Thailand's manufacturing production index (MPI) is expected to grow by 4-5% this year, up from an earlier forecast of 2-3% made by the Office of Industrial Economics (OIE), due mainly to fast-growing exports.
The adjustment in the forecast was announced as the OIE reported the MPI index for June increased by 17.58% year-on-year to 97.73 points.
The index level for June was a 2.65% decrease from May.
The June index was driven by increased car production that led to greater demand for steel and rubber tyres as well as an increase in electronics parts and circuit board manufacturing due to the work-from-home guidelines and high technology development.
Global economic recovery as a result of mass vaccinations in many countries and the easing of their lockdown measures led to the growth in Thai exports.
This will result in better prospects in the manufacturing sector. The OIE believes the industrial sector's GDP will grow by 3-4% this year, up from its earlier prediction of 2.5-3%.
"The impact of the third [Covid-19] outbreak was also factored in as we calculated the new [growth] targets," said OIE chief Thongchai Chawalitpichaet.
The increase of the MPI in June was driven by the automotive sector which saw its its production increase by 90.06% year-on-year, thanks to growth in demand from Australia, New Zealand, Japan and Vietnam.
Production of electronics parts and circuit boards increased by 32.32% year-on-year in the same month.
In the jewellery and precious metals sector, manufacturing grew by 178.89 % year-on-year as it was not affected by lockdown measures and manufacturers increased their sales online.