bank of thailand - this monetary policy report …...sentral ng pilipinasand and bank indonesia,...

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This Monetary Policy Report contains the information available as of September 18, 2018,the day before the sixth Monetary Policy Committee meeting this year

Key developments and outlook

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• The Thai economy is projected to gain traction, driven by both domestic and external demand

• Risks to growth tilt downward and there remain uncertainties regarding U.S. protectionism measures that could be additionally announced together with retaliatory measures

• Headline and core inflation are projected to rise gradually

• Risks to inflation tilt downward as (1) fresh food prices could fluctuate sharply depending on weather conditions and available supply and (2) structural changes could contribute to inflation rising only gradually

2017* 2018 2019

GDP growth 3.9 4.4 4.2

(4.4) (4.2)

Headline inflation 0.7 1.1 1.1

(1.1) (1.2)

Core inflation 0.6 0.7 0.8

(0.7) (0.9)

* Outturn, ( ) Monetary Policy Report, June 2018

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• The U.S. economy is expected to continue expanding following robust economic fundamentals.

• The euro area economies are expected to achieve slower growth than previously assessed mainly owing to private consumption which is partly resulted from political issues in the euro area countries.

• Japan’s economic growth is expected to slow down in 2019 due to the impact of trade protectionism.

• Chinese and Asian economies are projected to exhibit a slightly slower pace from intensifying trade protectionism and tightening financial conditions in some countries such as Philippines and Indonesia.

• Risks to the global economy tilt downward in line with the previous assessment. Although some effects of the 200 billion dollar worth of tariff that the U.S. imposed on China’s exports are included in the baseline projections, there remain possibilities that trade protectionism could be intensified.

• The monetary policy stance of Fed remains unchanged from the previous assessment. The number of rate hikes is expected to be four in 2018 and three in 2019. In addition, Fed will gradually commence its balance sheet reduction according to its announced plan.

• Most central banks maintain accommodative monetary policy stance, while some central banks in the region, such as the Bangko Sentral ng Pilipinasand and Bank Indonesia, raise their policy rates.

Foreign monetary policy

Trading partner economies are expected to record slightly slower-than-expected growth in 2019 due mainly to trade protectionism

-5

0

5

10

15

46

48

50

52

54

56

2011 2012 2013 2014 2015 2016 2017 2018

Global PMI new export orders (Adv. 3m)World trade volumes (RHS)Asia export volumes* (RHS)

%yoy, 3mmaDiffusion: Unchanged = 50

Note: *Asia exports include Hong Kong, Korea, Malaysia, Taiwan, and SingaporeSource: JPM, CPB

Asian exports are expected toslightly slow down going forward

Dubai oil prices are slightly revised up throughout the forecast horizon

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• Dubai oil prices are slightly revised up throughout the forecast horizon as oil supply is expected to decline more than expected given U.S. sanctions against Iran and economic problems in Venezuela.

• Risks to oil price projection are balanced.

Upside risks include geopolitical risks that could be more intensified and impacts from U.S. sanctions against Iran that could be greater than expected.

Downside risks include higher-than-expected oil supply from U.S. shale oil producers and trade protectionism that could negatively affect global trade volume and global economic growth more than expected.

Dubai oil price assumption

2030405060708090

2015 2016 2017 2018 2019 2020

Sep-18

Jun-18

+0.75 S.D.

–0.75 S.D.

USD/Barrel

USD/barrel 2017* 2018 2019

As of Sep 1853.1

70.3 69.8

As of Jun 18 69.2 68.3

* Outturn

Value of merchandise exports for this year remains unchanged from previous projection; next year’s exports would slow down more

than previously assessed due to trade protectionism

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• Value of merchandise exports for 2018 remains largely unchanged from previous projection, but is expected to slow down next year than previously assessed given trade protectionism that could be intensified in 2019

• However, exports benefit from the relocation of production base to Thailand for some products especially hard disk drives

Merchandise export value projection

% YoY 2017* 2018 2019

As of Sep 189.8

9.0 4.3

As of Jun 18 9.0 5.0

Thailand’s merchandise export value (by product)

020406080

100120140160

2013 2014 2015 2016 2017 2018

Agricultural products (12.3%)Electrical appliances (5.6%)Automative parts (6.5%)Petroluem-related products (11.5%)Electronics excl. HDD (9.0%)

