The Bank of Thailand (BOT) said on Monday that the Business Sentiment Index (BSI) has slightly increased from the historic low of 32.6 index points in April to 34.4 index points in May.
The three-month expected BSI also increased from 37.8 in April to 41.1 in May.
All sectors are still reported below the 50 point threshold. Though business sentiment was low, the coronavirus outbreak situation has steadily been improving.
Both manufacturing and non-manufacturing sentiments improved month on month from April to May. However, businesses in the automotive, machinery, and equipment sectors all had extremely low levels of confidence as consumers continued to stay away from durable goods.
Similarly, businesses within the hotel, restaurant, and transportation sectors continued to be pessimistic as the level of economic activity was still low even with the relaxed lockdown. Some businesses also opted not to reopen as demand is still lower than operating costs, the central bank said.
For the next three months, confidence of businesses in the transportation sector continued to be weak as a result of higher cost from social distancing measures. Additionally, normal travel would not resume until a vaccine is discovered which might take at least a year, the BOT added.
Apart from the BSI, the liquidity sentiment index also improved in May. But, it was still below the 50 point threshold for eight consecutive months.
Finance Minister Uttama Savanayana said on Monday that the ministry has already asked the BOT to clarify why only 10 per cent of its 500 billion baht soft loan budget has been disbursed so far.
He said the ministry is now preparing another fund worth 50 billion baht to help SMEs that were unable to access all the soft loans that the government introduced in March. This include the initial Government Savings Bank’s 150 billion baht budget and the latest BOT’s 500 billion baht budget.
Minster Uttama said measures to set up the new SME fund will be proposed to the cabinet next Tuesday.
More jobs needed
The Chairman of the Thai Chamber of Commerce (TCC) Kalin Sarasin said that Phase 3 of the easing period which began on Monday will inject around 100-200 billion baht into the Thai economy.
He said about 200 billion baht has already been injected into the economy since Phase 1 and 2 of the easing period which began since May 17. The TCC, however, still see a recession of more than 5 per cent for 2020 which is in line with the BOT’s 5.3 per cent recession prediction.
They also expects that the outbreak of the coronavirus will take away 7 million jobs which is in line with the National Economic and Social Development Council’s prediction that that 8.4 million people are at risk of losing their jobs in 2020.
Kalin urged the government is accelerate its job creation programs via spending on investment.
