BOT reveals that the number of tourists has decreased and exports have contracted, dragging down the Thai economy in June.

Bangkok, The Bank of Thailand revealed that the overall Thai economy in the second quarter was still expanding from the previous quarter. However, if we look at June 2024, it slowed down due to a decrease in the number and income of foreign tourists, a decrease in exports, and a good labor market. Ms. Chanyawadee Chaianan, BOT spokesperson, revealed that the overall Thai economy in the second quarter was still expanding from the previous quarter. However, when compared to the previous month, the economy in June slowed down due to a decrease in the number and income of foreign tourists after accelerating in the previous period, coupled with a decrease in exports, especially agricultural products that were in the late season and electronic products, whose inventories were still high, in line with the decrease in agricultural output and industrial production. Private consumption was stable, with the expansion in spending on non-durable goods being offset by the continuous contraction in the durable goods categ ory, especially in the automotive sector. However, private investment increased slightly. Government spending expanded from the previous year, both in regular and investment expenditures of the central government, while investment expenditures of state enterprises contracted in line with disbursements in public utility and infrastructure investment projects. In June, the general inflation rate decreased from the previous month in the energy and fresh food categories due to the price of gasoline decreasing in line with the price of crude oil in the world market, along with the price of vegetables decreasing in line with more products entering the market. The core inflation rate was similar to the previous month. The current account surplus increased from the deficit in services, income, and transfers, while the trade surplus was similar to the previous month. The labor market continued to improve in both the service and manufacturing sectors. The seasonally adjusted industrial production index fell from the previous month in several categories, especially the automotive category, mainly due to the production of passenger cars and commercial vehicles for domestic sales. This was partly due to financial institutions being cautious in granting loans, and some consumers not making purchase decisions as they waited to see the situation of car price reductions from more intense competition among manufacturers. Government spending excluding transfers expanded year-on-year from both routine and investment expenditures of the central government after the 2024 Budget Act came into effect at the end of April 2024. Regular expenditures expanded in line with disbursements for retirement benefits, pensions, medical expenses, and compensation for government employees, while investment expenditures expanded from disbursements by irrigation agencies. Investment expenditures of state enterprises contracted in line with disbursements in public utility and infrastructure investment projects. The overall economy in the second quar ter expanded from the previous quarter, but the expansion was not widespread. The main driving force was the tourism sector, which continued to expand, resulting in activities in the service sector, employment, and private consumption expanding from the previous quarter. In addition, exports of goods excluding gold also increased from the previous quarter, in line with overall improved industrial production. However, exports and production in some industries were still pressured by high levels of inventory and structural factors from reduced competitiveness. Private investment expanded from machinery and equipment. Government spending expanded significantly from routine expenses after the 2024 budget bill came into effect. In terms of economic stability, headline inflation increased from the previous quarter from the energy category following the government's gradual reduction in cost of living measures, and from the fresh food category following the reduced supply of vegetables and pork. Core inflation decre ased from the prices of prepared food and personal items. The current account balance showed a surplus close to the previous quarter, with the trade surplus increasing in line with merchandise exports, while the services balance, income, and transfers turned into a deficit due to lower tourism receipts and seasonal profit repatriation. Employment continued to improve from the previous quarter, mainly due to employment in the service sector. Source: Thai News Agency