Fiscal Policy Office Weekly Economic Indicators Report as of June 11, 2021

Jun 12, 2021 | view 4,242

The Fiscal Policy Office - FPO reports the weekly economic indicators as of June 11, 2021, as follows:
1. The Industrial Confidence Index (TISI) for May 2021 decreased to 82.3 from 84.3 in the previous month.
2. The Consumer Confidence Index for May 2021 decreased to 44.7 from 46.0 in the previous month.
3. The liquidity asset level of commercial banks in April 2021 was 1.78 times the legally required liquidity assets.
4. Eurozone GDP for Q1 2021 (third estimate) contracted by -1.3% compared to the same period last year.

Industrial Confidence Index (TISI) for May 2021 decreased to 82.3 from 84.3 in the previous month due to the ongoing COVID-19 outbreak, which has not yet subsided, along with clusters emerging in industrial factories affecting the manufacturing sector. Additionally, operators are facing rising costs and labor shortages. However, there are supportive factors from government economic stimulus measures, such as the 'We Win' program, which helps boost domestic purchasing power. Furthermore, the global economy is beginning to recover as the COVID-19 situation in many countries improves and cities start to reopen, along with economic stimulus measures from major economies benefiting exports.

Consumer Confidence Index for May 2021 decreased to 44.7 from 46.0 in the previous month, marking the lowest level in 22 years and 8 months since the survey began in October 1998. This decline is attributed to concerns over the third wave of COVID-19 in Thailand, coupled with worries about the political situation becoming less stable and delays in vaccination for the public, leading consumers to feel that the Thai economy has not significantly recovered and lacks stimulus for recovery, even though government economic stimulus measures, particularly the 'We Win' project and others, have somewhat boosted purchasing power.

Liquidity Asset Level of Commercial Banks in April 2021 was 1.78 times the legally required liquidity assets, with total outstanding liquidity assets of the banking system in April 2021 at 5.2 trillion baht, slightly increasing from the previous month. The Bank of Thailand has adjusted the liquidity asset maintenance requirement for commercial banks from the previous requirement of maintaining liquidity assets of no less than 6% of deposits to no less than 100% (or 1.0 times) of the estimated net cash outflow in a crisis (Liquidity Coverage Ratio: LCR) since January 2016.

US export value in April 2021 continued to grow for the second month at 53.2% compared to the same period last year, accelerating from the previous month's growth of 14.2% after contracting for 12 consecutive months. Meanwhile, import value in April 2021 grew by 36.9% compared to the same period last year, accelerating from the previous month's growth of 21.9%, marking the highest growth since data collection began in 1992, resulting in a trade deficit of -83.4 billion USD in April 2021, down from a deficit of -86.6 billion USD in the previous month. The inflation rate in May 2021 was 5.0% compared to the same period last year, accelerating from the previous month's growth of 4.2%, the highest level since August 2018 due to a low base resulting from the severe economic impact of the COVID-19 outbreak, combined with increased market demand as the US economy reopened. The number of first-time unemployment claims for the week (May 30 - June 5, 2021) was 376,000, down from the previous month and marking the sixth consecutive week of decline. However, this remains higher than the pre-pandemic average of 230,000 claims per week.

China export value in May 2021 grew by 27.6% compared to the same period last year, slowing from the previous month's growth of 31.8%. Meanwhile, import value in May 2021 grew by 51.8% compared to the same period last year, accelerating from the previous month's growth of 42.7%, marking the highest growth since February 2010, resulting in a trade surplus of 45.5 billion USD in May 2021, up from a surplus of 42.9 billion USD in the previous month. The inflation rate in May 2021 grew by 1.3% compared to the same period last year, accelerating from the previous month's rate of 0.9%. However, China's inflation rate remains lower than the July 2021 rate of 2.7%. The Producer Price Index in May 2021 grew for the fourth consecutive month at 9.0% compared to the same period last year, the highest level in nearly 13 years. Commodity prices in China have surged broadly due to strong recovery in the industrial sector, supported by the global economic recovery and large-scale economic stimulus measures from the US.

Eurozone GDP for Q1 2021 (third estimate) contracted by -1.3% compared to the same period last year, a decrease from the previous quarter's contraction of -4.7% and a revision from the previous estimate of -1.8%.

Malaysia industrial production in April 2021 grew by 50.1% compared to the same period last year, up from 9.3% in the previous month, driven by rapid production increases and a low base. Retail sales in April 2021 grew by 56.4% compared to the same period last year, up from 10.5% in the previous month, driven by sales across all types of goods and a low base. The unemployment rate in April 2021 was 4.6% of the total labor force, slightly down from the previous month.

Philippines industrial production in May 2021 grew by 154.3% compared to the same period last year, up from a contraction of -73.3% in the previous month, driven by increases in various industrial products. Export value in April 2021 grew by 72.1% compared to the same period last year, up from 31.6% in the previous month. Import value in April 2021 grew by 140.9% compared to the same period last year, up from 16.6% in the previous month. The unemployment rate for Q2 2021 was 8.7% of the total labor force, unchanged from the previous quarter.

Indonesia retail sales in April 2021 grew by 15.6% compared to the same period last year, up from a contraction of -14.6% in the previous month, driven primarily by sales of food, beverages, and tobacco. The Consumer Confidence Index in May 2021 was at 104.4 points, improving from 101.5 points in the previous month.

Taiwan export value in May 2021 grew by 38.6% compared to the same period last year, slowing from 38.7% in the previous month. Import value in May 2021 grew by 40.9% compared to the same period last year, accelerating from 26.4% in the previous month, marking the highest growth in 15 months, resulting in a trade surplus of 6.16 billion USD in May 2021, close to the previous month's surplus of 6.18 billion USD. The inflation rate in May 2021 was 2.48% compared to the same period last year, accelerating from 2.1% in the previous month, the highest level since February 2015, driven by rising prices in transportation and communication. The European Central Bank decided to maintain the policy interest rate at 0.0% during the June 2021 meeting, indicating that inflation is expected to rise both this year and next year due to increasing energy prices.

SET Index slightly increased from the previous week, in line with other regional stock markets such as Nikkei225 (Japan), JCI (Indonesia), PSEi (Philippines), and STOXX50E (European Union). The SET Index rose towards the end of the week, closing at 1,625.27 points on June 10, 2021, with an average trading value between June 7-10, 2021, at 97,204.51 million baht per day. Foreign investors, domestic institutional investors, and securities accounts were net buyers, while retail investors were net sellers. During June 7-10, 2021, foreign investors net bought securities worth 1,999.09 million baht.

Overall government bond yields decreased by 0 to -9 bps this week, with investors bidding for 11-year and 51-year government bonds, attracting interest of 3.13 and 2.04 times the auction amount, respectively. During June 7-10, 2021, foreign capital inflow in the bond market was net 13,917.73 million baht, and since the beginning of the year until June 10, 2021, foreign capital inflow in the bond market was net 50,692.44 million baht.

The Thai Baht appreciated from the previous week, closing at 31.14 baht per US dollar on June 10, 2021, appreciating by 0.04% from the previous week, in line with other currencies such as the yen and ringgit, which also appreciated against the US dollar. Meanwhile, the euro, won, Singapore dollar, and yuan depreciated against the US dollar compared to the previous week. The Thai Baht appreciated more than other currencies in the region, resulting in the Nominal Effective Exchange Rate (NEER) appreciating by 0.06% from the previous week.