Instead of relying on the PCI.
It has been recommended that when analysing household consumption in Thailand, it is better to focus on private consumption expenditure (PCE) rather than the more widely followed Private Consumption Index (PCI).
According to a research note from Standard Chartered, this is because PCE captures Thais’ consumption abroad, which has grown continuously since Q1-2014 (at an average rate of c.7.5% y/y) as outbound tourism becomes more affordable.
The increase in budget airlines and a stronger Thai baht (THB), especially against the Japanese yen (JPY), have significantly reduced travel costs and encouraged more leisure travel abroad by Thais in recent years.
Here's more from Standard Chartered:
The PCE has recorded positive growth since Q2-2014, while the PCI – which does not reflect this shift in consumer spending patterns – continued to trend downwards from July 2014 to August 2015, only returning to postive growth in recent months.
This shift towards more spending abroad points to stronger consumer spending than the widely watched measure indicates. Even so, spending that takes place abroad does not support GDP growth; for this, we need to see a pick-up in public investment spending, which we expect in 2016.
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