Monetary Policy Group August 2020

https://www.bot.or.th/English/MonetaryPolicy/EconomicConditions/PressRelease/Pages/default.aspx

Economic and Monetary Conditions July 2020

Economic and Monetary Conditions, July 2020

Content 1 Executive Summary 1

2 The Thai Economy 3

2.1 Supply 3 Agricultural sector Manufacturing sector Service sector

2.2 Domestic Demand 5 Private consumption Private investment Fiscal position

2.3 The global economy and external sector 7 The global economy External sector Balance of payments

2.4 Monetary and financial conditions 9 Corporate financing Interest rates Exchange rates

2.5 Financial stability 11 Inflation Labor market Stability and financial condition of corporate sector External stability

3 Link to related statistics and contents 14

Economic and Monetary Conditions, July 2020

1

1. Executive Summary

In July 2020, the Thai economy continued to improve driven by public spending and the relaxation of lockdown measures both in Thailand and abroad. Private consumption indicators, merchandise exports value, and manufacturing production exhibited lighter contractions. However, investment conditions remained vulnerable reflected by private investment indicators contracting deeper. Meanwhile, the tourism sector persistently experienced severe contraction due to travel restrictions on foreign tourist arrivals.

On the economic stability front, headline inflation recorded a softer negative, mainly from higher core inflation after some of the government’ s relief measures expired. Labor market somewhat improved consistent with the economic activities. Nonetheless, overall employment condition remained weak. The current account turned surplus mainly contributed by gold exports. Meanwhile, the capital and financial accounts were nearly balanced.

Details of the economic conditions are as follows: Private consumption indicators marked softer contractions as compared to the previous month.

Improvement in almost all spending categories were seen as lockdown measures were eased coupled with a temporary factor of extended weekends relatively more than last year partly due to the announcement of a substitute holiday for Songkran festival that was postponed from April. In addition, recovery in labor market, household income and consumer confidence motivated consumers to travel and spend more.

The value of merchandise exports contracted by 11. 9 percent from the same period last year. Excluding gold, the value of merchandise exports contracted by 14.3 percent. Both numbers showed a lesser contraction relative to the previous month as exports in several categories improved such as automotive and parts, machinery and equipment and electronics, in line with the resumption of economic activities in trading partner countries after lockdown measures were eased in various parts of the world. Manufacturing production contracted at a lower rate in almost all categories, aligning with the uptick in merchandise exports and private consumption.

Private investment indicators contracted at a higher rate as compared to the previous month from investment in machinery and equipment; weighed down by imports of capital goods, the number of newly registered motor vehicles, as well as domestic machinery and equipment sales. The weakening was a result of domestic and external demand still in the early stage of recovery, significant excess production capacity, and high economic uncertainty. However, investment in construction expanded slightly due to construction material sales, reversing the contraction last month.

The value of merchandise imports contracted by 25. 4 percent from the same period last year, sharper contractions in all categories of products as compared to the previous month. This was partly due to a discontinuity of low base effect last year for crude oil and capital imports. Though firmed up recently, subdued domestic and external demand still undermined imports.

The number of foreign tourist arrivals continued to contract severely at 100 percent from the same period last year. Thailand received no foreign tourist arrivals for the fourth consecutive months as international travel restrictions remained in place.

Public spending, excluding transfers, continued to expand from the same period last year, attributed by marked expansion in capital expenditures both from the central government and state enterprises. However, current expenditures contracted slightly due to purchases on goods and services.

Economic and Monetary Conditions, July 2020

2

Overall economic stability headline inflation recorded a softer negative, mainly from higher core inflation after some of the government’ s relief measures expired. Labor market somewhat improved, reflected by a decline in the number of workers registered for the temporary suspension of business (section 75) , consistent with the recovery in economic activities. Nonetheless, overall employment condition remained weak. The current account turned surplus attributed to a larger surplus in trade balance led by gold exports value. Meanwhile, the capital and financial accounts were close to being balanced.

Economic and Monetary Conditions, July 2020

3

2.1 Supply

Farm income turned into expansion from the same period last year mainly as a result of an increase in agricultural prices. Manufacturing production kept contracting at a slower pace, corresponding to the improvements of exports and private consumption indicators. Services sector contracted less due to the relaxation of lockdown measures, domestic tourism stimulus package launched by the government and extended weekends relatively more than last year.

