Thailand’s Industrial Confidence Index dropped to 87.1 in September, down from 87.7 in August, announced Nava Chantanasurakon, Vice Chairman of the Federation of Thai Industries (FTI). The decline is primarily due to severe flooding across northern, northeastern, and central regions, impacting homes, agricultural areas, industries, and tourism, with economic losses estimated between 30 and 50 billion baht.
The widespread flooding significantly disrupted various sectors. Nava noted that the weakened domestic purchasing power, driven by high household debt, further dampened sales of durable goods. Car sales plummeted by 24% while motorcycle sales declined by 11% in the first eight months of 2024.
Delays in government spending on public projects added to the challenges faced by the manufacturing sector. Additionally, cheap Chinese imports and a rapidly appreciating baht (US$1 = 33.25 baht as of press time) have intensified the pressure on the sector.
Despite these challenges, the tourism sector continues to provide a significant boost to the economy. Thailand welcomed 26,005,295 international tourists between January 1 and yesterday, October 16, marking a 30% increase compared to the previous year. This influx generated a total revenue of 1.21 trillion baht. Key markets contributing to this growth include China, the United States, ASEAN, Europe, India, and the Middle East.
“Tourism is expected to remain a key driver of economic growth, helping to offset some of the industrial sector’s downturn.”
Additionally, the government’s 10,000-baht cash rollout programme for 14.5 million welfare cardholders and disabled individuals at the end of September provided a temporary boost to domestic consumption, particularly for consumer goods.
The combination of these factors paints a complex picture of Thailand’s economic landscape, with significant challenges in the industrial sector counterbalanced by robust growth in tourism and temporary government measures to stimulate domestic consumption, reported Pattaya News.
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