The global economy in 2024 has shown signs of slowing down, reflected in the contraction of the manufacturing sector. In August, the US PMI index for the manufacturing and services sectors was 54.1, down from 54.3 in the previous month. However, the US Consumer Confidence Index (CCI) increased from 101.9 in July 2024 to 103.3 in August 2024. Overall, while American consumers have become more optimistic, their sentiment remains within a narrow range, and they continue to be concerned about the employment situation in the market. Additionally, the inflation rate has gradually decreased, leading the market to expect the US Federal Reserve (Fed) to cut interest rates. Furthermore, there is no clear recovery trend in China's real estate sector.
Overall, Thailand's economy has slowed down. Confidence in domestic spending remains weak, although tourism and exports helped drive the economy in early Q3. At the Monetary Policy Committee meeting 4/2024 on August 21, 2024, the committee voted 6 to 1 to maintain the policy interest rate at 2.50% per year, with 1 vote in favor of reducing the rate by 0.25% per year. Thailand's economy is expected to expand in line with previous assessments, driven mainly by tourism and domestic demand, although momentum from private consumption has slowed slightly. However, it is still necessary to monitor the continuity of growth amidst limitations, the government's extension of cost-of-living assistance measures, and the issue of household debt. Core inflation (general inflation excluding fresh food and energy) increased by 0.62% YoY, up from a 0.52% increase in July 2024 YoY. Headline inflation in August 2024 increased by 0.35% YoY. Economic uncertainty remains high, and it is essential to closely monitor both domestic and international economic conditions that could impact Thailand's industrial sector, particularly the government's economic policies and Thailand's Budget 2025. The overall consumer confidence index decreased to 49.5 in August from 49.7 in the previous month.
In terms of Thailand’s international trade in August 2024, Thailand’s export income value was 939,521 million baht, up 7% YoY. Meanwhile, Thailand’s import value was 941,019 million baht, up 8.9% YoY. Thailand's trade balance in August 2024 recorded a deficit of 1,497 million baht (Trade Policy and Strategy Office, Ministry of Commerce, 2024).
The Energy Information Administration (EIA) revealed that crude oil inventory decreased by 6.9 million barrels to 418.3 million barrels for the week ending August 30, 2024. OPEC+ decided to delay its plan to increase crude oil production by another two months and stated that it could temporarily halt or adjust the planned production increase if necessary, following the release of the Conference Board (CB) report, which revealed that the US consumer sentiment index rose from 100.3 in July 2024 to 103.3 in August 2024. On August 29, 2024, West Texas Intermediate (WTI) and Brent crude oil prices stood at $75.91 and $79.94 per barrel, respectively.
The average rubber prices announced by the Central Rubber Market in Songkhla increased in August 2024, aligning with the foreign futures market with the average SICOM rubber price at 173.57 cents per kg. The weather affects rubber tapping and rubber yield. The amount of rainfall in the production area affects the supply of raw materials. The tight supply has resulted in an increase in rubber prices. However, it is still necessary to monitor China's economic activities and the progress of the EUDR measures. Thailand exported 390,936.64 tons of natural rubber in August 2024, with an export value of 25.8 billion baht. As for tires in August 2024, Thailand exported 13.3 units of all tires, with an export value of 24.3 billion baht.
According to the Federation of Thai Industries (FTI), in August 2024, Thailand produced 119,680 cars, marking a 20.56% drop YoY. Of these, 36,892 units were produced for domestic sale, accounting for 30.83% of all production, reflecting a 40.49% decrease YoY. Domestic car sales in August 2024 totaled 45,190 units, a decrease of 2.60% from July 2024 and a 24.98% drop YoY.
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