สถานการณ์เศรษฐกิจไทยในปัจจุบัน และแนวโน้มในอนาคต ดร.เอกนิติ นิติทัณฑ์ประภาศ โฆษกกระทรวงการคลัง และผู้อำนวยการสำนักนโยบายเศรษฐกิจมหภาค สำนักงานเศรษฐกิจการคลัง

Ministry of Finance, Fiscal Policy Office Presentation outline Recent Economic DevelopmentRecent Economic Development Thailand’s Economic OutlookThailand’s Economic Outlook Key Challenges AheadKey Challenges Ahead Ministry of Finance

Ministry of Finance, Fiscal Policy Office Recent Economic Development in Thailand

Ministry of Finance, Fiscal Policy Office The Thai economy quickly rebound from the global economic crisis of and is resilient to external and internal shocks Real GDP Growth = 2.5 %2009 Real GDP Growth =-2.2%2010 Ministry of Finance

Ministry of Finance, Fiscal Policy Office GDP Growth (% y-o-y) [% Share of GDP] (% q-o-q sa) The quick economic recovery was due to (1) timely implementation of government stimulus, (2) rebound in global demand, and (3) rebound in domestic demand. Ministry of Finance 1 3 2

Ministry of Finance, Fiscal Policy Office GDP Growth by Sector (% y-o-y) [% Share of GDP] (% q-o-q sa) From the supply side, the economic recovery was due to pickups in public administration, financial sector as well as real estate and construction sectors. Ministry of Finance

Ministry of Finance, Fiscal Policy Office Timely implementation of expansionary fiscal and accommodating monetary policies was vital in supporting the Thai economic recovery. Bank of Thailand quickly reduced its policy interest rate from 3.75% to 1.25% Policy Interest Rate Core Inflation global econ crisispre-crisis Ministry of Finance Government implemented budget deficit of -5.9% in 2009 to revive the economy. global econ crisispre-crisis Budget Deficit/GDP Factors that Contributed to Economic Recovery 1

Ministry of Finance, Fiscal Policy Office FY2009 supplementary budget disbursement (SP1) Ministry of Finance Budget Items Framework Disbursement Disbursement rate (%) 1 Low income earner Living cost subsidy for income earner of less than 15,000 Baht - Socially secured (8.1 million persons) - Public sector official (including pensioners civil servant) 1.3 million persons 18,970 18,18796% 2 Household Extension of Utilities and transportation cost for another 6 months 11,297 11,295100% 3 Unemployed One month training program and living cost allowance for 3 months (Estimate of persons) 6,900 6,77398% 4 Parents/ Students Free education for 15 years - (Estimate of 10 million student) 19,503 19,474100% 5 Health Healthcare subsidy fund of 600 Baht per month - (Estimate of 830,000 persons) 3, % Health clinic improvement1,096 1,093100% 6 Village Sufficiency economy philosophy enhancement on village - Increase funding for 78,358 villages 15, % 7 Elder Elderly subsidy 500 Baht per month - (Estimate of 5 million persons) 9, % 8 Utilities Agricultural water source2,000 1,99099% Small water source % Village infrastructure1,500 1,499100% 9 Policeman Police officer residents of 532 places1,808 1,807100% 10 Tourism Tourism promotion1, % 11 Others Consumer goods price subsidy1, % Small and Medium Enterprises % Economic confidence restoration and national image promotion % 12 Contingency Contingency budget management4,090 00% 13 Treasury cash repayment 19, % Total 116, , %

Ministry of Finance, Fiscal Policy Office Tax Stimulus Measures SectorPolicy Details Individual Taxpayers Income tax exemption for taxpayers who are subject to 0.5 percent tax rate and having annual income of less than 1 million Baht. Community Enterprises Income tax exemption for community enterprises with an annual income of less than 1.8 million Baht (previously from 1.2 million Baht) for 58,000 community enterprises nationwide (only for income received between 2009 to 2010) Venture Capital 1. Extension period of Venture Capital establishment until 31 December Income tax exemption for any gains from transferring of SME shares in Exchanges by venture capitals (only applied for SMEs with asset worth less than 200 million Baht or number of workers less than 200 persons) Real-Estate 1. Tax deductions for up to 300,000 baht for new real estate purchased and transferred in 2009 as well as up to 100,000 baht for mortgage interest payment. 2. Special Business Tax Reduction from 3.3% to 0.11% for transfer of property during 29 March 2008 – 28 June Transfer fee reduction from 2% to 0.01% for transfer of property during 29 March 2008 – 30 June 2010 Tourism Double deduction for accommodation and conference room expenses arising in Thailand during 2010 accounting period Debt Restructuring and Merger and Acquisition 1.Exemption of Income Tax, Value Added Tax, Specific Business Tax and Stamp Duty arising from debt restructuring under BoT regulations undertaken in Exemption of Value Added Tax, Specific Business Tax and Stamp Duties for merger and acquisition of associated companies undertaken in 2009 Ministry of Finance