Jul 18

Note: ( ) indicates share of total exports in 2016Source: Thai Customs Department, calculated by BOT

* Outturn

Index, 3mm sa (Jan 13 = 100)

050

100150200250300350

2014 2015 2016 2017 2018

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• Number of foreign tourists in 2018 is broadly in line with the previous assessment: higher-than-expected outturn in the second quarter offsets a drop in number of Chinese tourists during 18H2

• The projected number of foreign tourists for 2019 is revised up given (1) increased tourist confidence, (2) new flight routes from ASEAN to Thailand, (3) increased management efficiency of airlines and airports

Europe ex Russia (15%)

China (28%)

Malaysia (10%)

Russia (4%)

Total

Tourism continues to gain traction on the back oflower-than-expected impact of Phuket tour boat sinking incident

Jul 18

Projected number of foreign tourists to Thailand

Million 2017* 2018 2019

As of Sep 1835.4

38.3 40.6

As of Jun 18 38.3 40.0

Number of foreign tourists by nationality


Note: ( ) indicates share of tourists in 2017Source: Department of Tourism

* Outturn

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• Improvements in household income are observed.

– Medium- and high-income households in non-agricultural sectors experience steady income growth. Low-income households also experience income growth supported by improvements in employment in most sectors.

– Farm income expands on the back of higher agricultural production and agricultural prices.

• Additional supporting factors are from government policies such as the second welfare card project (first and second phases), the community enterprise development project, and the agricultural reform project.

• However, structural factors still weigh on private consumption growth going forward.

o Elevated household debt

o Structural changes in the labor market such as adoption of automation in place of human labor in the production process

Private consumption is projected to record stronger growth than previous assessment due to improvements in household income

99.9

108.3

707580859095

100105110115

2014 2015 2016 2017 2018

Farm income Total non-farm income


Farm income and nonfarm income index

Jul 18

Sources: Office of Agricultural Economics, National Statistical Office, and Ministry of Commerce; calculated by BOT

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• Private investment growth in 2018 remains largely unchanged with the previous assessment, with slight improvement in 2019. This is attributed to better-than-expected private consumption together with capital outlays following production relocation to Thailand of some export-oriented industries during late 2018 and 2019.

• Moreover, private investment growth is also supported from public infrastructure investment, continual investment plans under the Eastern Economic Corridor (EEC) initiative and public-private partnership (PPP), and joint investment by various groups in the private sector in the bidding for mass rapid transit projects and high-speed trains connecting the three airports.

Private investment is projected torecord stronger growth in the period ahead

Private investment indexIndex, 3mm sa (2010 = 100)

Source: Bank of Thailand

120

125

130

135

140

145

2557 2558 2559 2560 2561

Jul 18

9 / 26

• Government consumption grows at a slower pace following compensation of civil servants, especially salary and medical expenditure given the policy to replace vacant job positions with contract workers.

• Public investment decreases from the previous projection for both the central government and state-owned enterprises.oFor the central government, investment is

revised down due to lower efficiency in budget disbursement by some government units, following construction problems such as land reclamation issues and some remaining impacts of the Public Procurement and Supplies Management Act.

oFor state-owned enterprises, some investment projects face operational difficulties such as the SRT light red line (Bang Sue-Phaya Thai-Makkasan-Hua Mak), the SRT dark red line (Bang Sue-Hua Lam Pong), and the suburban railway (Bang Sue-Rangsit) which could be delayed given project revisions.

Public spending is projected to be lower than expected

Billion baht 2017* 2018 2019

Government consumption2,532

2,656 2,786

(2,669) (2,819)

Public investment926

992 1,082

(1,028) (1,115)

Public spending projection at current prices (calendar year)

* Outturn, ( ) Monetary Policy Report June 2018

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Thailand’s economy is projected to grow in line with the previous assessment

(%YoY) 2017*2018 2019

Jun 18 Sep 18 Jun 18 Sep 18

GDP growth 3.9 4.4 4.4 4.2 4.2

- Private consumption 3.2 3.7 4.2 3.6 3.7- Private investment 1.7 3.7 3.7 4.4 4.5- Government consumption 0.5 2.7 2.3 2.9 2.2- Public investment -1.2 8.9 6.1 6.5 7.7- Exports of goods and services 5.5 5.5 5.5 3.8 4.1- Imports of goods and services 6.8 6.3 7.5 3.8 3.3Current account balance (billion USD) 51.1 40.0 35.4 36.0 36.3- Value of merchandise exports 9.8 9.0 9.0 5.0 4.3- Value of merchandise imports 13.2 14.7 16.9 6.9 5.6- Number of tourists (million) 35.4 38.3 38.3 40.0 40.6

