Monetary Policy Group February 2020

Economic and Monetary Conditions January 2020

Economic and Monetary Conditions, January 2020

Content 1 Executive Summary 1

2 The Thai Economy 3

2.1 Supply 3 Agricultural sector Manufacturing sector Service sector

2.2 Domestic Demand 5 Private consumption Private investment Fiscal position

2.3 The global economy and external sector 7 The global economy External sector Balance of payments

2.4 Monetary and financial conditions 9 Corporate financing Interest rates Exchange rates

2.5 Financial stability 11 Inflation Labor market External stability

3 Link to related statistics and contents 13

Economic and Monetary Conditions, January 2020

1

1. Executive Summary

In January 2020, the Thai economy continued to be on a decelerating trend. The value of merchandise exports excluding gold, manufacturing production, private investment indicators, and public spending continued to contract. Private consumption indicators expanded at a slower pace. However, farm income accelerated whereas the tourism sector expanded at a rate close to the previous month.

On the stability front, headline inflation edged up mainly on the back of an increase in energy prices partly due to the low base effect from domestic retail petroleum prices last year. The current account registered a smaller surplus from the trade balance. The capital and financial accounts posted a surplus from both the asset and the liability positions.

Details of the economic conditions are as follows: The value of merchandise exports expanded by 3.5 percent from the same period last year.

Excluding gold, exports value growth remained negative at 1.3 percent. The continued contraction was due to exports of 1) petroleum-related products such as chemical and petrochemical products, partly due to the slowdown in trading partners’ demand; 2) agricultural products especially rice as a result of price competition from competing countries and supply affected by the drought; and 3) electronic products which turned into contraction from the high base effect last year. However, exports of electrical appliances and hard disk drive continued to expand thanks to the relocation of production base to Thailand in the previous periods. Also, exports of agro-manufacturing products continued to expand from sugar.

Private investment indicators continued to deteriorate from the same period last year. The slowdown in domestic and external demand, the low capacity utilization rate, and the fragile business sentiment led to the delay in business investment. This was reflected by the continual contraction of investment in machinery and equipment from domestic machinery sales, and the number of newly registered motor vehicles, as well as import of capital goods which turned into contraction. In addition, investment in construction contracted from both permitted construction area and construction material sales.

Public spending, excluding transfers, continued to contract from both current and capital expenditures. Current expenditures contracted from purchases on goods and services and compensation of civil servants, partly due to the high base effect last year. Capital expenditures of central government continued to contract as a result of the delayed enactment of the FY2020 budget. Meanwhile, state enterprise’s capital expenditures also contracted from disbursement of some energy-related and transportation agencies.

Private consumption indicators expanded at a slower pace from the same period last year, consistent with softening household income and consumer confidence, together with financial institutions’ tightening of credit standards after credit quality deteriorated. Although farm income expanded well in this month, the outlook for this year was likely to be subdued because of the drought. The deceleration in private consumption indicators was from spending on services although spending on non-durable goods slightly improved from sales of consumer goods after the decline in the previous periods. Additionally, spending on durable goods less contracted from vehicle sales partly due to the benefit from the new car model launch. Consistently, manufacturing production contracted in line with softer domestic and external demand.

The value of merchandise imports was unchanged from the same period last year. However, excluding gold, imports value expanded by 1.4 percent. This was attributable to the expansion in imports of 1) fuel, both in terms of price and quantity; and 2) consumer goods such as air conditioner and garment.

Economic and Monetary Conditions, January 2020

2

Nevertheless, imports of raw materials and intermediate goods as well as capital goods excluding aircrafts, ships, floating structures, and locomotive, contracted in line with the contraction of merchandise exports, manufacturing production, and private investment indicators.

The number of foreign tourist arrivals expanded a rate close to the previous month with 2 .5 percent, mainly from the expansion in the number of Malaysian Russian and Hong Kong tourists as a result of Chinese lunar new year that came earlier than last year. However, the number of Chinese tourists contracted due to the announcement of Chinese government to ban on outbound group tour since January 24, 2020 after the outbreak of coronavirus disease 2019 (COVID-19) in China.

