Monthly economic update: May 2024
Executive summary
Global Economy
- In April 2024, global economic activities continued to grow, which was supported by faster service activity growth, while manufacturing output also expanded for a fourth consecutive month. The manufacturing sector also benefitted from the tapering off from destocking efforts, thereby leading to a third monthly rise in manufacturing new orders globally.
- US real GDP growth in Q1/24 slightly decelerated, primarily reflected decelerations in consumer spending, exports, and state and local government spending and a downturn in federal government spending. On the other hand, Chinese GDP in Q1/24 grew at a faster-than-expected pace despite weak consumer and business confidence and prolonged downturn in the real estate sector. Meanwhile, consumer price indicators in major countries fell marginally in April 2024.
Domestic Economy
- In March 2024, overall Thai economy slowed down, which was attributed to decrease in domestic demand as mainly from well-expanding in preceding month and the end of government stimulus measure (Easy E-receipt). Also, the number of foreign tourist arrivals also dropped considerably from the previous month in several nationalities particularly in Malaysia and Middle East as Ramadan period. The growth of merchandise exports in March slipped considerably for the first-time in eight months, mainly from the high-base effect, while imports value continued to expand from high energy import.
- Headline inflation in April 2024 turned positive in seven month, which was due mainly to energy prices after the end of government subsidy measures, fresh food prices also rose from lower production in unfavorable climate while core inflation remained in this month.
- Thai economic growth in Q1/24 grew better than expected, as mainly from private final consumption expenditure. While government expenditure and gross fixed capital formation continually diminished. Moreover, merchandise export of both agricultural and manufacturing products declined.
Financial Market
- Major central banks end their hiking cycle, except Bank of Japan with the end of monetary policy easing. Market participants and futures market have pointed out possibilities that the Fed would start cutting interest rates in September 2024 since US economic momentum remained robust.
- USDTHB largely depreciated in April 2024, ending 37.06 level. It could be around 36.50-36.90 in May 2024, as market participants reassess the probabilities for Fed’s interest cut to be in 2H2024.
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