FPO spots signs of low-income recovery
Improving farm income and a higher number of motorcycle registrations in August suggest that the economic recovery is spilling over to rural people, says a senior official at the Fiscal Policy Office (FPO).
New motorcycle registrations turned to growth of 3.9% last month, marking the first increase in seven months, after a 4% contraction in July, said FPO spokesman Pornchai Thiraveja.
Motorcycle sales are considered a gauge of grassroots income, Mr Pornchai said. Even so, new motorcycle registrations still shrank 2.9% from January to August, he said.
Although the Thai economy expanded 4.8% year-on-year from January to June, most farmers, constrained by low crop prices and high household debt, have not benefited.
The government has tried to boost their income by offering monthly living allowance of 200-300 baht and value-added tax (VAT) payback to 11.4 million recipients of the government's welfare scheme.
The positive motorcycle registration aligned with improved real farm income, which saw 3.4% growth in August and a 1.4% increase for the first eight months.
The improved farm income was attributed to higher agriculture output, as seen by an 8.1% increase in the farm output index. But the agricultural price index last month continued to shrink at 3%.
The farm output index surged 11.1% in the eight months through August, while the price index contracted 7.5%.
All indicators of private consumption in August were solid, with a 27.2% increase in passenger car sales, a 1.7% rise in VAT income and a 43-month-high consumer confidence index of 70.2.
Indicators for private investment were also positive, with commercial pickups soaring 23.7%, cement sales jumping 7.3%, the construction and building material price index rising 3.3% and real estate transaction fees adding 23.3%.
Export value rose 6.7% year-on-year in August to US$22.8 billion (740 billion baht), thanks to growth in Cambodia, Laos, Myanmar and Vietnam and in India, while import value expanded 22.8% to $23.4 billion, leaving trade in deficit.
Foreign tourist arrivals to Thailand increased 3% year-on-year to 3.23 million last month, with Malaysian tourists delivering the highest growth in 38 months. Tourism income that month rose 2.8% to 204.5 billion baht.
The manufacturing production index rose a meagre 0.7% in August, the lowest this year, as heavy rainfall and floods constrained purchasing orders, Mr Pornchai said.
The situation is expected to be temporary, he said.