Fiscal Policy Office Weekly Economic Report as of March 18, 2022

Mar 21, 2022 | view 920

Fiscal Policy Office Weekly Economic Report as of March 18, 2022 is as follows:

Thai Economic Indicators

Cement sales in Thailand for February 2022 grew by 0.6% compared to the same period last year, but contracted by -0.7% compared to the previous month after seasonal adjustments.

In February 2022, cement sales remained stable compared to the same period last year but slightly slowed down from the previous month after seasonal adjustments. This was due to the ongoing COVID-19 pandemic, which saw a resurgence in cases, although the severity of illness was less than in previous waves. Additionally, construction costs increased as prices for various construction materials rose due to the Russia-Ukraine conflict, leading businesses to delay investments.

International Economic Indicators
United States

New housing starts in February 2022 increased by 6.8% from the previous month (seasonally adjusted), while the previous month saw a contraction of -5.5% (seasonally adjusted), driven by growth in new housing across all types.
New building permits in February 2022 contracted by -1.9% from the previous month (seasonally adjusted), following a 0.5% increase in the previous month, primarily due to a decline in single-family home permits.
Industrial production in February 2022 grew by 7.4% year-on-year, accelerating from a 4.4% increase in the previous month, marking the highest level in eight months.
Retail sales in February 2022 grew by 17.6% year-on-year, up from 1.4% in the previous month, supported by rising inflation and strong demand, leading to continuous growth in retail sales.
The Federal Reserve raised the policy interest rate to 0.25-0.50% per annum, marking the first increase since December 2018, and signaled a potential reduction in the balance sheet, possibly at the next meeting on May 3-4, 2022.
The number of initial unemployment claims for the week of March 6-12, 2022, was 214,000, down from 229,000 the previous week, the lowest level in ten weeks, consistent with the four-week moving average of unemployment claims, which decreased to 223,000.

China

Industrial production for January-February 2022 grew by 7.5% year-on-year, accelerating from 4.3% in December 2021, marking the highest level since July 2021, driven by the recovery of the Chinese economy.
Retail sales for January-February 2022 grew by 6.7% year-on-year, up from 1.7% in December 2021, the highest level since August 2021, supported by strong consumption during the Chinese New Year festival.
The unemployment rate in February 2022 was 5.5% of the total labor force, up from 5.3% in the previous month, marking the fourth consecutive month of increase, aligning with the Chinese government's target unemployment rate of 5.5% for 2022.

Eurozone

Industrial production in January 2022 contracted by -1.3% year-on-year, returning to contraction after a 2.0% growth in December 2021, and contracting more than the market expectation of -0.5%.

Australia

The unemployment rate in February 2022 was 4.0% of the total labor force, down from 4.2% in January 2022, as the Australian government eased COVID-19 control measures.

Hong Kong

Industrial production in February 2022 grew by 5.8% year-on-year, slowing from 7.6% in the previous month, primarily due to reduced production in metals, computers, electronic and optical products, and machinery, significantly impacted by the severe COVID-19 outbreak affecting economic activities.
The unemployment rate in February 2022 was 4.5% of the total labor force, up from 3.9% in the previous month, the highest level in five months.
The Hong Kong Monetary Authority raised the policy interest rate from 0.5% to 0.75% per annum to maintain financial stability, following the U.S. Federal Reserve's lead, as the Hong Kong dollar is pegged to the U.S. dollar.

India

The inflation rate in February 2022 was 6.07% year-on-year, up from 6.01% in the previous month, the highest level since July 2021, and higher than the market expectation of 5.93%.

South Korea

The unemployment rate in February 2022 was 2.7% of the total labor force, down from 3.6% in the previous month, the lowest level since data collection began, while employment increased by 1.037 million positions year-on-year, primarily due to low base effects and government fiscal spending.

Taiwan

The Central Bank of Taiwan raised the policy interest rate from 1.125% to 1.375% per annum in the March 2022 meeting, marking the first increase of 25 basis points in ten years.

Singapore

Export value in February 2022 grew by 22.3% year-on-year, up from 22.1% in the previous month.
Import value in February 2022 grew by 19.6% year-on-year, down from 28.3% in the previous month.
The trade balance in February 2022 recorded a surplus of SGD 8.3 billion, up from a surplus of SGD 5.1 billion in the previous month.
The unemployment rate in Q4 2021 was 2.4% of the total labor force, down from 2.6% in the previous quarter.

Philippines

The unemployment rate in January 2022 was 6.4% of the total labor force, down from 6.6% in the previous month.

Malaysia

Retail sales in January 2022 grew by 7.3% year-on-year, up from 3.5% in the previous month, primarily due to fuel sales.
Export value in February 2022 grew by 16.8% year-on-year, down from 23.9% in the previous month.
Import value in February 2022 grew by 18.4% year-on-year, down from 26.7% in the previous month.
The trade balance in February 2022 recorded a surplus of MYR 19.8 billion, up from a surplus of MYR 18.6 billion in the previous month.

South Korea

Export value in February 2022 grew by 34.1% year-on-year, up from 25.3% in the previous month.
Import value in February 2022 grew by 25.4% year-on-year, down from 36.7% in the previous month.
The trade balance in February 2022 recorded a surplus of USD 3.8 billion, up from a surplus of USD 960 million in the previous month.
The Central Bank of Indonesia announced to maintain the policy interest rate at 1.75% per annum.

United Kingdom

The unemployment rate in January 2022 was 3.9% of the total labor force, down from 4.1% in December 2021, the lowest level in two years.
The Bank of England raised the policy interest rate to 0.75% per annum from 0.50% in the March 2022 meeting to address rising inflation.

Money Market Indicators and Exchange Rates

The SET index increased from the previous week, in line with other regional stock markets that also rose, such as Nikkei225 (Japan), STI (Singapore), and DJIA (USA). On March 17, 2022, the index closed at 1,681.76 points, with an average trading value between March 14-17, 2022, of THB 80,913.29 million per day. Foreign investors were net buyers, while domestic retail investors, domestic institutional investors, and brokerage accounts were net sellers. From March 14-17, 2022, foreign investors net purchased securities worth THB 13,382.56 million.

The overall yield on government bonds increased by 1 to 7 basis points. This week, investors participated in the auction of 15-year government bonds, with demand at 1.15 times the auction amount. Between March 14-17, 2022, foreign investor capital flowed out of the bond market, netting -THB 8,460.76 million, while since the beginning of the year until March 17, 2022, foreign capital flowed into the bond market, netting THB 47,011.86 million.

The Thai Baht depreciated from the previous week. As of March 17, 2022, the Baht closed at 33.25 Baht per US dollar, depreciating by -0.54% from the previous week. This trend was consistent with other regional currencies, such as the Yen, Euro, Ringgit, Won, and Yuan, which also depreciated against the US dollar, while the Singapore dollar appreciated slightly against the US dollar. The depreciation of the Baht was in line with other regional currencies, resulting in no change in the Nominal Effective Exchange Rate (NEER) from the previous week.