THAILAND’S industrial sentiment in March reached its highest level in a decade, boosted by a rebound in domestic demand and tourism, but high costs, slowing global growth and baht volatility were a worry, an industries group said on Wednesday (Apr 19).

The industries sentiment index of the Federation of Thai Industries (FTI) rose to 97.8 in March from 96.2 in February, when it had returned to pre-pandemic levels.

South-east Asia’s second-largest economy is expected to continue recovering, driven by the vital tourism sector and consumption, the FTI said.

“Entrepreneurs are less concerned over the domestic economy as domestic consumption and tourism are good,” FTI Deputy Secretary-General Sorakit Manbuphachat told a news conference.

The government is forecasting 25-30 million foreign tourist arrivals this year after receiving 11.15 million last year, compared to nearly 40 million in pre-pandemic 2019.

The FTI said China’s reopening would also support Thai tourism and exports in the second half of the year, but global economic and geopolitical problems remained a risk.

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The FTI said its index for industrial sentiment for the next three months also increased in March to 106.3 from 103.2 in February.

The group said spending ahead of a May 14 election was a short-term boost to the economy and it urged the next government to support longer-term growth while improving competitiveness and expanding export markets.

Firms were still worried about high costs, rising interest rates and baht fluctuation, the FTI said.

“Larger industrial sectors mostly export and have been impacted by softer global demand. A volatile baht also makes export decisions difficult,” Sorakit added.

Thai exports, also a key driver of growth, declined for a fifth straight month in February and exporters did not expect a rebound until the second half of 2023. REUTERS