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

Monetary Policy Group October 2019

Economic and Monetary Conditions September 2019

Economic and Monetary Conditions, September 2019

Content 1 Executive Summary 1

2 The Thai Economy 3

2.1 Supply 3 Agricultural sector Manufacturing sector Service sector Real Estate

2.2 Domestic Demand 6 Private consumption Private investment Fiscal position

2.3 The global economy and external sector 8 The global economy External sector Balance of payments

2.4 Monetary and financial conditions 10 Corporate financing Interest rates Exchange rates

2.5 Financial stability 12 Inflation Labor market External stability

3 Link to related statistics and contents 14

Economic and Monetary Conditions, September 2019

1

1. Executive Summary

In September 2019, the Thai economy continued to be on a decelerating trend. The value of merchandise exports continued to contract, consistent with the economic slowdown of trading partners. Manufacturing production and private investment indicators deteriorated. Private consumption indicators expanded at a similar pace compared with the previous month. Nonetheless, public spending rebounded from capital expenditures. The tourism sector also continued to expand mainly thanks to an increase in the number of Chinese and Indian tourists.

On the stability front, headline inflation edged lower on the back of falling energy prices and core inflation. The seasonally adjusted unemployment rate remained unchanged; however, the number of employed persons continued to decrease. The current account registered a smaller surplus from trade balance. The capital and financial accounts posted a deficit from the asset position.

Details of the economic conditions are as follows: The value of merchandise exports dropped by 1.5 percent from the same period last year. Excluding

gold, the value of merchandise exports continued to contract for the eleventh consecutive month at 3.3 percent. This was a result of 1) the economic slowdown of trading partners; 2) the continued downturn in electronic cycle; and 3) the contraction of global crude oil prices. Nevertheless, the value of exports expanded in some categories, including automotive and parts, agro-manufacturing products, and electrical appliances, due to the low base effect and the benefits of substituting exports to the US and China, as well as the relocation of production base to Thailand.

Private investment indicators continued to deteriorate from the same period last year. Investment in machinery and equipment continued to decrease from imports of capital goods, domestic machinery sales, and the number of newly registered motor vehicles for investment. This partly reflected that businesses had sufficient production capacity to accommodate future demand. Meanwhile, investment in construction declined from permitted construction area in almost every purposes, consistent with subdued construction and real estate activities.

Private consumption indicators moderately expanded at a similar pace compared with the previous month, although the government launched the economic stimulus measures to support the purchasing power this month. Spending on services and semi-durable goods grew at a faster pace, offsetting softer growth of spending on non-durable goods and further contraction in spending on durable goods due to lower domestic vehicle sales. Softened spending was in line with weakening fundamental factors from continued contraction in non-farm income, lower consumer confidence, and financial institutions’ tightening of credit standards for auto-leasing loans after credit quality deteriorated. Manufacturing production consistently contracted following softer domestic and external demand.

Public spending, excluding transfers, slightly rebounded due to the central government’s capital expenditures for transportation projects. However, current expenditures fell from purchases on goods and services. Also, state enterprises’ capital expenditures contracted from the disbursement of the Mass Rapid Transit Authority of Thailand (MRTA) and PTT Public Company Limited (PTT).

The value of merchandise imports contracted by 4.5 percent from the same period last year. Excluding gold, the value of merchandise imports declined by 3.5 percent due to the contraction of 1) imports of raw materials and intermediate goods, particularly electronic parts consistent with lower

Economic and Monetary Conditions, September 2019

2

production and exports, and crude oil which contracted in both price and volume partly due to the oil refinery shutdown for maintenance and 2) imports of capital goods excluding aircrafts, ships, floating structures, and locomotive, particularly telecommunication equipment and machinery and electric generating sets, in line with private investment indicators. Nonetheless, imports of consumer goods rebounded partly due to the low base effect.

The number of foreign tourist arrivals accelerated to 10.1 percent compared with the same period last year. This was driven by 1) the low base effect from the tour boat incident in Phuket; 2) the exemption of the visa on arrival fee, encouraging more visitors from China, India, and Taiwan; and 3) the political unrest in Hong Kong, persuading some tourists to shift their destination to Thailand. Moreover, tourists from other Asian countries continued to grow such as Laos, Japan, and South Korea.

