หนี้ครัวเรือนฉุด ดัชนีเชื่อมั่นอุตฯ ปรับตัวลดลง เสนอรัฐเร่งตรึงราคาดีเซล-ก๊าซหุงต้ม ลดภาระค่าน้ำมันHousehold Debt Drags Down Industrial Confidence Index; Urges Government to Cap Diesel and LPG Prices to Alleviate Fuel Costs

On Wednesday, March 13, 2024, Mr. Isaret Ratanadilok na Phuket, Vice President of the Federation of Thai Industries (FTI), and Mr. Pittiphat Manbupphachart, Deputy Secretary-General of the FTI, jointly announced the results of the industrial confidence index survey for February 2024, which stood at 90.0, a slight decrease from 90.6 in January 2024. When examining the components of the index, it was found that overall sales, total orders, production volume, and performance had decreased from the previous month. This was attributed to negative factors from the domestic demand slowing down compared to the previous month, due to concerns over the cost of living and household debt, leading consumers to be cautious with their spending. Exports continued to slow down due to the weak economic conditions of trading partner countries, particularly China and Japan, combined with the ongoing conflict in the Red Sea region, which has adversely affected Thailand's import-export activities, especially in the European and Middle Eastern markets.

Mr. Isaret Ratanadilok na Phuket, Vice President of the Federation of Thai Industries (FTI), and Mr. Pittiphat Manbupphachart, Deputy Secretary-General of the FTI, jointly announced the results of the industrial confidence index survey for February 2024, which stood at 90.0, a slight decrease from 90.6 in January 2024. When examining the components of the index, it was found that overall sales, total orders, production volume, and performance had decreased from the previous month. This was attributed to negative factors from domestic demand slowing down from the previous month, due to concerns over the cost of living and household debt, leading consumers to be cautious with their spending. Exports continued to slow down due to the economic conditions of trading partner countries that remained weak, particularly China and Japan. Additionally, the ongoing conflict in the Red Sea region has continued to affect Thailand's import-export activities, especially in the European and Middle Eastern markets. Furthermore, business operators are facing higher competitive pressures in the market, alongside impacts from lower-quality foreign products, resulting in reduced sales for Thai operators, while energy costs are on the rise.

However, there are still positive factors from the continuously recovering tourism sector and the impact of visa-free measures implemented for tourists from China, Kazakhstan, India, and Taiwan. Additionally, the Easy E-Receipt measures have helped stimulate domestic spending (during the period from January 1 to February 15, 2024), along with the price cap on diesel fuel at no more than 30 Baht per liter, effective from January 1, 2024, to March 31, 2024, which has benefited the business sector.

According to a survey of 1,316 operators covering 46 industrial groups of the Federation of Thai Industries (FTI) in February 2024, it was found that the factors that operators were increasingly concerned about included: the global economy 85.1%, interest rates on loans 74.3%, oil prices 53.7%, and the domestic economy 48.5%, respectively. Meanwhile, concerns that have decreased included the exchange rate (from an exporter’s perspective), with the reference exchange rate of the Thai Baht against the US Dollar at 38.0%, and the political situation in the country at 31.2%, respectively.

At the same time, the index prediction for three months ahead stands at 100.0, an increase from 98.4 in January 2024, supported by government measures to promote tourism which stimulate domestic spending and consumption. Additionally, government spending is expected to increase in the second quarter of 2024 after the Fiscal Year 2024 Budget Bill is approved. However, there are still factors that need to be monitored, including increased uncertainty in the global economy due to the slowdown of the Chinese economy and geopolitical risks, which may impact the export sector. Furthermore, the drought situation brought on by the El Niño phenomenon may affect industries reliant on agricultural materials and water supply in manufacturing.

Recommendations to the Government

Implement additional economic stimulus measures to encourage domestic spending and consumption, particularly tourism promotion measures.

Propose that the government extend measures to reduce the burden of fuel costs by capping diesel prices at no more than 30 Baht per liter and keeping LPG prices at 423 Baht per 15-kilogram cylinder, which will expire on March 31, 2024.

Support SMEs in accessing government procurement contracts more significantly, aiming for at least 50% of procurement budgets to go to SMEs, especially in local government entities.

The FTI has compiled data from the industrial confidence index survey and economic and industrial indicators from various agencies over the past 3 years, creating a Dashboard published on the Industry Data Space (iDS) website of the FTI to facilitate access to useful information for businesses and the public. This data can be accessed at www.fti.or.th/ids.

The FTI aims to “Strengthen Thai Industries for a Stronger Thailand.”

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Published by the Corporate Communications Division, Federation of Thai Industries (Tel: 0-2345-1013)

Prepared by the Economic and Academic Division, Federation of Thai Industries (Tel: 0-2345-1111)