what are thailand’s macroeconomic data? … and where are they? somprawin manprasert, ph.d....

What are Thailand’s macroeconomic data?

… and Where are they?

Somprawin Manprasert, Ph.D.Faculty of EconomicsChulalongkorn [email protected]

mailto:[email protected]

Why are macroeconomic data so important?

Real GDP Growth of Thailand (Percent)

9.2

-1.4

6.1

6.9

5.3

2.2

4.8

4.4

-10.5

5.9

9.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

There are uncertainties. The economy can be good or bad.


GDP, Private Consumption, and Personal Income

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1996 1997 1998 1999 2000 2001 2002 2003

Bill

ions

of B

ahts

GDP Personal Consumption Disposable Income

Its effects seem to be far from us, but in fact it could affect your wellbeing and your future income.


The bottom-line is we need to know what are consequences of a good economy, and what are consequences of a bad one.

We need to know ‘what is going on out there’ and ‘how could it affect your life’.


From Macroeconomic Condition To Anticipating Policy Reaction

In addition, whenever there is an undesired economic condition, the government usually intervenes.

Consequently, not only can the economic condition affect you, but the government’s counter-problem policies (such as interest rate hike) could also influence your decision.

What are characteristics of a good economic practitioner?

People who understand: 1. macroeconomic condition,

2. its consequences, and

3. are able to anticipate the government’s stabilization policy

will be better off during the course of

business cycle.

Objective

To know macroeconomic condition of a country, we must first understand economic data.

In this class, we will learn

1. What are macroeconomic data?

2. Where could we find those data in Thailand?

Economic Data and Economic Theory

Economics is a social science. Therefore, its methodology is in line with other sciences, such as physics, chemistry, and etc.

Scientists observe surrounding nature and try to develop a theory that could explains those natural behavior.

Like all other sciences, economic theories have been motivated by observation. Rather than nature, economists try to explain human behavior.

Why do we have to study ‘historical’ data anyway?

Leading theorists observed human’s economic behavior and put forward undeniable economic theories (such as Alfred Marshall, John Nash, and Robert Lucas).

Data Observation Question Finding Answer Economic Model

In reverse, a good economic practitioner needs to balance his/her knowledge between economic theory and economic reality.

Data Economic Theory

Outline of the Lecture

1. The National Accounts System• Structure of the data• Meaning and interpretation

2. Macroeconomic data sources in Thailand

The National Accounts System

The National Accounts System is the most comprehensive macroeconomic data of a country, including all economic activities and transactions.

The system has been standardized by the UN – The United Nations System of National Accounting (UN SNA)

Components of the UN System of National Accounting

1. National Accounts

2. Input-Output Tables

3. Flow-of-Fund Accounts

4. Balance of Payments

5. National Balance Sheet (or, National Wealth)

Implication of the System

The System of National Accounting is a country’s economic map, which consists of Real Activities and Financial Activities.

Real Sector contains economic activities that relate to production, income, and expenses, such as investment and consumption.

Financial Sector is an intermediary that facilitates financial transactions among economic agents, such as banking.

First two represent real activities, while the latter three display financial activities.

Let’s look at the first component… the National Accounts







The National Accounts is a component of the System of National Accounting.

The National Accounts depicts1. Gross output of the country2. National income of the country3. Expenses of the country

Gross Output National Income Expenditure

Example 1- What exactly is the GDP?

Consider “Table 3” from the National Accounts of Thailand.

What do we see when we look at the GDP?

Why do economists (or, anyone) always mention about the GDP?

Table 3. Gross National Product and National Income at Current Market Prices by Economic Activities

(Millions of Baht)

1996 1997 1998 1999 2000 2001 2002 2003p

Agriculture 438,119 447,176 498,587 435,507 444,185 468,905 513,094 595,004

Agriculture, Hunting and Forestry 350,172 351,974 390,604 332,045 326,389 357,979 407,046 491,026

Fishing 87,947 95,202 107,983 103,462 117,796 110,926 106,048 103,978

Non-Agriculture 4,172,922 4,285,434 4,127,860 4,201,572 4,478,546 4,664,597 4,932,949 5,335,358

