Thailand's Manufacturing Production Index (MPI) is expected to increase this year, driven by exports, despite sluggish manufacturing expansion in 2023 due to an economic slowdown.
Though the indicator contracted by 5.1% last year, following a year-on-year decrease of 6.2% in December to 87.76 points, exports of industrial products are showing a positive sign.
The exports, excluding gold and weapons, grew for the third consecutive month in December by 3.22%, said Warawan Chitaroon, director-general of the Office of Industrial Economics (OIE).
"This can be a factor driving the MPI in 2024," she said.
However, the OIE will closely watch the possible impact of geopolitical factors on the Thai economy this year as the country's trading partners, including the US, India and Indonesia, will hold elections for new presidents and a prime minister, Mrs Warawan said.
The presidential election in Indonesia is scheduled on Feb 14 while the US presidential election is set to take place on Nov 5.
The general election in India will be held in April.
The Chinese economy is another factor that could affect Thailand's tourism sector, causing a ripple effect on related businesses.
According to Mrs Warawan, the contraction of the MPI last year was attributed to the slow recovery of the Thai economy and the global economic slowdown.
Capacity utilisation stood at only 59% last year.
The domestic economy cannot be restored quickly partly due to the high rate of household debt that has led consumers to be more cautious when spending, Mrs Warawan said.
Household debt was estimated at more than 90% of GDP in 2023.
Higher interest rates on loans incurred additional financial costs, affecting manufacturers, she said.
These factors led to sluggish manufacturing in the country last year, although some industries still enjoyed growth in December.
Oil refining is one industry that saw an increase in production, though. Manufacturing of petroleum products, including jet fuel and diesel, increased by 7.2% year-on-year, following the recovery in tourism.
Production of cables, particularly power cables, rose 43.2% year-on-year due to growing domestic demand.