the value of export to Hong Kong, Taiwan, and India have increased favorably by 23.8, 27.3 and 20.4 percent respectively, especially the massive increase in China by 54.2 percent.
Imports: Import value and price showed a sign of increase, whilst import volume still plunged but at a slower pace. In the fourth quarter, import value in US dollar term increased by 1.4 percent, a first expansion after the fall by 37.6, 33.3 and 28.3 percent respectively in the first 3 quarters. Import price rose by 6.6 percent mainly due to the rising in oil price, however, import volume decreased by 4.8 percent at a slower pace compared to a fall of 32.6 percent in the first 9 months. A sign of domestic and global economic recovery had increase demand for raw material and stimulate demand for import, in order to use for producing products in response to the increase in economic activities. This reflects the increase in imports of semi-finished goods, raw materials and consumer goods. On the contrary, imports of capital goods, fuel and lubricant retreated in terms of Thai baht with a decrease of 2.9 percent in value and an increase of 2.0 percent in price.
- Import of capital goods declined both in terms of volume and value. Import value of capital goods decreased by 3.9 percent which decelerated from a plunge of 19.7 percent in the first 9 months, due to the gradual recovery of investment as well as an improvement in capacity utilization. Import goods that recorded a contraction were industrial machinery and components, metal products, and other capital goods, etc. Meanwhile, some major imported commodities turned to be in an expansion such as electrical machinery and parts, computer and parts, scientific and medical equipments, etc. In addition, the import volume and price dropped by 4.3 and 0.4 percent respectively.
- Semi-finished goods and raw materials: import volume and price increased. Import value of semi-finished goods and raw materials expanded by 2.9 percent, the first expansion after 4 consecutive quarters of contraction. This was due to an increase in demand on producing goods for export and domestic market, resulted from economic recovery. Import goods that recorded an increase were electrical machinery and parts, chemical products, and plastic products, etc. Conversely, import goods that declined at a slower pace were iron, steel and products, gems and jewelry, silver bar and gold, and crop and products, etc. Moreover, import volume and price of raw materials and semi-raw materials rose by 2.4 and 0.6 percent consecutively.
- Fuel and lubricant: import price increased and caused import to value to decrease at a deceleration rate. Import price of fuel and lubricant fell by 2.5 percent slower than 41.4 percent decrease in the first 9 months. Import volume declined by 19.4 percent, but the import price rose by 21.0 percent. A slower reduction of import value was resulted from the massive increase in crude oil and refined petroleum products price compared to low level during the same period last year.
- Consumer goods increased both in term of volume and price. Import value rose by 12.7 percent compared to the contraction of 13.1 percent in the first 9 months. This was owing to improvement of household consumption expenditure resulting from consumer confidence on economic recovery. Import goods that recorded increase were household electrical appliances, miscellaneous goods, pharmaceutical products, clothing, shoes and other garments, and vegetables and fruits products, etc. Moreover, the import volume and price of consumer goods increased by 11.7 and 0.9 percent consecutively.
For 2009, import value, in terms of US dollars, decreased by 24.9 percent with a decline in import volume and price of 23.0 and 2.5 percent consecutively. Meanwhile, in terms of Thai baht, import value contracted by 23.0 percent while import price remained unchanged.
Term of trade improved from the same period of previous year as export price in US dollars term increased at a faster pace than import price. The price of export rose by 7.5 percent, while the import price also increased by 6.6 percent. Hence, asymmetric price expansion improved term of trade in the fourth quarter by 0.9 percent.
Trade balance recorded a surplus of 2,673 million US dollars (which was equivalent to 89,039 million baht), lower than a surplus of 5,118 million US dollars (which was equivalent to 173,501 million baht) in the third quarter. Throughout 2009, trade balance registered a surplus of 19,416 million US dollars, which was equivalent to 669,988 million baht.
