The Bank of Thailand on Friday announced that the overall
Thai economy had continued to improve in February, citing consumer purchases
and investments which exceeded pre-flood levels.
Mathee Supapongse, senior director of the BoT Domestic
Economy Department, told a news briefing that the Private Consumption Index
grew by 6.6 percent compared to a year earlier in response to strong
consumer demand.
Meanwhile, the Private Investment Index was up by 8.8
percent year-on-year as the post-flood restored business confidence led
investors to resume their investment plans and increased investment for
repair work and replacement.
The Thai central bank projected that overall investment
would return to normal in the first quarter of this year.
In the meantime, production capacity in the automotive
industry also surpassed the pre-flood level in tandem with acceleration in
domestic vehicle sales, following a rapid increase in production to
accommodate the large pent-up demand, Mathee said. The automotive industry
is likely to fully recover from last year’s mega flood in the second quarter
in line with the Business Sentiment Index which rose above 50 for two
consecutive months.
The BoT senior director projected that the Business
Sentiment Index in the next three months would climb to 56.5 as earlier last
month, driven by all good factors, except production costs, which would
likely stand below 50 and cause concern among entrepreneurs.
Apart from the expected production cost, the Bt300 daily
minimum wage hike, which took effect on Sunday April 1 in the seven
provinces scheduled first, will also impact businesses in the service and
tourism sector as wages are the major operating cost.
Regarding exports, Mathee said that there were signs of
recovery, resulting from the recovery in the production sector.
However, some industries, including electronics and
electrical appliances, still have had limits in production after the flood
crisis.
As the global economy is projected to improve in the
second half of the year, Mathee saw that the improvement would benefit Thai
exports.
Thailand’s exports in February reportedly edged up 1.2
percent to approximately US$17.76 billion while imports expanded by 8.2
percent to $16.56 billion.
Meanwhile, headline inflation remained relatively stable
from the previous month at 3.35 percent year-on-year, Mathee said, adding
that inflationary pressure continued owing to the rising global oil price
and the Bt300 daily minimum wage implementation.
In a related development, the Office of Industrial
Economics on Friday reported that the February Manufacturing Production
Index slipped by 3.4 percent year-on-year to 171.74, but did grow by 9
percent from January. (MCOT)
