Monthly economic update: Nov 2023
Executive summary
Global Economy
- In September 2023, global economic momentum had been continuously softened with weak productions and services activities. This is in accordance with muted global trade and demands. Meanwhile, global headline inflation pressure steadily dropped and there had been more signals of nearly approaching the end of global hiking cycle.
- US economic activity had been expanding at a modest pace, while European economic growth faced downturn and likely to be in recession. Nevertheless, economies gained supports from resilient labor markets. Japanese economy steadily rebounded from domestic demands and tourists. China’s economy started to show signs of stabilizing.
Domestic Economy
- In September 2023, the Thai economy continued to recover at slower pace. Private consumption and investment slightly softened after a good expansion in the preceding period. The number of foreign tourist arrivals dropped sharply compared to previous month in several nationalities.
- The value of merchandise exports expanded slightly, which was two-consecutive month expansion, that increased from the previous month in major categories
- Headline inflation in October 2023 was contracted for the first-time in 25 months, which was due mainly to energy prices including electricity and retail oil price, on the back of government measures. Moreover, food prices also dropped further regarding to high-base effect and less supply of fresh food. Meanwhile, core inflation increased slightly decreased due to higher prepared food prices.
Financial Market
- Major central banks are near the end of their hiking cycle. Market participants and futures market have pointed out possibilities that the Fed would maintain its policy rate in December 2023 meeting.
- Investors went into long term bond tenor, for both US and Thai bond, due to anticipation that policy rates move toward their peaks. Meanwhile, 10y-2y yield spread for Thai government bond was still in positive territory.
- USDTHB slightly depreciated in October, ending 36.02 level. It could be around 35.00-35.50 in November. US Dollar dropped from its high levels following economic data suggesting the end of policy hike.