On the stability front, headline inflation stood at 1.05 percent, accelerating from the previous month on the back of an increase in energy prices, partly due to the low base effect from domestic retail petroleum prices last year. Meanwhile, core inflation slightly decreased. The current account registered a smaller surplus from the trade balance. The overall capital and financial accounts registered a surplus from both the asset and the liability positions. The former was due to the withdrawal of deposit abroad by the Foreign Investment Fund (FIF). While, the latter was mainly a result of foreign direct investment especially in real estate business, and the short-term loan of Thai Other Depository Corporations (ODCs).

Economic and Monetary Conditions, January 2020

3

2.1 Supply

Index sa(Jan 2014 = 100)

MPI Classified by Export Share

70

80

90

100

110

120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan 2018

Jul Jan 2019

Jul Jan 2020

Export<30% 30%<Export<60% Export>60%

Sources: Office of Industrial Economics , calculated by Bank of Thailand

-0.6 %

3.6 %-1.9 %

%MoM sa

Farm income expanded at a faster pace from the same period last year due to the acceleration of agricultural prices. Manufacturing production continued to contract at a similar rate as the previous month. Meanwhile, services sector grew at a similar rate to last month.

Manufacturing Production Index (MPI)

Note: the new MPI series as adjusted by the OIE (coverage and base year at 2016)R = 2019 Revision P = Preliminary dataSource: Office of Industrial Economics and seasonally adjusted by Bank of ThailandProduction index of petroleum does not include the production of diesel B10 and B20

(%YoY)Share2016R 2019

2019 2020

H1 H2 Q3 Q4 Dec JanP %MoM sa

Food & Beverages 1 . . . 1. 1.2 2. . . . Automotives 1 . . 2.1 12. . 2 . 1 . 1 . . - Passenger Cars . . . 1 . . 2 . 2 .2 2 .1 . - Commercial Vehicles .2 . 2. 1 . . 21. 1 . .2 . - Engine 1. . . 1 .2 . 1 . . . 2. Petroleum . . .2 11. . 1 .2 . 2. 2.2Chemicals .2 .2 . 1.1 1. . 1. .2 . Rubbers & Plastics . .2 . . . . 2. . 1.1Cement & Construction . 1.2 .2 2. . 1. 2. 2.2 . IC & Semiconductors . . .1 . 12.2 .1 . .1 .1Electrical Appliances . . . . 1. . 1 . 1 . . Textiles & Apparels . .2 . . . 1 . .2 . . Hard Disk Drive . . 1 . . . . 1 . 1 . 2. Others 1 . . . . .2 .1 2. 1. . MPI 1 . . 1. . .2 . . . . MPI sa ∆% from lastperiod

1 . 2. .1 1. 2. 2. .

Capacity Utilization (SA) 66.0 . . . . . .

Real Farm IncomeIndex sa (Jan 2014 = 100)

Source: Office of Agricultural Economics and calculated by Bank of Thailand

60708090

100110120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Real farm income saReal farm income sa, 3mma

Farm Income(%YoY) 2 1 2 1 2 2

H1 H2 Q3 Q4 Dec Jan

Nominal farm incomeP 2.4 2. 2. .2 . 1. .

Agricultural productionP 0.6 1. . 2. 2. . 2.2

Agricultural price

1.8 . 2. 2. . . .

Nominal Farm Income

Note: Farm income does not include government subsidies and transfers. P = Preliminary dataSource: Office of Agricultural Economics and calculated by Bank of Thailand

Economic and Monetary Conditions, January 2020

4

Capacity Utilization (sa)

(%) Weight 2016R

2019

Q1 Q2 Q3 Q4 Dec Janp

Food & Beverages 1 . . . . . . .

Automotives 1 . . . .1 1. 2. .

Petroleum . . 2. . . . .

Chemicals .2 . . . . . .

Rubbers & Plastics . . . . . .1 .2

Cement & Construction . . . . . . .

IC & Semiconductors . . 1.1 . . 1.2 2.

Electrical Appliances . . 1. . . .2 .

Textiles & Apparels . . . . 2. . .

Hard Disk Drive . . .1 2. 1.2 2.2 2.

Others 1 . . . . .2 . .

CAPU sa 1 . . . . . . .

