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PARISTA YUTHAMANOP
Economic activity slowed in August from the previous month due to the global economic slowdown and domestic political uncertainties, according to the latest data released by the Bank of Thailand.
Titinun Mallikamas, director of the central bank's Domestic Economy Department, said domestic consumption, private investment and international trade all fell sharply in August compared with the previous month.
Average growth in July and August remained strong compared with the year before, but at a slower pace than in the first half of the year.
The increase in political tensions due to anti-government protests and the demonstrators' closures of airports in Phuket and Hat Yai led to a sharp decline in tourism growth. Arrivals in August totalled 1.2 million, up just 0.2% from the year before and down sharply from 9.6% growth in July.
Consumer consumption also declined in August from July, with drops recorded in passenger car sales, value-added tax collections and consumer product imports.
Private investment, weak since the beginning of the year, continued to soften in August with a contraction in commercial car sales, cement sales and moderate imports of capital goods.
Dr Titinun said concerns about the country's political stability had also affected consumer confidence in August.
Inflation eased with the decline in global oil prices and the impact of the government's six-month, six-point populist package.
The central bank's Business Sentiment Index in August also showed that concerns over production costs over the next three months had eased with falling oil prices.
But businesses were indicating greater concern about the market overall in light of the slowing global economy.
''The current BSI dropped slightly in August, but increased for the three-month outlook. The key factor is easing concerns over production costs based on the oil price. Other categories also declined. But the new concern is market conditions,'' he said.
Exports in August totalled $16 billion, up 15.5% from the year before. Volume posted flat growth from the year before, with gains led by increases in price.
Imports stood at $17 billion, up 27% year-on-year, with volume down sharply from July. Overall, the trade deficit narrowed to $675 million in August from $762 million the previous month.
The current account deficit was $853 million in August, down slightly from $906 million in July. Net capital inflows totalled $100 million, compared with $1.3 billion in outflows in July.
Dr Titinun said outstanding bank loans rose 11.3% in August from the year before, mostly driven by working-capital credit. The deposit base posted a more modest increase of 3.6% year-on-year.
Unemployment remained low at 1.3% of the total labour force, he added, but could rise as the economy slowed.
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