Macroeconomics/TISI Index

Editorial team

FTI urged the government to boost tourism during high season

Tourism expansion boosted index revival while FTI urges the government to issue a stimulus package boosting tourism during the high season.

Mr. Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI)

Mr. Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), revealed that Thailand Industry Sentiment Index (TISI) for November 2022 was 93.5, which slightly increased from 93.1 in October 2022.

Increasing Index components are including total orders, total sales, and turnover while the confidence in production volume and production cost are declined.

The factor supporting the confidence of industrial entrepreneurs is the recovery of domestic demand and the expansion of international tourists. While the construction sector has seen in a good trend after the easing of flood situation, leading to construction material demand for home maintenance increased.

When the easing of chips-shortage crisis positively affects to the production of automotive and electronics products. In addition, declining of freight rates has benefits for the exporter. However, industrial entrepreneurs are still concerned about operation costs from the increase in electricity price, raw materials, wages, and loan interest rate which causes the financial cost to increase.

For the export sector, the risk includes foreign demand declining due to the global economy decelerating, the way China persists with Zero – Covid policy, and Thai baht appreciation which decreased exporter’s price competitiveness.

The survey, which was conducted in November 2022 from 1,315 enterprises, covering 45 industry clubs nationwide, unveiled concerning factors for entrepreneurs are global economy (70.3%), domestic politics (43.5%), loan interest rates (43.3%), baht against dollar exchange rates in exporters’ view (42.9 %), while factors of oil prices (59.2%), and domestic economy (39.4%) help relaxing enterprises’ concern respectively.

TISI for the next 3 months is forecasted at 97.0, having increased from 98.8 in October 2022 due to the entrepreneur's concern about the cost of production, especially energy price, which remained at a high-level including inflation which decreased domestic purchasing power. While the Russia-Ukraine war is prolonged, global economic instability and the fluctuation of exchange rates are still risk factors for the export sector.

Policy Recommendations to the government sector included
The government should launch measures to reduce entrepreneur’s production cost, such as postponement of electricity prices increased, to not exceed 4.72 baht per unit.

To encourage entrepreneurs to invest in renewable energy within factories, for reducing electricity costs during the on peak period in a concrete way.

To launch government measures for supporting soft power in order to stimulate the purchase of international tourists on Thai products and services. By expanding opportunity for Thai products in global market through tourism. It is expected that during the high season there will be at least 1.5 million foreign arrivals per month, and in 2023 the number of the arrivals are expected to meet 21 million.

In addition, the FTI has complied the survey results of TISI as well as data on economic and industry indicators from various agencies for the past 3 years. It is prepared as a dashboard published on Data Space (iDS) website of FTI to facilitate entrepreneurs and the general public to access useful information in their business operations.