Embassy of India
Bangkok
BAN/COM/201/2 /2013 18thSeptember,2013
ECONOMIC & COMMERCIAL REPORT FOR THE MONTH OF JULY, 2013
EXECUTIVE SUMMARY
v In July 2013, Thai economy continued to moderate following a decline in private consumption from car and other durable purchases and subdued exports as global demand remained fragile and domestic supply constraints persisted.
v Thailand’s total trade during the period January - July, 2013 was US Dollars 282.79 billion. Exports worth USD 132.37 billion and Imports worth USD 150.42 billion.
v Thailand’s total trade with India during the period January - July, 2013 was US Dollars 5.28 billion [Import from India USD 2.19 billion, Export to India USD 3.09 billion].
v During the month of July 2013, Headline inflation moderated to 2 percent (yoy) as contribution from fresh food prices and core inflation eased. Unemployment remained low.
v During the period January-July, 2013, thirteen (13) applications for investments, worth 840 million baht, were received from India, while ten (10) applications worth 1344 million baht were approved.
v Thai GDP in the second quarter of 2013 increased by 2.8%, compared to a 5.4% rise in the previous quarter.
v 27th Meeting of the India-Thailand trade negotiating committee (ITTNC) was held during 10-12th July, 2013 at Bangkok.
Embassy of India
Bangkok
BAN/COM/201/2 /2013 18thSeptember,2013
Economic & Commercial Report for the month of July, 2013
1. Business Sentiment
In July 2013, the Thai economy continued to moderate following a decline in private consumption from car and other durable purchases and subdued exports as global demand remained fragile and domestic supply constraints persisted. Flagging demand weighed down manufacturing production and private investment, but the tourism sector continued to expand robustly.Inflation eased and the unemployment rate stayed low. The current account recorded a deficit due mainly to gold imports and the repatriation of profits and dividends. At the same time, the capital account posted a deficit from short-term loan repayment by financial institutions, and the overall balance of payments was in deficit.Merchandise exports declined with softened global demand and on-going supply constraints, especially from shrimp disease. The merchandise export value stood at 18,804 million US dollars. Merchandise imports totalled 18,546 million US dollars, declining by 0.2 percent (yoy). Excluding gold, the import value stood at 17,137 million US dollars, down by 4.1 percent (yoy). The tourism sector expanded robustly, with 2.2 million foreign tourist arrivals or a growth of 22.5 percent (yoy), thanks to more tourists from China, Malaysia and Russia.
2. GDP
GDP in the second quarter of 2013 increased by 2.8%, compared to a 5.4% rise in the previous quarter. This was a result of slowdowns in both agricultural and non-agricultural sectors. On domestic expenditure, household consumption and investment grew slower by 2.4% and 4.5%, respectively. Similarly, inventories had built up but by smaller amount than the previous quarter. Meanwhile, government consumption went up by 5.8%. External demand contracted by 3.9%. After seasonal adjustment, GDP on the quarter-by-quarter basis declined by 0.3%. GDP in the first half of 2013 grew by 4.1%. Agricultural sector expanded by 0.1%, as the unresolved EMS disease in shrimp led to a 7.9% decline in fishery. Agriculture, hunting and forestry grew by 1.5% as rubber, oil palm, cassava, and fruits increased. However, production of paddy and maize fell. Livestock production remained stable from the previous quarter. Non-agricultural sector grew by 3.0%, decelerating from the previous quarter. Manufacturing sector decreased by 1.0% as external demand has not recovered while domestic demand slowed down. Other sectors e.g. electricity, gas and water supply, construction, transport and communication and wholesale and retail trade grew at slower rates. On the other hand, services sectors such as hotels and restaurants, financial intermediation and other services continued to show a favorable growth.
3. INFLATION
During the month of July, 2013, Headline inflation moderated to 2 percent (yoy) as contribution from fresh food prices and core inflation eased. Unemployment remained low.
