Real farm income surged to a 13-month high in May, suggesting the economic recovery is finally reaching farmers and low-income earners, says a senior official at the Fiscal Policy Office (FPO).
The indicator jumped by 9% year-on-year in May, compared with 7.8% growth in April and a 4.7% contraction in the first three months, said Pornchai Thiraveja, financial policy adviser.
With strong growth over the past two months, real farm income fell a mere 0.3% for the five months through May, he said.
Even though the Thai economy expanded at the fastest pace in five years at 4.8% year-on-year from January to March, most farmers have not benefited because of low crop prices and high household debt. The uneven economic recovery is one reason the Bank of Thailand has refused to follow in the footsteps of the US Federal Reserve in tightening monetary policy.
Several main crop prices have increased, said Mr Pornchai. Hom mali fragrant rice rose to 18,000 baht per tonne from 15,000 earlier this year, while palm oil climbed to 3.1 baht per kilogramme from 2.81 in April. Rubber rose to 45.7 baht per kg from 43.2 in April.
Other economic indicators in May also improved, he said.
Passenger car sales, which is a proxy for domestic consumption, shot up 26.8% over the same period last year.
But value-added tax, another indicator of domestic consumption, slowed down to 3% growth last month from 7% in April because of a high base effect.
Commercial pickup sales, an indicator of private investment, rocketed up by 28.6% year-on-year in May, said Mr Pornchai.
He said expansion of capital goods imports by 7.3% last month from 3.5% in April suggested that production for exports will be revved up in the period ahead.
Domestic cement sales rose 8.1% year-on-year in May, the fastest growth in 59 months, while raw material prices for construction gained 3.8% last month from a 2.7% increase in April.
But activities in the property sector cooled down in May.
Foreign tourist arrivals to Thailand increased 6.4% year-on-year to 2.76 million in May, with Chinese tourists in the lead.
Tourism income that month rose 9% to 136 billion baht.
In the meantime, Sorapol Tulayasatien, director of the FPO's Bureau of Macroeconomic Policy, said Thai economic growth has become more broad-based and spillover effects can be seen by the improving farm income.
Regarding mounting anxiety over the trade spat between China and the US, he said that dispute is expected to die down after the US midterm elections in November.
The FPO maintains its economic growth forecast at 4.5% this year and its quarterly review is scheduled to be made next month, he said.
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