Central bank data for April confirm impact from Sars

Parista Yuthamanop

April arrivals totalled 468,000, down 45% from the year before. Total arrivals for the first quarter was 2.83 million.

Atchana Waiquamdee, senior director for the central bank's domestic economy department, said even with arrivals down, employment in the hotel industry remained relatively stable, with many businesses choosing to cut costs through temporary leaves rather than outright layoffs.

She said many tourism-related companies had taken the view that the impact of Sars would be limited to the short-term.

In any case, falling tourism revenues in April helped push the service account into a deficit of $9 million for the month, the first deficit in nearly four years.

The Sars epidemic has hit airlines, hotels and tourist-related businesses sharply in recent months, with many companies already warning of poor results for the second quarter.

National carrier Thai Airways yesterday said passenger traffic in April was down over one-third from the year before due to Sars.

Total passenger traffic in April was 1.031 million, down 35.6% from the year before. Passenger load factor, representing the number of occupied seats per flight, was down to 54.8% in April compared with 76% the year before.

But the central bank said the overall economy still performed relatively well in April due to a strong export performance and domestic consumption.

Exports rose 22.8% from the year before to $5.86 billion in April. Gains were registered in all markets, with European shipments up 22.1% from last year, China up 78.7%, Asean 21.5%, US 11.1% and Japan 13.4%. Shipments were up 13.2% year-on-year, with prices increasing by 8.5%.

April imports totalled $5.72 billion, up 13.5% from the year before.

Dr Atchana said the current account surplus in April was $56 million, down from $608 million the previous month. Declines were attributed in part to seasonal factors.

Farm income was also up 35% in April from the year before due to a strong sugar cane crop. Higher agricultural income helped boost overall consumption, Dr Atchana said, given that around 40% of the work force was employed in the farm sector.

Manufacturing production, excluding the sugar industry, was up 12% in April from last year, a decline from the 13.3% increase posted the previous month.

Domestic consumption indicators showed a decline in April from previous months, with passenger car sales down by over half in April from the previous month. Department store sales also fell to single-digit sales in April, although the central bank said it remained too early to say whether the fall off in consumption represented a new trend.

Industrial capacity utilisation in April was 64.9%, down from 73.7% in March. The central bank said March figures had jumped as companies accumulated inventory ahead of the Songkran holidays.

Private investment figures meanwhile have yet to show a clear recovery in the aftermath of the Iraqi war, although new applications for investment promotion through the Board of Investment were rising.

The business sentiment index for April showed an eroding confidence at 46.7 points, for the first time in seven months as a result of the Iraqi war which lasted until April and the Sars outbreak.

But the three-month outlook stood at 54.9, close to pre-war levels. The index of higher than 50 signalled an improving confidence, while those lower indicated an eroding confidence.