4. TOTAL THAILAND TRADE DURING JANUARY TO JUNE 2013 COMPARED WITH SAME PERIOD IN THE PREVIOUS YEAR AND BALANCE OF TRADE DURING THE PREVIOUS YEAR:
Trade during JAN.-JULY 2013 / Trade during JAN.- JULY2013 / Rate of growth compared to same period in 2012 / Total imports during 2012 / Total exports during 2012 / Balance of trade during 2012(Amount in billion US$)
282.79 / Total Tr. 282.79
Export: 132.37
Import: 150.42
Tr. Bal: (-)18.05 / 2.30% / 247.59 / 229.52 / (-)18.07
Source: Ministry of Commerce, Govt. of Thailand
5. TOTAL TRADE IN US$ AND ITS GROWTH TO 20 COUNTRIES DURING THE PERIOD JAN. – JULY2013 (Amount in billion US$):
Sl. No. / Country / Thai imports / Thai exports / Total trade1. / Japan / 25.24 / 13.15 / 38.39
2. / China / 21.92 / 15.03 / 36.95
3. / USA / 9.10 / 13.19 / 22.29
4. / Malaysia / 7.76 / 7.47 / 15.23
5. / United Arab Emirates / 9.87 / 1.78 / 11.65
6. / Indonesia / 5.07 / 7.00 / 12.07
7. / Singapore / 4.94 / 6.62 / 11.56
8. / Australia / 3.36 / 6.25 / 9.61
9. / South Korea / 5.66 / 2.86 / 8.52
10. / Hong Kong / 0.48 / 7.42 / 7.90
11. / Taiwan / 4.61 / 1.92 / 6.53
12. / Switzerland / 6.35 / -- / 6.35
13. / Germany / 3.68 / 2.25 / 5.93
14. / Vietnam / 1.93 / 3.90 / 5.83
15. / India / 2.19 / 3.09 / 5.28
16. / Saudi Arabia / 4.38 / -- / 4.38
17. / Myanmar / 2.25 / 2.19 / 4.08
18. / United Kingdom / 1.98 / 2.10 / 4.08
19. / Philippines / -- / 2.76 / 2.76
20. / The Netherlands / -- / 2.61 / 2.61
Source: Ministry of Commerce, Govt. of Thailand
6. TOTAL TRADE WITH INDIA
(Amount in billion US$)
Description / 2008 / 2009 / 2010 / 2011 / 2012 / JAN. – JULY2013Total Trade / 5.97 / 4.95 / 6.64 / 8.19 / 8.68 / 5.28
Export / 3.34 / 3.22 / 4.39 / 5.18 / 5.48 / 3.09
Import / 2.63 / 1.73 / 2.25 / 3.01 / 3.20 / 2.19
Trade Balance / 0.71 / 1.49 / 2.14 / 2.17 / 2.28 / 0.90
Growth Rate % / 26.34 / -17.13 / 34.23 / 23.29 / 5.77 / 6.22
Source: Ministry of Commerce, Govt. of Thailand
7. TRADE FIGURES OF TOP 10 COMMODITIES WITH INDIA:
7 (a) Imports from India during JAN. – JULY2013
Sl No / Commodity / Import value(Value: billion US$)
1 / Jewelleryincludingsilverbarsandgold / 0.390
2 / Iron Steel and products / 0.300
3 / Vegetables & vegetable products / 0.285
4 / Machinery & parts / 0.202
5 / Chemicals / 0.172
6 / Parts & accessories of vehicles / 0.138
7 / Medicinalandpharmaceutical products / 0.081
8 / Yarn & fibers / 0.064
9 / Other metal ores, metal waste scrap and products / 0.063
10 / Finished Oil / 0.046
Source: Ministry of Commerce, Govt. of Thailand
7 (b) Exports to India during JAN. – JULY2013
Sl No / Commodity / Export value(Value: billion US$)
1 / Polymersofethylene,propylene,etc.inprimaryforms / 0.292
2 / Chemical Products / 0.273
3 / Iron & steel and their products / 0.252
4 / Precious Stones and jewellery / 0.238
5 / Spark ignition reciprocating internal combustion piston engines & parts thereof / 0.201
6 / Motor cars, parts & accessories / 0.163
7 / Machinery and parts thereof / 0.157
8 / Air-conditioning machines and parts thereof / 0.148
9 / Rubber / 0.110
10 / Automatic data processing machines and parts thereof / 0.097
Source: Ministry of Commerce, Govt. of Thailand
8. MAJOR INVESTMENTS IN THAILAND
8 (a) According to latest data available, the Board of Investment, Thailand approved 1271 projects during the period Jan.-July, 2013 with a total investment of 490.2 billion baht. Out of 1271 projects, 512 were 100% foreign investment, 333 JVs and 426 were 100% Thai investment.
INVESTMENT STRUCTURE
Year / No. of Projects / Investment (billion US$)100% Thai / 100% Foreign / JVs / Total / 100% Thai / 100% Foreign / JVs / Total
2010 / 629 / 558 / 379 / 1566 / 4.90 / 5.74 / 4.72 / 15.36*
2011 / 672 / 608 / 372 / 1652 / 4.90 / 5.66 / 4.41 / 14.97**
2012 / 813 / 886 / 563 / 2262 / 7.96 / 9.41 / 14.31 / 31.88***
Jan- July, 2013 / 426 / 512 / 333 / 1271 / 5.23 / 4.66 / 6.43 / 16.32^^
*US$ 1 = Baht 32 (Average for 2010)
**US$ 1 = Baht 30 (Average: 2011)
***US$ 1 = Baht 31.06 (Average: 2012)
^^ US $1= Baht 30.03 (Average rate for Jan. – July, 2013)
8 (b) INVESTMENT FROM INDIA TO THAILAND
Several Indian companies are operating in Thailand. Indian FDI into Thailand is around US$2 billion since 1970s. 13 new investment proposals/projects from India were approved with a total investment of 1740 million baht (US$ 56 million) in 2010. In 2011, 15 projects with a total value of 1693 million baht (US$ 56 million) were approved. In 2012, twenty seven (27) applications worth 18415 million baht were received, while twenty five (25) applications worth 6100 million baht were approved.
During the period January-July, 2013, thirteen (13) applications worth 840 million baht were received, while ten (10) applications worth 1344 million baht were approved.
