The document summarizes recent economic data and indicators from Thailand in November and December. Key points include: - Economic indicators in November showed signs of continued growth compared to October, with increases in private consumption and investment. Exports and tourism also grew despite a stronger baht. - Manufacturing production growth slowed slightly but business confidence rose. - Inflation rates picked up in line with economic growth, with headline inflation rising to 3.0% and core inflation higher than expected at 1.4%. - Private investment remained strong while the business sector was slightly more optimistic about the economic outlook.

1. ECONOMIC
UPDATE Capital Markets Research
4 January 2011
Thai Economic Update
November Economic Data Nalin Chutchotitham
nalin.c@kasikornbank.com
• Economic indicators in November are
somewhat stronger than October, suggesting
continued growth
• Manufacturing production growth still on a
down trend after early 2010’s highs
• Private investment still looking bright while
business sector is slightly more optimistic
• Private consumption index increased after 4
months of decline
• Private deposit and credit continued to see
double-digit expansion, in line with the growth
of domestic demand.
• Exports growth still strong but imports also
accelerated, narrowing the trade surplus
• Unemployment rate in October stayed at 0.9%
for the fourth month
December Inflation Data
• Inflation rates picked up in line with economic
growth: BoT may preempt rising prices with
more rate hikes
• Headline consumer price inflation climbed to
3.0% from 2.8% during the previous two
months
• Core inflation rose more than expected to 1.4%
• Producer price inflation edged up slightly to
6.7%
For private circulation only. The foregoing is for informational purposes only and not to be considered as an offer to buy or sell, or a solicitation of an offer to buy or sell any security. Although the information herein was obtained
from sources we believe to be reliable, we do not guarantee its accuracy nor do we assume responsibility for any error or mistake contained herein.
Further information on the securities referred to herein may be obtained upon request.
Page 1 of 5

2. Economic Update
Monthly Economic Data
Economic indicators in November are compared with a 6.0% gain in October and a 9.8% gain
somewhat stronger than October, suggesting in the third quarter. Production changes were mixed for
the month. Textiles and apparels saw a decline, probably
continued growth due to effects of global slowdown. However, a few
industries continued to grow by double-digit growth rates,
Thailand’s economic indicators in November showed namely integrated circuit, vehicles, chemicals, and
significant pick-up from the previous month with the electrical appliances. Meanwhile, capacity utilization
private consumption and investment indicators showing rate was little changed at 63.6%, compared to the
month-on-month increases. Meanwhile, exports and the previous month’s 63.9%.
tourism sector continued to show gains despite the
stronger baht. At the same time, manufacturing % yoy %
production saw slight slowdown but business confidence 40 75
index rose. In any case, there remained several 30
70
uncertainties to global economic recovery and foreign 20
exchange rate movements are likely to remain volatile for 10 65
some time.
0 60
-10
For the year 2010, foreigners had been net-buyers of 55
-20
Thai stocks on the back of strong economic recovery and
positive growth prospects. Their net-purchase was at -30 50
Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
$1.14bn in 2009 while it was at $1.92bn in 2010,
indicating an increase of 68.8% over the year. Manufacturing production index ISIC % yoy Capacity Utilization % (right axis)
$ mn
4000 Private investment still looking bright while
3000
2000 business sector is slightly more optimistic
1000
0
Private Investment Index % YoY
-1000
-2000 200 25
-3000 20
190
-4000
15
-5000 180
-6000 10
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 170 5
160 0
Foreign net buy of Thai equities ($ mn)
-5
150
-10
140 -15
Going forward, Thailand as a small and open economy
130 -20
would have to watch out for the bigger pictures such as
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
U.S. economic recovery and European debt problems.
Yet, positive trends elsewhere, such as expansion in PII % YoY (RHS) PII level
China, may help to offset the unwanted impacts. In anty
case, higher costs and volatility of exchange rates would Private investment index (PII) saw a slight gain of 0.3%
remain important risks for the business sector in 2011. mom vs the previous month’s fall of 1.1%. Compared to
On the other hand, cross-border tension with Cambodia the same period last year, the PII decelerated to 15.5%
and other domestic political issues may add to from 17.3% in October but it is still a double–digit growth,
consumers’ and businesses’ concerns as well. indicating a continuation of a relatively strong
momentum. The November reading showed construction
area permitted continued to grow favorably while real
imports of capital goods and commercial car sales were
% YoY Thailand's leading and coincidental economic indices
8 also affirmative of positive momentum going forward.
