Chart, exports-imports : a look on the services

People often focus on exports/imports of… goods. We certainly do it for Thailand…

But what about the services, bought and sold ?

That’s the second part of the current account balance.

Part 1 = trade balance (exports minus imports)
Part 2 =
net services & incomes & transfers

The sum of those 2 parts is the current account balance.

Ready ? Please be focused, it’s a little bit complicated.

Here are the official definitions (given by the BOT) of the part 2 :
Net Services are the net result of foreign trade related to services, defined as the net export (export less import) of services. Services include items such as transportation, travel expenses, government services n.i.e., communication services, construction services, royalties and license fees / patents, insurance, etc.

Income comprises compensation of employees (wages, salary, and benefit both in cash and in kind) and investment income (direct investment income, income on portfolio investment, and other investment earnings).

Current Transfers refers to donation or grant paid to or received from nonresidents, which results in transfers of ownership over real or financial resources.

(Source Bank Of Thailand, table EC_XT_011)

Let’s start with a view per month.

services1

There is obviously a degradation. We are in the red for 6 consecutive months. This pattern is unseen since january 2005 (beginning of my chart).

So let’s widen the timeline with a chart per quarter, since Q1 1997. Eleven years, that should be enough. ๐Ÿ˜‰

services2

Here too we see the degradation. Less with the number of quarters in the red (1 or 2 every year since 2002) but rather with the levels.

And we can see another pattern : Q4 and Q1 are always in the green. Why is that ? Well there is an important factor : tourism. High season.

But… but… not so fast. As I said, the datas cover oranges, bananas and apples : net services AND incomes AND transfers. ๐Ÿ˜‰

We need to look at the details of the balance of payment, which are given in another table… (and by quarter only, and with a longer time lag for the publication of the datas, therefore we don’t have Q3 yet) in order to isolate the net services only.

(Source Bank Of Thailand, table EC_XT_013)

Here is the new chart :

services4

On Q2, the net services was in the green with 929 millions USD. However, it’s not really a performance (we have to go back to Q2 2003 to find a lower amount)… It might be a pause after a very strong Q1.

Q3 is going to be very interesting to analyse…

We could see the first fallouts of the crisis. Datas will be published on november 30.

5 Responses to “Chart, exports-imports : a look on the services”


  1. 1 bill 9 November 2008 at 5:27 am

    I was fairly impressed with the numbers you published regarding the foreign currency reserves that Thailand currently holds. I got the impression that the country was fairly well positioned to weather negative net trade deficits…however, in looking at these graphs, I think they might not be in such a rosey position after all.

    Would you agree with this? How many months/years of this negative trade balance (and THB “management”) could the country endure before their foreign currency holdings might become an issue and we see a potential THB devaluation?

  2. 2 ThaiCrisis 9 November 2008 at 9:29 am

    ->Bill.
    First you’re right to say that international reserves of Thailand are large.
    However, since a few months, a new trend (downward) seems to have started.
    (i will update the chart)

    As for the balance of payments (and actually this is what we should look at, not only current account with trade balance), I think it’s too early to make a call.
    The last datas show a degradation (like for the current account, etc.)

    If the definition of a negative balance of payments is really simple (“more money are flowing out the country, than flowing in”) the causes might be numerous and different.

    It’s true that we are in the red on 4 consecutives months.

    But we can’t deny that the oil prices bubble have weighted on Q2.

    And Q1 was at historic high… so we could have a normal backward effect after.

    Anyway. We need to wait the figures of september, then we will have a clearer view by month and by quarter.

    Meanwhile, I’m going to make a chart on the balance of payments, since 1997.

  3. 3 dreampipe 10 November 2008 at 5:28 am

    thai crisis

    great stuff. looks to me like things have been somewhat bad under the hood and the numbers fro september onward, cot being worse than sept, will show how bad it is going to get.

    I always struggle with how to define the impact of tourism on thailand. as a gdp number it is not huge but the trickle down effect and the underground economic effect must be quite big.

    how would you analyze it?

  4. 4 ThaiCrisis 10 November 2008 at 6:20 am

    We have a way to get a clue (but a clue only). look at the details of the “services receipts”, of the balance of payments :

    (table EC_XT_013)
    http://www.bot.or.th/English/Statistics/EconomicAndFinancial/ExternalSector/Pages/StatBalanceofPayments.aspx#

    Line 13 : “travel”.

    Roughly, it represents half of the total amount.

    Other way : to look at details of GDP components, in “private consumption expenditure” with some sub-items like “hotels&restaurant services”, etc.

    But again, it’s just a part (and we can’t discriminate between local consumption and foreigners).

    Plus other datas would be needed to complete the picture : like tourists arrivals (unfortunatly details are not published anymore).

    So, yes, it’s rather complicated to have a clear cut % of tourism in the whole economy.

    But one thing is sure : if tourism represents only X % of total GDP, it can be of course like 80 % in some communities.
    If tourism goes down, impacts locally would be very important.


  1. 1 Hunted at Paragon, Police feeling the pinch the translation diaries… at The FARANG Speaks 2 Much Trackback on 10 November 2008 at 7:29 am

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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