April confidence hits in 11-year nadir

April confidence hits in 11-year nadir

Federation of Thai Industries chairman Supant Mongkolsuthree
Federation of Thai Industries chairman Supant Mongkolsuthree

Thailand's industrial confidence index stood at 75.9 in April, its lowest in 11 years, and a slight decrease across all sectors from 88 the month before.

The drop is a reflection of poor confidence in the economy because of the lockdown and curfew, the drought and the private sector's wariness of the Covid-19 pandemic.

FTI chairman Supant Mongkolsuthree said local entrepreneurs are facing a liquidity crunch from decreasing cash flow, specifically for small and medium-sized enterprises (SMEs).

In addition, agricultural output is expected to be weak this year because of the drought, which will in turn lower farmers' purchasing power.

The index in April was compiled from a survey of 1,102 companies across 45 industries.

Some 69.5% of businesses surveyed expressed concern over the global economic situation and its effect on export markets.

A full 44.9% of respondents raised concerns over the domestic political situation in response to Covid-19.

There were some positive factors, with 39.2% of those surveyed expressing positive sentiment about Thailand's currency exchange rate, while 29.7% appreciated low fuel prices and 17.9% favoured stable interest rates.

The FTI is calling on the government to support SMEs by refunding electricity deposits for businesses that use power meters no larger than 50 amps.

The federation has requested the Revenue Department exempt SMEs in all sectors from corporate income tax for three years (tax years 2020–2022).

Mr Supant expects the government's economic stimulus packages and investment projects like the Eastern Economic Corridor to boost the domestic economy in the second half of this year, inching towards growth.

The government recently eased lockdown restrictions by allowing malls to reopen and moving back the start time of the curfew from 10pm to 11pm, aiming to bolster economic sentiment.

Last month, FTI set up seven committees to brainstorm ways to deal with the Covid-19 crisis that include finances and taxes, labour, logistics and services, a committee to prevent Covid-19 outbreaks, a supporter committee to help FTI members, and the information and public relations committee to provide data to its members and the economic recovery committee.

"The seven committees will help and support FTI members to cope with the Covid-19 pandemic and those committees will closely cooperate with the government," he said.

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