Thailand has one of the lowest unemployment rates in the world, which doesn’t always fit the picture of an emerging-market economy that’s struggling to get growth going.
To get a fuller picture of what’s happening in the labor market — as well as in other under-reported industries in the economy, like the property market — the central bank is increasingly turning to “big data” sources drawn from social media and online stores to supplement official figures.
The Bank of Thailand is building its own employment index based on data from online jobs-search portals and is also creating a property indicator to give it a better sense of supply and demand in the housing market.
“We want to do evidence-based policy so big data is useful,” Jaturong Jantarangs, an assistant governor at the Bank of Thailand, said in an interview in Bangkok. “It’s not only a benefit to monetary policy but financial policy as well.”
“It enables us to catch the trend and sometimes see early warning signs,” Jaturong said on Nov. 29. “We use big data more and more these days.”
In a world where fast-growing technology is disrupting traditional jobs and industries, information is one way to stay ahead in the policy game, as policy makers in Indonesia recently outlined too. It’s also becoming increasingly crucial in an uncertain and complex world, the assistant governor said.
Read More: Big Data Is New Push for Bank Indonesia as It Reviews Rates
“Existing indicators that we are familiar with may not be enough to answer the questions, not in time and sometimes even lead to wrong answers,” he said.
In Thailand, the push to expand data sources has come right from the top. Governor Veerathai Santiprabhob — who was among the youngest heads of a central bank when he took office in 2015 at the age of 45 — has made it part of the bank’s three-year strategy and set up a dedicated team on data analytics. He leads a meeting every two months to discuss new data pilot projects.
“Our governor sees the importance of big data and is very active in this area,” Jaturong said.
The information is key for a central bank that’s trying to set monetary policy for a diverse economy. Exports have surged this year amid a pickup in global trade, while consumer sectors and private investment have languished.
The jobless figures only complicate the outlook. While economic growth has been lackluster, lagging peers, the unemployment rate has ranged between 1.2 percent and 1.3 percent this year. That compares with recent figures in Indonesia of 5.5 percent and 5.6 percent in the Philippines.
“Official data can’t capture the whole picture of the economy,” said Somprawin Manprasert, Bangkok-based head of research at Bank of Ayudhya Pcl. “We have a big informal sector. Many people are self-employed. This leads to a low unemployment rate.”
“The big data can show all aspects, so it can help us to solve the problems where they are,” he said.
It’s with that goal that the central bank analyzed data from the National Credit Bureau on high household debt, a key concern cited by policy makers when fending off calls to reduce interest rates. The analysis showed that young people under 25 years and retirees have higher rates of nonperforming personal loans compared to other age groups.
Another recent analysis focused on the trade sector. A study of 500 million export and import transactions in the past 15 years found that exports are dominated by a few players and markets. Export businesses have a high churn rate with 63 percent of new players closing up shop after the first year.
Thailand’s military administration is also trying to harness big data to improve policy decisions, Digital Economy and Society Minister Pichet Durongkaveroj said in an interview last month. Pichet said he’s been tasked to look into digitizing, integrating and analyzing information across more than 200 government departments.
Santitarn Sathirathai, head of emerging Asia economics at Credit Suisse Group AG in Singapore, said big data analytics can be used to better target policy responses as well as allow timely evaluation of past programs. At the same time, he called on authorities to make their data more readily available to the public.
“The government should not just view big data analytics as being solely about it using richer data but also about creating a more open data environment,” he said. That’s to ensure “people can have better access to many government non-sensitive datasets and help conduct analysis that could complement the policy makers,” he said.
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