Source: Office of Industrial Economics

Note: the new Capacity Utilization series as adjusted by the OIE (coverage and base year at 2016)R = 2019 Revision P = Preliminary data

* The latest month was estimated by the BOT80

90

100

110

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan 2018

Jul Jan 2019

Jul Jan 2020

Industrial Electricity Consumption*Quantity of Imported Raw MaterialsIndex of Work Hours in Manufacturing (3mma)

Index sa(Jan 2014 = 100)

Other Indicators of Manufacturing Production

Sources: NSO, OIE, Customs Department and seasonally adjusted by Bank Of Thailand

%MoM sa

7.5 %7.5 %

Dec = 0.6 %

80

90

100

110

120

130

140

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Service Production IndexNon-market Services (share 17%)Market Services (share 83%)

Service Production Index (SPI)Index sa, 3mma (Jan 2014 = 100)

Note : Latest data estimated by Bank of Thailand Market services covering trade, hotels and restaurants, transportation and telecommunication, financial intermediation, real estate, and business services Non-market services covering public administration and defence, education, health, and social work Source: Office of the National Economic and Social Development Board (NESDB), Ministry of Commerce, National Statistical Office, The Revenue Department, The Office of Industrial Economics ,and Ministry of Tourism and Sports

80

90

100

110

120

130

140

150

160

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Transport (8%) Information (5%)Trade (32%) Finance (14%)Hotel & Restaurant (10%) Professional Services (4%)

Service Production Index (SPI) by SectorIndex sa, 3mma (Jan 2014 = 100)

Note : Latest data estimated by Bank of Thailand Source: Office of the National Economic and Social Development Board (NESDB), Ministry of Commerce, National Statistical Office, The Revenue Department, The Office of Industrial Economics ,and Ministry of Tourism and Sports

Economic and Monetary Conditions, January 2020

5

2.2 Domestic Demand

405060708090

100

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Total CurrentNext 6 months Average 5 years

Consumer Confidence IndexDiffusion Index, sa(Unchanged = 100)

Average 5 years = 76.2

Source: The University of the Thai Chamber of Commerce, calculated by Bank of Thailand

Private consumption indicators expanded at a slower pace compared with the previous month. Meanwhile, private investment indicators and public spending, excluding transfers, markedly contracted from the corresponding month last year.

% YoY 20192 2020

H1 H2 Q3 Q4 Dec JanP %MoM

Permitted Construction Area (9mma) . .2 . .2 . . . 2.

Construction Materials Index . . 2. . . . . . Real Imports of Capital Goods . . 2. . . . . -2.5

Real Domestic Machinery Sales . . . . . . . 0.8

Newly Registered Motor Vehicles for Investment . 2. . 2. . 2 . . 11.3

Private Investment Index 2. .2 . 2. . . . -2.3

Private Investment Indicators

Note: %MoM is calculated from seasonally adjusted data P = Preliminary DataSource: Bank of Thailand

Note: * Comprises of the VAT on hotel and restaurant sector and the sale of transportation sector** Expenditure of non-resident in Thailand subtracted by expenditure of resident abroad

Source: Bank of Thailand

6080100120140160180

8090

100110120130140

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Service Index sa, 3mmaNet tourist spending Index sa, 3mma (RHS)

Jan 2014 = 100

Service Index* & Net Tourist Spending Index**

%YoY 2 2 2020

H1 H2 Q3 Q4 Dec JanP %MoM sa

Non-durables index 2.2 2. . . .2 . . . Semi-durables index . .2 . . . . . . Durables index 2. 2. .2 . . 2. . .2Services index 2. 2. 2. 2. .2 . . .

less Net tourist spending . . . .2 2. . . 2.2

PCI 2. . . .2 2. . .2 .

Private Consumption Indicators

Note: %MoM is calculated from seasonally adjusted data P = Preliminary DataSource: Bank of Thailand

90100110120130140150160

90

95

100

105

110

115

120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Nielsen’s FMCG Index sa, mmaFuel Index, sa (RHS)Fuel Index sa, 3mma (RHS)

Nielsen’s FMCG Index & Fuel IndexJan 2014 = 100

Source: The Nielsen company and Department of Energy Business, calculated by Bank of Thailand

80

90

100

110

120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Semi-durable Index sa,3mma

Durable Index sa, 3mma

Jan 2014 = 100Durable and Semi-durable Indices

Source: Bank of Thailand

Economic and Monetary Conditions, January 2020

6

Note: P = Preliminary data 1/ Includes cash payments for operating and purchase of non-financial assets, except loan repayments 2/ Excludes loan principal and interest payment