Real Farm IncomeIndex sa (Jan 2014 = 100)

Source: Office of Agricultural Economics and calculated by Bank of Thailand

60708090

100110120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Real farm income sa Real farm income sa, 3mmaFarm Income(%YoY) 2 1

2 1 2 2

H1 H2 H1 Q1 Q2 Jun Jul

Nominal farm incomeP 1.5 2.1 1.2 -6.7 -6.2 -6.1 -2.2 3.4

Agricultural productionP -0.4 1.2 -1.6 -10.0 -13.8 -4.8 2.4 1.4

Agricultural price

1.8 0.8 2. 3.6 8.8 -1.4 -4.5 2.0

Nominal Farm Income

Note: Farm income does not include government subsidies and transfers. P = Preliminary dataSource: Office of Agricultural Economics and calculated by Bank of Thailand

Manufacturing Production Index (MPI)

Note: the new MPI series as adjusted by the OIE (coverage and base year at 2016)R = 2019 Revision P = Preliminary dataSource: Office of Industrial Economics and seasonally adjusted by Bank of ThailandProduction index of petroleum does not include the production of diesel B10 and B20

(%YoY)Share2016R 2019

2019 2020

H1 H2 H1 Q1 Q2 Jun JulP%MoM

sa

Food & Beverages 1 . . . 1. . 11. . . . . Automotives 1 . . 2.1 12. 2. 1 . . . .2 1 . - Passenger Cars . . . 1 . . 1 . .1 . . 2 .1- Commercial Vehicles .2 . 2. 1 . 2.2 1 . .2 . . . - Engine 1. . . 1 .2 . 1 . . 2. . 2 . Petroleum . . .2 11. . . 1 . 1 . .1 1. Chemicals .2 .2 . 1.1 . .2 .2 . 2. . Rubbers & Plastics . .2 . . 1 . . 1 .2 1 .2 1 . .2Cement & Construction . 1.2 .2 2. 1. 1.2 . . . 1. IC & Semiconductors . . .1 . 2. . . 1 . . 2. Electrical Appliances . . . . 1 .1 . 2. 1 . .2 1 . Textiles & Apparels . .2 . . 1 . . 2 . 2 . 2 . . Hard Disk Drive . . 1 . . 1. . . 2. . . Others 1 . . . . 1 . . 1 . 1 . 1 . . MPI 1 . . 1. . 12. . 2 . 1 . 1 . . MPI sa ∆% from lastperiod

1 . 2. .1 . . 1 . . .

Capacity Utilization (SA) . . . .2 .1 . . .

Index sa(Jan 2014 = 100)

MPI Classified by Export Share

405060708090

100110120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan 2018

Jul Jan 2019

Jul Jan 2020

Jul

Export<30% 30%<Export<60% Export>60%

Sources: Office of Industrial Economics , calculated by Bank of Thailand

1.6 %

13.0 %

5.0 %

%MoM sa

(%)Share2016R

2019 2020

Q2 Q3 Q4 Q1 Q2 Jun JulP

Food & Beverages 1 . . . . . .1 . .

Automotives 1 . . . 1.2 . 2 . . .

Petroleum . 2. . . . .2 . .1

Chemicals .2 . . . .2 . .1 .

Rubbers & Plastics . . . . . . .2 .

Cement & Construction . . . . .2 1. . .

IC & Semiconductors . . . 1.1 . .1 . .

Electrical Appliances . 1. . . 2. 2. 1. .2

Textiles & Apparels . . . 2. . . . .

Hard Disk Drive . .2 2. 1. 1. . . .

Others 1 . . . .1 . . . 1.2

CAPU sa 1 . . . . .1 . . .

Capacity Utilization (sa)

Source: Office of Industrial Economics

Note: the new Capacity Utilization series as adjusted by the OIE (coverage and base year at 2016)R = 2019 Revision P = Preliminary data

75

85

95

105

115

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan 2018

Jul Jan 2019

Jul Jan 2020

Jul

Industrial Electricity Consumption*Quantity of Imported Raw MaterialsIndex of Work Hours in Manufacturing (3mma)

** As the data from April to June 2020 was not published, the index was estimated from the Q2 2020 data.

Index sa(Jan 2014 = 100)

Other Indicators of Manufacturing Production

Sources: NSO, OIE, Customs Department and seasonally adjusted by Bank Of Thailand

%MoM sa

3.5 %

5.8 %Jun = -2.1 %**

* The latest month was estimated by the BOT

Economic and Monetary Conditions, July 2020

4

80

90

100

110

120

130

140

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Service Production IndexNon-market Services (share 17%)Market Services (share 83%)

Service Production Index (SPI)Index sa, 3mma (Jan 2014 = 100)

