Economy brightens as confidence and registrations rise
Optimism about the Thai economy picked up pace last week as the Consumer Confidence Index rose to a 14-month high on a better performance by Thai exports, and new business registrations were up 6 percent during the first two months of 2016, according to statistics released by a university and government departments.
Rising prices for commodities and other goods, along with the reliably strong performance of the tourism sector, also helped propel the confidence index higher. Prices for rubber, oil palm and sugar cane –important agricultural exports for Thailand – were trending upwards.Thailand is among the world leaders in exports of those three commodities, as well as others such as rice.
The index, which is compiled by the University of the Thai Chamber of Commerce, rose for the third consecutive month from 74.5 to 75.8 in February, while the confidence sub-index on the overall economy edged up from 63.1 to 64.3. However, while confidence is on the upswing, the numbers indicate that the overall confidence level is still not high.
Thanavath Phonvichai, director of the university’s Economic and Business Forecasting Center, said the restrained overall confidence level has to do with the global economic situation and its potential effects upon the Thai economy.
The slow pace of the global recovery, along with changes in policies in the United States under its new administration and the United Kingdom because of Brexit, could possibly have effects upon Thai exports, according to consumers who were surveyed.
On the other hand, last week’s decision by the U.S. Federal Reserve to raise interest rates by one quarter of a point, may help some Thai exports as the rate rise could cause a slight depreciation in the Thai currency, making its goods more competitively priced in global markets. It will take time, however, to gauge the actual effect of the rate rise, which may prove to be negligible.
The rate rise “will cause the baht to depreciate [against the U.S. dollar], which should be a boon to our economic recovery,” said Mathee Supapongse, the Bank of Thailand’s deputy governor overseeing monetary stability.
The improving outlook for the economy also underpinned a 6 percent rise in new business registrations during the first two months of this year, according to the Department of Business Development at the Ministry of Commerce.
The number of new business registrations totaled 5,700, with combined registered capital of $770 million.
“Higher registration came in line with the country’s economic recovery alongside economic stimulus measures, while private investment prospects look positive due to the government extending a tax measure promoting domestic investment for another year and domestic tourism continues to grow,” saidBanjongjitt Angsusingh, director-general of the Business Development Department.