The world economy in 2024 is likely to expand similarly to the previous year. The US Federal Reserve (FED) has begun considering interest rate adjustments. It is expected that a reduction in the policy interest rate may occur in the second half of 2024. The US economy remains on positive growth, outperforming other major economies. This strength is evident in the tight labor market and the sustained expansion of domestic consumption. Consequently, inflation is decelerating at a slower pace than anticipated by the market. The US Consumer Confidence Index (CCI) experienced a decline from 114.8 in January 2024 to 106.7 in February 2024. Meanwhile, the Chinese economy shows nascent signs of recovery, which could alleviate deflationary pressures. However, the recovery remains fragile, and the efficacy of the latest measures introduced by the People's Bank of China (PBOC) is expected to be limited.
As for Thailand's economic situation in February 2024, exports expanded by 3.6% due to the global economy's improvement. Both agricultural and industrial product exports expanded. Regarding core inflation (Core CPI), excluding fresh food and energy, stood at 0.43% (YoY). Headline inflation decreased to 0.77% (YoY) in February 2024. However, it remains essential to monitor the economic situation both domestically and internationally, particularly its effects on the Thai manufacturing sector. Additionally, close attention should be paid to geopolitical issues that may impact the economy.
In February 2024, the Thailand Industrial Sentiment Index (TISI) decreased to 90.0 from 90.6 the previous month due to a slowdown in domestic demand, increased market competition, rising energy prices, and the prolonged conflict in the Red Sea area. However, there are several measures in place to stimulate domestic spending. Initiatives such as the Easy e-receipt measure, efforts to promote Visa-Free tourism, and measures to cap the price of diesel fuel at no more than 30 baht per liter (from January 1st to March 31st) are serving as supporting factors. Overall, Thailand's consumer confidence index for February 2024 is reported at 54.2, down from 54.5 in the previous month.
In terms of Thailand’s international trade in February 2024, Thailand’s export income value was 827,139 million baht, up 3.62% YoY. Meanwhile, Thailand’s import value was 856,508.11 million baht, up 3.16% YoY. Thailand's trade balance in February 2024 recorded a deficit of 29,369.08 million baht. (Trade Policy and Strategy Office, Ministry of Commerce, 2024).
The Energy Information Administration (EIA) announced that crude oil inventories increased by 4.2 million barrels, a 3-month high, to 447.2 million barrels, for the week ending February 29, 2024. Crude oil prices tend to fluctuate at a high level due to concerns over geopolitical conflicts in both the Middle East and Eastern Europe. Additionally, tensions in Europe may escalate further due to the possibility of a new round of US sanctions against Russia. However, the market remains under pressure as the US Federal Reserve continues to lean towards maintaining the policy interest rate at a high level after inflation has surpassed expectations. On February 29, 2024, West Texas Intermediate (WTI) and Brent crude oil prices stood at 78.26 and 83.62 USD/barrel, respectively.
The average rubber prices announced by the Central Rubber Market in Songkhla improved in February 2024, aligning with the foreign futures market compared to the previous month. This improvement can be attributed to adverse weather conditions and leaf fall disease, resulting in lower rubber output released to the market. However, rubber demand is on the rise, driven by the expanding automotive industry. In February 2024, Thailand exported 397,643 tons of natural rubber (including compound rubber), generating an export income of 21.4 billion baht. In the tire sector, Thailand exported 11.4 million units of all tires, for a total value of 20.5 billion baht.
According to the Federation of Thai Industries (FTI), in February 2024, Thailand produced 133,690 cars, marking a 19.28% drop YoY and a 5.92% decrease from the previous month. Of these, 86,762 units were produced for export, accounting for 64.90% of all production, reflecting a 9.26% decrease YoY. Domestic production for sale totaled 46,928 units, constituting 35.10% of all production, reflecting a 32.96% decrease YoY. Meanwhile, domestic car sales in February 2024 reached 52,843 units.
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.
