Flood Damage and Post-Flood Rehabilitation. Economic Performance in Q1/2012 and Outlook for 2012

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1 Presentation Outline 1 Flood Damage and Post-Flood Rehabilitation 2 Investment Plans of Strategic Committee for Reconstruction and Future Development 3 Economic Performance in Q1/2012 and Outlook for Economic Management for

2 4) GDP 2011 in Q1/2012 GDP Growth (%) Q1 Q2 Q3 Q4 Q1 GDP GDP (Seasonal Adjusted) Agricultural Sector Non-Agricultural Sectors After seasonal adjustment, Thai economy grew by 11.0% compared to the previous quarter. In the 1 st quarter of 2012, Thai economy increased by 0.3%, recovered after severe flood during October November The main driving factors include: Household consumption expanded after severe flood in 2011, mainly due to an increase in expenditure for post-flood restoration and rehabilitation. Private investment expanded, mainly contributed by the expansion in machinery and equipment following to a post-flood restoration process. The number of inbound tourists and occupancy rate increased. Major agricultural products expanded especially oil palm, cassava, and rubber. Manufacturing sector improved, largely due to restart of industrial plants that got affected by flood. Export value started to recover according to the improvement of industrial sector and major export market still expanded. 21

3 Supply Side Demand Side Thailand s Key Economic Indicators Demand Side Private consumption and investment continuously expanded whereas export showed a sign of recovery with an expansion of 6.7% after decreased in the past two months, according to the expansion of major industry especially automobile parts and assembly. Export to Europe still be in a good condition, which expanded by 6.8%. Supply Side Manufacturing production index expanded by 5.5%, turned to positive after a continuously decreased for 8 months since severe flood in Q4/2011. Agriculture production index increased by 7.3% after 0.2% decreased in previous month. Likewise, tourism sector expanded continually, foreign tourist increased by 8.3%. Meanwhile, unemployment rate remained low Q1 April May Q1 April May Private Consumption Index (%) Private Investment Index (Avg.) (%) Consumer Confidence Index Export (Mil. US Dollar) 56, , , , , ,549 Export Value(%YoY) Headline Inflation Core Inflation Manufacturing Production Index (%YoY) Capacity Utilization (%) Tourists (Thousand person) 5, , , , , ,523.8 Tourists (%YoY) Agricultural Production Index (%YoY) Agricultural Price Index (%YoY) Farm Income (%YoY) GDP (at constant price) 3.2 (Q1) 0.3 (Q1) Trend 22

4 Fiscal Balance Thailand s Key Economic Indicators (cont.) Fiscal Balance Value added tax (VAT) was slightly increased by 1.7% as a result of increase in VAT from import product by 30.1%. Total budget disbursement was at 1,456,246 million baht, equivalent to 61.2% of total budget. Capital budget disbursement was at 156,733 million baht equivalent to 38.3% of total capital budget, However, capital budget disbursement decreased by 8.5% compared to same period of last year, as a result of the delay of budget act approval Q1 April May Q1 April May VAT (Million Baht) 139, , , , , ,273.7 VAT (%YoY) Total Budget Disbursement (Mil. Baht) 1,070, ,205, ,411, ,172, ,321, ,456, Compared to annual budget (%) Current Budget Disbursement (Mil. Baht) 930, ,051, ,240, ,052, ,186, ,299, Compared to total current budget (%) Capital Budget Disbursement (Mil. Baht) 140, , , , , , Compared to previous period (%) Compared to total capital budget (%) Source: NESDB, MOF, MOC, BOT Trend 23

5 Economic Projection for 2012 (as of 21 st May 2012) Actual Data Projection for Feb May 12 GDP (at current price: Bil. Bht) 9, , , , ,573.1 GDP Growth (at constant price, %) Investment (at constant price, %) Private Public Consumption (at constant price %) Private Public Export value of goods (%)) Import value of goods (%) Trade balance (Bill. USD) Current account balance (Bill. USD) Current account to GDP (%) Inflation (%) Source: NESDB 24

6 Presentation Outline 1 Flood Damage and Post-Flood Rehabilitation 2 Investment Plans of Strategic Committee for Reconstruction and Future Development 3 Economic Performance in Q1/2012 and Outlook for Economic Management for

7 The economic management for 2012 Accelerating budget disbursement and implementing a reconstruction and future development plan. Enhancing a speed of rehabilitation measures for the flooddamaged industries, as some of them exhibited a slower-thanexpected recovery. Assisting entrepreneurs who are affected by a minimum-wage policy, particularly those labor-intensive SMEs by fostering them to utilize the government-assisting measures such that they could reduce production cost and enhance productivity. Managing and maintaining fair pricing of goods and services throughout the supply chain, particularly prices of household consumption goods. Implementing monetary and exchange rate policies to be consistent with a direction of global economic environment. 26

8 Thank you 27

9 Back up Fiscal Overview 28

10 Budget Structure for fiscal year Fiscal year 2009 (incl. mid-year budget) (incl. mid-year budget) Total government budget 1,951, ,700, ,169, ,380, ,400,000.0 as % of GDP changes from previous year (%) Current expenditures 1,411, ,434, ,667, ,840, ,901,911.7 as % of GDP as % of government budget changes from previous year (%) Capital expenditures 429, , , , ,938.8 as % of GDP as % of government budget changes from previous year (%) Principal repayment 63, , , , ,149.5 as % of government budget changes from previous year (%) Expenditures for replenishment of treasury account balance , , as % of government budget Budget balance -347, , , , ,000.0 changes from previous year (%) GDP 8,712, ,726, ,840, ,572, ,544,000.0 Source: Bureau of the Budget 29

11 Public Debt Situation Public debt at the end of April 2012 amounted to 4,614,626.0 million baht (42.4 % of GDP), mainly is government debt (3,088,521.4 million baht) or 74.0 % of total public debt. Million Baht 5,000,000 percent 50 4,000, ,000, ,000, ,000, (Apr) 0 Autonomous Agency Debt SFI FIDF Non-financial state enterprises government Debt Public debt per GDP (%) 30

12 Public Debt in At the end of FY 2012, public debt is expected to be up to 48.7% of GDP (compared to 42.2% of GDP at the end of FY 2011), mainly due to 1) An increase in budget deficit of 300 billion Baht, 2) Debts following 2 executive decrees to seek loans amounting to 350 billion baht for water management programmes and flood restoration and rehabilitation and 50 billion baht to set up fund to offer flood insurance for domestic investors. Subsequently, on this basis, public debt could be up to 53.8% by FY 2016 which is still below the limit of 60% of GDP, according to the fiscal sustainability framework. 70% 60% 50% 40% 30% 20% 10% 0% Debt / GDP Fiscal sustainability framework End of period (Fiscal Year) Public debt / GDP (%) Source: Ministry of Finance 31