Thai economy contracts 6.4% in third quarter
BANGKOK — The economy shrank 6.4 percent in the third quarter, the National Economic and Social Development Council (NESDC) said on Monday.
The gross domestic product in the third quarter however was an improvement from the 12.1 percent contraction in the second quarter, as a result of improvements in total exports of goods and services, private investment, and private final consumption expenditure. Meanwhile, the government’s final consumption expenditure, and public investment both expanded continually, the NESDC, the state-owned think-tank, said.
Agricultural production fell by 0.9 percent, due mainly to the decline in main crops including paddy, rubber and oil palm. The non-agricultural sector declined by 6.8 percent, improving from a fall of 12.9 percent in the second quarter, as the government has eased measures to prevent and control the spread of Covid-19. Furthermore, economic stimulus measures also supported the recovery of manufacturing and service sectors, which fell by 5.3 percent and 7.3 percent, respectively, improving from falls of 14.6 percent and 12.2 percent in the second quarter, the NESDC said. The recovered service sector included wholesale and retail trade, accommodation and food service activities, and transportation and storage. Moreover, construction, and information and communication expanded continually.
In terms of expenditure, private final consumption expenditure fell by 0.6 percent. Gross fixed capital formation, and exports and imports of goods and services contracted by 2.4 percent, 23.5 percent, and 20.3 percent, respectively. However, government final consumption expenditure expanded by 3.4 percent. After seasonal adjustment, the Thai economy in the third quarter expanded by 6.5 percent quarter on quarter.
Private final consumption expenditure fell by 0.6 percent, recovering from a fall of 6.8 percent in the second quarter. Non-durable and service items expanded by 2.7 percent, and 3.8 percent, respectively. However, durable and semi-durable items decreased by 19.3 percent, and 14.0 percent, respectively.
General government final consumption expenditure increasing by 3.4 percent, continued to expand from a rise of 1.3 percent in the second quarter. The expansion was mainly attributed to compensation of employees, with a 1.6 percent rise. Moreover, purchases of goods and services grew by 7.8 percent. In addition, social transfer in kind also expanded by 8.0 percent.
Gross fixed capital formation fell by 2.4 percent, compared to a fall of 8.0 percent in the second quarter. Private investment decreased by 10.7 percent, compared to a 15.0 percent reduction in the second quarter. Machinery items were a major contributing factor, with a reduction of 14.0 percent.
Meanwhile, construction expanded slightly by 0.3 percent. Public investment significantly expanded by 18.5 percent, increasing from a rise of 12.5 percent in the second quarter. The expansion resulted from an 18.4 percent expansion in public machinery items as well as an 18.6 percent increase in public construction, driven mainly by government construction.
Changes in inventories at current market prices in the third quarter decreased to the value of Bt120.6 billion. Reduction in stocks came mainly from rice, sugar, motor vehicles, preparation and spinning of textile fibers, and gold. Accumulation in stocks, meanwhile, included rubber, paddy, jewelry and related articles, computers and peripheral equipment, and refined petroleum products.
Goods and services balance at current market prices recorded a surplus of Bt257.2 billion, after a surplus of Bt397.5 billion in trade balance and a deficit of Bt140.3 billion in service balance.
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