Fiscal Position (Cash basis)Billion baht FY2018 FY2019

FY2019 FY2020Q1 Q2 Q3 Q4 Q1 Nov Dec Jan

Revenue 2, 2, 2 (%YoY) . . 2. 2. 2. . . 2. . .2 Expenditure1/ 2, 2 2, 2 2 2 2 (%YoY) . .2 2.2 . . . . 2 . . 2 . Budgetary B/L 2 22Non-Budgetary B/L 2 2 2 2 2 2 2 Cash B/L (CG) 2 2 2 Primary balance 2/ 2 2 2 2 Net Financing 2 Treasury B/L 2

Source : Bank of Thailand

Diffusion Index (Unchanged = 50)

40

50

60

Jan 2014

Jul Jan 2015

Jul Jan 2016

Jul Jan 2017

Jul Jan 2018

Jul Jan 2019

Jul Jan 2020

BSI Expected BSI (next 3 months)

Apr 20 52.4

Jan 20 .

Business Sentiment Index

60

80

100

120

140

160

180

Oct Dec Feb Apr Jun Aug

avg. FY2017-19 FY2019 FY2020

0

10

20

30

40

50

60

Oct Dec Feb Apr Jun Aug

avg. FY2017-19 FY2019 FY2020

Jan-20.4%

Jan-35.3%

Billion baht Central Government Current Expenditure(Excl. Subsidies/Grants and Other)

Central Government Capital Expenditure(Ex. Subsidies/Grants and Other)

Billion baht

Source: Comptroller General’s Department, Fiscal Policy Office and Bank of Thailand

0

10

20

30

40

Oct Dec Feb Apr Jun Aug

avg. FY2018-19 FY2019 FY2020

State Owned Enterprises Capital ExpenditureBillion baht

Jan-19.6%

4,0004,5005,0005,5006,0006,5007,000

707580859095

100105

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Construction Materials IndexPermitted Construction Area (RHS)

Investment in Construction1,000 m2

9mmaIndex sa

(Jan 2014=100)

Note: All data is in real terms.Source: NSO, Department of Public Works and Town & Country Planning, calculated by Bank of Thailand

Investment in Machinery and EquipmentIndex sa

(Jan 2014 = 100)

60

80

100

120

140

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Real Imports of Capital GoodsDomestic Machinery SalesCar Registered for Investment

Note: All data is in real terms.Source: Department of Land Transport, Customs Department, Revenue Department, calculated by Bank of Thailand

Economic and Monetary Condition, January 2020

7

2.3 The Global Economy and External Sector

%YoYShare 2019

2019P

2019P 2020P

H1 H2 Q3 Q4 Dec JanJan

(%MoM)

Consumer . 2. . . . . . . . Raw material & Intermediate . . . . . . . . .2o/w Fuel . .2 .2 2 . . 2 .2 . . . o/w Raw mat & Interm ex. Fuel . . . . . .2 . . .

Capital 2 . 2. . . . 2. . . . Others . . . . 2 . . . . . Total (BOP Basis) . . . .2 . . . . .

Ex. Gold . 2. . 2. . . . . Ex.

Gold&Fuel- 2. 2. 2. . . . . .

%MoM calculated from seasonally adjusted data. P = Preliminary data.Note: 1/ Data above are recorded by custom basis, except total import value which is recorded by BOP basis. Custom basis considers recording as goods pass through Customs, while BOP basis considers changes in ownership between residents and non-residents. 2/ Import of consumer goods In July includes temporarily imported jewellery for exhibition but is excluded in the total import value in BOP basis due to no changes in ownership.Source: Compiled from Customs Department’s data

Import ValueDec 2019 = 17.2 Bn USD Ex.Gold = 16.8 Bn USD

Jan 2020 = 19.3 Bn USD Ex.Gold = 19.0 Bn USD

Dec 2019 = 19.1 Bn USD Ex. gold = 18.9 Bn USDEx.Gold = 15.8 Bn USD

%MoM calculated from seasonally adjusted data. P = Preliminary data.Note: Data above are recorded by custom basis, except total export value which is recorded by BOP basis. Custom basis considers recording as goods pass through Customs, while BOP basis considers changes in ownership between residents and non-residents.Source: Compiled from Customs Department’s data

%YoYShare 2019

2019P

2019P 2020P

H1 H2 Q3 Q4 Dec JanJan

(%MoM)Agriculture . . . . . . . . 2. Fishery . . 2. .2 2. . . 2. . Manufacturing . . . .2 . . .2 . 2.