Mining and Quarrying 63,410 82,402 84,318 87,362 116,726 126,232 135,851 154,564

Manufacturing 1,370,438 1,427,657 1,428,323 1,514,030 1,653,658 1,715,926 1,831,903 2,060,447

Electricity, Gas and Water Supply 106,833 118,958 142,277 130,399 146,105 166,683 175,595 190,946

Construction 341,518 271,824 178,680 166,253 150,615 154,493 165,705 175,586

Wholesale and Retail Trade; Repair of Motor Vehicles,

Motorcycles and Personal and Household Goods 762,898 812,214 785,928 801,340 847,564 856,098 865,964 914,328

Hotels and Restaurants 248,960 245,872 230,921 255,738 275,214 289,175 309,626 300,414

Transport, Storage and Communications 341,051 369,949 360,918 376,111 395,926 427,049 449,603 465,204

Financial Intermediation 328,177 309,193 235,449 156,439 145,840 151,360 170,952 202,151

Real Estate, Renting and Business Activities 155,171 156,982 153,368 157,127 161,792 163,862 171,703 177,890

Public Administration and Defence; Compulsory Social Security 171,329 181,095 195,257 204,172 211,045 222,161 244,731 262,081

Education 149,224 163,467 181,699 186,666 196,542 202,318 211,261 220,938

Health and Social Work 68,848 76,417 83,165 90,926 96,678 104,825 107,649 106,803

Other Community, Social and Personal Service Activities 58,902 62,754 60,581 68,089 73,813 77,118 84,951 96,184

Private Households with Employed Persons 6,163 6,650 6,976 6,920 7,028 7,297 7,455 7,822

Gross Domestic Product, (GDP) 4,611,041 4,732,610 4,626,447 4,637,079 4,922,731 5,133,502 5,446,043 5,930,362

Plus : Net Factor Income Payment from the Rest of the World -102,084 -123,375 -160,044 -126,436 -76,874 -85,069 -88,632 -111,028

Gross National Product, (GNP) 4,508,957 4,609,235 4,466,403 4,510,643 4,845,857 5,048,433 5,357,411 5,819,334

Example 1- What exactly is the GDP?

What do we see when we look at the GDP?# Gross Domestic Product (GDP) is the total value of all

products produced within the country’s territory.

Why do economists (or, anyone) always mention about the GDP?# If we believe in the statement ‘the more, the better’, the

GDP represents the producing capacity of the country.

Example 1- and…What else from GDP?

In turns, these gross products generate income to the country. And, the total expenses of the country must not exceed its income. Look at GDP components.

Account 1. Domestic Product(Millions of Baht)

1996 1997 1998 1999 2000 2001 2002 2003p

Net Domestic Product at Factor Cost 3,496,067 3,561,095 3,471,092 3,461,276 3,712,111 3,861,229 4,067,574 4,425,839

Provision for Consumption of Fixed Capital 553,798 630,817 679,148 703,862 728,308 759,455 790,921 824,312

Indirect Taxes 573,428 551,105 489,680 489,619 505,778 537,994 614,605 712,761

Less : Subsidies 12,252 10,407 13,473 17,678 23,466 25,176 27,057 32,550

Gross Domestic Product at Market Prices 4,611,041 4,732,610 4,626,447 4,637,079 4,922,731 5,133,502 5,446,043 5,930,362

Private Consumption Expenditure 2,479,828 2,586,956 2,505,312 2,595,113 2,762,925 2,941,012 3,113,524 3,360,621

General Government Consumption Expenditure 469,516 476,705 511,691 533,041 557,807 581,117 603,651 630,378

Gross Domestic Fixed Capital Formation 1,892,923 1,598,633 1,035,447 965,899 1,081,420 1,181,315 1,243,148 1,425,269

Change in Inventories 35,240 -5,469 -89,474 -15,294 42,744 55,774 56,607 57,926

Exports of Goods and Services 1,809,910 2,272,115 2,723,953 2,703,308 3,287,284 3,380,750 3,499,004 3,886,566

Less : Imports of Goods and Services 2,099,234 2,205,119 1,988,907 2,120,348 2,862,305 3,047,574 3,134,265 3,485,272