Note : Latest data estimated by Bank of Thailand Market services covering trade, hotels and restaurants, transportation and telecommunication, financial intermediation, real estate, and business services Non-market services covering public administration and defence, education, health, and social work Source: Office of the National Economic and Social Development Board (NESDB), Ministry of Commerce, National Statistical Office,The Revenue Department, The Office of Industrial Economics ,and Ministry of Tourism and Sports

0

50

100

150

200

250

60

80

100

120

140

160

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Trade (32%) Finance (14%)Professional Services (4%) Transport (8%)Information (5%) Hotel & Restaurant (10%, RHS)

Service Production Index (SPI) by SectorIndex sa, 3mma (Jan 2014 = 100)

Note : Latest data estimated by Bank of Thailand Source: Office of the National Economic and Social Development Board (NESDB), Ministry of Commerce, National Statistical Office,The Revenue Department, The Office of Industrial Economics ,and Ministry of Tourism and Sports

Index sa, 3mma (Jan 2014 = 100)

Economic and Monetary Conditions, July 2020

5

2.2 Domestic Demand

Note: * Comprises of the VAT on hotel and restaurant sector and the sale of transportation sector

** Expenditure of non-resident in Thailand subtracted by expenditure of resident abroadSource: Bank of Thailand

020406080100120140160180

8090

100110120130140

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Service Index sa, 3mmaNet tourist spending Index sa, 3mma (RHS)

Jan 2014 = 100Jan 2014 = 100

Service Index* & Net Tourist Spending Index**

90100110120130140150160

90

95

100

105

110

115

120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Nielsen’s FMCG Index excl. alcohol and tobacco sa, 3mma

Fuel Index sa, 3mma (RHS)

Nielsen’s FMCG Index & Fuel IndexJan 2014 = 100 Jan 2014 = 100

Source: The Nielsen company and Department of Energy Business, calculated by Bank of Thailand

70

80

90

100

110

120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Semi-durable Index sa,3mma

Durable Index sa, 3mma

Jan 2014 = 100Durable and Semi-durable Indices

Source: Bank of Thailand

Private consumption indicators marked softer contractions from the previous month. This was a result of the relaxation of lockdown measures improving economic activities, and coupled with a temporary factor of extended weekends relatively more than last year. However, private investment indicators contracted at a higher rate as compared to the previous month from investment in machinery and equipment. Meanwhile, public spending, excluding transfers, continued to expand from the same period last year, attributed by marked expansion in capital expenditures.

%YoY 20192019 2020

H1 H2 H1 Q1 Q2 Jun JulP%MoM

saNon-durables index 2.2 3.1 1.3 -2.7 1.2 -6.8 -3.0 -1.3 1.6Semi-durables index 0.5 1.2 -0.1 -3.7 -1.7 -5.7 -4.0 -5.7 -0.1Durables index -2.0 2.7 -6.2 -20.4 -12.0 -29.1 -18.9 -15.7 8.4Services index 2.9 3.1 2.6 -19.0 -10.0 -28.1 -23.9 -22.8 1.8(less) Net tourist expenditure 0.0 -0.3 0.2 -60.6 -43.3 -87.2 -88.6 -92.4 -44.0

PCI 2.5 3.5 1.6 -4.2 2.1 -10.3 -4.5 -0.1 2.7

Private Consumption Indicators

Note: %MoM is calculated from seasonally adjusted data P = Preliminary DataSource: Bank of Thailand

30405060708090

100

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Total CurrentNext 6 months Average 5 years

Consumer Confidence IndexDiffusion Index, sa(Unchanged = 100)

Average 5 years = 76.2

Source: The University of the Thai Chamber of Commerce, calculated by Bank of Thailand

% YoY 2019 2020

H1 H2 H1 Q1 Q2 Jun JulP %MoM

Permitted Construction Area (9mma) 3. . .3 . . . . . .

Construction Materials Index . . . . .3 . 3. . .

Real Imports of Capital Goods . . . . . . . . .

Real Domestic Machinery Sales . 3. . .3 . .3 .3 . .

Newly Registered Motor Vehicles for Investment 3. . . . . . . . .

Private Investment Index . . . . . . . . .

