Ministry of Finance Economic Situation Weekly Report as of November 12, 2021

Nov 13, 2021 | view 1,684

The Ministry of Finance (MOF) presents the weekly economic situation report as of November 12, 2021, as follows:
1. The Industrial Confidence Index (TISI) for October 2021 increased for the second consecutive month to 82.1 from 79.0 in the previous month.
2. The liquidity asset level of commercial banks in September 2021 was 1.87 times the legally required liquidity assets.
3. Malaysia's GDP in the third quarter of 2021 contracted by -4.5% compared to the same period last year.
4. The Philippines' GDP in the third quarter of 2021 grew by 7.1% compared to the same period last year.
5. The UK's GDP in the third quarter of 2021 (preliminary) grew by 6.6% compared to the same period last year.

Thai Economic Indicators
The Industrial Confidence Index (TISI) for October 2021 increased for the second consecutive month to 82.1 from 79.0 in the previous month.

The index for October 2021 rose across all sizes of industries and regions, with almost all components of the index increasing, including overall order volume, overall sales, production volume, and performance, except for operational costs. This improvement was supported by the COVID-19 situation, which began to improve due to a decrease in daily infections and an increase in vaccination rates. As a result, the government continued to ease lockdown measures, allowing economic activities to gradually recover. Domestic and international demand continued to grow for both durable and non-durable goods, such as in the automotive, machinery and metalworking, electrical and electronics, food, and pharmaceutical industries. However, rising raw material and energy costs may impact production costs and transportation fees, while currency fluctuations and high shipping costs remain pressure factors for the export sector.

Financial Sector Indicators
The liquidity asset level of commercial banks in September 2021 was 1.87 times the legally required liquidity assets.

The total outstanding liquidity assets of the banking system in September 2021 stood at 5.1 trillion baht, slightly down from the previous month. The Bank of Thailand has adjusted the liquidity asset maintenance requirement for commercial banks from the previous requirement of at least 6% of deposits to at least 100% (or 1.0 times) of the estimated net cash outflow in a crisis (Liquidity Coverage Ratio: LCR) since January 2016.

Source: Bank of Thailand

International Economic Indicators

United States

The inflation rate in October 2021 grew by 6.2% compared to the same period last year, up from 5.4% in the previous month, marking the highest level since November 1993, driven by rising energy, housing, food, and new vehicle prices.
The number of initial unemployment claims for the week (October 31 - November 6, 2021) was 267,000, continuing to decline for the fifth consecutive week and reaching the lowest level since the pandemic began in the U.S. in March 2020, reflecting the ongoing recovery of the U.S. labor market.

China

The inflation rate in October 2021 grew by 1.5% compared to the same period last year, up from 0.7% in the previous month, marking the highest level since October 2020, due to rapid increases in non-food prices, particularly in transportation and communication, fuel and utilities, household goods and services, and health.

Australia

The consumer confidence index for November 2021 stood at 105.3 points, up from 104.6 points in October 2021, as the Australian government eased COVID-19 control measures.
The unemployment rate in October 2021 was 5.2% of the total labor force, up from 4.6% in September 2021, due to lockdown measures implemented by various states in Australia to control the spread of the Delta variant of COVID-19.

Malaysia

GDP in the third quarter of 2021 contracted by -4.5% compared to the same period last year, down from a growth of 16.1% in the previous quarter, or a contraction of -3.6% compared to the previous quarter (seasonally adjusted).
The unemployment rate in September 2021 was 4.5% of the total labor force, down from 4.6% in the previous month.
Industrial production in September 2021 grew by 2.5% compared to the same period last year, improving from a contraction of -0.7% in the previous month, primarily due to electrical and electronic products.
Retail sales in September 2021 contracted by -1.1% compared to the same period last year, a smaller contraction than the -7.4% in the previous month.

South Korea

The unemployment rate in October 2021 was 3.2% of the total labor force, continuing to rise for the second consecutive month and reaching the highest level in three months, compared to 3.0% in September 2021.

Taiwan

The export value in October 2021 grew by 24.6% compared to the same period last year, slowing down from 29.2% in the previous month, supported by strong demand for technology products.
The import value in October 2021 grew by 37.2% compared to the same period last year, slowing down from 40.4% in the previous month, with increased imports of machinery and electrical equipment, mineral products, and chemicals.
The trade balance in October 2021 showed a surplus of 6.12 billion USD, down from a surplus of 6.45 billion USD in the previous month.

Indonesia

The consumer confidence index in October 2021 stood at 113.4 points, up from 95.5 points in the previous month, due to the easing of pandemic control measures.
Retail sales in September 2021 contracted by -2.2% compared to the same period last year, worsening from a contraction of -2.1% in the previous month, primarily due to automotive parts and equipment.

Philippines

GDP in the third quarter of 2021 grew by 7.1% compared to the same period last year, down from a growth of 12.0% in the previous quarter, or a growth of 3.8% compared to the previous quarter (seasonally adjusted).
Industrial production in September 2021 grew by 122.7% compared to the same period last year, down from a growth of 527.3% in the previous month, primarily due to refined petroleum products.

United Kingdom

GDP in the third quarter of 2021 (preliminary) grew by 6.6% compared to the same period last year, slowing down from a growth of 23.6% in the previous quarter, and growing less than the market's expectation of 6.8% compared to the same period last year.
Industrial production in September 2021 grew by 2.9% compared to the same period last year, slowing down from a growth of 4.0% in August 2021, and marking the lowest growth since March 2021.

Money Market and Exchange Rate Indicators

The SET index slightly increased from the previous week, in line with other regional stock markets that also rose from the previous week, such as STI (Singapore), DJIA (USA), and DAX (Germany). On November 11, 2021, the index closed at 1,632.44 points, with an average trading value between November 8-11, 2021, of 72,511.32 million baht per day. Foreign investors and securities company accounts were net buyers, while domestic retail investors and domestic institutional investors were net sellers. During November 8-11, 2021, foreigners net bought securities worth 3,424.35 million baht.

The overall yield on government bonds decreased by -1 to -9 bps. This week, investors participated in the auction of 6 and 31-year government bonds, with interest from investors at 1.63 and 1.67 times the auction amount, respectively. During November 8-11, 2021, foreign investor capital flowed into the bond market, netting 43,634.74 million baht, and from the beginning of the year until November 11, 2021, foreign investor capital flowed into the bond market, netting 122,666.91 million baht.

The Thai baht appreciated from the previous week, closing at 32.88 baht per US dollar on November 11, 2021, appreciating by 1.47% from the previous week, in line with the appreciation of the yen and won against the US dollar. Meanwhile, the euro, ringgit, Singapore dollar, and yuan depreciated against the US dollar compared to the previous week. The baht appreciated more than other major currencies in the region, resulting in the NEER index appreciating by 1.49% from the previous week.