Statistical Discrepancy 22,858 8,789 -71,575 -24,640 52,856 41,108 64,374 54,874

Expenditure on Gross Domestic Product 4,611,041 4,732,610 4,626,447 4,637,079 4,922,731 5,133,502 5,446,043 5,930,362

Income

Expenses

Example 1- What exactly is the GDP?…to sum up

In accounting, these 3 things must be equal:1. Value of the Gross Domestic Product

2. Total factor payment to primary inputs

3. Total expenditure of the country

Example 2 Current Prices vs. Constant Prices

Consider ‘Summary Table 1-2’ from the National Accounts

Table 1. Balance Sheet of National Income and Expenditure at Current Market Prices1999 2000 2001 2002 2003p

Private Consumption Expenditure 2,595,113 2,762,925 2,941,012 3,113,524 3,360,621

General Government Consumption Expenditure 533,041 557,807 581,117 603,651 630,378

Gross Fixed Capital Formation 965,899 1,081,420 1,181,315 1,243,148 1,425,269

Change in Inventories -15,294 42,744 55,774 56,607 57,926

Expenditure on Consumption and Gross Capital Formation 4,078,759 4,444,896 4,759,218 5,016,930 5,474,194

Plus : Exports of Goods and Services 2,703,308 3,287,284 3,380,750 3,499,004 3,886,566

Exports of Goods 2,150,049 2,730,943 2,802,530 2,837,663 3,233,116

Exports of Services 553,259 556,341 578,220 661,341 653,450

Expenditure on Gross Domestic Product and Imports 6,782,067 7,732,180 8,139,968 8,515,934 9,360,760

Less : Imports of Goods and Services 2,120,348 2,862,305 3,047,574 3,134,265 3,485,272

Imports of Goods 1,800,131 2,513,501 2,691,579 2,719,439 3,077,529

Imports of Services 320,217 348,804 355,995 414,826 407,743

Expenditure on Gross Domestic Product 4,661,719 4,869,875 5,092,394 5,381,669 5,875,488

Plus : Statistical Discrepancy -24,640 52,856 41,108 64,374 54,874

Gross Domestic Product, (GDP) 4,637,079 4,922,731 5,133,502 5,446,043 5,930,362

Table 2. Expenditure on Gross Domestic Product at 1988 Prices1999 2000 2001 2002 2003p

Private Consumption Expenditure 1,542,775 1,623,716 1,690,644 1,779,852 1,894,432

General Government Consumption Expenditure 271,029 277,132 284,026 289,068 294,841

Gross Fixed Capital Formation 566,413 597,442 604,215 643,752 720,219

Change in Inventories -6,691 25,636 35,780 36,395 45,436

Expenditure on Consumption and Gross Capital Formation 2,373,526 2,523,926 2,614,665 2,749,067 2,954,928

Plus : Exports of Goods and Services 1,657,258 1,947,081 1,865,083 2,088,685 2,235,565

Exports of Goods 1,300,030 1,589,774 1,498,560 1,678,438 1,837,266

Exports of Services 357,228 357,307 366,523 410,247 398,299

Expenditure on Gross Domestic Product and Imports 4,030,784 4,471,007 4,479,748 4,837,752 5,190,493

Less : Imports of Goods and Services 1,178,170 1,497,672 1,415,355 1,609,145 1,732,308

Imports of Goods 960,845 1,267,932 1,188,789 1,347,176 1,478,300

Imports of Services 217,325 229,740 226,566 261,969 254,008

Expenditure on Gross Domestic Product 2,852,614 2,973,335 3,064,393 3,228,607 3,458,185

Plus : Statistical Discrepancy 19,366 35,066 9,208 8,952 1,859

Gross Domestic Product, (GDP) 2,871,980 3,008,401 3,073,601 3,237,559 3,460,044

Example 2 Current Prices vs. Constant Prices

What is the difference between ‘current market prices’ and ‘constant at 1988 prices’?

Value = Price x Quantity

In each year, both prices and quantity change. Therefore, if we want to examine only how the country’s producing capacity change over time, we need to fix prices.

In practice, we measure each year production value in terms of the base year. In this case, all years are measured in 1988 prices. When each year is measure in 1988 prices, its value represents quantity.