6
50 = neutral Thai Business Sentiment Indices
4
60
2
0 55
-2 50
-4
45
-6
-8 40
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
35
LEI CEI
30
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Manufacturing production growth still on a BSI BSI 3m forward expectations
down trend after early 2010’s highs
Business sentiment index rose in line with the PII and the
PCI, both for the November period and for 3-month
Manufacturing production index (ISIC basis) continued
ahead outlook. The confidence index picked up to 52.5
to decelerate in November. The MPI grew by 5.6% yoy
For private circulation only. The foregoing is for informational purposes only and not to be considered as an offer to buy or sell, or a solicitation of an offer to buy or sell any security. Although the information herein was obtained
from sources we believe to be reliable, we do not guarantee its accuracy nor do we assume responsibility for any error or mistake contained herein.
Further information on the securities referred to herein may be obtained upon request.
Page 2 of 5

3. Economic Update
from 50.0 in October while its 3-month forward outlook Exports growth still strong but imports also
index rose from 55.2 to 54.6. accelerated, narrowing the trade surplus
Private consumption made a U-turn upwards Exports growth accelerated to 28.7% yoy from 16.6% in
October, led by better exports performance in all of the
% YoY
12 115
sectors, namely agriculture, fishery and manufacturing.
10 110 Although we suspect that exporters’ income in baht terms
8 105 are likely to have been hit by the stronger baht, the
6 100 exports figures continued to show that global recovery
4 95
2 90
and expertise of local businesses have helped to propel
0 85 exports orders during the past few months.
-2 80
-4 75
-6 70
-8 65 % yoy $ mn
02 03 04 05 06 07 08 09 10 100 5,000
Private consumption index (sa, left axis) Consumer confidence index (right axis) 80 4,000
60 3,000
Private consumption index (PCI) picked up in 40 2,000
November by 3.5% mom after four months of decline. 20 1,000
0 0
This reversion had been led by gains from fuel
-20 -1,000
consumption, imports of consumer goods and VAT.
-40 -2,000
Meanwhile, sales of all types of vehicles remained
-60 -3,000
strong. This eases our concern with regards to the
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
sustainability of domestic demand going forward.
Trade balance ( $ mn, right axis) Imports (left axis) Exports (left axis)
Compared to the same period last year, the PCI rose by
4.1%, stronger than October’s 2.3% gain and slightly
lower than the third quarter’s 4.9% increase. This reflects Imports also accelerated in November, in line with the
a positive sign in the aftermath of serious flooding growing trend of domestic demand. Imports value rose by
situation during most of the Q4. 35.0% yoy in November after having slowed down to
14.4% yoy in the previous month.
40 120
Trade balance narrowed from $2.3bn in October to
30 110
$0.49bn in November, mainly on the faster pace of
20 100 imports growth. Meanwhile, the services, income and
10 90 transfers account recorded a surplus for the second
0 80
month in November as tourism sector continued to
perform well. The surplus was at $539mn, slightly higher
-10 70
than October’s $5467.mn.
-20 60
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 1,800 80
75
Retail sales % yoy (LHS) Consumer confidence index (RHS) 1,600 70
65
1,400 60
Meanwhile, the consumer confidence index (CCI) 55
continued to hover near 79-80 level for the fifth month. In 1,200 50
December, the CCI fell from 80.2 to 79.0, primarily on the 45
back of higher retail oil prices and flooding situation 1,000 40
35
during October and November. 800 30
Jan-07 Jan-08 Jan-09 Jan-10
Retail sales in October slowed down from 9.0% yoy in Tourist arrival ('000 left axis) Hotel occupany rate (right axis)
September to 4.5%. However, wholesale trade remained
rather strong at 6.9% yoy growth, despite a slowdown to
4.0% in September. Tourism sector’s performance remained positive. The
number of tourist arrivals in rose to 1.5 million from 1.36
At the same time, private deposit and credit continued to million in October, seeing a 10.2% yoy growth. Hotel
see double-digit expansion, in line with the growth of occupancy rate continued to rise to 55.1% from 48.9% in
domestic demand. October and 45.7% in September.
% yoy
14 The current account also declined to $1.0bn following the
12.2%
12 reduction in trade surplus. In October, it was recorded at
10 11.0% $2.2bn. Nevertheless, the baht remained supported at
8 such levels of surpluses. Overall balance of payments
8.1%
6
saw smaller surplus of $820mn.