Agro-manufacturing 2. . 2. 2.2 . .2 . 2. .2Electronics .2 . . 2. . . . . .

Electrical Appliances . . . . 2. . . . 2.

Automotive . . .2 . . . . . . Machinery & Equipment . . . . .2 .2 . .2 .

Petroleum Related . . . . . 2 . . . . Total (BOP Basis) . .2 . 2. . . . . .2

Ex. Gold . . . . . . . . Ex. Gold & Petroleum Related . . 2. 2. 2. . . 2.

Export ValueJan 2020 = 19.7 Bn USD Ex. gold = 18.5 Bn USD

75

85

95

105

115

125

Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Asian Export PerformanceIndex sa, 3mma (Jan 2015=100)

Note: Thai export excludes gold. Indonesian export excludes oil&gas.Source: CEIC, Customs Department, calculated by Bank of Thailand

PH INDOMYTHTWCNSGKR

90

100

110

120

130

Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

US (Jan 20) Euro Area* (Dec 19) Japan (Dec 19)

G3 Retail Sales

Note: *Volume Index Source: Bloomberg

Index (Jan 2015 = 100)

Jan 20

The current account registered a smaller surplus, mainly from the decrease in trade balance. Meanwhile, the capital and financial accounts registered a surplus from both the asset and the liability positions.

Economic and Monetary Condition, January 2020

8

Millions of USD 2019P 2019P 2020E

H1 H2 Q3 Q4 Dec JanE

1. Assets 2 TDI 2 2 - Equity 2 2 - Reinvestment of earnings 2 2 2

Thai portfolio investment 2 2 - Equity security investment 2 2 2 - Debt security investment 2

Loans 2 2 Other investments 2 - Trade credits 2 2 2 2 22 - Deposits abroad 2 2 2 2

2. Liabilities FDI 2 2 - Equity 2 2 2 - Reinvestment of earnings 2 2 2 2

Foreign portfolio investment 2 2 2 2 - Equity security investment 2 - Debt security investment 2

Loans 2 2 2 Other investments 2 2 2 - Trade credits 2 2 2 2 2 - Deposits abroad 2 2 2

Total financial flows (1+2) 2 2 2

Net Financial Flows

Source: Bank of Thailand P = Preliminary data E = Estimated data

50

100

150

200

250

Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Total China (28%) Malaysia (10%)East Asia ex. CN MY (30%) Europe ex. Russia (13%) Russia (4%)India (5%)

Index sa(Jan 2015 = 100)

Tourists Classified by Nationality

Note: denotes share of total tourist arrivals in 2 P = Preliminary dataSource: Ministry of Tourism and Sports, calculated by Bank of Thailand

%YoY (Share in

2019)2019

2019 2020%MoM

saH1 H2 Q3 Q4 Dec JanP

China (27.6%) . . . . . . . .

Malaysia (10.5%) . . . . .2 . 2 . .2

Asia ex. China & Malaysia (30.4%)

. . . . . . . .

Russia (3.7%) . . . 2. . . .2 .2

Europe ex. Russia (13.2%)

. . . 2. . . . .

India (5.0%) 2 . 2 . 2 . 2 . 2 . 2. 2. .

Others (9.6%) . . . . 2. . . . Total(million persons)

.2 (39.8)

. (19.8)

. (20.0)

.2 .

. (10.3)

2. (3.9)

2. (3.8)

.

Inbound Tourists by Country of Origin

Source: Ministry of Tourism and Sports

Source: Bank of Thailand P = Preliminary data E = Estimated data

Balance of Payments

Billion USD 2019P201 P 2020E

H1 H2 Q3 Q4 Dec JanE

Trade Balance 2 . 2. . . . . . Exports (f.o.b.) 2 . 2 . 22. . .2 . .

%YoY .2 . 2. . . . . Imports (f.o.b.) 2 . . . . .2 .2 .

%YoY . . .2 . . . . Net Services, Income & Transfers . . . . . 2.2 . Current Account . . . .2 . . . Capital and Financial Account 2. . . . . 2.2 2. Overall Balance . . . . . . .