Production side:
- Agriculture sector contracted by 2.2 percent due to the contraction of cassava, palm oil, rubber, and rice production by 16.4, 3.0, 1.9 and 0.7 percent respectively. This was mainly due to outbreak of pinkish cassava mealy bug and brown plant hoppers, coupled with worsening climate conditions like heavy rainfall and floods in many regions especially in the South. Crop price has increased by 2.9 percent, the first expansion of the year. This was contributed by: i) Rubber price increased sharply by 54.2 percent following the recovery of rubber product and vehicle and equipment sectors, with expansion of 15.9 and 8.7 percent respectively. ii) Palm oil price increased by 41.1 percent as a result of decreasing global supply caused by worsening climate conditions which devastated the major production areas in Indonesia, Malaysia, and southern Thailand and iii) Paddy rice decreased by 9.7 percent because of an excess supply due to the recent passage of the harvesting season. Livestock price has expanded by 5.8 percent, attributable to the rising domestic and international demand for swine and broiler chickens. Similarly, the price of fishery products experienced an improvement of 1.7 percent, caused by the increase in price of fish and prawns. This resulted from global decline in the production of prawns due to outbreak in prawn diseases in Thailand, Indonesia, and Vietnam. The rising agricultural price has improved farm income by 2.7 percent in this quarter. The whole year of 2009, agricultural production declined by 0.6 percent.
- Manufacturing Sector grew by 9.9 percent, considerably improved from a contraction of 5.9 percent in the previous quarter. The expansion was mainly influenced by an impressive growth of 22.9 percent in the export-oriented industries following global economic recovery which leads to an increase in global demand. Meanwhile, the index of foreign purchasing orders improved from 102.6 in the third quarter to 119.0 in the forth quarter. The well-performed industries included (1) electronic appliances, particularly integrated circuits and hard disk drive, which recorded and expansion of 46.9 percent and 27.9 percent respectively. Noting that part of the expansion was to meet the increasing orders over the last two quarters. (2) Canned seafood industry with a growth rate of 22.3 percent. The domestic-oriented industries also grew by 7.5 percent, recovered from a contraction of 7.9 percent in the previous quarter. This was partly due to better consumer confidence following the recent recovery of domestic economy and higher prices of agricultural products.
Notably, the well performed industries included (1) food and beverage (2) passenger cars in accordance with increasing orders (3) petroleum products (4) rubber and rubber products following the recovery of automobile industry, and (5) construction materials particularly iron and steel product which grew by 81.0 percent since the construction sector is expected to improve. At the end of quarter, the capacity utilization was 67.2 percent, rose from 62.5 percent in the previous quarter. Major industries that remarkably expanded their production capacity were food (61.1 percent from 46.1 percent), beverages (70.0 percent from 52.9 percent), rubber and rubber products (62.2 percent from 51.0 percent), vehicle and transporting equipments (72.2 percent from 59.9 percent), and electronic products (72.0 percent from 68.8 percent). However, several industries continued to operate with capacity utilization below 50 percent, including footwear products (34.3 percent), leather products (27.3 percent) and furniture (25.7 percent). For the year 2009, the manufacturing sector contracted by 5.1 percent.
- Construction sector grew by 5.1 percent, continually improved from 1.9 percent expansion in the previous quarter. Sales volume of construction materials such as steel and cement products increased by 13.6 and 9.6 percent respectively. The expansion in construction sector was mainly driven by significant improvement in private construction as a result of better entrepreneur confidence toward economic situation. Indeed, the private construction grew by 2.0 percent, reversed from a contraction of 6.3 percent in the previous quarter. The total permitted area for construction grew by 21.3 percent, part of which were 1.4 percent growth in residential construction and 115.9 percent growth in commercial building which included two planned construction of medium and large department stores inside Bangkok area. The permitted area for industrial plants also expanded by 7.2 percent following the recovery of industrial sector while the value of newly developed real estates in Bangkok and vicinities area grew by 37.2 percent, reflecting better confidence of residential developer. Public construction grew by 8.3 percent, mainly resulted by the implementation of government projects under the stimulus package (SP2) and also several mega projects such as the Purple Line of Mass Rapid Transit project (Bang Yai-Bang Sue) and BOI housing projects. Construction material price index registered a drop of 3.1 percent compared with the same period of last year. Prices of wood and wood products price continued to grow by 9.5 percent while prices of steel, concrete and cements products dropped by 6.2, 5.7 and 2.0 respectively.
- Real estate sector expanded by 1.8 percent in the fourth quarter, accelerated from the previous quarter from clearer trend of economic recovery. This was reflected in the housing developer sentiment index (HDSI), which leaped from 55.8 up to 57.8 in the fourth quarter. In addition, financial institutions began to ease their loan approval practice, which led to 7.6 percent expansion in housing loan. Moreover, reduction in housing price had quickened consumers’ buying decision. In this quarter, single-detached house (including land) and town house (including land) indexes has shrank by 4.0 and 2.6 percent respectively, compared with the same period of last year. During the fourth quarter, housing developers’ tends to focus their business in small size property located along outbound routes toward suburban area with a medium price range, to better accompany demand of urban consumers.
