Monthly economic update: Feb 2024
Executive summary
Global Economy
- In January 2024, global economic growth is stabilized with disinflation momentum being observed in most economies albeit still restrictive monetary policy. Central banks in major economies is managing the final descent of inflation to target while price pressures are clearly dissipating requiring for a less restrictive stance. Market participants have put more weights on interest rate cuts from major central banks over this year.
- US economic activity had been expanding at a modest pace with supports from labor market resilience and private consumption.
- China’s economic recovery at a slower pace than market expectations though its performance in 2023 being slightly higher than the official target.
Domestic Economy
- In December 2023, Thai economy softened from the previous month, following domestic demand from both private consumption and investment. The number of foreign tourist arrivals improved remarkably from the previous month in several nationalities, especially in tourists from long-haul destination and Malaysia while tourists from China improved consecutively.
- The growth of merchandise exports in December stayed robust which was the fifth-consecutive month expansion, mainly from the low-base effect and trade rebound. On the other hand, imports value contracted in 2 months 2-month expansion from most categories. In 2023, overall export and import contracted.
- Headline inflation in January 2024 was contracted in fourth-consecutive month, which was due mainly to energy prices including electricity and retail oil price, on the back of government measures, food prices also dropped further regarding to high-base effect while core inflation remained in this month.
Financial Market
- Major central banks end their hiking cycle. Market participants and futures market have pointed out possibilities that the Fedwould start cutting interest rates as early as in 1H2024 though anticipation for early cut in March 2024 declined since US economic momentum remained robust.
- USDTHB largely depreciated in January 2024, ending 35.44 level. It could be around 35.50-36.00 in February 2024, as market participants the probabilities for Fed’s early interest cut in March 2024.