Economic and Monetary Conditions, January 2020

9

2.4 Monetary and Financial Conditions

Note: net changes in outstanding loans extended by other depository corporations, other financial corporations, non-residents and others.

Billion baht Net Changes in Outstanding Loans

-1.2

-0.6

0.0

0.6

1.2

-120

-80

-40

0

40

80

120

160

Jan-

17Ap

r-17

Jul-1

7Oc

t-17

Jan-

18Ap

r-18

Jul-1

8Oc

t-18

Jan-

19Ap

r-19

Jul-1

9Oc

t-19

Jan-

20Ja

n-17

Apr-1

7Ju

l-17

Oct-1

7Ja

n-18

Apr-1

8Ju

l-18

Oct-1

8Ja

n-19

Apr-1

9Ju

l-19

Oct-1

9Ja

n-20

MoM, SA % MoM change, SA (RHS)

BusinessHousehold

%

Note: (1) Business credits : net changes in outstanding loans extended by other depository corporations, other financial corporations, non-residents and others;

(2) Debt : net changes in outstanding bonds (market value); (3) Equity : new issuance at par valueSources: Bank of Thailand, ThaiBMA, SET

Billion baht

Changes in Total Corporate Financing

-150

-100

-50

0

50

100

150

200

Jan-

17

Apr-1

7

Jul-1

7

Oct-1

7

Jan-

18

Apr-1

8

Jul-1

8

Oct-1

8

Jan-

19

Apr-1

9

Jul-1

9

Oct-1

9

Jan-

20

Business Credits (SA) Equity Debt 3MMA

Jan 20P

0.5

1.0

1.5

2.0

2.5

3.0

Jan-

17

Apr-1

7

Jul-1

7

Oct-1

7

Jan-

18

Apr-1

8

Jul-1

8

Oct-1

8

Jan-

19

Apr-1

9

Jul-1

9

Oct-1

9

Jan-

20

1D BRP 3M 2Y 5Y 10Y

Government Bond Yields

Sources: Bank of Thailand and ThaiBMA

As of 25 Feb 20

1.000.870.81

1.080.97

Commercial Bank Interest Rates*% p.a. 2018 Q1/19 Q2/19 Q /19 Q4/19 Jan 20 25 Feb 20

2-month deposit rate

Average of 5 largest Thai banks**

Average of other Thai banks

Average of foreign branches and subsidiary

MLR

Average of 5 largest Thai banks

Average of other Thai banks

Average of foreign branches and subsidiary

MRR

Average of 5 largest Thai banks

Average of other Thai banks

Average of foreign branches and subsidiary

1.37

1.46

1.11

6.28

7.31

7.58

7.19

8.46

8.54

1.42

1.48

1.19

6.28

7.31

7.58

7.19

8.47

8.54

1.46

1.48

1.19

6.28

7.31

7.58

7.19

8.50

8.54

1.4

1.

1.1

6.28

7.31

7.58

8.

8.54

1.33

1.51

1.11

6.08

7.31

7.59

8.

8.44

1.29

1.

1.11

6.08

7.27

7.59

8.

8.54

0.98

1.40

1.04

5.98

7.27

7.59

8.

8.44

End of Period Bangkok Bank, Krung Thai Bank, Kasikorn Bank, Siam Commercial Bank and Bank of Ayudhya

Source: Bank of Thailand

Total corporate financing increased compared with the previous month mainly from debt securities and business credits. New loans extended to private sector expanded from the previous month. The monthly average of Thai baht against the U.S. dollar in January 2020 and the NEER depreciated compared with the previous month.

Economic and Monetary Conditions, January 2020

10

Sources: Reuters, Bank of Thailand

% p.a.