On the stability front, headline inflation was at 0.32 percent, decelerating from last month on the back of higher contraction in energy prices from the high base effect last year and the deceleration of core inflation following a decline in processed food prices. The seasonally-adjusted unemployment rate was flat; however, the number of employed persons in all non-farm sectors continued to decrease. The current account surplus narrowed, attributed to the smaller trade balance surplus as a result of a decrease in the value of gold exports. The overall capital and financial accounts registered a deficit from the asset position due to investment in short-term debt securities in Japan by the Other Depository Corporations (ODCs) and outward foreign direct investment of Thai investors, particularly in the form of direct loans extended to affiliated companies.

Overall economic activities in the third quarter of 2019 were on the decelerating trend. The value of merchandise exports excluding gold which continued to contract had more impacts on domestic economic activities. Private consumption indicators grew at a slower pace in almost all categories. Consequently, manufacturing production and private investment indicators contracted. Only public spending and the tourism sector continued to expand well, partly due to the low base effect from the tour boat incident in Phuket last year. On the stability front, headline inflation declined on the back of lower domestic retail petroleum prices consistent with global crude oil prices, and the deceleration of core inflation. The seasonally-adjusted unemployment rate slightly increased from the previous quarter from a decline in the number of employed persons. The current account registered higher surplus attributed to trade balance due to an increase in gold exports and high contraction of merchandise imports value. The capital and financial accounts recorded a surplus from the liability position.

Economic and Monetary Conditions, September 2019

3

2.1 Supply

Index sa(Jan 2014 = 100)

MPI Classified by Export Share

70

80

90

100

110

120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan 2018

Jul Jan 2019

Jul

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

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

-2.0 %

-2.2%

-2.8 %

%MoM sa

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 Thailand

(%YoY)Share2016R 2018

2018 2019

H1 H2 Q1 Q2 Q3 Aug SepP %MoM sa

Food & Beverages 1 . . . . . 1. 1. . .1 . Automotives 1 . . 11. . . 1. . . . . - Passenger Cars . 1 . 1 .1 1 . . . . . . . - Commercial Vehicles .2 1 . 12.1 . . .2 .1 . . 2.1- Engine 1. . 1 . .2 2. . . .1 1. 2. Petroleum . . . 2. 1.2 . . .2 11.2 . Chemicals .2 . . 2. . 1. 1. . . . Rubbers & Plastics . 1.2 .2 2.1 .1 .2 . . 12.2 . Cement & Construction . . . . . 1. .2 . 2. . IC & Semiconductors . 2. . . 2. . 12. 1 .2 . 2. Electrical Appliances . . . .1 2. . 1. .1 .2 1. Textiles & Apparels . 2. . . . . . 1 .2 . 1. Hard Disk Drive . 2. 12. . 1 .2 1 . . 1 . . 1 . Others 1 . . 1. 1. .1 . . . .1 1. MPI 1 . . . 2. 1.2 2. .2 . . 2. MPI sa ∆% from lastperiod

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

Capacity Utilization (SA)

. . . . . . . .

Farm income expanded at a similar pace compared with the previous month, mainly owing to the expansion in agricultural prices. Manufacturing production continued to contract from the same period last year in almost all categories, consistent with softer domestic and external demands. Meanwhile, services sector expanded at a slower pace, mainly from trading sector.

Farm Income(%YoY) 20182018 2 1

H1 H2 Q1 Q2 Q3 Aug Sep

Nominal farm incomeP 1.6 . .1 .2 . . .1 .

Agricultural productionP 7.7 1 . . . 2. 1.1 1. 1.

Agricultural price

-5.7 . 2.1 . 2.1 2. 2. 2.

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

Economic and Monetary Conditions, September 2019

4

90

100

110

120

130

140

150

160

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

SPI Hotel and Restaurant (8%) SPI Finance (14%)SPI Trade (26%) SPI Transport (13%)SPI Real Estate (16%)

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

80

90

100

110

120

130

140

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Service Production IndexNon-market Services (share 24.8%)Market Services (share 75.2%)

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

Capacity Utilization (sa)

(%) Weight 2016R

2018 2019

Q2 Q3 Q4 Q1 Q2 Q3 Aug Sepp

Food & Beverages 1 . .2 .1 .2 .2 . . . .

Automotives 1 . . . . . . .2 . .

Petroleum . . . . . . . 2. .

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

Rubbers & Plastics . 2. 2. . .1 . . . .

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

IC & Semiconductors . .1 . . . . 2.2 1. .

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

Textiles & Apparels . . . .2 .2 . . . .1

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

Others 1 . . . . .2 . . . .

