MPI labours amid conflict
Manufacturers hit by surging oil prices
Thailand's Manufacturing Production Index (MPI) managed to increase slightly in April, rising 0.56% year-on-year to 91.79 points amid the prolonged impact of the Russia-Ukraine war.
When compared with the March MPI, the index dropped by 16.5%, due mainly to the temporary closure of factories during the long Songkran holidays, the Office of Industrial Economics (OIE) reported yesterday.
The government's easing of lockdown measures and the reopening of the country late last year were key factors that maintained the momentum of MPI growth during the first four months of this year.
From January to April, the MPI increased by 1.37% year-on-year to 101.97 points.
Thongchai Chawalitpichaet, director-general of the OIE, said he expects the Thai economy to keep growing, following the relaxation of entry rules for foreign visitors, which would help boost the battered tourism industry.
However, the Russia-Ukraine war remains a worry as it affects global oil prices and raw material costs, he said.
The ongoing surge in oil prices has caused the government to reduce its subsidy for the domestic diesel price. Yesterday, the board of the Oil Fuel Fund decided to increase the diesel price by one baht per litre, raising the retail price to 32.94 baht a litre, up from 31.94 baht a litre. The new price takes effect from today.
"Higher oil and raw material prices will eventually affect production costs in the manufacturing sector," said Mr Thongchai.
In April, capacity utilisation stood at 58.9%, a year-on-year decrease from 59.3% in the same period last year.
Key industries that drove the MPI in April included car manufacturing, which rose by 12.8% year-on-year, thanks to growing demand in key segments such as pickups and diesel-powered engines, following the economic recovery in Thailand and overseas.
Petroleum production rose by 12.5% year-on-year, driven by demand for jet oil and diesel as a result of the easing of restrictions on air travel and logistics.
Rubber manufacturing also rose by 23.4% year-on-year as a result of the global economic recovery.