Farm income continued to improve for a fifth straight month in July, reinforcing signs that the economic recovery has trickled down to grassroots people, says a senior official at the Fiscal Policy Office (FPO).
Real farm income last month jumped 5.2% from a year earlier, resulting in 1.1% growth for January to July, said Pornchai Thiraveja, financial policy adviser at FPO. Real farm income contracted 2.9% in January and 7.6% in February.
The improved farm income was attributed to higher agriculture output and increased prices for paddy rice, durian and chicken eggs, he said. But prices of rubber, chickens and vannamei shrimp remained weak, said Mr Pornchai.
The agricultural price index in July shrunk a meagre 0.9%, narrowing the seven-month contraction to 8.2%. The farm output index has increased 11.6% in the seven months through July.
Even though the Thai economy expanded at 4.8% year-on-year from January to June, most farmers have not benefited because of low crop prices and high household debt. The uneven economic recovery is one reason the Bank of Thailand has refused to follow in the footsteps of the US Federal Reserve in tightening monetary policy, while the government has worked to boost their income to increase their purchasing power.
He said the overall economy gained more speed in July, underpinned by stronger demand from both domestic and overseas markets. Value-added tax collection, an indicator of domestic consumption, expanded 18.2% last month, while passenger car sales shot up 21.4% and consumer confidence index hit a 42-month high at 69.1.
Indicators for private investment were mixed, with commercial pickups soaring 28.8% and cement sales jumping 10.5%, but the import volume on capital goods edged down 0.8%. However, the capital goods import volume gained 5% if taking out extra items such as trains, ships and aeroplanes.
Outbound shipments grew for the 17th straight month in July at 8.3% year-on-year. The industrial confidence index reached a 62-month high in July at 93.2, thanks to improved purchasing orders, sales and purchasing power.
Foreign tourist arrivals to Thailand increased 2.8% year-on-year to 3.18 million in July, with Malaysian tourists delivering the highest growth at 26.2%. Tourism income that month rose 6.4% to 166.4 billion baht.