The global economy in 2024 signals to slow down. US consumer spending is weakening, especially among low-middle-income groups. In addition, the US Federal Reserve (Fed) tends to cut policy interest rates 1-2 times this year. The global GDP index dropped for the first time in 8 months. The global manufacturing and service output index weakened, as did the GDP index of advanced and emerging economies. Due to concerns about this new trade war, freight rates increased the highest in 2 years as well. The US Consumer Confidence Index (CCI) decreased from 101.3 in May 2024 to 100.4 in June 2024. China's consumption, production, and investment sectors are still at risk. Meanwhile, the real estate crisis continues to affect China's economy.
Thailand's economic situation is supported by the expanding tourism sector. However, the consumption of durable goods and private investment have not fully recovered. It remains crucial to monitor both domestic and international economic conditions that influence Thailand’s economic recovery. In June 2024, core inflation (Core CPI), excluding fresh food and energy, rose by 0.36% YoY, a slight decrease compared with the previous month. Meanwhile, headline inflation increased by 0.62% YoY in June 2024. This rise is attributed to lower household electricity costs compared to the previous year, due to government cost-of-living reduction measures, and more favorable weather conditions for the agricultural sector. However, it remains essential to monitor both domestic and international economic conditions that affect Thailand’s industrial sector. Additionally, the US Consumer Confidence Index (CCI) decreased from 52.4 in May 2024 to 52.3 in June 2024.
In terms of Thailand’s international trade in May 2024, Thailand’s export income value was 960,220.44 million baht, up 7.20% YoY. Meanwhile, Thailand’s import value was 947,006.51 million baht, down 1.66% YoY. Thailand's trade balance in May 2024 recorded a surplus of 13,213.93 million baht. In June 2024, Thailand’s export income value was 892,766.41 million baht, down 030% YoY. Meanwhile, Thailand’s import value was 895,256.10 million baht, up 0.32% YoY. Thailand's trade balance in June 2024 recorded a deficit of 2,489.69 million baht (Trade Policy and Strategy Office, Ministry of Commerce, 2024).
The Energy Information Administration (EIA) revealed that crude oil inventory decreased by 12.2 million barrels to 448.5 million barrels for the week ending June 28, 2024. Furthermore, crude oil demand tends to slow down before the US Independence Day holiday. However, prices remain pressured by the global economy. Recently, the numbers in the US real estate sector have been unclear, with no signs of recovery after the Conference Board (CB) reported that the US Consumer Confidence Index decreased to 100.4 in June 2024 from 101.3 in May 2024. On June 28, 2024, West Texas Intermediate (WTI) and Brent crude oil prices stood at $81.54 and $84.79 per barrel, respectively.
The average rubber prices announced by the Central Rubber Market in Songkhla dropped in June 2024, aligning with the foreign futures market due to weather and the beginning of the rubber tapping season. In May and June 2024, Thailand exported 331,946 and 293, 771 tons of natural rubber (including compound rubber), generating an export income of 20.9 and 18.5 billion baht. In the tire sector, Thailand exported 12.1 and 11.4 million units of all tires in May and June 2024, respectively, for a total value of 21.2 and 20.5 billion baht.
According to the Federation of Thai Industries (FTI), in May 2024, Thailand produced 126,161 cars, marking a 16.19%drop YoY. Of these, 88,808 units were produced for export, accounting for 70.39% of all production, reflecting a 1% decrease YoY. Domestic production for sale totaled 37,353 units, constituting 29.61% of all production, reflecting a 38.57% decrease YoY. Meanwhile, domestic car sales in May 2024 reached 49,871 units, representing a 6.70% increase from the previous month but a 23.38% decrease YoY. This decline is primarily attributed to stricter loan approval processes by financial institutions and sluggish economic growth, exacerbated by the delayed approval of the government's 2024 annual budget.
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