The Bank of Thailand has issued a report on the economic and monetary conditions for June and the second quarter of 2014.
In the report, it said that overall economic activities in June 2014 expanded from the previous month owing mainly to an increase in merchandise exports.
On the domestic front, private consumption continued to rise, as the improved economic and political situation shored up private sector confidence. Nevertheless, manufacturing production declined as businesses satisfied higher demand partly by running down inventories that had been accumulated on the back of softened domestic demand and slow recovery in merchandise exports in the previous period.
Meanwhile, the tourism sector continued to be affected by political changes although there were signs of improvement toward the end of the month.
On the stability front, unemployment rose particularly in the agricultural sector, but the overall unemployment rate remained low. Inflation tapered off thanks to declines in energy and fresh food prices. The current account recorded a surplus as a result of export improvement and import contraction. The capital account posted a deficit owing mainly to outflows of direct investment and portfolio investment overseas by Thai investors. Overall, the balance of payments registered a deficit.
Overall economic activity in the second quarter of 2014 was likely to pick up from the previous quarter following improvement in political situation and clarity on government policy, which helped restore households and business confidence. Domestic spending, as a result, started to recover. Meanwhile, merchandise exports improved slightly due to rising demand from advanced economies in line with an expansion of export-oriented manufacturing production. Overall merchandise exports, however, recovered slowly due to softened demand from Asia. The tourism sector continued to be affected by political situation.
On the stability front, unemployment remained low. Inflation edged up on the back of higher prepared food and energy prices. The current account posted a surplus mainly because of import contraction.
The capital account registered a deficit owing to outflows of direct investment and portfolio investment abroad by Thai investors. In the second quarter of this year , the balance of payments posted a deficit.