The Federal Reserve (FED) kept its policy interest rate high until it saw sufficiently reliable signals. The FED had adjusted interest rates to push inflation down to a target of 2%. Furthermore, the US Consumer Confidence Index in August 2023 dropped to 69.5 from 71.6 the previous month. China gradually rolled out measures to support the economy. Meanwhile, some of China's manufacturing sector expanded again in August, but the risks are still great, as well as problems in the real estate sector amid the weakening of momentum from the opening of the country and the slowdown of the world economy. Recently, Country Garden, China's largest private real estate developer, lost nearly 7 billion US dollars and risked defaulting on debt payments. As for Thailand's economic situation in August 2023, it was supported by the tourism sector and improved domestic spending, which were factors supporting the economy at the beginning of the third quarter. Even though exports returned to positive growth and inflation was likely to decrease, it was still necessary to monitor the global economic situation and its impact on Thailand's export sector for the remainder of 2023. The new government's economic policy implementation was expected to help improve confidence as well as encourage domestic spending. Recently, the government stated that it was preparing to assist with the burden of utility and energy expenses as well as the farmer debt suspension project.
The Thailand Industrial Sentiment Index (TISI) in August 2023 decreased to 91.3 from 92.3 the previous month due to a slowdown in domestic economic recovery and rising interest rates on loans. Moreover, the export sector was slow in line with the global economy. In addition, the purchasing power of trading partner countries was weak. However, the tourism sector still expanded and helped support domestic consumption. The government should urgently roll out policies to revive and encourage the economy to help entrepreneurs and solve the cost of living problem, such as reducing electricity, oil, and gas prices, restructuring debt, and building investors' confidence. Overall, Thailand's consumer confidence index for August 2023 was reported at 53.4, up from 53.3 in the previous month.
In terms of Thailand’s international trade in July 2023, Thailand’s export income value was 764,444.04 million baht, down 7.73% YoY and down 9.95% compared with the previous month. Meanwhile, Thailand’s import value was 842,842.74 million baht, down 12.46% YoY and down 1.67% compared with last month. Thailand's trade balance in July 2023 recorded a deficit of 78,398.70 baht, down 41.63% (Ministry of Commerce, 2023).
According to S&P Global, the Manufacturing Purchasing Managers' Index (PMI) decreased to 47.9 in August 2023 from 49.0 the previous month. In August 2023, Thailand’s PMI stood at 48.9, down from 50.7 the previous month. 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 10.6 million barrels to 422.9 million barrels for the week ending August 25, 2023. Overall, crude oil prices declined because crude oil demand tended to slow down following the global economic slowdown, both in the industry sector and the service sector. Crude oil supply tended to continue tightening after OPEC, led by Saudi Arabia, was likely to extend the period to reduce production by another 1 million barrels per day for another month. On August 30, 2023, West Texas Intermediate (WTI) and Brent crude oil prices stood at 81.63 and 85.86 USD/barrel, respectively.
The average rubber prices announced by the Central Rubber Market in Songkhla in August 2023 decreased compared with the previous month and were in line with the international futures market. Rubber supply and demand tended to decline due to the economic slowdown and climate change. Overall, rainfall throughout the country was 27% less than normal, reflecting the impact of El Niño. The Association of Natural Rubber Producing Countries (ANRPC) held the 13th ANRPC Annual Rubber Conference and its related meetings on October 9–10, 2023, at the Radisson Blu Hotel, Guwahati, India. In July 2023, Thailand exported 322,174 tons of natural rubber (including compound rubber), generating an export income of 15.4 billion baht. In the tyre sector, Thailand exported 11.5 million units of all tyres for a total value of 20.6 billion baht.
In July 2023, Thailand’s car production was 149,709 units, up 4.72% YoY and up 2.85% compared with the previous month due to imported electric cars having a greater market share. In July 2023, Thailand's car production for export was 86,552 units (57.81% of all production), up 9.48% YoY, and domestic sales were 63,157 units (42.19% of all production). Meanwhile, Thailand's domestic car sales in July 2023 were 58,419 units, down 9.30% compared with the previous month and down 8.77% YoY due to the strictness of financial institutions in credit approval, resulting in a decline in purchasing power.
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.
