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Thai economy improved in July driven by exports and tourism
In July, Thailand’s economy grew due to exports, tourism, and private investment, but sentiment fell, inflation rose, jobless claims increased, and government spending expanded.
In July, Thailand’s economy saw improvement, bolstered by exports and tourism, alongside a rise in private investment. Despite this, consumer and business confidence waned, and inflation escalated, primarily due to elevated prices of fresh food. While the labor market showed signs of improvement, unemployment claims saw an uptick, and there was a notable increase in government expenditure.
Key Takeaways
In July, export of electronic products, agro-manufacturing products, and chemical/petro-chemical products increased, but there were declines in pick-up truck exports.
Foreign tourist arrivals remained stable, but tourism revenue rose due to higher average spending per visitor, especially from tourists from Russia and Germany.
Private investment indicators showed improvement, with increases in machinery/equipment investment and construction, but business sentiment continued to decline, especially in the automotive, real estate, and retail sectors.
Summary
- The Thai economy showed improvement after a slowdown in the previous month, driven by rising external demand. Increases in exports and tourism revenue positively affected manufacturing and related service sector activities. Private investment increased from the previous month, while private consumption remained stable. However, consumer and business sentiment continued to decline, partly due to concerns over slow economic growth. Government spending expanded from the previous year in both current and capital expenditures of the central government, although investment spending by state-owned enterprises contracted due to lower disbursements in transportation projects.
- On the economic stability front, headline inflation rose compared to the previous month, driven by higher prices in the fresh food category and increased core inflation. Fresh food prices went up due to a low base effect and a rise in fruit prices following reduced output. Core inflation increased mainly from higher prices of prepared food. The current account registered a lower surplus primarily due to a smaller trade surplus resulting from higher import of goods, while the services, income, and transfers account showed a deficit close to the previous month. The labor market continued to improve as employment increased in both manufacturing and service sectors. Nevertheless, the ratio of jobless claims to total contributors edged up and warranted close monitoring.
Details of the economic conditions for July relative to the previous month are as follows:
Source : https://www.bot.or.th/en/news-and-media/news/news-20240830.html
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Source: BOT Press Release No. 34/2024
