Ministry of Finance Requests Weekly Economic Indicators Report as of July 23, 2021

Jul 23, 2021 | view 1,976

The Ministry of Finance requests the weekly economic indicators report as of July 23, 2021:
1. Total budget disbursement in June 2021 grew by 25.3% year-on-year.
2. The government collected net revenue (after allocation to local governments) in June 2021, which grew by 54.9% year-on-year.
3. The government's cash flow position in June 2021 showed a surplus of 23,132 million baht.
4. Value-added tax collected by the government at constant prices in June 2021 grew by 5.0% year-on-year.
5. Taxes from real estate transactions in June 2021 grew by 8.5% year-on-year.
6. The value of exports in June 2021 grew by 43.8% compared to the same period last year, while the value of imports grew by 53.8% year-on-year.
7. The number of foreign tourists entering Thailand in June 2021 was 5,694, growing by 100.0% year-on-year.
8. The volume of passenger car sales in June 2021 grew by 20.6% compared to the same period last year.
9. The volume of commercial vehicle sales in June 2021 grew by 13.9% compared to the same period last year.

Thai Economic Indicators: Total budget disbursement in June 2021 amounted to 276,298 million baht, growing by 25.3% year-on-year, resulting in a total disbursement of 2,389,166 million baht over the first nine months, a contraction of -1.7%, with a cumulative disbursement rate of 68.2%.
(1) Current year expenditure amounted to 266,444 million baht, growing by 26.6% year-on-year, with a cumulative disbursement rate of 67.8%. This includes (1.1) regular expenditure of 217,784 million baht, growing by 29.8% year-on-year, with a cumulative disbursement rate of 73.7%, and (1.2) investment expenditure of 48,660 million baht, growing by 13.9% year-on-year, with a cumulative disbursement rate of 43.7%.
(2) Previous year expenditure amounted to 9,854 million baht, contracting by -1.7% year-on-year, with a cumulative disbursement rate of 74.5%.

The government collected net revenue (after allocation to local governments) in June 2021 amounting to 293,030 million baht, growing by 54.9%. Total revenue from three departments grew by 2.9% year-on-year, resulting in a total collection of 1,738,160 million baht over the first nine months.

Revenue growth was driven by corporate income tax, which grew by 85.3% year-on-year, personal income tax grew by 44.2% year-on-year, and excise tax grew by 40.0% year-on-year due to the deferment of beer and vehicle taxes, as well as the extension of the filing and payment deadlines for corporate and personal income taxes.

The government's cash flow position in June 2021 showed a budget surplus of 23,132 million baht. When including the off-budget surplus, the cash balance before borrowing showed a deficit of -6,532 million baht. In this month, the government borrowed 99,000 million baht, resulting in a cash balance after borrowing of -92,468 million baht. The cash reserves stood at 460,366 million baht.

The value-added tax collected by the government at constant prices in June 2021 grew by 5.0% year-on-year, and when compared to the previous month, after seasonal adjustments, it grew by 7.4%. The value-added tax collected from domestic spending contracted by -12.8% year-on-year, partly due to:
• High base effect due to last year's extension
The filing deadline for value-added tax for March and April 2020 was extended, resulting in some value-added tax being accounted for in May and June 2020.
• The third wave of the pandemic reduced travel and consumer spending, leading to a decrease in value-added tax collection. However, the value-added tax collected from imports grew significantly by 47.0% year-on-year due to a low base last year and the continuous improvement in Thailand's imports, resulting in a total growth of 5.0% year-on-year in value-added tax collection.

Taxes from real estate transactions in June 2021 grew by 8.5% year-on-year and grew by 6.3% compared to the previous month after seasonal adjustments.

The collection of taxes from real estate transactions in June 2021 improved compared to the previous month in almost all categories, especially in the category of withholding tax from the sale of real estate by individuals, which grew by 26.4% from a contraction of -0.7% in May 2021. This growth in June continued to benefit from a low base last year, while the impact of the intensified and widespread COVID-19 outbreak remains a major pressure factor on consumer purchasing power, affecting the buying and selling of high-value assets such as real estate.