Private Investment Indicators

Note: %MoM is calculated from seasonally adjusted data P = Preliminary DataSource: Bank of Thailand

Economic and Monetary Conditions, July 2020

6

Investment in Construction1,000 m2

9mmaIndex sa

(Jan 2014=100)

Note: All data is in real terms.Source: NSO, Department of Public Works and Town & Country Planning, calculated by Bank of Thailand

4,0004,5005,0005,5006,0006,5007,000

70

80

90

100

110

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Construction Materials IndexPermitted Construction Area (RHS)3 per. Mov. Avg. (Construction Materials Index)

Investment in Machinery and EquipmentIndex sa(Jan 2014 = 100)

Note: All data is in real terms.Source: Department of Land Transport, Customs Department, Revenue Department, calculated by Bank of Thailand

60

80

100

120

140

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Real Imports of Capital Goods Real Domestic Machinery SalesCar Registered for Investment

Note: P = Preliminary data 1/ Includes cash payments for operating and purchase of non-financial assets, except loan repayments 2/ Excludes loan principal and interest payment

Fiscal Position (Cash basis)Billion baht FY2018 FY2019

FY2019 FY2020Q2 Q3 Q4 Q1 Q2 Q3 May Jun Jul

Revenue , 3 , 3 3 3 (%YoY) . . .3 . . . . 3 . 3 . 3 . . Expenditure1/ , , 3(%YoY) 3. 3. . . . 3. . . . . . Budgetary B/L 3 3 Non-Budgetary B/L 3 Cash B/L (CG) 3 3 3 3 3 3 3 Primary balance 2/ 3 3 3 3 33 Net Financing 3 3 Treasury B/L 33 3 3 3 3 3 3

Source : Bank of Thailand

Diffusion Index (Unchanged = 50)

30

40

50

60

Jan 2014

Jul Jan 2015

Jul Jan 2016

Jul Jan 2017

Jul Jan 2018

Jul Jan 2019

Jul Jan 2020

Jul

BSI Expected BSI (next 3 months)

Oct 20 48.6

Jul 2042.9

Business Sentiment Index

0.0

10.0

20.0

30.0

40.0

Oct Dec Feb Apr Jun Aug

avg. FY2018-19 FY2019 FY2020

State Owned Enterprises Capital ExpenditureBillion baht

Jul17.2%

60

80

100

120

140

160

180

Oct Dec Feb Apr Jun Aug

avg. FY2017-19 FY2019 FY2020

010203040506070

Oct Dec Feb Apr Jun Aug

avg. FY2017-19 FY2019 FY2020

Billion baht Central Government Current Expenditure(Excl. Subsidies/Grants and Other)

Central Government Capital Expenditure(Ex. Subsidies/Grants and Other)

Billion baht

Source: Comptroller General’s Department, Fiscal Policy Office and Bank of Thailand

Jul-3.8%

Jul50.0%

Economic and Monetary Conditions, July 2020

7

85

95

105

115

125

Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

US (Jul) Euro Area* (Jun) Japan (Jun)

G3 Retail Sales

Note: *Volume Index Source: Bloomberg

Index (Jan 2015 = 100)

Jul 20

2.3 The Global Economy and External Sector

The current account turned surplus attributed to a larger surplus in trade balance led by gold exports value. The capital and financial accounts were close to being balanced.

%MoM calculated from seasonally adjusted data. P = Preliminary data.Note: Data above are recorded by custom basis, except total export value which is recorded by BOP basis. Custom basis considers recording as goods pass through Customs, while BOP basis considers changes in ownership between residents and non-residents.Source: Compiled from Customs Department’s data

%YoYShare 2019

2019P

2019P 2020P

H1 H2 H1 Q1 Q2 Jun JulJul

(%MoM)

Agriculture . . . . . . .2 . . . Fishery . . 2. .2 . . 2. . . . Manufacturing . . . .2 . . 2 . . .2 .2

Agro-manufacturing 2. .2 2.2 2. . . 2.2 2. 2. . Electronics . . . . . . . . 2. .

Electrical Appliances . . . . . . . . 2.2 .

Automotive . . .2 . 2 . .2 . . 2 . . Machinery & Equipment . .2 . . . . 2 . 22. . .

Petroleum Related . . . . . . 2 . . 22. .2Total (BOP Basis) . . . 2. .2 . . 2 . . .

Ex. Gold . . . 2. .2 2 . . . . Ex. Gold & Petroleum Related . . 2. . 2. 2 . . . .

Export ValueJun 2020 = 16.1 Bn USD

Ex. gold = 15.8 Bn USD

Jul 2020 = 18.5 Bn USD

Ex. gold = 16.9 Bn USD

%YoYShare 2019

2019P

2019P 2020P

H1 H2 H1 Q1 Q2 Jun JulJul

(%MoM)

Consumer .2 . . . . . . . . . Raw material & Intermediate . .2 . . . . 2 . . 2 . .2

o/w Fuel . 2. . 22. 2 . . . 2. . . o/w Raw mat & Interm ex. Fuel . . . .2 .2 2. .2 . . .2

Capital 2 . 2.2 . 2. .2 . . . 2 . 2.

