Thailand Monthly Economic Monitor
18 April 2023
The economy expanded moderately as private consumption and tourism improved. However, lingering soft global
demand continued to weigh on manufacturing goods exports. Inflation slowed and returned to the Bank of
Thailand’s target range of 1-3 percent, amid easing global energy prices. However, pressure from high producer
prices on consumer prices remains. As a result, authorities continued to implement cost-of-living support,
maintained interest rate normalization and extended the SME soft loan facility. The Thai baht appreciated in line
with most major ASEAN currencies in early April as the current account returned to surplus and the US dollar
weakened.
The economy continued to expand in February, boosted by Figure 1: Services and Manufacturing Growth
private consumption and tourism recovery. In February, Diverged Further
(Index, Q4 2019 = 100)
services increased by 16.7% (year-on-year), supported by 140 Manufacturing Production Index
strong private consumption and improving consumer confidence Service Production Index
130 Private Consumption Index
as the labor market and tourism continued to recover (Fig. 1). Goods Exports
Private consumption increased for the fourth consecutive month 120
and consumer confidence reached a post-pandemic high. The
110
unemployment rate fell to below 1.0 percent in February.
However, manufacturing production contracted for the fifth 100
consecutive month at 3.8% (year-on-year), remaining below its
pre-pandemic level, due to the fall in external demand. 90
Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Source: CEIC; World Bank staff calculations.
Tourism recovery slowed slightly over the past 2 months as
arrivals from ASEAN and India declined. Tourist arrivals Figure 2: Tourism Recovery Slowed
reached 59.4 percent of the pre-pandemic level, up from 57.6 (Percent of 2019 level*)
70
percent in the previous month. Arrivals from China continued to China Japan 59 58 59
Korea Europe (Excl.Russia)
surge and reached 15 percent of the 2019 level (Fig. 2). 60
Russia USA 50
47
However, tourists from India continued to decline due to a Covid 50 ASEAN India 43
Others Total
testing requirement for those returning from Thailand, effective 40 34 35
until February 13. In addition, arrivals from ASEAN decelerated 30 25
18
after a strong pick-up in December and January. 20
9
4 6
10 4
Goods exports remained weak due to falling global demand -
for manufacturing goods. Goods export growth contracted for
the fifth consecutive month by 4.1 percent (year-on-year) in
Note: *Average of 2019 is adjusted for forseasonality
February, the second weakest in ASEAN after the Philippines. Source: CEIC; World Bank staff calculations.
Falling manufacturing exports, especially electronics, electrical
appliances, chemicals, and steel, contributed to the overall Figure 3: Manufacturing Exports Contracted
(left: diffusion index; right: Percent year-on-year)
contraction, similar to other major exporters in Asia and in-line
Manufacturing PMI: Global
with the subdued Global Manufacturing Purchasing Manager Thai Exports: Agriculture, Agro Industrial Products, YoY (RHS)
Index (PMI) (Fig. 3). In contrast, exports of agricultural and agro- Thai Exports: Manufacturing, YoY (RHS)
60 50
industrial products expanded by 3.6 percent (year-on-year).
55 25
The fiscal deficit narrowed due to lower spending and
50 0
higher revenue collection. The central government’s deficit
narrowed to 7.3 percent of GDP in the first five months of fiscal 45 -25
year 2023 (Oct 2022 - Feb 2023), down from 8.0 percent of GDP
in the same period last year. This reflected a decrease in total 40 -50
Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
expenditures to 22.9 percent of GDP, down from 24.5 percent
Source: CEIC; World Bank staff calculations
THAILAND MONTHLY ECONOMIC MONITOR | 1
last year, while revenue increased from 14.9 percent to 15.7 Figure 4: Consumer Prices may Face Pressure From
percent. However, the deficit remained above the 2019’s pre- High Producer Prices
(Percent, year-on-year)
pandemic level of 2.0 percent. Fiscal consolidation has been 12.0
Producer Price Index (PPI), 2022 10.4
constrained by extended cost-of-living support measures Consumer Price Index (CPI), 2022
through social benefits, subsidies, and the excise tax cut on CPI, Jan-Mar 2023 8.3
7.8
8.0
diesel. The State Oil Fund remained in deficit by THB 92 billion 6.4
5.8 6.1
(0.6 percent of GDP), as the cost of the LPG price subsidy 4.7
4.2
5.2
3.9
continued to rise. 4.0 3.4 3.7
Inflation slowed due to softening energy prices, while the
0.0
Bank of Thailand continued to raise the policy rate. Headline Indonesia Philippines Malaysia* Thailand
inflation fell to 2.8 percent (year-on-year) in March reflecting the
Note: *Malaysia CPI as of Feb 2023
decline of the global oil price and a cut to the regulated price of Source: MOC; CEIC; World Bank staff calculations.
