Business sentiment rose for the fifth straight month in October, boosted by improving economic prospects, stimulus packages to prop up year-end consumer spending, and lower domestic retail oil prices.
The University of the Thai Chamber of Commerce (UTCC) said the TCC Confidence Index, which gauges the sentiment of the business sector and members of the Thai Chamber of Commerce in all provinces nationwide, rose to 33.2 in October, up from 32.5 in September, 32.3 in August, 31.8 in July and 31.5 in June, the first year-on-year increase in 14 months.
This followed readings of 31.3 in May, 32.1 in April, 37.5 in March, 44.9 in February and 45.4 in January.
"Higher business sentiment stems largely from a host of government stimulus packages, such as the co-payment programme, the 'We Travel Together' programme, and the 'Shop and Payback' tax rebate scheme. The latest forecast from the Bank of Thailand's Monetary Policy Committee upgrades the economic outlook for 2020 to a contraction of 7.6%, an improvement from -8.1% previously predicted," said Thanavath Phonvichai, UTCC president.
The National Economic and Social Development Council (NESDC) reported on Monday GDP contracted by 6.4% year-on-year in the third quarter, much improved from -12.1% in the second quarter, the biggest decline since the Asian financial crisis of the late 1990s.
The first-quarter GDP saw a 2.0% year-on-year decline as Covid-19 started to take its toll on global business activity.
The state planning unit upgraded its full-year economic forecast to a 6% contraction on Monday from a 7.5% decrease on Aug 17.
For 2021, the NESDC forecasts the economy will expand within a range of 3.5-4.5%, mainly supported by improvement in domestic demand, global economic recovery and improved global trade.
Other factors supporting the positive outlook include the government's fiscal budget disbursement, economic stimulus measures and a low base from this year.
"Although business confidence improved for the fifth consecutive month, it remains below 50. This means the private sector is concerned several risk factors remain relatively high, with the pandemic still being the greatest worry," he said. "Other considerations are political rallies that may affect the government's economic stimulus measures, and consumer spending and tourism sentiment during the year-end festive season."