0%

2%

4%

6%

8%

10%

12%

30-D

ec-1

624

-Jan-

1715

-Feb

-17

8-M

ar-1

729

-Mar

-17

24-A

pr-1

717

-May

-17

7-Ju

n-17

28-Ju

n-17

20-Ju

l-17

11-A

ug-1

74-

Sep-

1725

-Sep

-17

17-O

ct-1

79-

Nov-

1730

-Nov

-17

25-D

ec-1

717

-Jan-

187-

Feb-

1828

-Feb

-18

22-M

ar-1

817

-Apr

-18

9-M

ay-1

831

-May

-18

21-Ju

n-18

12-Ju

l-18

6-Au

g-18

28-A

ug-1

818

-Sep

-18

9-Oc

t-18

1-No

v-18

22-N

ov-1

817

-Dec

-18

9-Ja

n-19

30-Ja

n-19

21-F

eb-1

914

-Mar

-19

4-Ap

r-19

30-A

pr-1

924

-May

-19

17-Ju

n-19

8-Ju

l-19

30-Ju

l-19

21-A

ug-1

911

-Sep

-19

2-Oc

t-19

25-O

ct-1

915

-Nov

-19

9-De

c-19

2-Ja

n-20

23-Ja

n-20

14-F

eb-2

0

HKD THB CNY IDR INR KRW MYR PHP SGD

As of 25 Feb 2020

Regional Exchange Rate Volatility

-0.8%-0.2% -0.2% -0.1%

-0.1% -0.1% 0.0%

0.4% 0.5% 0.7%

1.3%

1.7%

2.1%

-2.5%

-0.6%-0.2%

0.2%

-1.8%

-0.7% -0.3%

-2.7%-2.1%

-0.4%-1.1%

-1.8%

0.0%

-3%

-2%

-1%

0%

1%

2%

3%

THB GBP INR PHP EUR JPY VND SGD KRW TWD CNY MYR IDR

Avg of Jan 20 compared to avg of Dec 19

Avg of Feb 20 compared to avg of Jan 20

Sources: Reuters, calculated by Bank of ThailandNote: Avg-period data, + = Appreciation against USD

Exchange Rate Movement

29.0

30.0

31.0

32.0

33.0

34.0

35.0

36.0108110112114116118120122124126128130132

29-D

ec-1

7

16-F

eb-1

8

5-Ap

r-18

28-M

ay-1

8

13-Ju

l-18

3-Se

p-18

19-O

ct-1

8

7-De

c-18

28-Ja

n-19

15-M

ar-1

9

8-M

ay-1

9

26-Ju

n-19

14-A

ug-1

9

30-S

ep-1

9

18-N

ov-1

9

8-Ja

n-20

25-F

eb-2

0

NEER25

USDTHB (RHS)

Note: Monthy average rate Sources: Reuters, calculated by Bank of Thailand

Exchange RatesIndex (2012 = 100) USDTHB (reverse)

Appreciation

Feb 2 2 USDTHB = 31.25NEER25 = 123.19

Economic and Monetary Conditions, January 2020

11

2.5 Financial Stability

Headline inflation edged up from the previous month, mainly driven by an increase in energy prices. This was partly due to the low base effect of domestic retail petroleum prices in the same period last year. External stability remained strong, providing sufficient cushion against global financial market volatility.

0

1

2

3

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Rent (19.62%)Food & Beverage (28.17%)Non-Food & Beverage ex. Rent (52.21%)

Sources: Ministry of Commerce calculated by Bank of Thailand

Core inflation contribution%YoY

Jan0.47%

( ) Share in Core Inflation

-2

-1

0

1

2

3

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Raw food (15.69%)Energy (11.75%)Core Inflation (72.56%)

Headline inflation contribution%YoY

Jan1.05%( ) Share in Headline Inflation

Sources: Ministry of Commerce calculated by Bank of Thailand

80859095

100105110115

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Total Agriculture (31%) Manufacturing (17%)Construction (6%) Trade (17%) Service (29%)

Employment Index (December 2019)

Note: Data from 2014 onward are based on The 2010 Population and Housing Census.( ) denotes share in total employment

Source: Labor Force Survey, NSO calculated by BOT

Index sa, 3mma (Jan 2014=100)

0.5

1.0

1.5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Unemployment Rate (December 2019)

Dec 2019Unemployment rate 1.0 %Unemployment rate (sa) 1.1 %

%

Note: Data from 2014 onward are based on The 2010 Population and Housing CensusSource: Labor Force Survey, NSO

Employment (December 2019)

10,000

12,000

14,000

16,000

18,000

20,000

20,000

22,000

24,000

26,000

28,000

30,000

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Non-Agriculture (sa, 3mma) Non-Agriculture (sa)Agriculture (sa, 3mma) (RHS) Agriculture (sa) (RHS)Not in Labor Force (sa, 3mma) (RHS) Not in Labor Force (sa) (RHS)

