The Thai Industries Sentiment Index (TISI) has increased for two months in a row as economic activity resumes, the Federation of Thai Industries (FTI) said on Thursday.
The index climbed from a low of 75.9 points in April to 78.4 in May, then to the latest of 80 index points in June.
Supant Mongkolsuthree, the FTI’s chairman, said lifting the curfew and reopening businesses in Phase 3 and 4 of the lockdown’s easing period have contributed to the increased sentiment in June.
Other contributing factors include the number of confirmed coronavirus cases remaining stable throughout the month and border trade increasing as checkpoints reopen.
However, at 80 index point, the score is still below the 100-mark which means that the overall sentiment is still low.
Supant said businesses, especially SMEs, are still suffering from a shortage of liquidity due to the sudden drop in demand and the nationwide lockdown.
The strengthening of the baht and the increasing of oil and raw material prices have also led to added costs on production and logistics.
Looking at the next three months, the forward-looking index decreased from 91.5 in May down to 90.1 in June as businesses are concerned about the prospect of weak domestic demand as the economic recovery is still fragile.
There are also concerns over the possibility of a second wave of the outbreak. The economic activity also tends to be low during the rainy season.
To increase the industries sentiment, the FTI recommends that the government:
- Procure ‘Made in Thailand’ products for government purchases
- Allow the Thai Credit Guarantee Corporation (TCG) to provide more credit guarantees for SMEs’ loans from the Bank of Thailand’s soft loan budget (valued at 500 billion baht) and persuade commercial banks to give out more loans to SMEs.
- Come up with more investment incentives to attract more foreign investors, especially in the Eastern Economic Corridor (EEC)
