KASIKORNBANK For further information, please contact Investor Relations Unit or visit our website at www.kasikornbankgroup.com or www.kasikornbank.com
1
Operating Environment: Economic Outlook for 2016Key GDP Forecasts and Assumptions
2.8 | 2.5-3.5 | |
0.9 | ||
2014 | 2015 | 2016F |
Key Points:
% YoY
6.0
3.0
0.0
Government expenditure and tourism receipts remain key economic drivers, while household spending may see a limited rebound
However, heightened global economic uncertainties will pose risk on exports
% YoY
2014
2015
2016F*
(Previous)
2016F* (New)
Base Case
Range
Base Case
GDP
0.9
2.8
3.0
2.5-3.5
3.0
Private Consumption
0.6
2.1
1.9
1.7-2.5
2.1
Government Consumption
2.1
2.2
3.0
2.9-3.7
3.3
Total Investment
-2.6
4.7
4.3
3.5-5.1
4.3
Gov't Budget Deficit (% of GDP)
-2.9
-2.9
-2.9
-3.2 to -2.6
-2.9
Exports (Customs Basis)
-0.4
-5.8
0.0
-3.0 to -1.0
-2.0
Imports (Customs Basis)
-9.0
-11.0
-4.5
-8.0 to -5.0
-6.6
Current Account (USD bn)
15.4
31.6
43.9
36.0-42.0
39.1
Headline Inflation
1.9
-0.9
0.4
0.3-0.9
0.6
Policy Interest Rate**
2.00
1.50
1.25
1.50
Given government stimulus efforts as well as visible progress on some large investment projects, Thai GDP growth forecast is maintained at 3.0% (Base Case)
Notes: The current MPC's policy rate is at 1.50%
Source: * KResearch (as of June 29, 2016 vs forecast in April 2016)
** KBank Capital Markets Research (as of May 20, 2016)
Risk Factors:
Chinese economic uncertainty
Slow recovery in commodity prices
Volatile funds flows
Geopolitical tension
Spillovers from BREXIT
2
Currency and Interest Rate OutlookUSD/THB: End Period Interest Rate Trend
Bt
38
3632.91
35.97
35.50
4.00
% p.a.
2.00
2.00
3.25
2.75 2.25
2.00 1.50 1.50
34
3230.15
31.54 30.60 32.68
0.00
0-0.25 0-0.25 0-0.25 0-0.25 0-0.25
0.25-0.50 0.25-0.50
30
4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16F
USD/THB
Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16F
Fed Funds rate BOT's 1-Day Repurchase rate
The Fed is expected to refrain from lifting the Fed funds rate further this year as a result of uncertainties arising from the BREXIT vote. We expect the Fed funds rate to remain between 0.25-0.50% in 2016
No further rate hike in 2016 should support the Thai baht in the near-term. We expect USD/THB to hover around 35.50 for year-end 2016
The Fed should be able to resume policy rate normalization in 2017, after uncertainties including the U.S. Presidential election pass. This would allow the dollar to more significantly regain strong momentum next year, following the rising U.S. interest rate outlook
Domestic growth has shown positive development in recent months, driven by good performance in the tourism sector and continued public spending and investment
The passing of the referendum to accept the new constitution provided a sense of certainty regarding a general election in 2017. This supports policy continuity and reduces pressure for more easing by the BOT
The BOT is expected to maintain the policy rate at 1.50% for the rest of 2016. Fiscal policy should take the front seat in driving growth while the BOT focuses on maintaining financial stability
Note: F is estimated by KBank Capital Markets Research (as of Aug 10, 2016)
3
Monthly Economic Conditions: July - August 2016Units: % over-year, otherwise indicated
2015
2015
2016
4Q
1Q
2Q
May
Jun
Jul
Aug
YTD.
