BANGKOK: Economic indicators for August show significant improvement from July but suggest the economy is still contracting, according to the Finance Ministry.
Releasing its monthly economic report on Monday, the ministry’s Fiscal Policy Office predicted the economic situation would get better in the third quarter after a sharp contraction of 12.2% in the second quarter.
Reopening the country to tourists would also boost the recovery, said fiscal policy adviser Wuttipong Jittungsakul, referring to a plan to allow foreign travellers back into Thailand next month. Before the Covid-19 travel ban, Thailand welcomed 6.7 million foreign tourists this year.
August’s revenue from value added tax (VAT), an indicator of private consumption, fell 3.8% year on year – but far less than the 11.6% drop in July. Car sales rose 14.8% from July, but contracted 35.5% year on year.
Motorcycle registration dropped 2.5% year on year, compared to 5.8% contraction in July.
Farmers’ income increased for the second month in a row, by 9.2%, up from 3.8% in July. The consumer confidence index rose for the fourth consecutive month, to 51.
Effective control of Covid-19, relaxation of restrictions, and implementation of aid packages had helped boost consumer spending. The fiscal Policy Office predicted the economic situation in the third quarter (July-September) would be better than the second quarter, he said.
Private investment also improved slightly, with imports of capital goods and commercial cars increasing 1.5% and 13.1% respectively from July. They dropped year-on-year, but at a decelerating rate of 11.5% and 0.5%.
Cement sales in August rose 2.7% year on year but were flat compared to sales in July. However the property sector remained on a downward trajectory, with tax revenue from real estate transactions dropping 6.9% from July and 14.1% year on year.
Exports in dollar terms contracted 7.9% in August, better than the 11.4% contraction in July.
Budget disbursement rose 9.2% year on year in August with a monthly increase of 3.3%.
Meanwhile, Pisit Puapan, executive director of the Finance Ministry’s Macroeconomic Policy Bureau, said economic indicators in August pointed to recovery in all four regions of the country. — The Nation/ANN.