The Federation of Thai Industries (FTI) revealed that the industrial confidence index in August decreased from the previous month due to slowing domestic demand, especially for automobiles, as well as flooding in the North and Northeast. The government is urged to provide relief measures for the business sector and stimulate purchasing power of the public sector.
Mr. Kriangkrai Thienukul, Chairman of the Federation of Thai Industries (FTI), and Mr. Pipop Chokwatana, Executive Director of the Federation of Thai Industries (FTI) and Vice Chairman of Economic and Academic Affairs, jointly revealed the results of the survey on the industrial confidence index in August 2024 at 87.7, down from 89.3 in July 2024, due to negative factors from slowing domestic demand, especially durable goods such as automobiles, as reflected by domestic car sales for 7 months (January-July 2024) at 354,421 units, down 23.71 percent, especially pickup trucks and trucks, due to stricter lending by financial institutions, while purcha
sing power is still fragile due to concerns about household debt problems as high as 90.8 percent of GDP in Q2/2024, which pressured domestic consumption. In addition, entrepreneurs are still facing high production costs, including electricity costs, raw material prices, and financial costs, which are obstacles to doing business, including dumping problems of cheap products from abroad, making Thai products unable to compete due to higher costs, resulting in lower sales.
In addition, the flooding problem in the northern and central regions has damaged the agricultural and industrial sectors, as well as slowing down the construction sector. In terms of exports, freight rates are still high and tend to increase, especially for routes to the United States and Europe, due to China’s accelerated exports and the intensifying conflict situation in the Middle East. Meanwhile, the baht has appreciated rapidly from 36.46 baht per US dollar in July 2024 to 34.92 baht per US dollar in August 2024, causing Thai products
to be more expensive compared to competitors and reducing competitiveness.
However, in August, there were positive factors from the easing of the political situation, which made investors and entrepreneurs more confident and had expectations about the new government’s economic stimulus measures. Meanwhile, budget disbursements and government spending will continuously stimulate the economy (budget disbursement results for 2024 at the end of August 2024 were disbursed at 81.6 percent). The tourism sector is still a driving force for domestic consumption from the government’s tourist attraction measures, as reflected by the number of foreign tourists for 8 months (January – August 2024) of 23,567,850 people, an increase of 31 percent (YoY), generating 1,107,985 million baht in revenue for the country.
From a survey of 1,330 entrepreneurs covering 46 industrial groups of the Federation of Thai Industries (FTI) in August 2024, it was found that the factors that entrepreneurs were increasingly concerned about we
re the global economy at 67.5 percent, the domestic economy at 65.2 percent, oil prices at 61.3 percent, and exchange rates (from an exporter’s perspective), with the exchange rate referencing the baht against the US dollar at 40.6 percent, respectively. The factors that entrepreneurs were less concerned about were the domestic political situation at 56.0 percent and loan interest rates at 45.8 percent, respectively.
While the index is forecasted for the next 3 months at 93.9, down from 95.2 in July 2024, there are factors that entrepreneurs are still concerned about, including the increase in the minimum wage to 400 baht per day, which will directly affect the production costs of entrepreneurs, especially SMEs and labor-intensive industries. The problem of non-performing loans (NPLs) tends to increase. Geopolitics is still protracted and intensifying. However, there are still supporting factors from the 10,000 baht economic stimulus project and in the last quarter of 2024, the tourism atmosphere is expected
to become lively again, along with the proposal to the government.
Accelerate the announcement of economic stimulus measures for the rest of 2024
Reduce the electricity deposit amount to enhance liquidity in the industrial sector and delay the collection of additional electricity deposits.
Amend the Anti-Dumping and Countervailing Act B.E. 2542 to effectively enforce anti-dumping (AD), countervailing (CVD), safeguard measures against increased imports (SG), and countervailing (AC) measures, including reducing the investigation period to promptly resolve the problem of dumped goods.
4. Issue relief measures for the business sector affected by the floods, such as exempting corporate tax, extending the tax filing period, exempting import duties on machinery, and investing in water infrastructure and water management systems to solve the problem of flooding in the long term.
Requesting that the government adhere to the resolution of the provincial minimum wage rate consideration subcommittee in considering t
he minimum wage rate, including taking into account the current economic conditions and impact factors.
Source: Thai News Agency