Note: * Outturn

Uncertainties regarding U.S. trade protectionism measures and retaliatory measures by its trading partners despite the baseline projection already taking into account some impact of the 200 billion dollar worth of tariff that the U.S. imposed on China’s exports

Geopolitical risks and economic problems in emerging markets

Lower-than-expected growth in private consumption as domestic purchasing power has yet to see broad-based improvements

Lower-than-expected growth in public expenditure due to the impacts from the Public Procurement Act and the revision of investment project approvals on transportation projects

Better-than-expected economic growth of trading partners due to U.S. tax reform and a softer-than-expected slowdown of the Chinese economy

A higher-than-expected domestic spending due to government infrastructure investment projects, public-private partnership (PPP), as well as government measures aimed at supporting private spending which might be additionally announced going forward

Greater-than-expected number of Chinese tourists following the recovery after the Phuket boat incident

Downside risks

Upside risks

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Risks to growth projection remain tilting downward, albeit to a lesser extent compared with the previous projection, thanks to the upside risks

regarding government measures aimed at supporting private spending that could be more than expected

GDP growth forecast

Note: Fan chart covers 90% of the probability distribution

-2

0

2

4

6

8

10

-2

0

2

4

6

8

10

2015 2016 2017 2018 2019 2020

% YoY

Inflation outlook is in line with previous assessment

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• In recent periods, headline inflation trended up due mainly to energy prices while core inflation slightly slowed down.

• Going forward, inflation is expected to rise in line with the previous assessment. Lower-than-expected core inflation and price increases in fresh food items are expected to be compensated by higher energy prices in tandem with global crude oil prices.

• Structural factors causing a gradual rise in inflation still remain. Such factors include improvement in production technology that results in lower costs of goods and services, intensified price competition among businesses resulting in difficulties in raising prices, as well as structural changes in the labor market.

%YoY 2017* 2018 2019

Headline inflation0.7

1.1 1.1

(1.1) (1.2)

Core inflation0.6

0.7 0.8

(0.7) (0.9)

Inflation projection

Contribution to headline inflation%YoY

Aug 18

-3-2-10123

2014 2015 2016 2017 2018Raw food price (15.69%) Energy price (11.75%)Core inflation (72.56%) Headline inflation

Source: Ministry of Commerce, calculated by Bank of Thailand, ( ) denotes share in headline inflation basket


Headline inflation forecast Core inflation forecast

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Risks to inflation projection tilt downwarddue to risks to economic growth and volatilities in fresh food prices

Note: Fan chart covers 90% of the probability distribution

-3-2-1012345

-3-2-1012345

2015 2016 2017 2018 2019 2020

Headline inflation target 2.5 1.5%

% YoY

-1

0

1

2

3

-1

0

1

2

3

2015 2016 2017 2018 2019 2020

% YoY

2017* 2018 2019

GDP growth 3.9 4.4 4.2

(4.4) (4.2)

Headline inflation 0.7 1.1 1.1

(1.1) (1.2)

Core inflation 0.6 0.7 0.8

(0.7) (0.9)

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Forecast summary


Key considerations in formulating monetary policy

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Sustainable Economic Growth

The Thai economy is projected to continue to gain traction, driven by both domestic and external demand. Private consumption would continue to achieve higher growth supported by improvements in income and employment in most sectors. Public expenditure would grow at a lower rate than previously assessed due to constrained budget disbursement, as well as reviews and changes in investment plans. Private investment is expected to grow. Merchandise exports and tourism would continue to expand although merchandise exports is expected to somewhat slow down due to the impact of trade protectionism measures between the U.S. and China.

Price Stability

Headline and core inflation are projected to increase broadly in line with the previous assessment. However, downside risks remain as fresh food prices could fluctuate sharply depending on weather conditions and agricultural output. Meanwhile, demand-pull inflationary pressures would gradually improve although structural changes might contribute to more persistent inflation than in the past despite full potential economic growth.

