The global economy in 2024 is under increasing pressure, particularly due to geopolitical tensions and the slowdown of China's economy. The market is closely monitoring the trajectory of China's economy following the announcement of significant economic stimulus measures by the People's Bank of China (PBOC). Key measures include reductions in short-term and medium-term interest rates, as well as a decrease in the minimum down payment rate for second-hand properties. The conflict in the Middle East remains highly tense following Iran's retaliation against Israel with approximately 200 missiles, in response to Israel's killing of the top leader of Hezbollah and other senior leaders from various armed groups. Meanwhile, the US Federal Reserve (FED) Chairman Jerome Powell has signaled a slower rate cut of 0.25%. The US Manufacturing Purchasing Manager Index (PMI) declined to 47.3 in September 2024, down from 47.9 in the previous month, while the US Consumer Confidence Index (CCI) fell from 105.6 in August 2024 to 98.7 in the last month, due to the current economic and employment conditions deteriorating.
Thailand's economy has slowed down due to flooding, particularly in the North. The Central and Southern regions should also be monitored. Additionally, the rapid appreciation of the baht against the dollar has impacted economic growth and may lead to a decline in exports. However, the tourism sector, which is approaching its high season, is expected to support spending in the service sector. Core inflation (general inflation excluding fresh food and energy) increased by 0.77% YoY, a slight increase from 0.62% YoY in August 2024. Headline inflation in September 2024 increased by 0.61% YoY. Nonetheless, it is important to monitor the continuity of growth amidst constraints and household debt challenges. The overall consumer confidence index in September 2024 rose to 51.6, up from 49.5 in the previous month.
In terms of Thailand’s international trade in September 2024, Thailand’s export income value was 889,074 million baht, up 1.1% YoY. Meanwhile, Thailand’s import value was 886,336 million baht, up 9.9% YoY. Thailand's trade balance in September 2024 recorded a surplus of 2,738 million baht (Trade Policy and Strategy Office, Ministry of Commerce, 2024).
The Energy Information Administration (EIA) reported that crude oil inventories increased by 3.8 million barrels to 417 million barrels for the week ending September 27, 2024. This followed the OPEC+ meeting, where members agreed to maintain the policy of reducing oil production. OPEC+ will continue to gradually increase production by 0.18 million barrels per day in December 2024. Meanwhile, the Conference Board (CB) reported that the U.S. consumer confidence index increased from 105.6 in August 2024 to 98.7 in September 2024. On September 30, 2024, West Texas Intermediate (WTI) and Brent crude oil prices stood at $68.17 and $71.77 per barrel, respectively.
The average rubber prices announced by the Central Rubber Market in Songkhla increased in September 2024, aligning with the foreign futures market with the average SICOM rubber price at 189.56 cents per kg. Thailand is experiencing heavy rain, covering 60-80% of the country, with the South facing heavy to very heavy rainfall. The amount of rainfall in production areas is impacting the supply of raw materials, leading to a tightening of supply and an increase in rubber prices. However, it remains essential to monitor the economic activities of China and the U.S., as well as the progress of the EUDR measures.
According to the Federation of Thai Industries (FTI), Thailand produced 122,277 cars in September 2024, representing a 25.48% YoY decrease. Of these, 87,666 units were produced for export, accounting for 71.69% of total production, reflecting a 15.78% YoY decline. Meanwhile, 34,611 units were produced for domestic sale, making up 28.31% of total production, which marks a 42.31% YoY decrease. Domestic car sales in September 2024 totaled 39,048 units, a 13.59% decrease compared to August 2024. This decline is attributed to stricter loan approvals due to concerns over high car-related bad debt, which amounted to 259 million baht in July 2024.
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