Major investments were seen in the following sectors: (1) Agricultural products (2) Minerals & Ceramics (3) Light Industry (4) Metal Processing (5) Electronics & Electrical (6) Chemical, Plastic & Paper (7) Service & Infrastructure.
8 (c)INVESTMENTS FROM THAILAND TO INDIA
Actual inflow of FDI from Thailand into India from April, 2000 to June, 2013 (for the period data are available) is registered as US $114.06 million. Thai investments are mainly in infrastructure, real estate, food processing sectors and recently in hotel and hospitality sector. [Source : DIPP, MOC, GOI]
8(d) INVESTMENT NEWS
According to Thai Board of Investment, during the period Jan-July, 2013, Foreign Direct Investment also showed a similar positive trend with 783 applications with investment value of 275.991 billion Baht were approved which showed increase in applications by 10.44 percent ( from 709 applications during Jan –July, 2012) and in value by 24.60 percent ( from 221.514 billion Baht during Jan- July, 2012). Out of total 783 approved applications, 512 are 100% foreign investment.
Japan remained largest foreign investor in Thailand with investment of 134.371 billion Baht and the second was Hong Kong with 33.995 billion baht. The Netherlands was third with 26.368 billion Baht.
9. INDIA’S INVESTMENT INTERESTS
With the signing of the India-ASEAN free trade agreement and the ASEAN free trade agreement (AFTA), Thailand is expected to become an attractive destination for Indian investment, particularly in software development, textile & garment, automobile, infrastructure development, railway construction etc. Since 2005, Indian investments were seen primarily in Agricultural Products, Minerals and Ceramics, Light Industries/Textiles, Metal Products and Machinery, Electric and Electrical Products, Chemicals and Paper and Services.
10. THE TOP FIVE PRINCIPAL IMPORT SOURCES & INDIA DURING THE PERIOD JANUARY - JULY, 2013:
Sl. No. / Country / Import value (Billion US$)1 / Japan / 25.24
2 / China / 21.92
3 / United Arab Emirates / 9.87
4 / USA / 9.10
5 / Malaysia / 7.76
14. / India / 2.19
Source: Ministry of Commerce, Govt. of Thailand
11. THE TOP FIVE PRINCIPAL EXPORT DESTINATIONS & INDIA DURING THE PERIOD JANUARY - JULY, 2013:
Sl No / Country / Export value (billion US$)1 / China / 15.03
2 / Japan / 13.15
3 / USA / 13.19
4 / Malaysia / 7.47
5 / Hong Kong / 7.42
10. / India / 3.09
Source: Ministry of Commerce, Govt. of Thailand
12. THE TOP FIVE PRINCIPAL IMPORT ITEMS OF THAILAND DURING THE PERIOD JANUARY - JULY, 2013:
Sl No / Commodity / Import Value (billion US$) / India’s share (billion US$)01 / Crude Oil / 20.86 / Nil
02 / Machinery & Parts / 13.91 / 0.202
03 / Jewelry including Silver bars & gold / 12.69 / 0.390
04 / Iron, Steel & products / 9.57 / 0.300
05 / Electrical machinery and parts / 9.03 / 0.046
Source: Ministry of Commerce, Govt. of Thailand
13. THE TOP FIVE PRINCIPAL EXPORT ITEMS OF THAILAND DURING THE PERIOD JAN.- JULY2013:
Sl. No. / Commodity / Export Value (billion US$) / India’s share (billion US$)01 / Motor cars, parts & accessories / 13.95 / 0.163
02 / Automatic data processing machines and parts thereof / 10.17 / 0.097
03 / Refine fuels / 6.67 / 0.008
04 / Chemical products / 5.47 / 0.273
05 / Polymers of ethylene, propylene etc. in primary forms / 5.29 / 0.292
Source: Ministry of Commerce, Govt. of Thailand
14. BILATERAL NEWS/NEWS ON INDIA
Private forum for Thai-Indian trade urged
The Board of Investment of Thailand is encouraging six Thai businesses to pave the way for more trade and investment with India via the establishment of the Thai-Indian business forum. The forum would serve as an intermediary with the state to turn obstacles into opportunities. Delta Electronics plans to invite local suppliers to invest in making car parts for the growing auto industry in India. Some major Thai corporations already active in India are Chareon Pokphand Plc in agriculture and food, Srithai Superware Plc in kitchen ware and Dusit Thani Plc in hotels. Mr. Udom Wongviwatchai, secretary-general of the BoI, said that there were six sectors of interest for Thai investors - agriculture goods, automobile parts, electric appliances and parts, construction, real estate and hotels, and power generation, especially in northeastern India, such as Assam, which is an abundant source of oil and natural gas. The BOI is ready to assist Thai investors with trade and investment information, sourcing potential Indian business partners or negotiating with the Indian government on reducing trade and investment obstacles. Some hurdles are tax duplication, a tax system that varies from one state to another, frequent tax structure changes, shortage of skilled workers and obtaining work permits. India, with the world's second largest population, offers a huge market with growth potential for various industries, especially in the northeast.