BANGKOK, Thailand – Thailand’s economy remained broadly stable in August, supported by a recovery in foreign tourism and modest gains in private consumption and investment, while exports and industrial production slowed, according to the Bank of Thailand (BOT).
BOT Assistant Governor and spokesperson Chayawadee Chai-anant said the economy was little changed from July. Exports excluding gold declined slightly, while foreign tourist arrivals and domestic demand improved. Exports excluding gold fell 0.1% month-on-month, while imports excluding gold increased 4.5%. Foreign tourist arrivals rose 1.8% from the previous month after seasonal adjustment.
Thailand welcomed about 2.5 million foreign visitors in August. Chinese arrivals increased, while arrivals from India also improved. Long-haul tourism remained broadly stable after strong growth in previous months. From January 1 to September 26, foreign arrivals totaled about 22.9 million.
Private consumption increased 0.4% month-on-month, driven mainly by spending on durable and semi-durable goods. Sales of passenger cars and motorcycle registrations increased, partly supported by motor shows and the launch of new vehicle models.
Private investment rose 2.2%, led partly by spending on machinery and equipment.
On the supply side, economic activity declined, mainly due to weaker industrial production. Output of optical signal transmission equipment slowed after strong growth in previous months, while production of hard disk drives, computers and passenger cars also fell in line with weaker exports.
Agricultural production increased, supported by the start of the white rice harvest and a recovery in shrimp production from the previous month’s low base, when heavy rainfall had damaged output.
Household concerns remain over living costs and debt
The BOT said consumer confidence improved after seasonal adjustment, partly reflecting government economic stimulus measures. However, households continued to face concerns over living costs and high debt burdens. Spending on services also showed improvement, supported by hotels and restaurants and increased overseas travel by Thai residents. Semi-durable goods spending edged up, particularly textile and clothing imports.
Non-durable goods consumption remained broadly stable. Fuel sales declined following higher prices, while alcohol sales also fell. Sales of consumer goods recovered partly due to the government’s Thai Plus program.
Labor market shows signs of vulnerability
The overall labor market remained broadly stable, with the number of workers insured under Section 33 of the Social Security Act reaching about 12.3 million in August, up 0.2% from July.
However, the number of people receiving unemployment benefits under Section 38 continued to rise. The latest available July figure was about 300,000 after seasonal adjustment, representing a 10.3% increase from the previous month.
Chayawadee said the increase partly reflected structural changes in the economy. Some expanding sectors, particularly technology businesses, require fewer workers while demanding higher levels of skills, potentially reducing their ability to absorb labor compared with the past.
Inflation rises to 2.53%
Headline inflation accelerated to 2.53% in August from 1.95% in July, mainly due to higher fresh food prices, particularly meat and eggs. Lower production caused by changing weather conditions and higher production costs contributed to the increase.
Energy prices also rose, reflecting higher domestic retail fuel prices in line with global crude oil prices.
Core inflation increased to 1.44% from 1.34%, mainly due to higher prices for prepared food as businesses gradually passed higher costs on to consumers.
Central government expenditure excluding transfers increased 2.3% year-on-year, supported by spending by both the central government and state enterprises.
Thailand also recorded a current-account surplus of US$2.4 billion in August.
BOT watches technology, war and flooding
Looking ahead, the BOT said key issues to monitor include the sustainability of the technology and artificial intelligence cycle, developments in wars and geopolitics, US international trade policies, the effects of flooding and high temperatures, and the recovery of tourism.
The August figures show an economy supported by tourism, consumption and private investment, while weaker exports and industrial production remain areas to watch. Rising food and energy prices also added pressure on inflation.