Private Consumption Index (PCI)
1.5
3.2
2.2
4.1
5.2
3.4
2.4
3.1
Non-durables Index
3.5
3.8
3.2
2.7
3.6
0.7
0.7
2.6
Durables Index
-6.7
-2.0
-8.5
4.3
7.8
6.9
3.8
-1.6
Service Index
6.8
4.4
7.8
7.1
7.7
7.1
7.2
7.4
Passenger Car Sales
-19.1
-11.7
-26.6
4.9
8.3
19.6
9.6
-9.2
Motorcycle Sales
-3.7
-3.7
-9.0
6.4
14.3
6.9
12.2
-0.2
Private Investment Index (PII)
0.8
1.6
1.1
0.9
1.3
0.9
0.8
0.9
Domestic Sales Volume of Cement
-0.8
-0.8
0.9
-0.1
0.0
-2.7
-3.8
-0.1
Domestic Machinery Sales at constant prices
9.2
3.0
8.0
7.4
1.7
7.6
6.3
7.5
Imports of Capital Goods at constant prices
-0.8
3.2
1.3
-3.4
-0.6
-4.8
-3.0
-1.4
Commercial Car Sales
-2.3
17.2
4.0
12.0
21.2
4.0
-6.1
5.7
Manufacturing Production Index
0.3
0.3
-0.9
1.7
2.7
1.4
-5.1
-0.5
Capacity Utilization
65.8
64.6
68.8
64.6
67.5
66.7
62.3
66.1
Agriculture Production Index
-4.3
-0.1
-6.0
-1.6
-0.3
-2.4
2.3
-3.4
Agriculture Price Index
-5.9
-6.2
-5.3
5.0
6.4
3.9
16.2
2.0
No. of Tourists
20.4
3.7
15.5
8.2
7.6
7.2
10.8
11.9
Exports (In terms of U
Imports (In terms of U
S Dollars)
Price Volume
S Dollars)
Price Volume
-5.6
-7.9
-1.4
-3.1
-3.7
1.9
-4.5
-2.6
-2.3
-2.7
-2.4
-0.8
-0.6
-0.4
0.3
-1.4
-3.4
-5.4
1.1
-2.3
-3.1
2.3
-4.8
-1.2
-11.3
-13.2
-14.4
-7.8
-0.2
-9.3
-8.6
-10.8
-10.8
-11.0
-7.7
-5.0
-5.0
-4.3
-3.4
-5.9
-0.6
-2.4
-7.3
-3.0
5.1
-5.3
-5.3
-5.2
Trade Balance (USD millions)
34,565
9,626
13,301
9,747
3,506
3,791
3,195
26,243
Current Account (USD millions)
31,958
10,550
16,576
8,375
2,234
2,978
3,667
28,618
Headline CPI
-0.9
-0.9
-0.5
0.3
0.46
0.38
0.10
0.29
-0.02
Core CPI
1.1
0.84
0.67
0.8
0.78
0.80
0.76
0.79
0.74
Key figures in July 16 suggest Thai economic growth was rather tepid
Private consumption grew at a lower rate, dragged down by a decline in durable items after pent-up demand dissipated
Exports contracted due to weak demand from ASEAN and China
Current account surplus remains solid amid a considerable decline in imports
August 2016 headline inflation picked up due to low base effect
Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), University of the Thai Chamber of Commerce (UTCC), Office of Industrial Economics (OIE), and Office of Agricultural Economics (OAE)
4
Economic Condition Highlights: July - August 2016Aug16 BSI declined due to concern over economic prospects
Jul16 Private consumption grew at a lower rate, led by a decline in car sales after pent-up demand dissipated
47.8
73.2
85 60
55
80
CCI
50
75 45
40
70
35
%YoY
20%
BSI
0%
-20%
2.4% 0.8%
-3.0% -3.0%
-6.9%
3.8%
65 30
Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
PCI PII Car Sales Construction Materials
Imports of Capital Goods
Consumer's Durable
Consumer Confidence Index (CCI) Business Sentiment Index (BSI)
1Q16 2Q16 Jun-16 Jul-16
Jul16 Foreign arrivals cooled during low season
Jul16 Exports declined amid lackluster global demand
35.00
30.00
Million Person
25.00
20.00
15.00
10.00
5.00
0.00
29.9
17.2% 18.9% 18.7%
24.8
-6.7%
20.5%
25%
11.9% 10.9% 20%
15%
19.5
10%
5%
0%
3.0
-5%
-10%
Export Value (USD Million)
25,000
20,000
15,000
10,000
5,000
0
19.2
22.4
26.5
Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
10%
% YoY
0%
-4.5%
-8.6-1%0%
-20%
2011 2012 2013 2014 2015 7M 2016 Jul-16
No of Foreign Tourist Arrival % Tourist Arrival YoY (RHS)
Exports Exports (excluding gold) % YoY for Exports % YoY for Exports exc Gold
Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), University of the Thai Chamber of Commerce (UTCC), and Office of Industrial Economics (OIE)
5
Economic Condition Highlights: July - August 2016400%
Activity in the property market decline in 2Q16 in absence of government stimulus
Jul16 MPI and CapU declined, partly due to a chemical plant shut-down
Y
o Y
%
5
%YoY of MPI
0
-5
-10
MPI (lhs) %Capacity Utilization (rhs)
-15
-5.1
75
65
62.3
55
45
35
%Capacity Utilization Rate
300%
200%
100%
0%
-100%
32%
-22%
-38%
1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16
Construction areas permitted in municipal zone
Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
Condominium Registration Nationwide New Housing registered in BKK and Vicinity
