Thai business optimism lowest in 2 years

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Thai PM
Thailand’s Prime Minister Yingluck Shinawatra

Business optimism in Thailand is at its lowest level since the 2011 floods, according to a survey of more than 3,000 private sector leaders. The International Business Report warned that business confidence fell to its lowest level since the 2011 floods in the third quarter of 2013, dropping to 28 per cent, down from 22 per cent the previous quarter, the Bangkok Post cited.

This means more business leaders are pessimistic than optimistic about the economy over the next 12 months. The report also found than 50 per cent of businesses in Thailand cite a lack of skilled workers as a constraint on their expansion plans, compared to 42 per cent of companies across ASEAN as a whole.

According to Ian Pascoe, managing partner of Grant Thornton, the management consultancy behind the research, populist government policies are “partly” to blame.

“The Thai economy has been through a marked transition in 2013,” he said. “Exports are depressed with growth of just one per cent forecast. The increase in the minimum wage, very low unemployment, a change in global consumption towards higher-technology goods, continued protectionism in some of the service industries, the ill-conceived rice-pledging scheme and persistently low productivity all weigh heavily on Thailand’s competitiveness,”he said.

Despite this, he said the economies of Thailand’s major trading partners are performing strongly and tourism remains buoyant, indicating that growth should pick up in 2014.

Meanwhile, GDP growth in Thailand for 2013 will not reach 3.7 per cent as earlier projected, but it will be above 3 per cent, Somchai Sajjapongse, director general of the Fiscal Policy Office (FPO) at the Finance Ministry, said on November 21. He attributed the lower than expected economic growth for this year to a slowdown in exports, for the National Economic and Social Development Board’s earlier forecast of zero growth for the export sector, and the ongoing political turmoil.

However, he expects the economy to improve in 2014 on the back of the country’s strong economic fundamentals and the strong status of Thai financial institutions and low inflation and unemployment rates.

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Reading Time: 2 minutes

Thailand’s Prime Minister Yingluck Shinawatra

Business optimism in Thailand is at its lowest level since the 2011 floods, according to a survey of more than 3,000 private sector leaders. The International Business Report warned that business confidence fell to its lowest level since the 2011 floods in the third quarter of 2013, dropping to 28 per cent, down from 22 per cent the previous quarter, the Bangkok Post cited.

Reading Time: 2 minutes

Thai PM
Thailand’s Prime Minister Yingluck Shinawatra

Business optimism in Thailand is at its lowest level since the 2011 floods, according to a survey of more than 3,000 private sector leaders. The International Business Report warned that business confidence fell to its lowest level since the 2011 floods in the third quarter of 2013, dropping to 28 per cent, down from 22 per cent the previous quarter, the Bangkok Post cited.

This means more business leaders are pessimistic than optimistic about the economy over the next 12 months. The report also found than 50 per cent of businesses in Thailand cite a lack of skilled workers as a constraint on their expansion plans, compared to 42 per cent of companies across ASEAN as a whole.

According to Ian Pascoe, managing partner of Grant Thornton, the management consultancy behind the research, populist government policies are “partly” to blame.

“The Thai economy has been through a marked transition in 2013,” he said. “Exports are depressed with growth of just one per cent forecast. The increase in the minimum wage, very low unemployment, a change in global consumption towards higher-technology goods, continued protectionism in some of the service industries, the ill-conceived rice-pledging scheme and persistently low productivity all weigh heavily on Thailand’s competitiveness,”he said.

Despite this, he said the economies of Thailand’s major trading partners are performing strongly and tourism remains buoyant, indicating that growth should pick up in 2014.

Meanwhile, GDP growth in Thailand for 2013 will not reach 3.7 per cent as earlier projected, but it will be above 3 per cent, Somchai Sajjapongse, director general of the Fiscal Policy Office (FPO) at the Finance Ministry, said on November 21. He attributed the lower than expected economic growth for this year to a slowdown in exports, for the National Economic and Social Development Board’s earlier forecast of zero growth for the export sector, and the ongoing political turmoil.

However, he expects the economy to improve in 2014 on the back of the country’s strong economic fundamentals and the strong status of Thai financial institutions and low inflation and unemployment rates.

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