Thai Economy News

Thai Economy Remains Subdued

Car and Retail Sales Showed Signs of Improvement, but Recovery Within this Year Unlikely

Thailand Economy

Of late, there is little good news coming from the Thai economy.

And these are challenging times for occupational optimists. A look into how the political unrest unfolds does not help investor confidence either.

Both the economy and the stock market are underperforming, and things are unlikely to change for the rest of this year.

Meanwhile, household confidence in August inched up to 50.1 from 51.0 in July, and most economic indicators improved incrementally.

But consumer confidence is still painfully low compared to pre-crisis levels.  And a closer look at economic data reveals that the coronavirus accelerated a crisis that was already in the making.

Consumer Confidence Index
Consumer Confidence Index, Source: Bank of Thailand

Weakness in demand, particularly for discretionary purchases and big-ticket items, is likely to continue for at least until the end of this year.

On top of that, household spending continues to be under pressure from the comatose tourism industry and falling export income due to weak global demand.

And because analysts expect a V-shaped recovery for neither tourism nor esports,  household consumption is bound to further contract.

Plunge in Car Sales Weighing on the Thai Economy

Total car sales nosedived -14.8% year-over-year in August. And this little favorable number is an improvement from -26.8%  and -32.6% year-over-year in July and June.

Thailand car sales September 2020
Thailand Car Sales, Source: Toyota Motor Thailand Co Ltd

However, this further decline marked the 15th month of car sales contraction in a row.  As in other areas of the economy, car sales have been declining since the second half of 2019, but the lockdown has significantly accelerated the downward trend.

In the same vein, total vehicle exports crashed by 28.9% year-over-year in July amidst dimmed global demand.

Thailand Vehicle Exports 2020
Thailand Vehicle Exports, Source: Ministry of Commerce

Retail Sales Improved since Reopening

June retail data (the figures trail two months) indicate a decline of 17.4% year-over-year, improving from the whopping -28.2% tumble in May year-over-year.

Thai economy Retail Sales
Thailand Retail Sales, Source: CEIC

This improvement reflects the partial reopening of Bangkok in May.  And retail sales are likely to improve further in July and August in line with further easing of restrictions on businesses.

Joe Miller
the authorJoe Miller
I have been living in Thailand for over 20 years and witnessed the many changes the country has undergone since the Asian Financial Crisis. I have spent time in Phuket, Samui, Hua Hin, and Chiang Mai, but I gravitate back to Bangkok when all is said and done. It is here that I spent years running a software development company and teaching at universities. These days I live on the Internet with Bangkok as my base. I never stopped believing in the enormous potential of Thailand's kingdom, which is why I joined the ThaiVest Team.

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