Firms unfazed by US woes

Firms unfazed by US woes

US banking collapse does not worry Thais

A young woman examines a display of bouquets of vibrant and colourful fresh flowers at Pak Khlong Talat, Bangkok’s renowned flower market. (File photo: Somchai Poomlard)
A young woman examines a display of bouquets of vibrant and colourful fresh flowers at Pak Khlong Talat, Bangkok’s renowned flower market. (File photo: Somchai Poomlard)

The collapse of US banks is expected to have only a minor impact on Thai companies and the overall Thai economy, according to the latest business survey by the University of the Thai Chamber of Commerce (UTCC).

Based on a sample group of 600 Thai business owners nationwide, including those in the agricultural, industrial, service, and commercial sectors, the majority of business owners (73.5%) believe the impact of the US banking fallout on their businesses and the overall Thai economy will be marginal.

However, a majority of them (80%) still believe there is still a chance that Thailand's international trade will feel an impact.

"According to the survey, it was found that the business sector considers 'costs' to be the most impacted factor, whether it be costs from inflation rates or production costs that directly affect sales and business profits," said Thanavath Phonvichai, president of the UTCC.

"Business owners believe that sales are currently not strong due to repeated misfortune. Even though the Thai economy has improved in terms of tourism and increased trade, the sluggish global economy, tepid Thai exports, existing concerns about high electricity costs, the global economic slowdown, high inflation as well as bank failures in other countries, have led to cautious spending habits among consumers."

Nevertheless, Mr Thanavath said business owners generally believed the situation would gradually improve from the end of the third quarter onwards, and that the country's economy would recover significantly in the fourth quarter.

As for the political situation, the business sector is also concerned about the formation of a new Thai government, the new government's stability, and its policies.

"The formation of the new government this time may appear in various dimensions, be it a political landslide, changes in coalition parties, protest events outside parliament, or how the government policies will be implemented. All of these create uncertainty for business owners and investors, making the second and third quarters of this year a 'wait and see' period," he said.

"Investment or investment expansion will be a 'wait and see' situation in the second and third quarters. Investment, especially short-term investment, is unlikely to be the key driving force of the country's development."

He also expected the upcoming election to be a fierce competition, with campaigning and political competition being relatively intense. This is because the opposition party aims to be the ruling party under a "landslide" policy, while the coalition parties also want to have the most seats in the parliament.

As a result, there will be a lot of money spent on campaigning over a month and a half, worth at least 100-120 billion baht, up from the original estimate of 50-60 billion baht.

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