Thailand’s economy shows positive signs

The Thai Industries Sentiment Index (TISI) increased for the first time in four months to 89.3 points in July, driven by higher demand for food, medicine and cosmetic products, said the Federation of Thai Industries (FTI).

The improvement followed a weaker reading in June of 87.2 points, the lowest level in 24 months, as Thailand is struggling to restore the economy amid higher operating costs for reeling small and medium-sized enterprises.

With more purchase orders for food, medicine and cosmetic products, along with the government expediting budget disbursement, many businesses appeared to have more confidence, said Kriengkrai Thiennukul, Chairman of the FTI.

Increased budget spending, particularly on state infrastructure development projects, pumped capital into the economy, benefiting the construction sector significantly, he said.

Kriengkrai said investors' applications for state investment incentives increased by 35% year-on-year to more than THB 458 billion ($13.22 bilion) in value.

All these factors contributed to the higher July TISI reading, but do not mean entrepreneurs can be complacent about the country's economic situation, he said.

Thailand is still struggling with high levels of household debt, with the household debt-to-­GDP ratio currently at 91%.

The July TISI calculation was based on a survey of 1,323 entrepreneurs across 46 industries under the FTI. The global economy topped their list of concerns, receiving 66.8% of votes, followed by the domestic political situation (58.7%) and the fluctuation of foreign exchange rates (37.9%).