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

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

* The latest month was estimated by the BOT80

90

100

110

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan 2018

Jul Jan 2019

Jul

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

Index sa(Jan 2014 = 100)

Other Indicators of Manufacturing Production

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

%MoM sa

-0.8 %

-6.4 %

-1.1 %

Economic and Monetary Conditions, September 2019

5

Newly Launched Propertiesin Bangkok and Vicinity Area

11 11

22

05

1015202530354045

2012 Q1

2013 Q1

2014 Q1

2015 Q1

2016 Q1

2017 Q1

2018 Q1

2019Q1

Low-rise residents Condominium Total

Source Agency for Real Estate Affairs AREA and calculated by Bank of Thailand

Thousand units,sa

Q3/2019

New Mortgage Loans from Commercial Banks in Bangkok and Vicinity Area*

107

17

0

5

10

15

20

25

2012 Q1

2013 Q1

2014 Q1

2015 Q1

2016 Q1

2017 Q1

2018 Q1

2019 Q1

Low-rise residents Condominium Total

* seasonally adjusted by Bank of ThailandSource: Bank of Thailand

Q3/2019Thousand units,sa

Housing Price index

100

120

140

160

180

200

2013 Q1

2014 Q1

2015 Q1

2016 Q1

2017 Q1

2018 Q1

2019 Q1

Single house TownhouseCondominium Land

Source Mortgage loan reported by commercial banks, calculated by Bank of Thailand

Index (Jan2009 = 100)Q3/2019

Economic and Monetary Conditions, September 2019

6

2.2 Domestic Demand

Private Consumption Indicators

%YoY 20182018 2019P

H1 H2 Q1 Q2 Q3 Aug SepP %MoM sa

Non-durable index . . . 2. . . . . . Semi-durable index 2. 2. . . . . . . . Durable index . . .2 . . . . . . Service index . . . . 2.2 2. 2. . .

less Net tourist spending . . . 2. . . . . .

Private Consumption Index . . . .2 2. . . . . Note: %MoM is calculated from seasonally adjusted data P = Preliminary DataSource: Bank of Thailand

405060708090

100

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

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 20182 2 P

H1 H2 Q1 Q2 Q3 Aug Sep %MoM sa

Permitted Construction Area (9mma) . . . . . . .2 . 0.5

Construction Materials Index . . . . 2. . . . 1.4

Real Imports of Capital Goods . .2 2.2 2. 2. . . 2. 2.6

Real Domestic Machinery Sales . . . 2. . . . . -0.6

Newly Registered Motor Vehicles for Investment . . . . . 2. .2 . -1.9

Private Investment Index . .2 2. . . . . . 0.5

Private Investment Indicators

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

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 abroad

Source: Bank of Thailand

6080100120140160180

8090

100110120130140

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

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

Jan 2014 = 100Jan 2014 = 100

Service Index* & Net Tourist Spending Index**Nielsen’s FMCG Index & Fuel IndexJan 2014 = 100 Jan 2014 = 100

90100110120130140150160

90

95

100

105

110

115

120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Nielsen’s FMCG Index sa, mmaFuel Index, sa (RHS)Fuel Index sa, 3mma (RHS)

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

80

90

100

110

120

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Semi-durable Index sa,3mma

Durable Index sa, 3mma

Jan 2014 = 100Durable and Semi-durable Indices

Source: Bank of Thailand

Private consumption indicators moderately expanded at a similar pace compared with the previous month, although the government launched the economic stimulus measures to support the purchasing power this month. Private investment indicators continued to deteriorate from the same period last year, from both investment in machinery and equipment and investment in construction, in line with the slowdown of economic activities. However, public spending, excluding transfers, slightly rebounded due to the central government’s capital expenditures.

Economic and Monetary Conditions, September 2019

7

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

FY2018 FY2019Q3 Q4 Q1 Q2 Q3 Q4 Aug Sep

Revenue 2, 2, 2 22 (%YoY) . . . . 2. 2. 2. . . 2 . Expenditure1/ 2, 2 2, 2 2 (%YoY) . .2 . 2. 2.2 . . . . 22. Budgetary B/L 2 2 Non-Budgetary B/L 2 2 2 2 2 2 Cash B/L (CG) 2 2 2Primary balance 2/ 2 2 2 Net Financing 2 2 2 2Treasury B/L 2 2 2

60

80

100

120

140

160

180

Oct Dec Feb Apr Jun Aug

avg. FY2016-18 FY2018 FY2019

0

10

20

30

40

50

60

Oct Dec Feb Apr Jun Aug

avg. FY2016-18 FY2018 FY2019

Sep-3.0%

Sep14.0%

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

Source : Bank of Thailand

Diffusion Index (Unchanged = 50)

40

50

60

Jan 2014

Jul Jan 2015

Jul Jan 2016

Jul Jan 2017

Jul Jan 2018

Jul Jan 2019

Jul

BSI Expected BSI (next 3 months)

Dec 19 54.1

Sep 19 .

