Industrial confidence falls further

The Industrial Confidence Index in December was still below the 100-point level for the ninth consecutive month, due mainly to the fluctuation of the baht and the cloudy political situation.

The index was 85.9, declining from 91 in November.

Federation of Thai Industries (FTI) vice chairman Adisak Rohitasune yesterday said the index had been severely affected by the baht's appreciation and the sharp fall on the Stock Exchange of Thailand on December 19.

Although many negative factors such as oil prices, political turmoil and interest-rate trends are better, he said the FTI predicted that the average sentiment index for this year would still be below 100.

Adisak said these factors continually affected operators and investor confidence, and would also delay expansion of production capacity in the industrial sector this year.

He said the baht was predicted to stabilise at a rate higher than Bt36 per dollar due to the Bank of Thailand's 30-per cent withholding measure.

However, he added that from an FTI survey, most operators would be pleased with an exchange rate of Bt38.

Meanwhile, the index suggests that operators this year are concerned about the changing exchange rate, energy prices and infrastructure prices, because these three factors are difficult to predict among rapid changes in local and global situations.

Chalida Ekvitthayavechnukul

Thailand News
The Nation Thailand
Friday January 26, 2007