4
2
0
-2
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Private credit Private Deposits M2
For private circulation only. The foregoing is for informational purposes only and not to be considered as an offer to buy or sell, or a solicitation of an offer to buy or sell any security. Although the information herein was
obtained from sources we believe to be reliable, we do not guarantee its accuracy nor do we assume responsibility for any error or mistake contained herein.
Further information on the securities referred to herein may be obtained upon request.
Page 3 of 5

4. Economic Update
US$, mn Current account (Trade balance + Services and transfers)
of what the Ministry of Commerce had anticipated (3.0 –
6000
3.5%).
5000
4000
During December, headline consumer price index (CPI)
3000 rose by 0.16% from the previous month, mainly due to
2000 the rise in several food products and raw food items. Fuel
1000 prices rose by about 3.0% as well. In addition, core CPI
0 had risen by 0.35% from November’s level, more than
-1000 the average over the past 11 months of 0.1% mom climb.
-2000
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 %
Trade balance Services and transfers Balance of Payments 1.0
0.5
Unemployment rate in October was at 0.9%,
unchanged from the previous three months 0.0
% -0.5
3.0
-1.0
2.5 Jan-09 Jul-09 Jan-10 Jul-10
2.0 MoM Core CPI MoM CPI
1.5
1.0 The producer price index lowered slightly in December,
0.5 recording a decline of 1.1% mom. However, the change
0.0 in the supply-side price measure is still rather substantial
Jan-08 Jan-09 Jan-10 at 6.7% yoy. This is why we have to look at a combined
unemployed labor force Seasonally inactive labor force reading of both the index and its growth, similar to the
figure depicted below.
Unemployment rate remained at low levels while demand
for labor remained high. The BoT reported that average 180 25%
wage of employed labor increased by 9.1% yoy, in line 170 20%
with the increased employment and working hours in 160
15%
150
both the agriculture and non-agriculture sectors. 140 10%
130 5%
% yoy 120 0%
Employment growth
110
5.0 -5%
100
4.0 90 -10%
80 -15%
3.0
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
2.0
PPI: CPA (Thailand) PPI yoy
1.0
0.0
In recent news, we have observed Bank of Thailand’s
-1.0
(BoT) repeated warnings of excessive government’s
-2.0 subsidies. Although such subsidies (electricity, cooking
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
gas, bus and train fares etc.) helped to reduce the
impacts of global economic recession during the past two
years, the central bank is concerned if the continuation of
such measures would distort real price pressure to the
Inflation rates picked up in line with economic
public as the global economy continues to recover and
growth – BoT may preempt rising prices with global commodity prices are trending upwards. This had
more rate hikes been on the key reasons why the BoT had been
gradually shifting its monetary policy stance away from
10% the ultra-eased end but still maintaining an
8% accommodative level of policy rate for sustainable
6% growth.
4%
2%
0%
-2%
-4%
-6%
01 02 03 04 05 06 07 08 09 10
CPI Core CPI
Headline inflation rate accelerated from 2.8% to 3.0% in
December, similar to the core inflation rate which climbed
to 1.4% from 1.1% in November. For the whole year,
consumer price inflation averaged at 3.3%, the mid-range
For private circulation only. The foregoing is for informational purposes only and not to be considered as an offer to buy or sell, or a solicitation of an offer to buy or sell any security. Although the information herein was
obtained from sources we believe to be reliable, we do not guarantee its accuracy nor do we assume responsibility for any error or mistake contained herein.
Further information on the securities referred to herein may be obtained upon request.
Page 4 of 5

5. Economic Update
Bank of Thailand Economic Data
2010
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10
The Real Sector (%yoy , unless specified otherwise)
Manufacturing Production Index, seasonally adjusted (level) 187.5 191.9 188.8 182.5 189.3 187.9 189.2
Manufacturing Production Index, without seasonal adjustment (level) 185.0 194.2 190.1 183.7 201.5 191.2 190.4
Manufacturing Production Index, without seasonal adjustment 15.9 14.2 13.1 8.4 8.1 6.0 5.6
Industrial Capacity Utilization (%) 64.3 65.4 64.8 63.6 64.4 63.9 63.6
Private Consumption Indicators
Retail Sales (at 2002 prices) 8.1 11.9 12.3 8.5 8.9 4.7 n.a.