Business Sentiment Index

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

707580859095

100105

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Construction Materials IndexPermitted Construction Area (RHS)

Investment in Construction1,000 m2

9mmaIndex sa

(Jan 2014=100)

Note: All data is in real terms.Source: NSO and Bank of Thailand

Investment in Machinery and EquipmentIndex sa

(Jan 2014 = 100)

60

80

100

120

140

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Real Imports of Capital GoodsDomestic Machinery SalesCar Registered for Investment

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

Economic and Monetary condition, September 2019

8

2.3 The global economy and external sector

Aug 2019 = 21.9 Bn USD Ex. gold = 20.0 Bn USD Ex.Gold = 15.8 Bn USD

%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 2018

2018P

2018P 2019P

H1 H2 Q1 Q2 Q3 Aug SepSep

(%MoM)Agriculture .2 . . 2. 2. . . . . . Fishery . . . . . .2 2. 2.2 . . Manufacturing . . .2 . . . . . 2. .

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

Electrical Appliances . . . . . 2.2 2. . . .

Automotive .2 . . . . . . . . .

Machinery & Equipment

. . . . 2. .2 .2 . . .

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

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

Ex. Gold & Petroleum Related

. . 2. . . 2. . . .2

Export ValueSep 2019 = 20.4 Bn USD Ex. gold = 19.8 Bn USD

75

85

95

105

115

125

Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

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 INDOMYTHTWCNSGKR

The current account registered a lower surplus, mainly from the trade balance in which the value of gold exported decreased. The overall capital and financial accounts registered a deficit from the assets positions.

%YoYShare 2018

2018P

2018P 2019P

H1 H2 Q1 Q2 Q3 Aug SepSep

(%MoM)

Consumer . 2. . . . . . 2.2 . 2.

Raw material & Intermediate

. . . . . . . . . .

o/w Fuel . . . . . . . . 2 . 2 .2

o/w Raw mat & Interm ex. Fuel

. . . . 2. .2 . .2 . .

Capital 22. . . . . . . . . .

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

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

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

Ex. Gold&Fuel

- . . .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. 2/ Import of consumer goods In July includes temporarily imported jewellery for exhibition but is excluded in the total import value in BOP basis due to no changes in ownership.Source: Compiled from Customs Department’s data

Import ValueAug 2019 = 18.3 Bn USD Ex.Gold = 17.6 Bn USD

Sep 2019 = 17.7 Bn USD Ex.Gold = 16.9 Bn USD

Economic and Monetary condition, September 2019

9

Millions of USD 2018P 2018P 2019PYTDH1 H2 Q1 Q2 Q3 Aug SepE

1. Assets 22 2 2 TDI 2 2 2 2 - Equity 2 2 2 2 - Reinvestment of earnings 2 2 2 2

Thai portfolio investment 2 2 2 2 2 2 2 - Equity security investment 2 22 22 - Debt security investment 2 2 2

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

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

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

Loans 2 2 2 2 2 2 Other investments 2 2 - Trade credits 2 2 - Deposits abroad 2 2 2 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 2018P2018P 201 P

H1 H2 Q1 Q2 Q3 Aug SepE YTDTrade Balance 22. . . . . . . 2. 2 . Exports (f.o.b.) 2 . 2 . 2 . . . . 2 . 2 . .

%YoY . 2. 2. . .2 . 2. . 2. Imports (f.o.b.) 22 . . . . . . . . .

%YoY . . . 2. . . . . . Net Services, Income & Transfers . . . . . .2 . . . Current Account 2 . . . 2.2 . . . . 2 . Capital and Financial Account . 2. . . .2 .2 . . . Overall Balance . . . . . . . . 2.

50

100

150

200

Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Total China (28%)Malaysia (11%) Asia ex. CN MY (30%)Europe ex. Russia (14%) Russia (4%)

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

%YoY (Share in

2018)2018

2018 2019%MoM

saH1 H2 Q1 Q2 Q3 Aug SepP

China (27.6%) . 2 . . . .2 . . . .

Malaysia (10.6%) . 2. 2 . . . . . . .

Asia ex. China & Malaysia (29.9%)

.2 . . .2 . . . . 2.