The value of exports in June 2021 was 23,699 million USD, representing a growth of 43.8% compared to the same period last year. This remains the highest growth rate in nearly 11 years since June 2010. Key products that continued to support exports in that month included vegetables and fruits (+110%), gems and jewelry (+114%), automotive equipment and parts (+79%), computers (+22%), machinery and components (+73%), rubber (+112%), cassava products (+82%), and granulated sugar (+19%). When considering the main trading partners of Thailand, there was growth in almost all major markets, especially the United States, China, Japan, the European Union, ASEAN, and South Asia, which grew by 41.2%, 42.0%, 32.3%, 46.5%, 42.8%, and 125.7% year-on-year, respectively. The value of exports in the first half of 2021 grew on average by 15.5% year-on-year.

The value of imports in June 2021 was 22,754 million USD, growing significantly by 53.8% compared to the same period last year. This growth was driven by key import categories such as crude oil, chemicals, machinery and components, steel, electrical machinery and components, circuit boards, other metal ores, scrap metal and products, and automotive components and equipment. The value of imports in the first half of 2021 grew on average by 26.2% year-on-year. The trade balance in June 2021 remained in surplus at 945 million USD, resulting in a cumulative trade surplus for Thailand in the first half of 2021 of 2,439 million USD.

The number of foreign tourists entering Thailand in June 2021 included special tourist visa (STV) holders, Thailand Privilege Card holders, and business travelers, totaling 5,694 people, growing by 100% year-on-year from June 2020 when tourists could not enter Thailand. This number slightly decreased from the previous month due to the new outbreak of COVID-19 both abroad and domestically, along with public health measures that increased the quarantine period for travelers from abroad to 14 days (from the previous 7-10 days), effective from May 1, 2021.

Most tourists were from the United States, the United Kingdom, Myanmar, the Middle East, and China. Overall, in the second quarter, 20,275 foreign tourists entered Thailand. On July 1, 2021, the “Phuket Sandbox” and “Samui Plus” projects were launched to allow foreign tourists to visit Thailand without quarantine. In the Phuket Sandbox, 9,530 tourists arrived from July 1-22, 2021, with 254,700 room nights booked from July to September 2021.

The volume of passenger car sales in June 2021 was 24,892 units, growing at a slower rate of 20.6% compared to the same period last year, and when compared to the previous month after seasonal adjustments, it grew by 27.0%. This was partly due to a low base effect as some factories temporarily halted production last year, coupled with consumers reducing spending on high-value items. Additionally, the manufacturing sector is currently facing a shortage of production parts. However, the automotive market continues to be supported by ongoing promotional activities from car companies.

The volume of commercial vehicle sales in June 2021 was 42,436 units, growing by 13.9% compared to the same period last year and growing by 5.0% compared to the previous month after seasonal adjustments, driven by the sales of one-ton pickup trucks, which grew by 12.1% compared to the same period last year.

In June, commercial vehicle sales grew for the fourth consecutive month, benefiting from a low base last year. However, the new outbreak of COVID-19 has led to increased restrictions on economic activities, resulting in reduced purchasing power among consumers. It is expected that the volume of domestic vehicle sales will continue to slow down. Nevertheless, government relief measures and economic stimulus, the reopening of tourist areas under the “Phuket Sandbox,” continued export growth in line with the global economy, and progress in domestic vaccination will remain key supporting factors to restore confidence and consumer spending in the remaining months of the year.

United States:
New housing starts in June 2021 grew by 29.1% year-on-year or grew by 6.3% from the previous month (seasonally adjusted), accelerating from the previous month’s growth of 2.1% (seasonally adjusted), reaching the highest level in three months due to increased single-family and condominium construction driven by rising market demand, although there are still issues with shortages of construction materials and labor.

New residential building permits in June 2021 contracted by -5.1% from the previous month (seasonally adjusted), a sharper contraction than the previous month’s -2.9% (seasonally adjusted), and the lowest level in four months, with declines across all types of housing.