Financial Stability

Financial stability remains sound overall but there remain a need to monitor risks that could lead to the build-up of vulnerabilities in the financial system in the future, particularly competition in mortgage loan market which leads to looser credit standards, search-for-yield behavior in the prolonged low interest rate environment, and debt serviceability of households and SMEs which had yet to clearly improve.

Monetary policy decision and monetary policy outlook

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• The MPC voted 6 to 1 and later 5 to 2 to maintain the policy rate at 1.50 percent at the meetingson August 8 and September 19, 2018 respectively.

• Some voters voted to raise the policy rate by 0.25 percentage point to 1.75 percent.

Monetary policy decision

• Most Committee members voted to keep the policy rate unchanged due to the view that the current accommodative monetary policy stance remained necessary to support the continuation of robust economic growth and that financial stability risks remained manageable.

• Committee members who voted to raise the policy rate viewed that the economy was sufficiently robust and expanded above potential and that the policy rate has been in the down cycle since 2011 and remained at a low level for the longest period compared with past instances. Therefore, they viewed that a gradual reduction in accommodative monetary policy toward a normal level would not affect economic growth but would instead reduce financial stability risks.

The Monetary Policy Committee’s remark

• The Committee viewed that, should economic expansion continue and inflation move more firmly within the target, the need for currently extra accommodative monetary policy would start to be gradually reduced, and the need for a policy rate increase in order to build up policy space in the future would be increasing. The Committee’s evaluation of the appropriate conditions would be data dependent, including careful assessment of the outlook of economic growth and inflation, as well as risks especially on the external front.

Monetary policy direction in the period ahead

1.18

1.95

2.34

2.84

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul

1Mn 2Y 5Y 10Y%

New Loan Rate (NLR)*

New Loan Rate (NLR)* stabilizes at low levels, indicating accommodative financial conditions.

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2013 20172014 2015 2016 2018* The NLR is calculated from interest payments on loan contracts by 14 Thai

commercial banks excluding loans to households and financial intermediaries and is weighted by loan size. This covers loan in Thai baht exceeding 20 million baht in all types of loan, objectives, and term, as well as with and without collateral. In addition, interest rates on loan contracts are calculated from the median between the highest and lowest interest rate of each contract.

Financial conditions remain accommodativeand conducive to economic growth

Overall Thai government bond yields pick up especially medium-and long-term yields mainly due to Thai economic outturns which are better than market expectations and higher demand by foreign investors for some series of government bonds. However, the impact on financing costs for businesses is limited.

2013 20172014 2015 2016 2018

Thai government bond yields

18 Sep 18

Source: Bank of Thailand Source: ThaiBMA (as of 18 September, 2018)

7.086.28

4.13

2.751.50

0

2

4

6

8

Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul

MLR NLR Policy rate% p.a.Jul 18

Credit growth in the commercial bank system*Growth in business financing outstanding

classified by source*

Overall business financing continues to expand in line with domestic demand growth. Business credit growth continues to accelerate while the growth in corporate bonds issuance remains largely unchanged.

Business financing continues to expand through various channels

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Private credit growth accelerates in both corporate and household credits. Particularly, SME and large corporate loan growth improve across various sectors, reflecting a more broad-based economic recovery.

6.55.55.9

0

2

4

6

8

10

Jan 2015

Jul Jan 2016

Jul Jan 2017

Jul Jan 2018

Jul

Business loanHousehold loanPrivate loan

10.6

6.57.6

0

10

20

30

40

Jan-13 Jan-14 Jan Jan-16 Jan-17 Jan-18

Outstanding of corporate debt**Business creditTotal financing

%YoY

Note: * Business credit covers lending activities of Other Depository Corporations (ODCs) including commercial banks, special financial institutions, cooperatives and money market mutual funds

** In August businesses in telecommunication and energy sectors did not roll over the matured bondsRemark: Data of ODC’s business and household loans since January 2016 is revised due to changes in the data processing system for more accuracy.

Sources: ThaiBMA and Bank of Thailand

Jul 18

Jul 18

%YoY

303132333435363785

9095

100105110115120

Jan Jul Jan Jul Jan Jul Jan Jul

The baht against the U.S. dollar and the nominal effective exchange rate appreciate

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The Nominal Effective Exchange Rate (NEER) and the RealEffective Exchange Rate (REER) appreciate following the baht’s appreciation relative to most trading partner currencies, especially the Chinese yuan, regional currencies, and emerging market currencies which depreciate during the period of the EM sell-off.

