Economy improves slightly but overall recovery remains slow

BOT spokesperson Chayawadee Chaianant said contributing factors include increasing foreign arrivals and direct foreign investment, while the value of exports, excluding gold, also rose after contracting the previous month.

“Foreign arrivals in January totalled 3.04 million people, increasing 1.5% from the previous month, thanks to the government’s visa-free policy,” she said. “Meanwhile, the average spending of foreign tourists also increased by 17.1% over December. partly due to the (New Year) festival.”

While manufacturing contracted at a lower rate year-on-year, production in several industries remained sluggish, she said, adding that this can be put down to the subdued recovery in global demand, high levels of inventory as well as structural factors, which suppressed production.

In terms of domestic demand, private investment gradually improved, and private consumption and activities in the service sector continued to expand thanks to the rise in tourism revenue and the government’s Easy E-Receipt scheme, which offers tax rebates of up to 50,000 baht.

Government spending, however, contracted due to lower expenditures of the central government.

On the economic stability front, headline inflation decreased in all major categories, especially fresh food prices, following lower prices for fruits and vegetables as a result of higher output. Energy prices also decreased due to the high base rate last year.

In addition, core inflation slightly decreased from the high base effect of prepared food last year. The labour market, however, deteriorated, with lower employment in the manufacturing sector, especially in export-driven industries, and in some service sectors. The current account registered a deficit as the trade balance deteriorated despite showing a surplus in the areas of services, income, and transfers.