Other Accounts

GDP by sector

Private consumption expenditure in details

Investment by type of goods

Others

Now… Let’s move on.






2. Input-Output Table – What is it?

It is what it’s named !

Information from the table tells us: 1. The economy’s output structure: What kind of goods are we

producing? And, how many are they?

2. The economy’s structure of production: To producing these output, what kind of inputs do we use? And, how many do we need?

…for the whole economy!

Think of the economy as a factory.

The Look of an Input-Output Table

Sales from i to j q i

Purchases of j from

i

Intermediate Flow s X i,j

Private consumption

Governm

ent expenditure

Investment

Inventory change

Exports

Special exports

Imports

Total output from industry

i

Wages and salaries Operating surplus Depreciation Net indirect taxes

q j Total input from industry j Gross Output

Final Demands -- f

Expenditure

Value-added v

Income GDP

Example:An Imaginary 8-Sector Economy

Buyer Seller

Agri Mining Gas-Elec

Mfg Trade Trnspt Srvics Oths Con Gov Inv Exp Imp FD Row Sum

Agri 20 1 0 100 5 0 2 0 15 1 0 40 -20 36 164Mining 4 3 20 15 2 1 2 0 2 1 0 10 -10 3 50Gas-Elec 6 4 10 40 20 10 25 0 80 10 0 0 0 90 205Mfg 20 10 4 60 25 18 20 0 400 80 200 120 -170 630 787Trade 2 1 1 10 2 3 6 0 350 10 6 10 0 376 401Transport 2 1 5 17 3 2 5 0 130 20 8 5 0 163 198Services 6 3 8 45 20 5 20 0 500 40 10 30 -20 560 667Others 0 0 0 0 0 0 0 0 0 150 0 0 0 150 150Intermediate 60 23 48 287 77 39 80 0 614

Deprec 11 5 60 130 35 40 25 0 306Wage 65 20 21 260 140 97 485 150 1238Profit 20 2 56 60 40 12 59 0 249Indirect tax 8 0 20 50 109 10 18 0 215Value-added 104 27 157 500 324 159 587 150 2008

Col Sum 164 50 205 787 401 198 667 150 1477 312 224 215 -220 2008

Sell to

Buy

from

The third component is…






3. Flow-of-Funds Accounts

Look at the table…what information does the table show us?

The Flow-of-Funds Accounts show… the relationship between national savings and investment among

economic agents in the country. Those economic agents include Household, Government, Business firms, and other countries.

Savings InvestmentSource of Funds Use of Funds

The FoF Accounts also display types of financial intermediaries that facilitate transfers between savings and investment.

Look ‘Outside’ for the forth component







Look at the table…what information does the table show us?

The BoP displays the country’s trade and financial transactions with the rest of the world over a particular period of time, usually one year.

Two main parts in the BoP1. Current Account

– It shows income and expenditure from trading goods and services with the rest of the world.

– Example, export of cars, income from tourists.2. Capital and Financial Account

– It records financial flows between the country with the rest of the world.– Example, government external loans.

At Last….






5. National Balance Sheet

The National Balance Sheet reveals the value of total assets and liabilities of the country at a particular time.

There are 2 types of assets reported in the National Balance Sheet:

1. Tangible Assets: land, buildings, machinery, etc.2. Intangible Assets: Financial instruments, bonds, patents, etc.

In addition to the aggregate report, the account also includes balance sheets for detail sectors, such as financial sector, producing sector, household, and government.

Where do we find economic data for Thailand?

The National Economic and Social Development Board (www.nesdb.go.th)– All data about real sectors, including the National Accounts, Input-Output tables, Flow-of-

Fund accounts.

Bank of Thailand (www.bot.or.th)– All data about financial sectors, both in domestic transactions and with external

transactions, including the Balance of Payments, capital flow, interest rates, exchange rates.

Ministry of Finance (www.mof.go.th)– All data about government revenue, expenses, and projects.

Ministry of Commerce (www.moc.go.th)– All data including Free Trade Agreement, as well as domestic prices.

National Statistical Office (www.nso.go.th)– Employment, labor forces, others

what are thailand’s macroeconomic data? … and where are they? somprawin manprasert, ph.d....

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