FPO: Pandemic hits hard

FPO: Pandemic hits hard

Consumption up 4.6% as panic ensues

Panic buying at a supermarket in Iconsiam as domestic consumption in February expanded 4.6% year-on-year. (Photo by Arnun Chonmahatrakool)
Panic buying at a supermarket in Iconsiam as domestic consumption in February expanded 4.6% year-on-year. (Photo by Arnun Chonmahatrakool)

The coronavirus pandemic took an obvious toll on domestic investment and the tourism sector in February, but consumption remained resilient, according to a senior official at the Fiscal Policy Office (FPO).

Private investment momentum was sluggish last month, with an 18.1% year-on-year contraction in commercial truck sales and a 10.2% fall in capital goods imports, said FPO deputy director-general Wuttipong Jittungsakul, attributing the contraction to concerns over coronavirus infections.

However, investment in the building sector improved as cement sales contracted only 1.9% year-on-year in February from 5% in January.

Tax revenues related to property transactions shrank 18.8% year-on-year and the building raw material price index fell 2% last month from the declines in steel and related product prices as the global economy sputters, he said.

The capital goods import contraction aligned with exports, which shrank 4.5% on year in February after 3.3% growth in January, said Mr Wuttipong.

Without weapons, gold and fuel, Thailand's outbound merchandise shipments in dollar terms would have risen 1.5% from a year earlier last month.

February's export value to Thailand's major trade counterparts, including the US, Japan and China, slowed from January, while shipments to the Middle East and nine countries in Asean jumped 16.4% and 6.1% on year, respectively.

Import value in dollar terms shrank by 4.3% over the same period last year in February, leaving a trade surplus of US$3.9 billion.

For the tourism sector, number of foreign travellers plunged 42.8% year-on-year, led by Chinese tourists with a 84.9% fall, while tourists from South Korea, Hong Kong and Malaysia dipped 72.6, 54.8% and 39.6%, respectively, because of the fast-spreading pandemic.

The Bank of Thailand last week unexpectedly trimmed its economic growth forecast for 2020 to a 5.3% contraction from 2.8% growth predicted in December, while economists expect the country is on course for a technical recession in the first half of the year.

Yesterday Thailand reported 136 new coronavirus infections, raising the total to 1,524.

The spike in infections prompted Prime Minister Prayut Chan-o-cha to invoke a state of emergency to curb the spread.

Mr Wuttipong said production in the industrial and farm sectors showed signs of a slowdown, dampened by the economic uncertainties and the severe drought.

Consumer confidence last month fell to 52.5 points on concerns that the pandemic would affect tourism, people's lifestyle and the economy.

Domestic consumption in February expanded 4.6% year-on-year.

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