Thai industrial sentiment dips despite tourism boost
The Federation of Thai Industries (FTI) reported a minor dip in the industrial sentiment index for February, which fell to 90.0 from 90.6 in the preceding month. This decline was attributed to a slowdown in both domestic demand and exports, despite a boost from the tourism sector.
The FTI revealed that household concerns over high living costs and debt issues led to weaker domestic demand compared to January. Concurrently, export volume also suffered due to the sluggish economies of trade partners. Thailand’s household debt stands at an alarming 91% of the gross domestic product, a figure that the Bank of Thailand (BoT) warns could hinder long-term growth and risk the nation’s financial stability if it surpasses 80% of GDP.
In contrast, the tourism sector emerged as a beacon of hope, buoying overall sentiment. The FTI indicated that another industrial index, which forecasts sentiment over the subsequent three months, saw an uptick in February.
According to government data, Thailand played host to 7.43 million international tourists between January 1 and March 10, a year-on-year increase of 47%. Tourist expenditure during this period amounted to 359 billion baht (US$10 billion). China led the influx, with 1.36 million visitors, reported Bangkok Post.
In a bid to further capitalise on tourism’s potential, the government has set a lofty goal of attracting 40 million foreign tourists this year, a significant leap from last year’s 28.15 million arrivals.
In related news, a recent announcement by the FTI revealed that industrial sentiment in Thailand took a downturn in December, recording a decline from 90.9 to 88.8. This significant drop was attributed to a combination of factors, namely the weakening spending power of consumers and prevailing export concerns.
The FTI, which is responsible for tracking fluctuations in various business and industry sectors, noted that this decrease was a reflection of the prevailing economic climate. The downturn is seen as a clear indication of the impact of ongoing global economic challenges on local industries.
