Thailand's Manufacturing Production Index (MPI) continued to decrease in August, with a year-on-year drop of 7.5% to 91.8 points due mainly to the global economic slowdown that affected exports, says the Office of Industrial Economics (OIE).
In July, the MPI declined by 4.43% year-on-year to 91.1 points.
During the first eight months of this year the index dipped by 4.9% year-on-year to 94.6.
"The continual decrease in MPI reflects the weak economy and unfavourable business sentiment," said Warawan Chitaroon, director-general of the OIE.
Capacity utilisation in August stood at just 58.1%. From January to August, the rate was around 60%.
August MPI was driven by certain industries, especially sugar production which increased by 49.5% year-on-year due to growing demand from domestic and overseas markets, according to the OIE.
Chemical fertiliser and nitrogen compound manufacturing also rose by 29.5% year-on-year because of the drop of chemical fertiliser prices and good marketing campaigns.
The OIE earlier decided to revise down the MPI growth forecast for 2023 to a contraction ranging from -2.8% to -3.8%, down from the previous projection of 0-1%, due to the unfavourable global economic situation and the Thai tourism industry yet to fully recover.
Mrs Warawan believes the government's measures to reduce electricity bills and diesel prices as well as the 10,000-baht digital wallet scheme will boost the economy.
The energy price solution gained the most votes of 85.9% from 290 executives of the Federation of Thai Industries (FTI) who were asked for their opinions on the Srettha Thavisin government's policy statement, delivered in parliament during Sept 11-12, according to the latest FTI poll.
The controversial digital wallet policy gained the least votes of just 27.2% when the interviewees were asked whether it would be an effective booster.
Besides the impact of the global economic slowdown on exports, the country faces high household debt, weak purchasing power, an interest rate hike and a looming drought that will deal a blow to the agricultural sector.
"Farmers are prone to weaker purchasing power if drought severely affects their earnings," said Mrs Warawan.
The government is aware of financial troubles in the agricultural sector, so the cabinet resolved on Sept 26 to grant a three-year debt moratorium to farmers, which will cost the government about 30 billion baht.
Farmers also need more help in other areas, including farming techniques to increase crop yields, according to the FTI.