Others . . . . 2 . . . . . .2

Total (BOP Basis) . . . . 2. . 2 . .2 2 . .

Ex. Gold . 2. . . . 2 . . 2 . .

Ex.Gold&Fuel 2. 2. 2. . . . . 2 . .

%MoM calculated from seasonally adjusted data. P = Preliminary data.Note: 1/ Data above are recorded by custom basis, except total import value which is recorded by BOP basis. Custom basis considers recording as goods pass through Customs, while BOP basis considers changes in ownership between residents and non-residents. Source: Compiled from Customs Department’s data

Import ValueJul 2020 = 14.4 Bn USD

Ex.Gold = 14.3 Bn USD

Jun 2020 = 13.8 Bn USD

Ex.Gold = 13.4 Bn USD

70

80

90

100

110

120

Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Asian Export PerformanceIndex sa, 3mma (Jan 2015=100)

Note: Thai export excludes gold. Indonesian export excludes oil&gas.Source: CEIC, Customs Department, calculated by Bank of Thailand

PH

IDMY

TH

TWCN

SG

KR

Economic and Monetary Conditions, July 2020

8

%YoY (Share in 2019)

20192019 2020

H1 H2 H1 Q1 Q2 Jun JulP

China (27.6%) . . . . . . . .

Malaysia (10.5%) . . . . 2. . . .

Asia ex. China & Malaysia (30.4%)

. . . . . . . .

Russia (3.7%) . . . 2 . . . . .

Europe ex. Russia (13.2%)

. . . .2 . . . .

India (5.0%) 2 . 2 . 2 . . . . . .

Others (9.6%) . . . . .2 . . . Total(million persons)

.2 (39.8)

. (19.8)

. (20.0)

.2(6.7)

. (6.7)

. (0.0)

. (0.0)

. (0.0)

Inbound Tourists by Country of Origin

Source: Ministry of Tourism and Sports

Millions of USD 2019P 2019P 2020P

H1 H2 H1 Q1 Q2 Jun JulE YTD1. Assets 2 2 2 2 2 TDI 2 2 2 2 2- Equity 2 2 - Reinvestment of earnings 2 2 2

Thai portfolio investment 2 2 2 2 2 2 2 - Equity security investment 2 2 2 2 2 2 2 2 - Debt security investment 2

Loans 22 2 2 Other investments 2 2 2 - Trade credits 2 2 2 2 2 2 - Deposits abroad 2 2 2 2

2. Liabilities 2 2 FDI 2 2 2 2 2 2 2 - Equity 2 2 2 2 2 - Reinvestment of earnings 2 2 2 2 2 2 2

Foreign portfolio investment 2 2 2 2 2 2 - Equity security investment 2 2 - Debt security investment 2 2 2 2 2 2

Loans 2 2 2 2 2 2 2 2 Other investments 2 2 2 2 2 - Trade credits 2 2 2 2 - Deposits abroad 2 2

Total financial flows (1+2) 2 2

Net Financial Flows

Source: Bank of Thailand P = Preliminary data E = Estimated data

Source: Bank of Thailand P = Preliminary data E = Estimated data

Balance of Payments

Billion USD 2019P201 P 2020P

H1 H2 H1 Q1 Q2 Jun JulE YTDTrade Balance 2 . 2. . . . . 2. . 2 .2Exports (f.o.b.) 2 2. 2 . 22. . . . . . 2 .2

%YoY . . 2. .2 . . 2 . . . Imports (f.o.b.) 2 . . . . 2. . . . .

%YoY . . . 2. . 2 . .2 2 . . Net Services, Income & Transfers . .2 . . . . 2. 2. . Current Account . . 2 . . . . .2 . . Capital and Financial Account . . . . . . 2. . . Overall Balance . . . . . . . 2. .2

0

50

100

150

200

250

Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Total China (28%) Malaysia (10%)East Asia ex. CN MY (30%) Europe ex. Russia (13%) Russia (4%)India (5%)

Index sa(Jan 2015 = 100)

Tourists Classified by Nationality

Note: denotes share of total tourist arrivals in 2 P = Preliminary dataSource: Ministry of Tourism and Sports, calculated by Bank of Thailand

Jul 20

Economic and Monetary Conditions, July 2020

9

2.4 Monetary and Financial Conditions

Total corporate financing increased compared with the previous month. New loans extended to private sector increased mainly from the previous month due to household loans. The monthly average of Thai baht against the U.S. dollar in July 2020 and the NEER depreciated compared with the previous month.

