Thailand’s industrial sentiment witnessed a decline in August primarily due to sluggish domestic demand, elevated production costs, and the impact of floods, according to the Federation of Thai Industries (FTI). The FTI urged the government to unveil economic stimulus measures within the current year to bolster the struggling industrial sector.
The industrial sentiment index, as reported by the FTI, retreated to 87.7 in August from 89.3 in July, following a brief uptick in the preceding month after four consecutive months of decline. The slowdown in domestic demand was highlighted by a notable 24% year-on-year drop in car sales during the initial seven months of 2024, attributed to stricter lending practices by banks.
In addition to weakened domestic demand, the FTI pointed out that exports were adversely impacted by the baht appreciating to a 19-month peak against the dollar. The baht strengthened by 2.3% vis-à-vis the dollar this year, positioning it as the second strongest currency in Asia after the Malaysian ringgit.
Moreover, floods in certain regions of Thailand inflicted damage on both the agricultural and industrial sectors, causing disruptions in construction activities as well. The FTI emphasized the necessity for governmental aid to assist businesses affected by the floods and underscored the importance of support for the overall resilience of the economy in the face of these environmental challenges.
