BOT: AI Cycle Supports Thai Economy, July Growth Continues, Japanification Watched
Macro
The Bank of Thailand (BOT) revealed that the Thai economy in July expanded from the previous month, driven by the global technology and artificial intelligence (AI) cycle, which boosted exports of electronic goods and the manufacturing sector. Meanwhile, the tourism sector improved. Exports were valued at 34,341 million US dollars, expanding 22.3% year-on-year, led by electronics and electrical appliances. Imports were valued at 34,388 million US dollars, expanding 35.5%, slowing from 48.9% in the previous month, in line with lower fuel imports. Headline inflation stood at 1.95%, down from 2.42% in the previous month, while core inflation was 1.34%, up slightly. The BOT acknowledged that there are several signs raising questions about "Japanification," or a prolonged economic slump similar to Japan, but pointed out that the causes differ, and Thailand still has potential in manufacturing and services that are not fully utilized. The key is to increase people's income, and it is hoped that measures under the 200 billion baht loan decree will help in the future.
