Business sentiment hit its lowest rate in 18 months in July, attributed to the mounting trade row between the US and China, falling exports and relatively low farm prices.
The Thai Chamber of Commerce (TCC) confidence index, a gauge of nationwide business sentiment, fell for a fifth straight month in July to 46.7 points from 47.1 in June, 47.4 in May, 47.8 in April, 48.4 in March and 48.5 in February.
The TCC index sampled 369 members of the chamber nationwide spanning agriculture, industrial, trade and service sectors.
Sauwanee Thairungroj, president of the University of the Thai Chamber of Commerce (UTCC), said business sentiment in all regions remained tepid on mounting concerns about the simmering trade war that is expected to deal a heavy blow to exports and the economy.
The stronger baht also affected the competitiveness of shippers, while foreign tourist arrivals have yet to fully recover, she said.
Ms Sauwanee said low rainfall also hurt agricultural production in the northern region.
The business sector urged the government to harness the strong baht, making it move in line with the currencies of Thailand’s competitors.
"The slowing economy has lead some small and medium-sized enterprises [SMEs] to bank on unorganised loans to increase their liquidity, with many of them cutting their overtime payments to employees," she said, blaming as well financial institutions’ stringent lending requirements.
Ms Sauwanee said business operators nationwide are calling for the government to speed up discussions with financial institutes to relax their lending rules for SMEs.
They have also asked the central bank to further cut the policy interest rate.