Press Release on the Economic and Monetary Conditions for February 2025
Summary
- The Thai economic activities softened in February, both in the service and manufacturing sectors.
- The tourism sector slowed down mainly due to lower Chinese tourist arrivals as many had traveled in the previous month for the Chinese New Year festival, together with safety concerns being a suppressive factor, while the number of tourists from other nationalities increased.
- Automotive production slightly improved but remained at a low level, while the construction sector continued to slow down.
- Production and exports of electronic products increased in line with the recovery of the electronics cycle, but future risks from U.S. trade policies warranted a close monitoring.
- The overall labor market improved, but the rising ratio of unemployment claims to total insured persons warranted a close monitoring.
The Thai economic activities in February softened from the previous month, specifically the service sector related to tourism as the number and revenue of foreign tourists decreased. Additionally, manufacturing production declined, particularly in the chemical and petroleum sectors, together with a slowdown in private investment after a good expansion in the previous period. However, exports increased in several categories, especially in automotive, electronics, and precious metals. Private consumption also improved, while government spending continued to expand from both current and capital expenditures by the central government.
On the economic stability front, headline inflation slightly decreased from the previous month, mainly due to lower energy inflation, driven by the high base effect and declining gasoline prices. Meanwhile, core inflation increased, following higher prices of prepared food, food ingredients, and public transportation fares. The current account registered a larger surplus mainly from improvement in the trade balance, despite lower surpluses from services, income, and transfers, due to lower tourism revenue. The labor market overall improved slightly compared to the previous month.
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