BoT reveals economy in August 2023 on track for recovery – with ‘export recovery – government policy – drought’ monitored

Commerce Bank reveals that the Thai economy in August 2023 is on track for recovery despite “weak domestic demand – private investment”. Monitor 3 risk factors: export recovery – government policy – drought.


On September 29, Dr. Skapop Banyanukul, Senior Director, Macroeconomics Department, the Bank of Thailand (BoT) announces the economic conditions and salaries for August 2023, as the Thai economy in August 2023 is still on the recovery trend after income in the tourism sector. Including activities in the services sector that continue to recover. As for domestic demand, whether consumption or private investment, although they will slow down somewhat. After the expansion accelerated last month

At the same time, the value of merchandise exports, with the exception of gold, declined. This is partly due to slowing demand from trading partners. Meanwhile, industrial production remained stable. As for government spending, it continues to expand compared to current expenditures.

Economic stability and overall inflation rose from the energy category. After gasoline prices rose, at the same time, core inflation and the fresh food category declined. According to the prices of ready-to-eat foodstuffs and meat prices as a result of the increased supply in the market and the labor market continues to improve. As for the current account balance, it is important that there is a surplus from the trade balance.

Dr. Skabob said this regarding economic expectations in September 2023 and in the coming period. It should continue to expand. It is important according to local demand and tourism sector. The factor to watch is the recovery in exports. Government policy and the impact of Ignino drought on agricultural production and prices.

Details of the Thai economic situation in August 2023 They are as follows:

Private consumption indicators, after removing seasonal factors, decreased from the previous month. This comes after spending in the non-durable goods category accelerated in the previous period. Especially the volume of fuel sales, but spending in the services category continued to rise. Especially in the category of hotels and restaurants. This is in line with the spending of both Thai and foreign tourists. The factors supporting household purchasing power have improved. Both non-farm employment including consumer confidence are back on the rise. After the formation of the government, there became more clarity.

Private investment indices, after removing seasonal factors, decreased from the previous month. According to investment in machinery and equipment, especially imports of capital goods, investment in construction increased with increased sales of building materials. At the same time, the area allowed for construction decreased. After a significant acceleration in the previous month

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The value of merchandise exports, excluding gold, decreased, after excluding seasonal factors, from the previous month. Exports of processed agricultural products declined after demand from trading partners slowed. Meanwhile, the agricultural product category declined after durian was exported to China. But after the end of the harvest season, exports of some product categories improved. Especially products whose value moves with the price of oil. and electrical appliances

The value of merchandise imports, with the exception of gold, decreased after excluding seasonal factors from the previous month. According to imports of raw materials and intermediate products, including fuel, especially spare parts for electronic equipment, and crude oil, imports of consumer goods increased with imports of electric vehicles from China.

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Industrial production, after removing seasonal factors, stabilized from the previous month. The production categories that improved include: 1) the food and beverage category based on sugar production, 2) the hard disks category based on production cycles, and 3) the chemicals category based on chemical fertilizer production, but the production of automotive products decreased. From the production of passenger cars and small trucks after the acceleration of production in the previous period.

The number of foreign tourists, after removing seasonal factors, decreased from the previous month. According to the important number of Chinese tourists, this is partly due to the slowdown in the Chinese economy, which has made Chinese people more cautious in spending. However, the number of tourists from many nationalities, such as Japan, Malaysia, Germany and Australia, has increased. According to the demand for tourism that continues. As for the income of the tourism sector, it is constantly rising. This is expected to be partly a result of the increased number of days of stay for foreign tourists.

Government spending, excluding transfer funds, increased compared to the same period last year. Of the regular expenses according to the disbursement of employee compensation, including bonuses, pensions, and medical expenses for government employees. At the same time, capital expenditures decreased after payments to transportation agencies. After spending in the previous period, as for investment expenditures in state institutions, they shrank as a result of the high base effect. According to what was spent on infrastructure projects and public facilities in the previous year.

Economic stability and overall inflation rose from the energy category. Especially the price of gasoline. At the same time, core inflation and the fresh food category declined. According to the prices of ready-made foodstuffs and the price of pork according to the increase in supply in the market. The labor market continued to improve. This is reflected in the increasing number of people insured in the social security system. Especially in the services sector, as for the current account balance, the surplus came as a result of the increase in the trade balance.

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While the balance of services, income and transfers recorded a deficit similar to the previous month. As for the exchange rate, the average baht rate decreased against the US dollar due to: 1) increased market expectations of an interest rate hike by the US Federal Reserve. 2) Yuan depreciation following Chinese economic numbers that were below market expectations and 3) Thai economic numbers released that were below market expectations.

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