Thai economy slowed down from the previous quarter in Q4 2023

The Bank of Thailand reported a slowdown of the Thai economy for December and the fourth quarter of 2023.

Exports remained stable, but some categories, such as white rice and machinery, declined due to various factors including sluggish global demand and reduced import demand in ASEAN countries. The industrial production index also continued to decline, particularly in the automotive sector.

• Industrial production, especially in the automotive sector, declined due to cautious credit extension by financial institutions and the increasing trend of imported electric vehicle use.
• Private sector investment indicators decreased after a previous acceleration, reflecting declines in machinery and equipment investment, capital goods imports, and construction sector sales.
• Foreign tourist arrivals increased after seasonal adjustment, driven by a higher number of Asian tourists, particularly Chinese tourists benefiting from the visa exemption scheme

In December merchandise exports were steady, but some categories declined due to global demand and drought impact. Manufacturing production decreased in some areas, while private investment indicators softened. Merchandise imports declined across major categories.

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Private consumption remained stable, with increased spending on non-durable goods and services. There was also an increase in foreign tourist arrivals, particularly from Asia. However, public spending contracted due to lower capital expenditures.

Headline inflation decreased due to government subsidies on benzene prices and lower global crude oil prices, while fresh food prices also went down because of higher output. Core inflation remained stable. The labor market improved overall, but there was a weaker sign in manufacturing employment. The current account balance showed a smaller surplus compared to the previous quarter, mainly due to a smaller surplus in the trade balance.

Foreign tourist arrivals increased after seasonal adjustment, driven by a higher number of Asian tourists, particularly Chinese tourists benefiting from the visa exemption scheme. However, tourist arrivals from Europe and the U.S. slightly slowed down. Tourist expenditures also increased in line with the higher number of foreign tourists.