Russia (3.9%) . . . . . 2. . . .2

Europe ex. Russia (13.8%)

2. . .2 2. . 2. 2. 2. .

Others (14.3%) . . . . . .2 . . . Total(million persons)

. (38.2)

. (19.4)

2. (18.8)

2. .

. .

.2 .

. .

. 2.

2.2

Inbound Tourists by Country of Origin

Source: Ministry of Tourism and Sports

Economic and Monetary Conditions, September 2019

10

2.4 Monetary and financial conditions

Commercial Bank Interest Rates*% p.a. 2017 2018 Q1/19 Q2/19 Q /19 24 Oct 19

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

1.37

1.48

1.11

6.28

7.31

7.58

7.19

8.46

8.54

1.37

1.46

1.11

6.28

7.31

7.58

7.19

8.46

8.54

1.42

1.48

1.19

6.28

7.31

7.58

7.19

8.47

8.54

1.46

1.48

1.19

6.28

7.31

7.58

7.19

8.50

8.54

1.4

1.

1.1

6.28

7.31

7.58

8.

8.54

1.4

1.

1.1

6.28

7.31

7.58

8.

8.54

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

Source: Bank of Thailand

1.0

1.5

2.0

2.5

3.0

Jan-

17Ma

r-17

May-1

7Ju

l-17

Sep-

17No

v-17

Jan-

18Ma

r-18

May-1

8Ju

l-18

Sep-

18No

v-18

Jan-

19Ma

r-19

May-1

9Ju

l-19

Sep-

19

1D BRP 3M 2Y 5Y 10Y

Government Bond Yields

Sources: Bank of Thailand and ThaiBMA

As of 24 Oct 19

1.5 1.4 1.4

1. 1.4

Note: Data for other depository corporations’ (ODCs) private credit and the ODCs’ private credit extended to households have been revised since January 2016 due to reflect the improvement in the data processing system.Source: Bank of Thailand

Billion baht

New Private Credit Extended by Other Depository Corporations

-0.8

-0.2

0.4

1.0

1.6

-80

-40

0

40

80

120

160

Jan-

17Ap

r-17

Jul-1

7Oc

t-17

Jan-

18Ap

r-18

Jul-1

8Oc

t-18

Jan-

19Ap

r-19

Jul-1

9

Jan-

17Ap

r-17

Jul-1

7Oc

t-17

Jan-

18Ap

r-18

Jul-1

8Oc

t-18

Jan-

19Ap

r-19

Jul-1

9

MoM, SA % MoM change, SA (RHS)

BusinessHousehold

%

Total corporate financing slightly decreased compared with the previous month mainly due to financing through debt securities. New credit slightly decelerated from credit extended to households. As for the exchange rate, Thai baht against the U.S. dollar remained unchanged while the NEER slightly depreciated when compared to the month-end level of the previous month.

Note: Business credits and debt refer to change in outstanding (par); equity refers to new issuance at par value.

Source: Bank of Thailand, ThaiBMA, SET

Sources of Corporate Financing Billion baht

-50

0

50

100

150

200

Jan Jul Jan Jul Jan Jul

Business Credits (SA) Equity Debt 3MMA

2017 2018 2019

Economic and Monetary Conditions, September 2019

11

30.1

31.1

32.1

33.1

34.1

35.1

36.198

100102104106108110112114116118120122124126128130

30-D

ec-1

6

20-F

eb-1

7

7-Ap

r-17

30-M

ay-1

7

17-Ju

l-17

04-S

ep-1

7

20-O

ct-1

7

12-D

ec-1

7

30-Ja

n-18

19-M

ar-1

8

9-M

ay-1

8

26-Ju

n-18

15-A

ug-1

8

1-Oc

t-18

19-N

ov-1

8

9-Ja

n-19

26-F

eb-1

9

17-A

pr-1

9

7-Ju

n-19

24-Ju

l-19

11-S

ep-1

9

NEER25

USDTHB (RHS)

Sources: Reuters, calculated by Bank of Thailand

Exchange Rates

Index (2012 = 100) USDTHB (reverse)

Appreciation

24 Oct 2 9USDTHB = 30.28NEER25 = 127.40

Sources: Reuters, Bank of Thailand

% p.a.