Source: Labor Force Survey (NSO), calculated by BOT

Thousand persons sa, 3mma

Economic and Monetary Conditions, January 2020

12

External Stability Indicators

Criteria 2019P2019P 2020E

H1 H2 Q3 Q4 Dec JanE

Solvency Indicators Current Account / GDP (%)

Debt / GDP (%) < /

Debt / XGS1/ (%) < /

Debt Service Ratio (%)

Liquidity Indicators

Gross Reserves / ST Debt > 1 time

Gross Reserves / Imports2/ > 3 times

ST Debt / Total Debt (%)

Note: XGS – Export of Goods and Services (3-year average) Monthly Import of Goods and Services (1-year average)

Severely indebted countriesSource : Bank of Thailand P=Preliminary data E=Estimated data

External Debt Outstanding

Note: *including BOT bonds held by non-residents and SDRs allocations by IMF Source : Bank of Thailand P=Preliminary data E=Estimated data

Billion USD 2019P2019P 2020E

Change Jan20-Dec19

H1 H2 Q3 Q4 Dec JanE Total

1. General government .2 . .2 . .2 .2 . . 2. Central Bank* . 5. . . . . . . 3. Other Depository Corporations (ODC) . . . . . . . . 4. Other Sectors 5. .5 5. . 5. 5. 5. .

- Other Financial Corporations (OFC) .2 . .2 .5 .2 .2 . .2- Non Financial Corporations (NFC) 5. .5 5. .2 5. 5. . . O/W Foreign Trade Credit 2 . 2 . 2 . 2 . 2 . 2 . 2 . .

5. Total . . . .2 . . 2. . Short-term (%) . .5 . 5. . . . Long-term (%) 5.2 2.5 5.2 . 5.2 5.2 5.2

Economic and Monetary Conditions, January 2020

13

3. Link to related statistics and contents

Agricultural sector

Agricultural prices: Agricultural prices

Agricultural production: Agricultural products

More information: Office Of Agricultural Economics www.oae.go.th Manufacturing sector

Manufacturing production: Manufacturing production index (MPI)

Capacity utilization rate: Capacity utilization rate

More information: Office of Industrial Economics www.oie.go.th Real estate sector

Property Indicators: Property Indicators (EC_EI_009_S2)

More information: Real Estate Information Center www.reic.or.th/ Public finance

Central government revenue: Government revenue

Central government expenditure (GFSM2001): Government expenditure (EC_PF_011)

Fiscal Position (GFSM2001): Fiscal position in cash basis (EC_PF_009)

More information: Fiscal Policy Office www.fpo.go.th Labor market

Labor force survey: Labor force survey (EC_RL_009_S4)

Employment: Number of employed persons classified by occupation (EC_RL_012)

Average wage: Average wage classified by industry (EC_RL_014_S2)

More information: National Statistical Office www.nso.go.th

Economic and Monetary Conditions, January 2020

14

Inflation

Inflation: Consumer price index (CPI)

More information: Bureau of Trade and Economic Indices www.price.moc.go.th

Other reports of Monetary Policy Group, Bank of Thailand

Monthly report on Business Sentiment Index: Business Sentiment Index

Quarterly report on Business Outlook: Business Outlook Report

Quarterly report on Credit Condition: Senior Loan Officer Survey

Economic and Monetary Conditions, January 2020

15

Contact

Agricultural sector Sectoral Analysis Division 0 2283 6637

Manufacturing sector Sectoral Analysis Division 0 2283 5650

Service sector Sectoral Analysis Division 0 2356 7300

Real estate sector Macro Surveillance Team 1-2 0 2356 7096

Private consumption Macroeconomics Team 1-2 0 2283 5647

Private investment Macroeconomics Team 1-2 0 2283 5639

Public finance Public Finance Team 0 2356 7877

The global economy International Economics Division 0 2283 5147

External sector and balance of payments Balance of Payment Division 0 2283 6726

Monetary and financial conditions Monetary Policy Strategy Division 0 2283 6186

Inflation Macro Surveillance Team 1-2 0 2283 7090

Labor market Sectoral Analysis Division 0 2283 5645

Financial Stability Macro Surveillance Team 1-2 0 2356 7098

Financial Position Macro Surveillance Team 1-2 0 2356 7098

External stability Balance of Payment Division 0 2283 5636