The Thai baht depreciates against the U.S. dollar mainly due to the Thai economic outturns which are better than market expectations. Foreign investors switch back to invest in emerging markets (EM), in particular, in countries with sound external stability.

2015 2016 2017 2018

USDTHB (RHS)

DXY

NEERAppreciation

Negative value indicates depreciation

(18 September 2018 compared with 30 June 18)

REER

Note: (1) DXY is currency index of USD relative to EUR JPY GBP CAD SEK CHF (2) REER data are available as monthly averages. (Data as of August 2018)

Baht per U.S. dollarIndex

Source: Bank of Thailand, Bloomberg, and Reuters (data as of September 18, 2018) Source: Bank of Thailand and Reuters (data as of September 18, 2018)

Thai baht vis-a-vis U.S. dollar (USDTHB), Nominal Effective Exchange Rate (NEER), and the Dollar Index (DXY) Currency changes against U.S. dollar

-7%-6%-5%-4%-3%-2%-1%0%1%2%3%

INR

CNY

IDR

MYR

AUD

PHP

TWD

JPY

KRW

SGD

GBP

EUR

THB

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External stability indicators

External stability remains strong thanks to sustained current account surplus and external debt to GDP ratio that is below the international benchmark.


International reserve remains high with the ratio of reserve to short-term debt stands at 3.5.

Thailand’s external stability remains strong and provides cushion against volatilities of both domestic and global financial markets

International reserve to short-term debt ratio

Time Billion US Dollar


Criteria 2017P

2018P

H1 Jun JulE

Solvency Indicators

Current account / GDP (%) > -2 11.2 8.4

Debt / GDP (%) < 80 35.3 33.4

Liquidity Indicators

Gross reserves / ST debt > 1 time 3.2 3.4 3.4 3.5

Gross reserves / Imports1/ > 3 times 9.8 9.3 9.3 9.1

ST debt / Total debt (%) 42.1 41.2 41.2 40.7

Note: 1/ XGS – Export of goods and services (3-year average)P=Preliminary data E=Estimated data

3.5

0

50

100

150

200

250

0

1

2

3

4

5

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2017

Q120

17Q2

2017

Q320

17Q4

2018

Q120

18Q2

Jul-1

8

Reserve (RHS)Reserve to short-term debt

Ratio of number of newly approved housing loans account with high Loan-to-value (LTV) or high Loan-to-income (LTI)

Financial stability remains sound, but there exist pockets of risks that warrant monitoring, including saving cooperatives and the property sector which becomes more vulnerable following mortgage competition

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Household debt serviceability, especially for housing loan, has been deteriorating whereas improvement is observed for other loans.

Financial institutions are competing in extending mortgage loans and become willing to bear higher risks. This is reflected by a rising number of accounts with LTV exceeding 90% and accounts with high LTI.


2.7 3.4

1.5 2.4 2.5

0

1

2

3

4

5

6

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2014 2015 2016 2017 2018

Total Housing

Auto Credit card

Personal loans

%

Ratio of non-performing loans (NPL) in consumer loans, classified by type

49

30

0

10

20

30

40

50

60

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2014 2015 2016 2017 2018

Percentage of total number of accounts

Loan-to-value (LTV) > 90%Loan-to-income (LTI) > 5 times

80.877.6

60

65

70

75

80

85

90

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2013 2014 2015 2016 2017 2018

%

Household debt to GDP ratioHousehold debt to financial assets,

classified by income group

Source: Socio-Economic Survey (SES), National Statistical Office

0

5

10

15

20

2013

2015

2017

2013

2015

2017

2013

2015

2017

2013

2015

2017

2013

2015

2017

Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

percentile 25 percentile 50 percentile 75

Time

Household debt level remains high while debt serviceability of low-income household continues to deteriorate

Lowest income Highest income

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Household debt remains high while the ratio of household debt to GDP has gradually declined

Vulnerability in household balance sheets increase especially low-income households

Source: Bank of Thailand and Office of the National Economic and Social Development Board

Search-for-yield behavior under prolonged low interest rate environment warrants monitoring

