Confidence picks up in Q1, survey finds
Play
Businesspeople have started to gain more confidence in the country's economic prospects this quarter amid lingering concern over their production costs, according to the Bank of Thailand's December survey.
The three-month forward-looking Business Sentiment Index rose to 56.9 from 54.4 in November, while the current BSI surged to 48.5 in December from 39.0 in November.
“The current and future business confidence indices improved. Almost all elements stayed above 50,” senior director Mathee Supapongse said yesterday. A reading above 50 means an increase in confidence.
The current BSI for investment climbed to 54.2 in December and the three-month BSI for investment advanced to 59.5.
However, production costs remained a prolonged concern in the December survey with its index keeping below 50, Mathee said. “Businesspeople expressed relatively serious concern over this.”
Businesspeople also see less price pressure in the next 12 months. Headline inflation was expected to ease to 3.6 per cent, compared to 3.7 per cent in the November survey.
In December, the balance of payments continued to contract – by US$1 billion (about Bt31 billion) compared with November’s $1.5-billion shrinkage. “The improvement is due to the healthier tourism sector, Thai companies’ overseas investment, higher trade credits and more short-term debt repayments by commercial banks,” he said. “Insurance claims of $2.5 billion also came in.”
The payments account for the whole of last year was expected to run a surplus of $1.2 billion due to increases in foreign direct investment, commercial bank deposits and foreign lending, and trade credits, as well as Thai companies’ investment outside the territory.
After experiencing a sharp economic slowdown in 2011 on Japan’s twin disasters and the severe floods in this country, Thailand is expected to see a full recovery in production in the third quarter of this year.
Electrical appliances, hard-disk drives and automobiles are forecast to rebound in the second quarter, while integrated circuits will stage a recovery in the third quarter.
Last year’s constraints on manufacturing and transport networks eventually caused exports, private consumption and investment to deteriorate in the last quarter.
Exports expanded 16.4 per cent in 2011, compared with 28.4 per cent in 2010. Exports in December continued to drop by 2.1 per cent year on year while the Private Consumption Index improved by 1.7 per cent month on month in December.
Private investment showed signs of fighting back. December’s Private Investment Index contracted 2.3 per cent month on month, compared with November’s 6.8-per-cent decline.