Existing home sales in June 2021 grew by 22.9% year-on-year or grew by 1.4% from the previous month (seasonally adjusted), accelerating from the previous month’s contraction of -1.2% (seasonally adjusted) and marking the first growth in five months due to increased market supply from new housing starts.

The number of initial unemployment claims for the week of July 11-17, 2021, was 419,000, up from the previous week’s 368,000, the highest level in two months and higher than the weekly average before the COVID-19 outbreak in the U.S., which was 230,000.

Japan:
The inflation rate in June 2021 grew by 0.2% year-on-year, accelerating from the previous month’s contraction of -0.1% year-on-year, marking the first growth after eight consecutive months of contraction, supported by rising energy prices. The inflation rate in Japan has increased in line with consumption recovering as vaccination efforts against COVID-19 accelerate.

The value of exports in June 2021 grew by 48.6% year-on-year, slowing from the previous month’s growth of 49.6% year-on-year, partly due to a low base effect and the expansion of global trade markets starting to recover.

The value of imports in June 2021 grew by 32.7% year-on-year, accelerating from the previous month’s growth of 27.9% year-on-year.

The trade balance in June 2021 returned to a surplus of 383 billion yen after a deficit in the previous month of -189 billion yen.

Malaysia:
The inflation rate in June 2021 was 3.4% year-on-year, down from 4.4% in the previous month due to significant transportation and food costs.

Indonesia:
The Bank of Indonesia announced to maintain the policy interest rate at 3.5% per annum to support economic recovery from the COVID-19 outbreak.

Singapore:
The inflation rate in June 2021 was 2.4% year-on-year, unchanged from the previous month.

South Korea:
The producer price index in June 2021 grew by 6.4% year-on-year, slowing from the previous month’s growth of 6.6% year-on-year.

Hong Kong:
The inflation rate in June 2021 was 0.7% year-on-year, slowing from the previous month’s growth of 1.0% year-on-year, due to a low base effect from last year’s electricity subsidy measures.

The unemployment rate in June 2021 was 5.5% of the total labor force, down from 6.0% in the previous month, the lowest level since April 2020, reflecting a good economic recovery as the number of new daily infections gradually decreases.

Taiwan:
The unemployment rate in June 2021 was 4.76% of the total labor force, increasing from 4.15% in the previous month, the highest level since October 2010, due to a new wave of COVID-19 and the reintroduction of stricter control measures.

Money Market and Exchange Rate Indicators:
The SET index slightly decreased from the previous week, in line with other regional stock markets that also declined, such as Nikkei225 (Japan), HSI (Hong Kong), and TWSE (Taiwan). In this week, the SET index decreased at the beginning of the week and gradually increased until the end of the week. On July 22, 2021, the index closed at 1,552.38 points, with an average daily trading value between July 19-22, 2021, of 75,764.07 million baht. Foreign investors and domestic institutional investors were net sellers, while domestic retail investors and brokerage accounts were net buyers. During the period from July 19-22, 2021, foreigners sold securities net -3,983.62 million baht.

The yield on government bonds with maturities of less than 7 years increased by 1-2 bps, while those with maturities of 7 years and above generally decreased by -1 to -11 bps. In this week, investors participated in the auction of 4-year and 30-year government bonds, which attracted interest of 1.8 and 3.8 times the auction amount, respectively. From July 19-22, 2021, foreign investor capital flowed into the bond market net 8,204.36 million baht, and from the beginning of the year until July 22, 2021, foreign investor capital flowed into the bond market net 61,268.38 million baht.

The Thai baht depreciated from the previous week, closing at 32.85 baht per USD on July 22, 2021, a depreciation of -0.62% from the previous week. This trend is consistent with other currencies, such as the yen, euro, ringgit, won, Singapore dollar, and yuan, which also depreciated against the USD compared to the previous week. The Thai baht depreciated more than other major currencies in the region, resulting in the NEER index depreciating by -0.28% from the previous week.