The situation of repeated attacks on cargo ships by the Houthi rebel group in the Red Sea is damaging to global supply chains. It affects sea cargo shipping because the Red Sea is the main trade route between Asia and Europe. The Federal Reserve (FED) signals that it will stop raising its policy rate. Meanwhile, the US economic and inflation outlook has a chance of a soft-landing next year. The US Consumer Confidence Index (CCI) increased to 110.7 in December 2023 from 101.0 in November 2023. As for China's economy, the real estate sector remains sluggish, putting pressure on the overall economy. In addition, according to the annual Central Economic Work Conference of the Communist Party of China (CPC), the government has stated that in 2024, China will prioritize implementing industrial policy.
In December 2023, Thailand's economy had slowly grown amid political uncertainty. Thailand’s economic recovery concentrated in the service sector, and many variable factors affect the economy. Thailand needs to focus on restructuring the economy to create competitiveness and accelerating FTA negotiations to attract investment. Moreover, Thailand should expand the market and increase trade value with foreign countries to have a market that supports exports. Furthermore, Thailand should find a solution to attract more tourists. In December 2023, Thailand was supported by a decrease in energy prices and the inflation rate. Meanwhile, headline inflation decreased by 0.83% YoY in December 2023.
The Thailand Industrial Sentiment Index (TISI) in December 2023 decreased to 88.8 from 90.9 the previous month due to the slowdown in the manufacturing sector. Moreover, consumer purchasing power has not yet fully recovered because of the household debt problem. The freight rate also increases as a result of attacks on cargo ships by the Houthi rebel group. However, the government should monitor the situation and roll out policies such as police to assist and mitigate the impact of rising freight rates from the Red Sea conflict. Overall, Thailand's consumer confidence index for December 2023 is reported at 54.8, down from 55.0 in the previous month.
In terms of Thailand’s international trade in December 2023, Thailand’s export income value was 795,823.94 million baht, up 4.65% YoY. Meanwhile, Thailand’s import value was 770,821.56 million baht, down 3.05% YoY. Thailand's trade balance in December 2023 recorded a surplus of 25,002.38 million baht. Overall, in 2023, Thailand’s export income value was 284,561.80 million US dollars, down 1.0%. In 2023, Thailand's trade balance recorded a deficit of 5,192.48 million US dollars, down 61.83% (Trade Policy and Strategy Office, Ministry of Commerce, 2023).
The American Petroleum Institute (API) announced that crude oil and diesel inventories increased by 1.84 million barrels and 0.27 million barrels, respectively, for the week ending December 22, 2023. The market continues to closely monitor the uncertain situation in the Red Sea of the Middle East region after Houthi forces attacked all cargo ships bound for Israel through the Red Sea. As a result, the market is concerned about the impact on the supply of crude oil and refined oil. Furthermore, shipping companies halted or rerouted oil shipments, which took more than 10 days, increasing shipping costs by 29%. On December 27, 2023, West Texas Intermediate (WTI) and Brent crude oil prices stood at 74.11 and 79.65 USD/barrel, respectively.
The average rubber prices announced by the Central Rubber Market in Songkhla in December 2023 slightly changed compared with the previous month because rain in Southern Thailand started to decrease. Rubber farmers can tap more rubber. Moreover, rubber prices in the international futures market have decreased. In November 2023, Thailand exported 375,029 tons of natural rubber (including compound rubber), generating an export income of 19.3 billion baht. In the tire sector, Thailand exported 12.1 million units of all tires, for a total value of 23.0 billion baht.
In November 2023, Thailand’s car production was 163,337 units, down 14.10% YoY but up 2.90% compared with the previous month. In November 2023, Thailand's car production for export was 93,372 units (57.17% of all production), down 13.02% YoY, and domestic sales were 69,965 units (42.83% of all production), down 15.51% YoY. Meanwhile, Thailand's domestic car sales in November 2023 were 61,621 units. From January to November 2023, Thailand’s car production was 1,708,042 units, up 0.98%.
Disclaimer: The information contained herein is obtained from a variety of sources and the dissemination of information is for the purpose of providing information to interested parties only. The Thai Rubber Association is not responsible for any damages that may occur from the use of this information by any person.