Passenger Car Sales (units) 68.1 86.2 74.3 59.4 45.8 43.2 40.9
Motorcycle Sales (units) 26.5 43.2 34.2 20.0 9.3 2.0 9.3
Imports of Consumer Goods (at 2000 prices) 45.2 37.4 13.5 27.4 9.2 11.3 16.9
Private Investment Indicators
Commercial Car Sales (units) 42.5 44.6 37.0 46.4 35.6 28.9 36.3
Imports of Capital Goods (at 2000 prices) 37.0 42.9 27.9 32.0 21.7 11.6 20.5
Cement Sales (tons) 19.4 6.4 3.5 -4.5 3.7 -7.4 -1.8
Government Cash Balance (billions of baht) -15.4 122.6 -56.3 -0.1 67.4 -76.0 -104.0
Consumer Price Index 3.5 3.3 3.4 3.3 3.0 2.8 2.8
Food 4.6 6.1 6.9 7.5 6.6 5.5 5.8
Non-Food 2.8 1.5 1.4 1.0 0.9 3.7 1.1
Core Inflation (excluding raw food and energy) 1.2 1.1 1.2 1.2 1.1 1.1 1.1
External Accounts (Millions of US$, unless specified otherwise)
Exports 16,435.0 17,877.0 15,475.0 16,292.0 17,955.0 17,046.0 17,584.0
( %) 42.5 47.1 21.2 23.6 21.8 16.6 28.7
Imports 14,144.0 15,334.0 16,266.0 15,440.0 14,712.0 14,773.0 17,094.0
( %) 53.6 38.3 36.5 41.8 15.7 14.4 35.0
Trade Balance 2,291.0 2,543.0 -791.0 852.0 3,243.0 2,273.0 490.0
Current Account Balance 1,172.0 821.0 -1,001.0 280.0 2,767.0 2,740.0 1,019.0
Net Capital Flow -2,410 741 2,980 3,206 1,126 2,405 443
Monetary authorities 62 173 261 149 409 200 -35
Government -170 96 423 901 584 443 -162
Bank -1,703 2,554 527 1,860 460 4,155 584
Others -599 -2,082 1,772 297 -654 -2,215 56
Balance of Payments -989 2,166 1,412 3,589 4,270 5,822 820
Official Reserves (billions of US$) 143.5 146.8 151.5 155.2 163.2 171.1 168.0
Monetary Statistics (End of period) (Billions of baht)
Monetary Base 1,088.8 1,072.0 1,066.9 1,045.6 1,118.1 1,072.2 1,109.9
( %) (14.3) (9.3) (11.3) (8.0) (13.7) (9.6) (9.3)
Narrow Money (M1) 1,261.9 1,180.2 1,173.0 1,181.4 1,175.5 1,202.3 1,235.4
( %) 14.4 15.1 15.8 11.4 11.7 11.4 10.8
Broad Money (M2) 11,001.5 10,846.4 10,887.1 10,968.1 11,116.1 11,322.4 11,497.3
( %) 6.7 6.9 8.7 8.4 9.8 11.1 11.0
Other Depository Corporations Deposits 10,229.1 9,983.3 9,974.5 10,015.9 10,091.6 10,204.1 10,389.3
( %) 7.0 6.2 7.6 6.6 7.8 8.5 8.1
Other Depository Corporations Private Credits 9,101.2 9,196.7 9,219.7 9,299.8 9,432.7 9,580.5 9,743.9
( %) 7.3 8.5 9.1 9.8 10.8 12.1 12.2
Interest Rates (% p.a.)
Repurchase Rate, 1 day (closing rate daily average) 1.25 1.25 1.40 1.56 1.75 1.75 1.75
Overnight Interbank Rate (mode daily average) 1.16 1.13 1.27 1.43 1.62 1.62 1.62
Fixed Deposit Rate (1 year) 0.65-0.75 0.65-0.75 1.00-1.25 1.00-1.25 1.10-1.43 1.10-1.50 1.10-1.50
Prime Rate (MLR) 5.85-6.25 5.85-6.25 6.00-6.38 6.00-6.38 6.00-6.38 6.00-6.38 6.00-6.38
Exchange Rate (Baht : US$) 32.39 32.47 32.33 31.74 30.83 29.97 29.89
Source: Bank of Thailand
For private circulation only. The foregoing is for informational purposes only and not to be considered as an offer to buy or sell, or a solicitation of an offer to buy or sell any security. Although the information herein was
obtained from sources we believe to be reliable, we do not guarantee its accuracy nor do we assume responsibility for any error or mistake contained herein.
Further information on the securities referred to herein may be obtained upon request.
Page 5 of 5