Contractions in exports, spending and investment reported for January

Bank of Thailand confirms Thai economy is continuing to slow

TThe Thai economy continued to slow down in January with exports, industrial production, private investment and public spending all contracting, according to the Bank of Thailand (BOT).
January’s exports rose 3.5 per cent year on year. Excluding gold, Thai exports fell 1.3 per cent from contractions in shipments of chemical and petrochemical products whose prices are aligned with that of crude, as well as drops in electronic items, and adverse impacts from high competition for agricultural products. Imports excluding gold rose 1.4 per cent.
Both domestic and external demand slowed though industrial production capacity remained high despite low business confidence. As a result, businesses continue to postponing investment, reflecting the consistent shrinkage in domestic sales of machinery and equipment and new car registration.
Imports of capital goods also contracted with construction indicators including approved construction areas and construction materials sales continuing to fall.
Public spending particularly investment declined due to the delayed 2020 budget disbursement.
Private consumption was lower than the previous month following weak income factors and low consumer confidence, the central bank said. Financial institutions exercised caution in loan extension and approval.
Farm income in January increased, but is expected to shrink for the whole of this year as a result of the ongoing drought.
Tourism expanded compared to a month earlier at 2.5 per cent with rises in the number of foreign tourists from Malaysia, Russia and Hong Kong. However, Chinese tourists fell following the ban by the Chinese government on overseas tours from January 24 this year due to the coronavirus Covid-19 outbreak in the country.
With regard to Thailand’s economic stability, headline inflation edged up from a month before from rises in energy prices as a result of last year’s low domestic retail prices in oil.
Thailand’s current account faced less surplus in parallel with the nation’s trade account.

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