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THAILAND INVESTMENT > Thailand Economy in 2010
  Thai Economy in Second Quarter 2010

The Thai economy in 2Q2010 increased by 9.1% compared to a rise of 12.0% in previous quarter, resulting from that domestic demand expansion comprising household consumption expenditure grew by 6.5%, mainly driven by higher expenditures on durable goods such as vehicles, and electrical appliances in line with higher farm income of major crops, as well as slowdown in inflation rate. Overall investment increased by 12.2%, originating from private investment expansion whereas public investment contracted as a result of a reduction of state enterprise. Government consumption expenditure increased by 6.3% due partly to the budget disbursement under the Thai Khem Kaeng scheme. In addition, net exports of goods and services expanded as a result of a 28.3% rise of exports of goods whereas imports of goods decelerated by 30.2%.

Domestic production increased by 9.1% as a consequence of non-agricultural production rising by 10.0% compared to 13.4% in previous quarter. Such an expansion was found from almost all sectors, led by manufacturing with growth of 18.0%, especially export-oriented industries, together with an irregular low base of production base at the same period of previous year. Agricultural production decreased, mainly attributed by crops production. Seasonally adjusted gross domestic product increased by 0.2% compared to 3.3% in previous quarter.

 
 
Source: Bank of Thailand as of October 29, 2010
 
 

International reserves at the end of October 2010 reached 169.36 billion US dollars.

(International reserves)


 
 
JAN 2010 FEB 2010 MAR 2010 APR 2010 MAY 2010 JUN 2010 JUL 2010 AUG 2010 SEP 2010 OCT 2010
142.40 141.80 144.09 147.59 143.52 146.76 151.52 155.19 163.24 169.36
 
 
Source: Bank of Thailand as of October 29, 2010
 
 

For external sector, trade and service balance at current market prices registered a surplus with the value of 158.7 billion baht, compared with a surplus of 209.4 billion baht in previous quarter, comprising surpluses of trade balance and services balance with the value of 150.4 billion baht and 8.3 billion baht, respectively.

Thai Economic Projection in 2010

The economic forecast for 2010 is expected to be in the range of 7.0-7.5 percent. With regard to the assessment of economic outlook, exports and private consumption are forecasted to grow by 25.7 and 4.1 percent respectively. Tourism and investment are expected to expand by 4.7 and 9.2 percent, consecutively, providing that domestic political situation remains stable. Consequently, key economic indicators are forecasted as follows: (i) headline inflation between 3.0-3.5 percent; (ii) unemployment rate at 1.3 percent; and (iii) current account surplus of 4.9 percent of GDP.

The economic management for the rest of 2010 should emphasize the following issues: (i) improve country image in order to restore confidence of foreign tourists and investors. At the same time, the government should expedite the implementation of national reconciliation plan to ensure the constant improvement of domestic political condition and general economic confidences; (ii) resolve key limitations to economic expansion, especially the Map Ta Phut Industrial Estate environmental regulations problem and related issues under the Section 67 of the 2007 Constitution, as well as, labor shortage in key manufacturing sectors; (iii) monitor and mitigate the impacts of drought on agricultural production as well as maintain the stability of agricultural prices in the presence of Thai baht appreciation against the constant devaluation of Vietnamese's Dong; (iv) speed up key investment projects under the Thai Khem Kaeng Stimulus Package (SP2) and prepare key projects under the budget of FY2011 to be ready for implementation in the last quarter of 2010 and the first quarter of 2011 when the world economy tends to slowdown; and (v) implementation of well-balanced monetary and exchange rate policies to maintain economic stability and to facilitate economic expansion under the pressure from Thai baht appreciation as well as an increase in volatility of capital flow and exchange rate movement of major currencies.

Economic Projection 2010

 
 
 

Actual Data

Projection 2010

2007

2008

2009

May 2010

August 20101

GDP (at current prices: Bil. Bht)

8,529.8

9,075.5

9,050.7

9,729.5

10,000.9

    GDP per capita (Bht per year)

129,239.6

135,454.6

134,683

144,141

148,162

GDP (at current prices: Bil. USD)

246.8

272.0

263.6

299.4

307.7

    GDP per capita (USD per year)

3,739.2

4,060.0

3,922.6

4,435.1

4,558.8

GDP Growth (at constant prices, %)

4.9

2.5

-2.2

3.5-4.5

7.0-7.5

Investment (at constant prices, %)

1.5

1.2

-9.0

4.6

9.2

    Private (at constant prices, %)

0.6

3.2

-12.8

5.0

12.1

    Public (at constant prices, %)

4.2

-4.6

2.7

3.5

1.7

Consumption (at constant prices, %)

2.8

3.0

-0.1

2.8

4.0

    Private (at constant prices, %)

1.7

2.7

-1.1

3.0

4.1

    Public (at constant prices, %)

9.7

4.6

5.8

1.6

3.9

Export volume of goods & services (%)

7.8

5.1

-12.7

8.8

15.1

    Export value of goods (Bil. USD)

151.3

175.2

150.9

174.3

189.7

        Growth rate (%)

18.2

15.9

-13.9

15.5

25.7

        Growth rate (Volume, %)

11.9

6.0

-14.0

9.0

17.2

Import volume of goods & services (%)

4.4

8.5

-21.8

16.4

20.6

    Import value of goods (Bil. USD)

138.5

175.1

131.5

163.0

174.8

        Growth rate (%)

9.1

26.5

-24.9

24.0

32.9

        Growth rate (Volume, %)

3.5

8.4

-22.7

18.0

24.9

Trade balance (Bil. USD)

12.8

0.1

19.4

11.3

14.9

Current account to balance (Bil. USD)

15.7

1.6

20.3

12.2

15.1

Current account to GDP (%)

6.3

0.5

7.8

4.1

4.9

Inflation (%)          
    CPI

2.3

-0.8

-0.8

3.0-4.0

3.0-3.5

    GDP Deflator

3.2

2.0

2.0

3.0-4.0

3.0-3.5

 
 

Source: Thai Economic Performance in Q2 and Outlook for 2010, August 23, 2010, Office of National Economic and Social Development Board
Note: 1/ Reinvested earnings has been recorded as part of FDI in Financial account, and its contra entry recorded as income on equity in current account.

Update

The economic conditions in the third quarter of 2010 continued to grow at a slower pace from the previous quarter. With respect to supply side, manufacturing production decelerated in line with export after a surge in production during the first half of the year. Meanwhile, farm income continued to expand favorably. Consumption and investment, albeit decelerating from the first half of the year, expanded satisfactorily and continued to be the main engine contributing to economic expansion in this quarter. With regard to the economic stability, core inflation rose from the first half of the year, while the current account and the balance of payment continuously recorded surpluses from the first half of the year.

(Source: Press Release on Economic for September, Bank of Thailand)


Updated: 10 November 2010

 
 

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Source : Boi