The global economy and inflation slowed down because global demand for goods tended to slow down due to pressure on prices and high interest rates. In June 2023, the World Bank raised its global economic forecast for 2023 to 2.1% from 1.7% in its year-round assessment, but it remained in a slower direction than in 2022. Furthermore, it was expected that the Federal Reserve (FED) would likely raise interest rates in 2023 another 1-2 times. However, it was necessary to keep an eye on China and global economic growth.
Thailand's economy was supported by private consumption and the improved tourism sector. Thailand’s economy remained at risk. Even though Thailand’s economic growth improved, it still faced structural barriers and many other problems, such as climate change, an increasingly aging population, household debt, political issue, etc. The Ministry of Commerce revealed that headline inflation in June 2023 increased by 0.23% YoY. In addition, the Consumer Confidence Index in June 2023 was slightly lowered to 56.1 from 56.6 the previous month. Moreover, inflation in the third quarter of 2023 was likely to expand at a relatively low rate.
The Thailand Industrial Sentiment Index (TISI) in June 2023 increased to 94.1 from 92.5 the previous month due to the continual growth of domestic demand, baht depreciation, and decreasing freight rates. However, the export sector still slowed down. Moreover, the US tended to increase interest rates. The government should prepare to deal with the drought situation caused by the El Niño phenomenon, including adequate water management. In addition, the government should take care of the impact of high product prices and a high cost of living. Overall, Thailand's consumer confidence index was reported at 56.1 in June 2023, up from 56.6 in the previous month.
In terms of Thailand’s international trade in May 2023, Thailand’s export income value was 830,448.41 million baht, down 2.79% YoY but up 12.05% compared with the previous month. Meanwhile, Thailand’s import value was 904,563.31 million baht, down 1.68% YoY but up 13.44% compared with last month. Thailand's trade balance in May 2023 recorded a deficit of 74,114.90 million baht (Ministry of Commerce, 2023).
According to S&P Global, the Manufacturing Purchasing Managers' Index (PMI) dropped to 46.3 in June 2023 from 48.4 the previous month. The declining PMI in June raised concerns that the economy might enter a recession in the second half of the year amid the rising cost of living, higher interest rates, and concerns about changing economic and spending trends. In June 2023, Thailand’s PMI stood at 53.2, down from 58.2 the previous month due to the domestic manufacturing sector. Although the new orders increased, it was at a slow rate. Products manufactured in Thailand were getting more attention and expanding their customer base. Furthermore, the number of tourists entering the country increased. However, overall business sentiment declined due to concerns about economic and political issues.
The American Petroleum Institute (API) announced that crude oil inventories decreased by 4.4 million barrels for the week ending June 30, 2023. Overall, crude oil prices were volatile because the market was pressured by the economic recovery. In addition, the global economy also faced recession risk, which affected world oil consumption. The market kept an eye on the OPEC+ meeting, held in Vienna, Austria, on July 5–6, 2023. It was projected that the meeting would negotiate for further production cuts. Moreover, the OPEC had not allowed various news reporters to attend the meeting. On June 30, 2023, West Texas Intermediate (WTI) and Brent crude oil prices stood at 70.64 and 74.90 USD/barrel, respectively.
The average rubber prices announced by the Central Rubber Market in Songkhla in June 2023 decreased compared with the previous month. In May 2023, Thailand exported 379,408 tons of natural rubber (including compound rubber), generating an export income of 18 billion baht. In the tyre sector, Thailand exported 12.22 million units of all tyres for a total value of 20.6 billion baht.
In May 2023, Thailand’s car production was 150,532 units, up 16.48% YoY and up 27.96% compared with the previous month due to the production of exports and domestic sales of both passenger cars and pick-up trucks increasing from the low base of the previous year. In May 2023, Thailand's car production for export was 89,709 units (59.59% of all production), up 23.46% YoY, and domestic sales were 60,823 units (40.41% of all production). Meanwhile, Thailand's domestic car sales in May 2023 were 65,088 units, up 9.34% compared with the previous month.
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.