Note: (1) Business credits : net changes in outstanding loans extended by other depository corporations, other financial corporations, non-residents and others;

(2) Debt : net changes in outstanding bonds (market value); (3) Equity : new issuance at par valueSources: Bank of Thailand, ThaiBMA, SET

Billion baht

Changes in Total Corporate Financing

-100

-50

0

50

100

150

200

Jan-

17

Apr-1

7

Jul-1

7

Oct-1

7

Jan-

18

Apr-1

8

Jul-1

8

Oct-1

8

Jan-

19

Apr-1

9

Jul-1

9

Oct-1

9

Jan-

20

Apr-2

0

Jul-2

0

Business Credits (SA) Equity Debt 3MMA

Jul 20P

Note: net changes in outstanding loans extended by other depository corporations, other financial corporations, non-residents and others.

Billion baht Net Changes in Outstanding Loans

-1.4

-0.8

-0.2

0.4

1.0

1.6

2.2

2.8

3.4

-140-100-60-202060

100140180220260300340

Jan-

17Ap

r-17

Jul-1

7Oc

t-17

Jan-

18Ap

r-18

Jul-1

8Oc

t-18

Jan-

19Ap

r-19

Jul-1

9Oc

t-19

Jan-

20Ap

r-20

Jul-2

0Ja

n-17

Apr-1

7Ju

l-17

Oct-1

7Ja

n-18

Apr-1

8Ju

l-18

Oct-1

8Ja

n-19

Apr-1

9Ju

l-19

Oct-1

9Ja

n-20

Apr-2

0Ju

l-20

MoM, SA % MoM change, SA (RHS)

BusinessHousehold

%

Commercial Bank Interest Rates*

End of Period Bangkok Bank, Krung Thai Bank, Kasikorn Bank, Siam Commercial Bank and Bank of Ayudhya

Source: Bank of Thailand

% p.a.2019 2020

Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Jul 20 25 Aug 20

2-month deposit rate

Average of 5 largest Thai banks**

Average of other Thai banks

Average of foreign branches and subsidiary

MLR

Average of 5 largest Thai banks

Average of other Thai banks

Average of foreign branches and subsidiary

MRR

Average of 5 largest Thai banks

Average of other Thai banks

Average of foreign branches and subsidiary

1.42

1.48

1.19

6.28

7.22

7.58

7.19

7.93

8.54

1.46

1.48

1.19

6.28

7.22

7.58

7.19

7.96

8.54

1.4

1.

1.1

6.28

7.22

7.58

7.79

8.54

1.33

1.51

1.11

6.08

7.19

7.59

7.73

8.44

0.75

1.26

0.84

5.93

7.13

7.41

.64

7.66

8.32

0.49

0.99

0.60

5.36

6.71

6.91

6.00

7.12

7.89

0.49

0.93

0.60

5.36

6.71

6.91

6.00

7.12

7.89

0.49

0.90

0.58

5.36

6.71

6.91

6.00

7.12

7.890.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan-

17

Apr-1

7

Jul-1

7

Oct-1

7

Jan-

18

Apr-1

8

Jul-1

8

Oct-1

8

Jan-

19

Apr-1

9

Jul-1

9

Oct-1

9

Jan-

20

Apr-2

0

Jul-2

0

1D BRP 3M 2Y 5Y 10Y

Government Bond Yields

Sources: Bank of Thailand and ThaiBMA

As of 25 Aug 20

0.50

0.870.50

1.40

0.48

%

Economic and Monetary Conditions, July 2020

10

29.0

30.0

31.0

32.0

33.0

34.0

35.0

36.0108110112114116118120122124126128130132

29-D

ec-1

7

16-F

eb-1

8

5-Ap

r-18

28-M

ay-1

8

13-Ju

l-18

3-Se

p-18

19-O

ct-1

8

7-De

c-18

28-Ja

n-19

15-M

ar-1

9

8-M

ay-1

9

26-Ju

n-19

14-A

ug-1

9

30-S

ep-1

9

18-N

ov-1

9

8-Ja

n-20

25-F

eb-2

0

13-A

pr-2

0

2-Ju

n-20

21-Ju

l-20

NEER25

USDTHB (RHS)

Note: Monthly average rate Sources: Reuters, calculated by Bank of Thailand

Exchange RatesIndex (2012 = 100) USDTHB (reverse)