- Financial sector improved from the previous quarter with an expansion of 6.6 percent. As a result of improving consumer confidence, household expenses registered a growth of 1.4 percent, the first expansion in 2009. Indeed, household credit extended by commercial banks and other financial institutions grew by 5.2 and 11.3 percent respectively. Overall, credit extended by commercial bank expanded by 2.2 percent, continually improved from a 0.3 percent growth in the previous quarter. Meanwhile, credit extended by other financial institutions expanded by 14.7 percent. Nevertheless, business credit extended by commercial banks and other financial institutions contracted by 8.6 percent and 8.3 percent respectively. This indicated that firms are able to raise fund by issuing their own debt securities rather than applying for credit from financial institutions.
- Hotels and restaurants expanded by 13.5 percent compared to the same period of last year, attributable to the rising of foreign tourists. In the fourth quarter, number of foreign tourists was reported at 4.2 million persons, increased by 26.2 percent from the same period of 2008. This significant improvement was due to the seasonal effect and economic recovery in Thailand major tourism market. The number of tourists from Asian countries notably increased by 33.1 percent, mostly from China, Republic of Korea and Taiwan. Similarly, average occupancy rate stood at 54.6 percent, accelerated from 49.6 percent in the same period of last year. The advancement in occupancy rate was experienced throughout the country, especially in central region.
For the year 2009, number of foreign tourists visiting Thailand recorded at 14.1 million persons, slightly higher than target of 14.0 million persons. Nevertheless, number of foreign tourists in 2009 declined by 3.4 percent, comparing to the same period of the last year. This drawback was mainly concentrated in the first half year due to the following factors: i) economic recession, ii) outbreak of influenza A (H1N1), and iii) uncertainty in domestic political situation. However, all three drawbacks has gradually improved in the later half which made number of foreign tourists increased significantly by 11.5 percent.
- Employment rose, while unemployment rate declined. In the fourth quarter, employment was at 38.18 million persons, increased by 1.8 percent from the same period of the previous year. The economic recovery has improved employment demand, especially in hotel and restaurant, retail and wholesale, and construction sectors by 10.9, 5.7, and 2.9 percent respectively. However, employment in agriculture sector declined by 2.4 percent. This was mainly due to i) high demand for labor in non-agriculture sector, ii) outbreak of pinkish cassava mealy bug and brown plant hoppers, and iii) worsening climate conditions. Thus, employment in manufacturing sector has expanded by 0.4 percent. Number of unemployment persons in this quarter counted at 384,000 persons, declined by 120,000 persons compared to the same period of last year which equivalent to 23.8 percent reduction. Therefore, the average unemployment rate was at 1.0 percent. Moreover, number of insured persons claimed for unemployment compensation gradually declined which reflected greater demand for employment.
The overall energy consumption efficiency improved from the previous quarter.
- The ratio of oil consumption to GDP. In the fourth quarter of 2009, the ratio of oil consumption to GDP stood at 0.9166 percent, decreased from 0.9264 percent in the third quarter, but increased from 0.9012 percent in the fourth quarter of 2008. It indicates that economic change does not improve the oil consumption behavior in both traveling and other activities. For 2009, the ratio of oil consumption to GDP stood at 0.9424 percent increased from 0.9005 percent in 2008.
- Domestic consumption of refine petroleum products: Total energy consumption increased, especially alternative energy with experienced continuous growth. In the fourth quarter of 2009, gasohol usage grew by 4.8 percent with daily usage stood at 12.2 million litre (59.4 percent of total gasoline consumption). Bio-diesel (B5) usage increased by 47.9 percent, with average daily usage of 22.1 million litre. Consumption of NGV and LPG grew by 48.6 and 21.0 percent respectively. The increase in consumption of alternative energy was owing to economic recovery which was caused higher demand for passenger car and commercial car for transportation.
Consumption of traditional gasoline 95 and 91 and high speed diesel decreased by 7.9 and 13.8 percent respectively. Consumption of traditional oil continued to decline as the structure of energy consumption shifted towards the alternative energy such as gasohol and bio-diesel in which prices are evidently lower. For 2009, consumption of high speed and low speed diesel declined by 25.6 percent while consumption of bio-diesel (B5) grew by 115.8 percent. Consumption of traditional gasoline 95 and 91 decreased by 18.1 percent whereas consumption of gasohol increased by 31.8 percent. Moreover, consumption of LPG and NGV for car increased by 5.2 and 85.5 percent consecutively.