Bangkok: The Industrial Confidence Index for August 2015 has continued its downward trajectory, recording a slight dip from 86.6 to 86.4. This persistent decline reflects ongoing uncertainty and challenges within the industrial sector, as stakeholders express concerns regarding economic policies and external trade barriers.
According to Thai News Agency, Mr. Nawa Chantanasurakon, Vice Chairman of the Federation of Thai Industries (FTI), and Ms. Banchusa Putthaprommongkol, a member of the FTI and Vice Chairman of its Economic and Academic Affairs Division, announced the latest figures. The decline underscores apprehensions stemming from various factors, including the unresolved candidacy of Prime Minister Paethongtarn, the imposition of a 19% US import tariff, a significant 40% transportation tax, and geopolitical tensions such as the Thai-Cambodian border dispute, which has led to damages amounting to 14 billion baht. Additionally, natural disasters like Tropical Storm Kajiki have exacerbated the situation, causing flooding in northern Thailand.
Despite these challenges, the industrial sector remains hopeful about the newly appointed economic team, which has been well-received for its credibility and proactive engagement with private stakeholders. The Prime Minister has tasked Mr. Ekniti Nitithanpraphat with conducting small-group discussions with the FTI to refine economic policy strategies. The “Half-Half” scheme is anticipated to play a crucial role in bolstering purchasing power towards the year’s end.
In response to pressing economic challenges, the Federation of Thai Industries has outlined urgent policy solutions across five critical areas. These include addressing US tariffs and dumped goods, enhancing SME liquidity, managing energy costs, resolving Thai-Cambodian border trade issues, and mitigating the appreciation of the Thai baht. Initiatives such as Fast Track Loans for SMEs, promoting local content, liberalizing electricity, and exploring local currency settlements are among the proposed measures to stabilize and invigorate the industrial sector.
Furthermore, the private sector has voiced concerns over the formation of a new government, dwindling product demand from trading partners, and the adverse effects of the 19% US tariff. A comprehensive negotiation strategy with the US has been proposed to clarify the Regional Value Content (RVC) rules and safeguard the Thai manufacturing sector from punitive tariffs.
In light of the Thai-Cambodian border dispute, the private sector suggests compensating affected businesses through indirect transportation routes via Laos and Cambodia, with the proposal to double tax deductions for related costs. The push for a green economy policy also gains traction, emphasizing the recycling of waste materials and industrial by-products to foster sustainable industrial practices.