Major countries’ economies are slow down. The Federal Reserve (FED) expects economic growth to slow to about 1.5% in 2024, down from 2.1% this year. The US economy tends to weakened, as reflected in employment numbers, bank credit growth, and second-hand home sales. In addition, the US Consumer Confidence Index (CCI) dropped from 108.7 in August 2023 to 103.0 in September 2023. Meanwhile, China's economy shows signs of recovery but still faces risks in many sectors. As for Thailand's economic situation in September, it received supporting factors from the tourism and export sectors. Inflation is likely to decrease; however, it is still necessary to monitor the global economic situation and its impact on Thailand's export sector during the remainder of 2023. On September 27, 2023, the Monetary Policy Committee (MPC) unanimously resolved to increase the policy interest rate by 0.25% per year from 2.25% to 2.50% per year, effected immediately.
The Thailand Industrial Sentiment Index (TISI) in September 2023 decreased to 90.0 from 91.3 the previous month because interest rates are moving upward. Furthermore, the manufacturing sector is slowing down. In addition, both domestic and international demand have slowed down. Moreover, the Thai baht weakened. There are also problems with protracted geopolitical conflicts, and there is concern that energy prices may increase due to winter demand. Meanwhile, the tourism sector continues to recover. However, the government should monitor the situation and roll out policies to revive and encourage the economy. Furthermore, the Thai Industrial Standards Institute (TISI) and the Customs Department should be strict in detecting imported products which are not of quality. Overall, Thailand's consumer confidence index for September 2023 was reported at 55.7, up from 53.4 in the previous month.
In terms of Thailand’s international trade in August 2023, Thailand’s export income value was 824,938 million baht, up 2.6% YoY. Meanwhile, Thailand’s import value was 822,476 million baht, down 12.8% YoY. Thailand's trade balance in August 2023 recorded a surplus of 2,462 million baht. From January to August 2023, Thailand’s export income value was 187,593.1 million US dollars, down 4.5% (Trade Policy and Strategy Office, Ministry of Commerce, 2023).
According to S&P Global, the Manufacturing Purchasing Managers' Index (PMI) increased to 49.8 in September 2023 from 47.9 the previous month. In September 2023, Thailand’s PMI stood at 47.8, down from 48.9 the previous month. In September, Thailand’s manufacturing sector was slowing down because new orders declined. For Thailand's manufacturers, the pressure on the cost of production eased.
The American Petroleum Institute (API) announced that crude oil inventories decreased by 2.2 million barrels to 416.3 million barrels for the week ending September 22, 2023; as a result, the market were increasingly concerned about oil supply. Overall, crude oil prices increased because the market was concerned about the tight crude oil supply due to the extension of the period to reduce Saudi Arabia's production capacity by 1 million barrels per day. Moreover, many investors were concerned because the Federal Reserve (FED) and other central banks tended to maintain high interest rates for a long time to control inflation. As a result, it might affect oil demand. Furthermore, they also kept an eye on the ministerial meeting of OPEC and its allies (OPEC+) held on October 4, 2023. On September 29, 2023, West Texas Intermediate (WTI) and Brent crude oil prices stood at 90.79 and 95.31 USD/barrel, respectively.
The average rubber prices announced by the Central Rubber Market in Songkhla in September 2023 increased compared with the previous month and in line with the international futures market because China’s economy signaled a recovery. In August 2023, Thailand exported 330,486 tons of natural rubber (including compound rubber), generating an export income of 15.2 billion baht. In the tyre sector, Thailand exported 12.2 million units of all tyres for a total value of 21.7 billion baht.
In August 2023, Thailand’s car production was 150,657 units, down 12.27% YoY but up 0.63% compared with the previous month due to a decrease in the production of pickup trucks for domestic sale. In August 2023, Thailand's car production for export was 88,661 units (58.85% of all production), up 1.07% YoY, and domestic sales were 61,996 units (41.15% of all production). Meanwhile, Thailand's domestic car sales in August 2023 were 60,234 units, down 3.62% compared with the previous month and down 11.69% YoY due to the strictness of financial institutions in credit approval.
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.
