Thai service sector and exports are bouncing back: Central bank

The Bank’s latest report indicates that the service sector continues to rebound, driven by the increasing number of foreign tourists and the rise in the export value of various products, excluding gold, in several categories.

In terms of production, the report notes that the industrial sector has stabilised, although private consumption and private sector investments have slowed down after an earlier acceleration. State spending has contracted, both in central government expenditures and state enterprise investments, and investors are awaiting clarity on the government's economic stimulus policies.

Regarding price stability, the general inflation rate has decreased across all major categories. Fresh food prices, especially for vegetables, fruits, and meat products, have declined and energy prices have decreased due to government measures to reduce electricity and diesel prices.

The core inflation rate has slightly decreased, primarily due to lower prices of processed foods, and the labour market continues to show signs of improvement. The current account surplus has shifted from trade surplus to deficit, with increasing imports being a significant factor.

The Bank also reported that the production of vehicles has declined, particularly in the production of pickup trucks, which had previously accelerated. Financial institutions remain cautious in extending credit, and there has been a temporary shutdown in the petrochemical industry for maintenance.

The exchange rate of the Thai baht against the US dollar has weakened on average due to market expectations of a prolonged high-interest rate environment in the United States. The weakening Chinese economy has also contributed to the volatility.