The Thai Industries Sentiment Index (TISI) has fallen to its lowest level in ten months as a result of the prolonged process of forming a new government, high levels of consumer debt, living expenses, and interest rates, as well as a slowdown in exports.
Due to a slowdown in the manufacturing sector and in the demand for goods, the index fell from the previous month to 92.3.
Due to elements including excessive family debt, high living expenses, and interest rates, the creation of a new government in Thailand has been delayed, which has resulted in a decline in the Thai Industries Sentiment Index.
Concerns about the state of the world economy and a downturn in exports are growing, with Thailand’s exports decreasing for nine straight months and risks from China’s economy’s slower-than-expected development.
In order to increase investor confidence and lessen the effects of growing borrowing prices, the private sector is calling for the rapid creation of the new administration as well as the issue of economic rehabilitation and stimulating programs.
Domestic issues include high levels of household debt and high living expenses have decreased households’ purchasing power, which has reduced demand for a variety of items. While this is happening, interest rates are still rising, which is increasing the cost of borrowing. The uncertain political climate was now affecting the trust of the commercial sector.
The still-fragile global economy is one of the risk factors outside of Thailand, according to the Federation of Thai Industries (FTI), which has led to a slowdown in Thailand’s exports for nine months running. The Chinese economy’s slower-than-expected growth was another foreign risk concern.
The FTI’s forward confidence index for the following three months dropped from the previous month’s reading to 100.2, which is also a decrease. Businesses’ concerns over delays in the formation of the new administration, which could have a negative impact on budget planning for the state sector, were blamed for the decline.
It was anticipated that the delay in forming the administration would lead to a lack of continuity in the application of economic policy. The tendency for production costs, such as those for fuel, electricity, and labor, to grow alarmed the private sector as well. Given the current state of the global economy, which is characterized by considerable uncertainty, such a cost increase would constitute a barrier to corporate operations.
The private sector, according to FTI Chairman Kriengkrai Thiennukul, wants a new government to be created immediately and economic stimulus and rehabilitation programs to be published quickly. According to him, the private sector intended to boost investor confidence and implement policies to lessen the effects of rising borrowing prices. This would increase the liquidity of small and medium-sized businesses and lower the danger of them obtaining non-performing loans.
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SOURCE: https://www.thailand-business-news.com
