Thai industrial sentiment keeps rising
Thailand’s captains of industry see smooth sailing ahead. The Kingdom’s Industrial Sentiment Index hit its highest level in 10 months in March with executives of major firms bullish about Thailand’s economy because of its growing tourism and purchasing power.
Wiwat Hemmondharop, Vice-Chairman of the Federation of Thai Industries (FTI), said that spending by higher numbers of tourists was stimulating demand for goods and services, leading to ripples of growth throughout the economy. Meanwhile, higher prices for agricultural products are giving farmers more purchasing power.
Another bright spot has been an increase in construction activity, which drives demand for a wide range of goods from cement to electronics.
The FTI produces the index, which was based on a survey of 1,316 enterprises across 45 industry clubs that are federation members. While their outlook is overwhelmingly positive, members nonetheless expressed some concern about rising prices for raw materials and energy.
Inflation in Thailand, which rose sharply along with other countries around the globe following the pandemic, has fallen to about 1 percent. Energy prices have soared in recent weeks prompting the government to issue some subsidies to consumers. A significant percentage of Thailand’s energy is imported and affected by regional and global inflation patterns, although the majority, mainly natural gas, is sourced locally.
The global economy was also a concern among executives because of rising interest rates, especially by the United States Federal Reserve. Central banks have been raising interest rates to try and tame inflation.
“Higher interest rates will not only affect Thai businesses, especially small and medium-sized enterprises, but also weaken international trade,” Wiwat added.