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Thai industrial confidence index drops for the first time in 5 months

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Industrial confidence index drops for the first time in 5 months

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BANGKOK: -- Industrial confidence index for the month of January dropped for the first time in five months to 86.3 points from last December’s 87.5 points, said Mr Suphan Mongkolsuthee, president of the Federation of Thai Industries.

He attributed the declining confidence in the industrial sector to the concern over drought problem, risks from global economy, especially Chinese economy and declining domestic purchasing power.

Industrial operators however welcomed global oil price slump as it helped reduce production costs.

The FTI predicted that industrial confidence index for the first quarter of this year would drop to 100.8 points compared to the last quarter’s 102.7 points reflecting industrial operators’ concern over volatility in global money market which will impact on foreign exchange rates.

However, the FTI pointed out that operators still have confidence in the economy and to carry on with their businesses.

Source: http://englishnews.thaipbs.or.th/content/151321

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-- Thai PBS 2016-02-18

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FTI: Industry confidence down

BANGKOK: -- Thailand's industries sentiment index declined from 87.5 in December 2015 to 86.3 points in January 2016, Federation of Thai Industries (FTI) chairman Suphan Mongkolsuthee said on Wednesday.


Mr Suphan said confidence of industrial operators dropped for the first time in five months in January, mainly due to the drought situation in Thailand and the volatile global economy.

He said the country's economic growth forecast for this year remains 3% to 3.5%. The FTI chairman said exports for 2016 may grow 2% year-on-year, but the sluggish global economy may impede its growth. Thai exporters may have to penetrate new markets in Cambodia, Laos, Myanmar and Vietnam (CLMV).

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-- NNT 2016-02-18 footer_n.gif

FTI predicted ICI would drop to 100.8 points for the first quarter of 2016. But for January 2016 it's already down to 86.3 points. If the rest of 2016Q1 holds at 86.3 points, then FTI's prediction will be 16% overstated.

Now FTI predicts a 3-3.5% GDP growth rate for 2016.

If FTI's prediction holds to the same accuracy as for the ICI, the adjusted forecast will be 2.5-2.9% GDP growth rate for 2016. That would bracket the 2.8% growth realized for 2015. This is close to Deputy Prime Mininster for Economic Affairs Somkid prediction on 2016-01-07 that the Thai economy will grow by 2.8-3% for 2016; but that forecast is predicated in part on a 5% export growth. The Thai National Shippers' Council foresees exports growing 2% while the Bank of Thailand expects export growth to be flat. (The Nation 2016-01-04)

Best case scenario is that the Thai GDP growth rate for 2016 will be 2.8% and worst case scenario is 2.5%.

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