Ministry of Finance, Fiscal Policy Office Ministry of Finance Strong Thailand 2012 Program Budget Framework by Sectors ObjectivesSector Total% Environmental / energy preservation and productivity enhancement 1. Water management/ Irrigation for agriculture 67,14579,09780,786227, Infrastructure development for national competitiveness and living standard enhancement 2. Logistics 3. Energy 4. Communication 5. Tourism infrastructure 6. Health system 7. Standard of living 8. Science 9. Environment 108,767 76,935 20,451 2,968 32,136 20,693 2,636 2, ,604 37,824 5,783 2,697 36,711 4,121 3,398 2, ,633 42, ,310 28,583 2,456 5,168 1, , ,195 26,234 6,975 97,430 27,270 11,202 6, Tourism promotion and development10. Tourism development5,8873,0331,81810, Innovative economic development11. Innovative economic4,0811,5201,6417, Education and Learning development12. Education53,51345,24844,826143, Health system13. Public health sector human resource development 2,5283,5124,40010, Job creation and living standard development 14. Community level investment 110,19215,79914,954140, Other Cabinet objectives15. Agricultural sector price guarantee scheme 41, Contingent reserves11, Total 563,481366,675365,8651,296,021100

Ministry of Finance, Fiscal Policy Office Ministry of Finance Progress under Strong Thailand 2012 Program As of Jul 23, 2010

Ministry of Finance, Fiscal Policy Office 5 5 Rebound in Global Demand: diversification of export markets towards high growth region has propelled exports as an engine of growth. Thai exports have diversify away from G-3 towards China and ASEAN. Share of Thai Exports (%) -20.5% -26.2% -17.7% +11.9% +31.6% Exports to China and ASEAN region have contributed to rebound in overall export growth. Contribution to Export Value Growth by Region (%) Ministry of Finance Factors that Contributed to Economic Recovery 2

Ministry of Finance, Fiscal Policy Office Internal Stability: Low unemployment and manageable inflation. External stability: Current account surplus and adequate reserves Ministry of Finance Rebound in domestic demand given strong economic stability. Factors that Contributed to Economic Recovery 3

Ministry of Finance, Fiscal Policy Office Ministry of Finance Banking sector is resilient given low NPLs and strong capital base. Net NPLs gradually reduced to just about 2.5% of total loan. Capital Adequacy Ratio is well above international standard.

Ministry of Finance, Fiscal Policy Office Thailand Economic Outlook

Ministry of Finance, Fiscal Policy Office Looking forward, we forecast the Thai economy to growth by 5.5%, or within the range of 5% – 6%, in Ministry of Finance

Ministry of Finance, Fiscal Policy Office Private consumption is expected to pick up given increasing income for farmers, roughly 39.0% of Thai workforce. Growth in Real Private Consumption Growth in Nominal Farm Income (%) Ministry of Finance Labor Force by Sector

Ministry of Finance, Fiscal Policy Office Private investment is expected to continue to pick up, given high capital utilization rate and supporting banking credit. Growth in Real Private Investment Capital utilization rate is returning to pre-crisis level. Credit growth picks up to support investment. (%) Ministry of Finance global econ crisispre-crisis global econ crisispre-crisis

Ministry of Finance, Fiscal Policy Office Continued expansionary fiscal policy will further support the Thai economy. Growth in Real Public Consumption (%) Growth in Real Public Investment (%) Ministry of Finance Going forward, expansionary fiscal policy would continue to support economic recovery. Public Debt / GDP is maintained at sustainable level. Sustainability Framework

Ministry of Finance, Fiscal Policy Office Continued growth momentum of main trading partners in Asia will further propel the economy. Growth in Export Volume (%) Ministry of Finance Growth in USD Export Value

Ministry of Finance, Fiscal Policy Office Pickup in domestic demand and continued strong and stable expansion in exports will be important drivers of 2010 GDP growth. Ministry of Finance

Ministry of Finance, Fiscal Policy Office Key Challenges Ahead

Ministry of Finance, Fiscal Policy Office Key Challenges  The pace of global economic recovery given employment problem in the U.S. and public debt problem in Europe.  Volatilities in oil and commodity prices as well as volatilities in exchange rate and capital flow.  Greater competition from peers.  Political uncertainty Positive Factors  Well-diversified export markets and pent up demand  Continued expansionary fiscal policy and low interest rate environment  Adequate level of international reserves to cover capital flow volatility  Resilient banking sector with low NPLs and high capital base  Enhanced competitiveness through tax incentives for Regional Operating Headquarter and medium-term infrastructure investment program.  “National Reconciliation Plan” Ministry of Finance

Ministry of Finance, Fiscal Policy Office Thank you.