The global economy remained slowdown. Although the impact of COVID-19 and the war in Ukraine began to subside, the China-U.S. technology war was still protracted. The International Monetary Fund (IMF) projected global growth at 3.0% both in 2023 and 2024. Global inflation is projected to decline from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024. The core inflation was in a gradual downward trend. Meanwhile, the inflation forecast for 2024 has been adjusted upward. According to the latest Federal Reserve (FED) meeting, interest rates were raised by 0.25% to a range of 5.25–5.50%. China's economy tended to recover more slowly than expected. The European economy faced fragility from domestic demand and the aftermath of the Russia-Ukraine war. As for Thailand's exports, it still faced the economic uncertainties of its major trading partners. The debt serviceability of households and small and medium enterprises (SMEs) was a potential risk in the future. The value of Thailand's exports in June continued to contract. In addition, Thailand's economy might face threats from climate change with higher temperatures, and heat waves might lead to drought conditions or the El Niño phenomenon. As a result, it would affect the agricultural and industrial sectors in a wide range.
The Thailand Industrial Sentiment Index (TISI) in July 2023 decreased to 92.3 from 94.1 the previous month due to a slowdown in the manufacturing sector and demand. In addition, interest rates were trending upward. Moreover, household debt problems and the cost of living increased. The global economy remained fragile. Overall, Thailand's consumer confidence index was reported at 53.3 in July 2023, up from 56.1 in the previous month.
In terms of Thailand’s international trade in June 2023, Thailand’s export income value was 848,926.60 million baht, down 3.2% YoY but up 2.23% compared with the previous month. Meanwhile, Thailand’s import value was 857,187.85 million baht, down 10.22% YoY and 5.24% compared with last month. Thailand's trade balance in June 2023 recorded a deficit of 8,261.25 baht, down 83% (Ministry of Commerce, 2023).
According to S&P Global, the Manufacturing Purchasing Managers' Index (PMI) increased to 49.0 in July 2023 from 46.3 the previous month. In July 2023, Thailand’s PMI stood at 50.7, down from 53.2 the previous month. Thailand’s manufacturing sector decreased because new orders declined. The demand decreased. As a result, pressure on prices also dropped. It might lead to a decrease in business confidence.
The American Petroleum Institute (API) announced that crude oil inventories increased by 1.319 million barrels for the week ending July 21, 2023. Overall, crude oil prices rose because the market was concerned about tightening supply due to production cuts by OPEC and its allies (OPEC+). Meanwhile, China government announced support for economic stimulus policies. However, the market kept an eye on the OPEC+ meeting on August 4, 2023, to see if the meeting would roll out further policies. On July 28, 2023, West Texas Intermediate (WTI) and Brent crude oil prices stood at 80.58 and 84.99 USD/barrel, respectively.
The average rubber prices announced by the Central Rubber Market in Songkhla in July 2023 decreased compared with the previous month and were in line with the international futures market. Rubber prices still faced risks because interest rates in the trading partners’ countries were raised. Furthermore, the economy remained slow, as did foreign demand. In addition, China began to control the export of two metals used in the EV and telecommunications chip industries. In June 2023, Thailand exported 343,972 tons of natural rubber (including compound rubber), generating an export income of 16.3 billion baht. In the tyre sector, Thailand exported 12.26 million units of all tyres for a total value of 21.1 billion baht.
In June 2023, Thailand’s car production was 145,557 units, up 1.78% YoY but down 3.30% compared with the previous month due to the fact that production for domestic sale decreased by 2.01%. In June 2023, Thailand's car production for export was 84,909 units (58.33% of all production), up 4.66% YoY, and domestic sales were 60,648 units (41.67% of all production). Meanwhile, Thailand's domestic car sales in June 2023 were 64,440 units, down 1.04% compared with the previous month and down 5.16% 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.