0%

2%

4%

6%

8%

10%

12%

30-D

ec-1

624

-Jan-

1715

-Feb

-17

8-M

ar-1

729

-Mar

-17

24-A

pr-1

717

-May

-17

7-Ju

n-17

28-Ju

n-17

20-Ju

l-17

11-A

ug-1

74-

Sep-

1725

-Sep

-17

17-O

ct-1

79-

Nov-

1730

-Nov

-17

25-D

ec-1

717

-Jan-

187-

Feb-

1828

-Feb

-18

22-M

ar-1

817

-Apr

-18

9-M

ay-1

831

-May

-18

21-Ju

n-18

12-Ju

l-18

6-Au

g-18

28-A

ug-1

818

-Sep

-18

9-O

ct-1

81-

Nov-

1822

-Nov

-18

17-D

ec-1

89-

Jan-

1930

-Jan-

1921

-Feb

-19

14-M

ar-1

94-

Apr-1

930

-Apr

-19

24-M

ay-1

917

-Jun-

198-

Jul-1

930

-Jul-1

921

-Aug

-19

11-S

ep-1

92-

Oct

-19

HKD THB CNY IDR INR KRW MYR PHP SGD

As of 24 Oct 2019

Regional Exchange Rate Volatility

-1.2%

-0.4% -0.2% -0.1%0.0%

0.5% 0.6% 0.6% 0.8% 0.8%1.0%

1.2%

2.1%

-0.9%

0.4%

1.2%

0.0%

1.0%

-0.4% -0.3%

0.1%

-0.6%

0.3%

1.2%

0.5%

2.5%

-2%

-1%

0%

1%

2%

3%

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

End of Sep 19 compared to end of Aug 1924 Oct 19 compared to end of Sep 19

Exchange Rate Movement

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

Economic and Monetary Conditions, September 2019

12

2.5 Financial stability

Headline inflation continued to decline from the previous month due to a higher contraction in energy and lower core inflation. The seasonally adjusted unemployment rate remained unchanged from last month. However, the number of employed persons continued to decrease in the non-farm sector. External stability continued to be strong and thus provide cushion against the volatility coming from the global financial markets.

-2

-1

0

1

2

3

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

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

Headline inflation contribution%YoY

Sep0.32%( ) Share in Headline Inflation

0

1

2

3

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

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

Core inflation contribution%YoY

Sep0.44%

( ) Share in Core Inflation

0.5

1.0

1.5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Unemployment Rate

Sep 2019Unemployment rate 1.0 %Unemployment rate (sa) 1.0 %

%

Note: Data from 2014 onward are based on The 2010 Population and Housing CensusSource: Labor Force Survey, NSO

80859095

100105110115

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Total Agriculture (31%) Manufacturing (17%)Construction (6%) Trade (17%) Service (29%)

Employment Index

Note: Data from 2014 onward are based on The 2010 Population and Housing Census.( ) denotes share in total employment

Source: Labor Force Survey, NSO calculated by BOT

Index sa, 3mma (Jan 2014=100)

EmploymentThousand persons sa, 3mma

10,000

12,000

14,000

16,000

18,000

20,000

20,000

22,000

24,000

26,000

28,000

30,000

Jan2014

Jul Jan2015

Jul Jan2016

Jul Jan2017

Jul Jan2018

Jul Jan2019

Jul

Non-Agriculture (sa, 3mma) Non-Agriculture (sa)Agriculture (sa, 3mma) (RHS) Agriculture (sa) (RHS)Not in Labor Force (sa, 3mma) (RHS) Not in Labor Force (sa) (RHS)

Source: Labor Force Survey (NSO), calculated by BOT

Thousand persons sa, 3mma

Economic and Monetary Conditions, September 2019

13

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 2018P2018P 2019P

Change Sep19-Aug19

H1 H2 Q1 Q2 Q3 Aug SepE Total

1. General government . 2 . . .2 . . . . . 2. Central Bank* . 5. . . 5. . . . . 3. Other Depository Corporations (ODC) . 5. . . . . . . . 4. Other Sectors . . . . . 2. . 2. .

- Other Financial Corporations (OFC) .5 . .5 . . . .2 . .5- Non Financial Corporations (NFC) . 2. . 5. . . .2 . .2O/W Foreign Trade Credit 25. 2 . 25. 25. 2 . 2 .2 2 . 2 .2 .

5. Total 2. 5 .2 2. .5 . . . . . Short-term (%) . 2. . .5 . 5. . 5. Long-term (%) . 5 . . .5 2. . . .

External Stability Indicators

Criteria 2018P2018P 2019P

H1 H2 Q1 Q2 Q3 Aug SepE

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

Economic and Monetary Conditions, September 2019

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 www.oie.go.th 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, September 2019

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, September 2019

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