The Industrial Confidence Index in Thailand has declined for the third consecutive month, falling to 90.0 in September from 91.3 in August, according to the Federation of Thai Industries (FTI). The weakening is primarily due to a slowdown in the manufacturing sector, affected by diminished domestic purchasing power and a sluggish global economic outlook.
Kriengkrai Theinnukul, Chairman of the FTI, attributes the decline to reduced household debt, lower agricultural income, and weakening demand from trade partners, particularly China. Additionally, entrepreneurs are grappling with increased financial costs due to the Bank of Thailand’s (BOT) policy rate hike.
The FTI predicts a further decline in the index over the next three months, with forecasts dropping to 97.3 from 99.5. However, the remainder of the year is expected to see some economic boost due to the visa-free policy, despite geopolitical tensions affecting energy and commodity prices.
To combat the economic downturn, the FTI has put forth three key recommendations to the government. These include urging the BOT to minimize the interest rate gap between deposits and loans and to expedite the establishment of a “Virtual Bank”. The FTI also calls for the Thai Industrial Standards Institute (TISI) and the Customs Department to intensify efforts to prevent the import of substandard products. Lastly, the federation suggests promoting renewable energy trading through incentives for excess electricity purchases via the Net Metering system.
The FTI is also preparing for the upcoming 2023 Foreign Industrial Club (FIC 2023) Event, scheduled for November 1st. With the theme ’Reformation of Thai Economy Amidst Polycrisis’, the event aims to serve as a platform for business discussions involving both public and private sectors from Thailand and abroad. High-level government officials, including Prime Minister Srettha Thavisin, will participate, alongside diplomats and foreign investors. (NNT)