Appreciation

Aug 2 2 USDTHB = 31.21NEER25 = 122.31

As of 25 Aug 2020

-2.8%

-0.9%

0.1% 0.2% 0.3% 0.6% 0.6% 0.7% 0.9% 1.0%1.0%

1.3% 1.5%

-1.4%

0.7%

0.0%

1.8%1.3% 0.9% 1.1%

0.1%

3.6%

0.2%

1.0% 1.2%

3.3%

-4%

-2%

0%

2%

4%

IDR THB VND MYR SGD JPY KRW TWD GBP INR CNY PHP EUR

Avg of Jul 20 compared to avg of Jun 20

Avg of Aug 20 compared to avg of Jul 20

Sources: Reuters, calculated by Bank of ThailandNote: Avg-period data, + = Appreciation against USD

Exchange Rate Movement Aug 2020(Average data

until 25 Aug 2020)

Sources: Reuters, Bank of Thailand

% p.a.

0%

4%

8%

12%

16%

20%

24%

29-D

ec-1

730

-Jan-

1827

-Feb

-18

28-M

ar-1

830

-Apr

-18

30-M

ay-1

827

-Jun-

1825

-Jul-1

827

-Aug

-18

24-S

ep-1

824

-Oct

-18

21-N

ov-1

821

-Dec

-18

22-Ja

n-19

20-F

eb-1

920

-Mar

-19

22-A

pr-1

923

-May

-19

21-Ju

n-19

19-Ju

l-19

20-A

ug-1

917

-Sep

-19

16-O

ct-1

914

-Nov

-19

16-D

ec-1

915

-Jan-

2013

-Feb

-20

12-M

ar-2

010

-Apr

-20

13-M

ay-2

011

-Jun-

2010

-Jul-2

011

-Aug

-20

HKD THB CNY IDR INR KRW MYR PHP SGD

As of 25 Aug 2020

Regional Exchange Rate Volatility

Economic and Monetary Conditions, July 2020

11

2.5 Financial Stability

1

Headline inflation recorded a softer negative, mainly from higher core inflation. Labor market somewhat improved, in line with the economic activities. External stability remained resilient, providing sufficient cushion against global financial market volatility.

00.20.40.60.811.21.41.61.8

0.8

1.3

1.8

2.3

2.8

3.3

3.8

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Lay-Off Claims (RHS) account for 27% of total jobless claims**

Ratio of Jobless Claims to Total Contributors in Section 33

%, SA %, SA

Jobless Claims

Note: Employees who contribute to social security system (Section ) account for % of total employment.

** 2020, 7-month averageSource: Social Security office, calculated by Bank of Thailand

-4

-3

-2

-1

0

1

2

3

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Raw food (15.69%)Energy (11.75%)Core Inflation (72.56%)

Headline inflation contribution%YoY

Jul-0.98%

( ) Share in Headline Inflation

Sources: Ministry of Commerce calculated by Bank of Thailand

-1

0

1

2

3

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul Jan2020

Jul

Rent (19.62%)Food & Beverage (28.17%)Non-Food & Beverage ex. Rent (52.21%)

Sources: Ministry of Commerce calculated by Bank of Thailand

Core inflation contribution%YoY

Jul0.39%( ) Share in Core Inflation

-

50

100

150

200

250

300

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

OtherTransportationTradeHotel & TourismRestaurant & RecreationOther ManufacturingElectronicRubbers & PlasticsAutomotives

Lost Working Hours Index (Man-Month*) from the Temporary Suspension of Business (Section 75**)

Man

-Mon

th (1

,000

Wor

kers-

Mon

th

Note: * Man-Month = Number of workers x ( Number of missing working days in a month / Number of days in a month)** The Section 75 number is calculated by summarizing firms and employees

reported to the Ministry of Labour for the temporary suspension of business.Source: Department of Labour Protection and Welfare, Ministry of Labour, calculated by Bank of Thailand

Economic and Monetary Conditions, July 2020

12

-2.0

-

2.0

4.0

6.0

8.0

10.0

-10

-5

0

5

10

15

20

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Commerce Construction Manufacturing* Petroleum Real Estates Services Telecom Transport Overall

OPM P50 RoA P50 (RHS)Percentage Percentage

Return on Assets and Operating Profit Margin by Sectors

Note: 50th percentile, *Manufacturing excludes petroleum and petrochemical, Services include Hotel, Education and Hospital .Source: Stock Exchange of Thailand; calculation by Bank of Thailand

Interest Coverage Ratio by Sectors

Note: 50th percentile, *Manufacturing exclude petroleum and petrochemical, Services include Hotel, Education and Hospital.Source: Stock Exchange of Thailand; calculation by Bank of Thailand

