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BOT issues Northern Economic report for November
The Bank of Thailand’s economic report shows
passenger traffic in Chiang Mai for the past year.
Chiang Mai Mail reporters
The Bank of Thailand, Northern Branch issued their latest
economic report for November, 2014 which saw a slight slowdown from the
previous month due to a slackness of private consumption and investment
including short fall of government current expenditure. The slowdown was
associated with drops in manufacturing and processed agricultural
production. Nevertheless, tourism sector has been performing well during
its peak season.
On stability front, key indicators such as inflation and unemployment
rate remained unchanged. For banking sector, deposits growth ascended
while credits descended continually. Private consumption and investment
weakened further with a slower pace than expected.
The Private consumption index dropped by 2.7 percent year-on-year year
on year from decline of automobile sales shouted with slackening general
purchasing power. Farm income and consumer confidence also came off from
households’ spending cautiousness. However, overtime income from
non-agriculture sector, government’s farmer subsidy scheme and tourists
spending helped boosting sales of those consumer goods.
Private investment continued its negative territory. Private investment
index fell by 4.1 percent year on year contributed mainly from a
declining of construction materials sales and those suspended decision
on new investments. Nonetheless, permitted construction area in
municipalities rebounded on both residential and commercial building
projects and investment promotion approval from BOI also expanded in
categories of services, public utilities and alternative energy.
Government disbursement through provincial treasury offices in the
Northern region declined by 43.6 percent year on year due to a huge
subsidy transfer to local authorities and academic institutions.
Meanwhile, disbursement on investment such as maintenance and
rehabilitation grew marginally.
Exports ticked up by 2.2 percent year on year mainly from cross-border
trade on consumer goods to Myanmar. Meanwhile, exports of electronic
components to Japan, China and Europe dropped from high production last
month. Import values decreased by 4.4 percent year on year following
imports of raw materials and intermediate goods.
The Manufacturing Production Index decreased by 7.3 percent year on year
mainly from production of beverages, construction materials, processed
food industry, electronic components and sugar owing to a delay in
sugarcane crushing process. Nevertheless, production of camera lenses,
tableware ceramics, jewelry and furniture performed well.
The Major Crop Production Index fell by 7.3 percent year on year owning
to second crop rice and sugarcane production. Altogether, sugar mills
postponed the start of seasonal production causing harvest-to-cut.
However, production of off-season longan as well as cassava and
livestock especially broilers and eggs went up. In the meantime, major
crop price lowered by 3.7 percent year on year, accounted for declining
prices of glutinous paddy, soybean, livestock, particularly swine,
broilers and eggs. Farm income, thus, contracted by 10.7 percent year on
year.
The Tourism sector kept growing during the high season. The tourist
promotion campaigns from public and private sector such as “Chiang Mai
Golf Classic 2014” and “China’s first-tier cities road show” in line
with more direct and charter flights available helped boost numbers of
tourists as evidenced by increased number of air passengers and
occupancy rate from the previous month.
Inflation came off further to 1.2 percent year on year following prices
of fuel in accordance with falling global prices. Likewise, prices of
fresh food, especially meat, chicken and fruits went down as a result of
abundant supply. The unemployment rate remained low at 0.4 percent year
on year.
In October 2014, commercial banks’ deposits totaled 590,042 million
baht, a 4.7 percent rise year on year due to an increase of government
accounts and more deposit competition among commercial banks.
Concurrently, commercial banks’ lending, accounted for 583,685 million
baht, grew by 4.8 percent year on year, moderating for 17 consecutive
months, partly from a slackness of hire purchase lending. However,
lending by banks has improved in some categories such as wholesale and
retail trade, rice mills and agricultural processing businesses which
showed a 3-month consecutive increase.
Hotel occupancy rates for the past year from
the BoT.
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EU cuts GSP privileges due to trade policy changes
The Ministry of Foreign Affairs has explained that the European Union now
excludes Thailand from its Generalized System of Preferences (GSP) because
of changes in its trade policies. The European Union stopped all GSP
privileges for Thailand, China, Ecuador and the Maldives on Jan 1.
Some privileges for Thailand ended earlier, but this time severe
restrictions also impact the export of shrimp and squid. The Department of
Foreign Trade at the Ministry of Commerce estimates that the GSP exclusion
may cause Bt30 billion in damage, nearly 4 per cent of the value of Thai
exports to the EU or 0.3 per cent of the total value of Thai exports.
The GSP was introduced in the form of tariff reduction in 1971 to allow
developing countries to sell their products to the EU to improve their
economies. The EU now excludes Thailand, China, Ecuador and the Maldives
from its GSP because the World Bank has defined them as upper-middle income
countries from 2011 to 2013.
The European Union informed Thailand and other trading parties of the
decision in December 2012 and had Thailand adjust for the change last year.
The Ministry of Foreign Affairs stated that the GSP exclusion of Thailand
had nothing to do with any political situation in the country or with
bilateral relations between Thailand and the EU and EU countries. It said
that the relations and cooperation on economic affairs, trade, education,
tourism, research and development continued as usual.
Since being informed of the EU’s decision, the Ministry of Foreign Affairs
warned the Thai private sector of the exclusion and led the Thai business
community to other countries to find new markets instead of Europe. (MCOT
online news)
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