Aug16 Headline inflation picked up due to low base effect
Property prices picked up in 2Q16 due to new land price land appraisal
1.5
1.0
0.5
0.0
-0.5
5
4
3
+0.79% Yo2Y
1
0
-1
0.29% YoY-2
Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
20.0
%MoM
%YoY
% YoY
15.0
10.0
5.0
0.0
Headline CPI (MoM-lhs) Core CPI (MoM-lhs)
Headline CPI (YoY-rhs) Core CPI (YoY-rhs)
-5.0
14.4
4.7
4.0
Single House (With Land) Townhouse (With Land) Land
1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16
Sources: BOT, MOC, OIE, and REIC (Real Estate Information Center)
6
Exports and Imports: July 16Exports by Country
Imports by Country
Others 24.8%
ASEAN 25.0%
USA 5.7%
Others 20.0%
Japan 15.5%
Middle East 3.8%
Hong Kong 4.9%
Japan
9.2% USA
12.1%
EU 10.0%
China 10.3%
EU 9.3%
Middle East 7.8%
China 22.5%
ASEAN 19.2%
Top 10 Exports by Product (BOP Basis) Top 10 Imports by Product (BOP Basis)
Total Exports (BOP Basis) | July 16 | ||
USD Millions | Weight | %YoY | |
Exports, f.o.b. (BOP basis) | 17,277 | 100.0% | -4.6% |
Electronics | 2,503 | 14.5% | -3.8% |
Automotive | 2,367 | 13.7% | -17.4% |
Agro-manufacturing Products | 2,112 | 12.2% | -5.4% |
Machinery & Equipment | 1,520 | 8.8% | -6.7% |
Electrical Appliances | 1,023 | 5.9% | 0.4% |
Petro-chemical Products | 919 | 5.3% | -11.3% |
Metal & Steel | 827 | 4.8% | -2.9% |
Other Manufacturing products | 661 | 3.8% | -8.9% |
Apparels and Textile Materials | 550 | 3.2% | -13.3% |
Petroleum products | 503 | 2.9% | -40.3% |
Total Imports (BOP Basis) | July16 | ||
USD Millions | Weight | %YoY | |
Imports, f.o.b. (BOP basis) | 14,083 | 100.0% | -8.6% |
Machinery, equipment, and supplies | 3,324 | 23.6% | -4.8% |
Electronics parts and electrical appliances | 2,160 | 15.3% | -3.0% |
Fuel | 2,087 | 14.8% | -21.2% |
Materials of base metal | 1,435 | 10.2% | -9.0% |
Non-durables Consumer goods | 1,093 | 7.8% | 8.2% |
Chemicals | 971 | 6.9% | -9.0% |
Automotive | 813 | 5.8% | 13.2% |
Agricultural and agro-manufacturing products | 652 | 4.6% | -14.7% |
Plastics | 630 | 4.5% | 4.0% |
Non-monetary gold | 344 | 2.4% | -62.4% |
Source: Bank of Thailand (BOT), BOP Basis = Balance of Payment Basis
7
Exports and Imports: 7M16Exports by Country
Imports by Country
Middle East 4.4%
Hong Kong 5.2%
Others 23.8%
Japan
9.6% USA
11.3%
ASEAN 25.4%
EU 10.3%
China 10.1%
USA 6.2%
EU 9.2%
Middle East 7.2%
Others 20.2%
China 21.8%
Japan 16.1%
ASEAN 19.3%
Top 10 Exports by Product (BOP Basis) | |||
Total Exports (BOP Basis) | 7M16 | ||
USD Millions | Weight | %YoY | |
Exports, f.o.b. (BOP basis) | 120,563 | 100.0% | -2.6% |
Automotive | 18,547 | 15.4% | -0.9% |
Electronics | 17,095 | 14.2% | -6.2% |
Agro-manufacturing Products | 14,856 | 12.3% | -1.1% |
Machinery & Equipment | 10,752 | 8.9% | -5.1% |
Electrical Appliances | 7,408 | 6.1% | 1.2% |
Petro-chemical Products | 6,394 | 5.3% | -7.5% |
Metal & Steel | 5,123 | 4.2% | -5.9% |
Other Manufacturing products | 4,928 | 4.1% | 0.3% |
Jewellery | 4,026 | 3.3% | -2.5% |
Apparels and Textile Materials | 3,819 | 3.2% | -7.4% |
Top 10 Imports by Product (BOP Basis)
Total Imports (BOP Basis) | 7M16 | ||
USD Millions | Weight | %YoY | |
Imports, f.o.b. (BOP basis) | 94,321 | 100.0% | -10.8% |
Machinery, equipment, and supplies | 23,808 | 25.2% | -1.7% |
Electronics parts and electrical appliances | 14,100 | 14.9% | -7.3% |
Fuel | 12,810 | 13.6% | -32.8% |
Materials of base metal | 9,349 | 9.9% | -9.2% |
Non-durables Consumer goods | 7,639 | 8.1% | 3.1% |
Chemicals | 6,271 | 6.6% | -12.8% |
Automotive | 5,787 | 6.1% | 7.3% |
Agricultural and agro-manufacturing products | 5,051 | 5.4% | -9.2% |
Plastics | 4,194 | 4.4% | -3.0% |
Non-monetary gold | 2,467 | 2.6% | -39.0% |
Source: Bank of Thailand (BOT), BOP Basis = Balance of Payment Basis
8
Kasikornbank pcl published this content on 13 September 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 14 September 2016 11:00:04 UTC.
Original documenthttp://www.kasikornbank.com/EN/Investors/PresentationJournal/PresentationsWebCast/Monthly Econ Info_Aug 16.pdf
Public permalinkhttp://www.publicnow.com/view/9E3954BC6DCD7FC575E5171993368E1B716EAC57
