Revenue, jobs and incomes continue to rise
Despite an export slowdown that has affected Thailand and other countries in the region, the Kingdom continued to post some positive economic results as revenues increased during April and employment and average incomes were up in the first quarter of the year, according to statistics released last week.
Thailand’s economy relies on exports for the bulk of its growth, but policymakers have been encouraging a shift to a more balanced economy with consumption and investment driving an increasing share of growth. While that shift will take time to achieve, the statistics released last week highlighted the importance of non-export elements of the economy and provide evidence that a solid base for stronger growth exists.
Tax revenues, particularly for the value added tax (VAT), are one indicator of consumption. Krisda Chinavicharana, director-general of the Fiscal Policy Office, said April’s rise in VAT revenues shows an improvement in consumption from March as collection of VAT at constant prices returned to positive territory at 2.5 percent year on year. VAT collection based on domestic spending advanced 6.2 percent. However, VAT collection on imports contracted 3.6 percent.
April’s private investment figures also showed improvement, particularly in construction – another early indicator of stronger economic activity – as taxes from property transactions rose by 58.8 percent year on year, compared with the 15.7 percent rise recorded in March.
Government spending can provide support for economic growth, and spending rose 16.8 percent year-on-year in April. Spending and investment by the government is expected to continue to expand as its massive infrastructure-building program begins to gather steam later this year.
Average household income was up 3.4 percent year on year, according to the National Economic and Social Development Board, while employment edged up by 0.2 percent despite a 2.7 fall in agricultural jobs because of the severe drought gripping the country.
Factory output also climbed slightly in April, with the Industry Ministry reporting that its manufacturing production index (MPI) increased 1.54 percent from a year earlier. A Reuters poll had forecast a rise of 0.8 percent. In March, output rose a revised 2.2 percent from a year earlier, its first annual gain in three months. April’s manufacturing output was led by automobiles and car parts, air conditioners and petroleum.