0.0

0.5

1.0

1.5

2.0

2.5

-5

0

5

10

15

20

25

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

61 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Q1/

61 Q

3/61

Q1/

62 Q

3/62

Q1/

63

Commerce Construction Manufacturing* Petroleum Real Estates Services Telecom Transport Overall

ICR P50 D/E P50 (RHS)Times Times

Economic and Monetary Conditions, July 2020

13

External Stability Indicators

Criteria 2019P2019P 2020P

H1 H2 H1 Q1 Q2 Jun JulE

Solvency Indicators Current Account / GDP (%) Debt / GDP (%) < /

Debt / XGS1/ (%) < / Debt Service Ratio (%)

Liquidity Indicators

Gross Reserves / ST Debt > 1 time

Gross Reserves / Imports2/ > 3 times ST Debt / Total Debt (%)

Note: XGS – Export of Goods and Services (3-year average) Monthly Import of Goods and Services (1-year average)

Severely indebted countriesSource : Bank of Thailand P=Preliminary data E=Estimated data

External Debt Outstanding

Note: *including BOT bonds held by non-residents and SDRs allocations by IMF Source : Bank of Thailand P=Preliminary data E=Estimated data

Billion USD 2019P 2019P 2020P Change Jul20-Jun20H1 H2 H1 Q1 Q2 Jun JulE

1. General government .2 . .2 . 2 . . . .2 .22. Central Bank* . 5. . .2 2.5 .2 .2 2. .53. Other Depository Corporations (ODC) . . . .5 . .5 .5 . . 4. Other Sectors 5. .5 5. .5 .5 .5 .5 .2 .

- Other Financial Corporations (OFC) . . . . . . . 2 . . - Non Financial Corporations (NFC) 5. .5 5. . . . . . . O/W Foreign Trade Credit 2 . 2 . 2 . 2 .5 2 .2 2 .5 2 .5 2 . .

5. Total . . . . 5.5 . . . . Short-term (%) 5. .5 5. . . . . 5. Long-term (%) 5. 2.5 5. . . . . .

Economic and Monetary Conditions, July 2020

14

3. Link to related statistics and contents

Agricultural sector

Agricultural prices: Agricultural prices

Agricultural production: Agricultural products

More information: Office Of Agricultural Economics www.oae.go.th Manufacturing sector

Manufacturing production: Manufacturing production index (MPI)

Capacity utilization rate: Capacity utilization rate

More information: Office of Industrial Economics http://www.oie.go.th/view/1/Home/EN-US

Real estate sector

Property Indicators: Property Indicators (EC_EI_009_S2)

More information: Real Estate Information Center www.reic.or.th/

Public finance

Central government revenue: Government revenue

Central government expenditure (GFSM2001): Government expenditure (EC_PF_011)

Fiscal Position (GFSM2001): Fiscal position in cash basis (EC_PF_009)

More information: Fiscal Policy Office www.fpo.go.th Labor market

Labor force survey: Labor force survey (EC_RL_009_S4)

Employment: Number of employed persons classified by occupation (EC_RL_012)

Average wage: Average wage classified by industry (EC_RL_014_S2)

More information: National Statistical Office www.nso.go.th

Economic and Monetary Conditions, July 2020

15

Inflation

Inflation: Consumer price index (CPI)

More information: Bureau of Trade and Economic Indices www.price.moc.go.th

Other reports of Monetary Policy Group, Bank of Thailand

Monthly report on Business Sentiment Index: Business Sentiment Index

Quarterly report on Business Outlook: Business Outlook Report

Quarterly report on Credit Condition: Senior Loan Officer Survey

Economic and Monetary Conditions, July 2020

16

Contact

Agricultural sector Sectoral Analysis Division 0 2283 6637

Manufacturing sector Sectoral Analysis Division 0 2283 5650

Service sector Sectoral Analysis Division 0 2356 7300

Real estate sector Macro Surveillance Team 1-2 0 2356 7096

Private consumption Macroeconomics Team 1-2 0 2283 5647

Private investment Macroeconomics Team 1-2 0 2283 5639

Public finance Public Finance Team 0 2356 7877

The global economy International Economics Division 0 2283 5147

External sector and balance of payments Balance of Payment Division 0 2283 6726

Monetary and financial conditions Monetary Policy Strategy Division 0 2283 6186

Inflation Macro Surveillance Team 1-2 0 2283 7090

Labor market Sectoral Analysis Division 0 2283 5645

Financial Stability Macro Surveillance Team 1-2 0 2356 7098

Financial Position Macro Surveillance Team 1-2 0 2356 7098

External stability Balance of Payment Division 0 2283 5636