diesel. The diesel price was reduced further to THB 33 per liter
in April from its peak of THB 35 per liter in H2 2022. Inflation Figure 5: The Current Account Balance Returned to
Surplus in February
returned to the Bank of Thailand’s target range of 1-3 percent for (USD billion)
the first time since January 2022. Core inflation also declined, BOP: USD: Trade Balance
reaching 1.8 percent. However, strengthening domestic BOP: USD: Services, Primary Income & Secondary Income
BOP: USD: Current Account Balance
consumption and a strong pick-up in producer prices since 2022
6.0
may exert more pressure on consumer prices (Fig. 4).
4.0
Consequently, the Bank of Thailand maintained gradual
monetary policy normalization, by raising the policy rate by 25 2.0
basis points to 1.75 percent while extending its SME soft loan 0.0
facility by one more year until April 2024 to support economic -2.0
recovery. -4.0
-6.0
The Thai baht appreciated in early April as the US dollar fell Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
and the current account balance returned to surplus. In Source: Haver Analytics; World Bank staff calculations.
March, the Nominal Effective Exchange Rate (NEER)
depreciated, similar to most Asian currencies. Bond and equity
markets recorded net outflows, mainly due to outflows from the
equity market. However, in the first week of April, the NEER
appreciated, as investors lost confidence in the US dollar and
the current account returned to a surplus. The current account
recorded a surplus of THB 1.3 billion or 3.2 percent of GDP, as
the trade balance turned to surplus due to the deceleration of the
goods import growth while the services income balance
continued to expand (Fig. 5).
News Highlights: Issues to Watch:
• World Bank maintains Thailand's 2023 growth outlook • Tourism: Will Chinese tourists recover as fast as
at 3.6 percent (Reuters, Link). projected in 2023?
• High pollution levels in northern provinces are keeping • Inflation: Will inflation continue to decline, despite rising
tourists away (CNN, Link). demand?
• Bank of Thailand raised its policy rate, more tightening • Politics: How would the general election results affect
likely (Reuters, Link). Thailand’s economic outlook?
Prepared by Warunthorn Puthong, under the guidance of Kiatipong Ariyapruchya and Ekaterine T.
Vashakmadze. For further questions, please email wputhong@worldbank.org
THAILAND MONTHLY ECONOMIC MONITOR | 2
Selected Economic and Financial Indicators
2022 2022 2023
2021 2022
Q1 Q2 Q3 Q4 Oct Nov Dec Jan Feb
GDP and Inflation (%YoY)
GDP growth (real) 1.6 2.6 2.2 2.5 4.6 1.4
Contribution to GDP growth:
Private consumption 0.3 3.4 1.8 4.0 5.2 3.0
General Government consumption 0.6 0.0 1.1 0.4 -0.3 -1.3
Gross fixed capital formulation: Private 0.5 0.9 0.5 0.4 1.9 0.8
Gross fixed capital formulation: Public 0.2 -0.3 -0.3 -0.6 -0.5 0.1
Net Exports of goods and services -3.7 1.7 4.5 0.3 -0.8 2.6
Change in Inventory 1.5 -0.6 -2.9 0.4 1.7 -1.1
Residual and errors 2.1 -2.6 -2.6 -2.4 -2.6 -2.7
GDP, nominal (USD Billion) 506 496 130 123 119 125
GDP, nominal (THB Billion) 16,167 17,367 4,286 4,214 4,337 4,530