0

10

20

30

40

50

Q1/0

9

Q3/0

9

Q1/1

0

Q3/1

0

Q1/1

1

Q3/1

1

Q1/1

2

Q3/1

2

Q1/1

3

Q3/1

3

Q1/1

4

Q3/1

4

Q1/1

5

Q3/1

5

Q1/1

6

Q3/1

6

Q1/1

7

Q3/1

7

Q1/1

8

Ratio of debt securities to depositsRatio of equity securities to depositsRatio of assets in savings cooperatives to depositsRatio of mutual funds to deposits

Source: BOT, TFIIC and SEC

Ratio of various types of household assets to deposits in financial institutions (excludes savings cooperatives) Ratio of net asset value in mutual funds, classified by type

Source: SEC

Top 1043%

Top 11-205%

Others52%

Source: (1) The Thailand Securities Depository Co., Ltd. (2) Custodians(3) Securities Brokers and (4) BOTSource: Cooperative Auditing Department, calculations by BOT

0

5

10

15

Dec 14 Dec 15 Dec 16 Dec 17 Jun 18Loans to other cooperatives Securities Other Than Shares

Shares and Other Equity Currency and Deposits

Loans to members Total Assets (%YoY growth)Note: Savings cooperatives were subjected to tighter regulation by government since H2/2017

23 / 26

Household assets have become more concentrated in mutual funds and savings cooperatives. Mutual funds are investing more in risky asset classes.

Outstanding of private debt securities (as of June 2018)

The issuance of debt securities is concentrated in large corporates, which tend to invest in non-core businesses and overseas enterprises.

Contribution to growth of savings cooperatives’ assets, classified by type

Saving cooperatives are more inclined to search for yield behavior, especially in debt securities and loans to other cooperatives.

%

% YoY

The Committee views that there remain key issues that continue to warrant monitoring

• Trade protectionism between the U.S. and major economies that could further intensify and affect global economy and Thai exports

• The impact of trade protectionism and trade diversion on businesses and Thai labors

• Geopolitical risks that could affect financial and commodity markets, especially oil prices

• Strength of domestic demand• Progress of private and public investment projects in

the period ahead• Some delays in budget disbursement after the

enforcement of the Public Procurement and Supplies Management Act

• Changes in inflation dynamic due to structural factors

Financial markets• Tightening financial conditions following Fed’s rate

hikes although ECB and BOJ would remain accommodative monetary policy stance for some period

• Concerns over trade protectionism and risks of emerging markets that could affect exchange rates and capital flows in the period ahead

24 / 26

Global economy Thai economy

Thai financial stabilities• Financial institutions compete in extending mortgage

loans and become more willing to bear higher risks• Elevated household debt which has yet to show

clear signs of deleveraging and debt serviceability among some households and small enterprises which continues to deteriorate

• Search for yield and underpricing of risks in the prolonged low interest rate environment

Forecast assumptions

25 / 26

Attachment

%YoY 2017*2018 2019


Dubai oil price (USD per barrel) 53.1 69.2 70.3 68.3 69.8

Farm income (% YoY) 1.5 2.8 2.9 2.1 2.3

Public expenditure (calendar year)

- Government consumption (billion Baht)** 2,532 2,669 2,656 2,819 2,786

- Public investment (billion Baht)** 926 1,028 992 1,115 1,082

Fed funds rate (% year end) 1.375 2.375 2.375 3.125 3.125

Trading partners’ GDP growth (% YoY) 3.9 3.8 3.8 3.6 3.5

Regional currencies per USD (excl. RMB)*** 155.7 149.9 153.2 149.1 153.8

Note: * Outturn** Includes spending in Infrastructure Investment plans*** Higher value indicates currency depreciation against the USD

Assumption on trading partners’ GDP growth

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Attachment

% YoY Weight 2017*2018 2019


United States 14.9 2.2 2.7 2.8 2.3 2.3

Euro Area 10.0 2.5 2.2 2.1 2.0 1.8

Japan 13.6 1.7 1.2 1.2 1.0 1.0

China 15.7 6.9 6.6 6.6 6.3 6.2

Asia** 37.4 4.6 4.4 4.3 4.2 4.1

Total*** 100 3.9 3.8 3.8 3.6 3.5

Note: * Outturn** Weighted by shares of Thailand’s major trading partners in 2014 (7 Asian countries including Singapore

(6.5%), Hong Kong (7.9%), Malaysia (8.0%), Taiwan (2.5%), Indonesia (5.9%), South Korea (2.8%), and Philippines (3.7%))

*** Weighted by shares of Thailand’s major trading partners in 2014 (13 countries).

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