Consumer Prices Index: Headline 1.2 6.1 4.7 6.5 7.3 5.8 6.0 5.6 5.9 5.0 3.8
Consumer Prices Index: Core 0.2 2.5 1.4 2.2 3.1 3.2 3.2 3.2 3.3 3.1 1.9
Output Indicators
Manufacturing Production Index (%YoY) 6.5 0.6 1.5 -1.1 7.9 -6.0 -4.3 -5.3 -8.4 -4.4
Capacity Utilisation (%) 63.3 62.8 66.8 61.2 62.8 60.3 60.1 61.3 59.6 62.3
Farm Production Index (%YoY) 2.0 1.0 2.7 3.0 -4.8 3.0 2.0 1.7 5.4 2.6
Service Index (%YoY) 0.3 12.9 9.0 13.3 16.1 13.1 15.1 13.0 11.2 13.8
Labor Market
Unemployed workers (Thousand Persons) 748 527.0 607.6 546.6 491.4 462.5
Unemployment rate (%) 2.0 1.3 1.5 1.4 1.2 1.2
Underemployment/1 (Thousand Persons) 584 273 319 264 235 275.9
Underemployment (%) 1.5 0.7 0.8 0.7 0.6 0.7
Balance of Payments (USD million)
Current account -10,646 -16,942 -2,447 -8,027 -7,688 1,219 562 -445 1,102 -2,002
Current account (% of GDP) -2.1 -3.5 -1.9 -6.5 -6.5 1.0 1.4 -1.1 2.7 -4.8
Trade Balance 32,354 10,814 7,186 2,509 -1,851 2,970 1,466 542 963 -2,670
Exports of goods (%YoY) 20.0 5.8 14.2 9.6 6.7 -7.5 -3.6 -5.5 -12.9 -3.4
Imports of goods (%YoY) 28.8 15.5 16.5 22.7 23.2 -0.3 3.1 8.2 -10.5 9.1
Service, primary and secondary Income -43,000 -27,756 -9,633 -10,536 -5,837 -1,751 -903 -987 139 668
Tourist Arrivals (Thousand Persons) 428 9,958 498 1,582 2,413 5,465 1,475 1,748 2,241 2,145
Financial account -5,980 3,738 -183 -3,485 -
Financial account (% of GDP) -1.1 2.9 -0.1 -2.9 -
Foreign direct Investment, net -4,511 1,964 -363 -353 -
Portfolio flows -11,894 2,650 1,911 -765 -
Others Investments 11,581 -734 -1,647 -2,816 -
Central Government Budget (Fiscal Year, THB billion)/2
Revenue 2,857 2,992 632 883 833 684 232 205 247 249
Expenditure 4,124 3,845 840 892 925 1,076 453 259 365 293
Central Government balance -1,266 -852 -208 -9 -91 -392 -221 -53 -118 -44
Central Government balance (% of GDP) -7.9 -3.9 -4.8 -0.2 -2.1 -8.7
Public debt (% of GDP) 58.8 60.5 60.6 61.0 60.5 61.0 60.8 60.7 61.0 61.3
Financial Markets Indicators
Policy rate (%) 0.50 1.25 0.50 0.50 1.25 1.25 1.00 1.25 1.25 1.50 1.50
M2 (%YoY) 6.0 5.20 5.9 6.1 4.7 4.10 4.0 4.3 4.1 3.2 -
Household Debt (sa, % of GDP) 89.7 - 89.2 88.4 87.0 -
SET Index 1,658 1,669 1,695 1,568 1,590 1669 1,609 1,635 1,669 1,671 1,622
Thai government bond yield, 10 year (%) 1.90 2.45 2.26 2.81 3.08 2.45 3.10 2.52 2.45 2.45 2.50
Foreign exchange reserve
and FX forward position (USD billion) 279 246 273 251 228 246 229 239 246 252 245
USD/THB, end of period 33.42 34.56 33.30 35.30 37.91 34.56 38.03 35.37 34.56 32.79 35.15
THB NEER, average 117.4 115.5 116.7 116.0 113.5 115.8 113.0 115.9 118.4 121.9 119.9
1/ Underemployment accounts for workers who are occupied less than 35 hours per week and are available for additional work (defined by BOT).
2/ Fiscal Year 2023 begins in October 2022 and ends in September 2023, Fiscal Balance according to GFS.
Source: Office of the National Economic and Social Development Council, Bank of Thailand, Office of Industrial Economics, Ministry of Industry
National Statistical Office of Thailand, Fiscal Policy Office, Public Debt Management Office, Haver Analytics.
THAILAND MONTHLY ECONOMIC MONITOR | 3