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US human-trafficking scold adds to SME worries

Jul 28. 2015
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By Sucheera Pinijparakarn

The

The US GOVERNMENT decision to keep Thailand in Tier 3 of its "Trafficking in Persons" report will add to the worries over the competitiveness of small and medium-sized enterprises in the fishing industry, said Benjarong Suwankiri, head of TMB Analytics,

Thailand has been in Tier 3, the lowest level of the TIP report, since last year but enterprises in the US have until now have had little awareness of Thailand’s fishing industry. However, that is expected to change now that Thailand has been left languishing in Tier 3, which could reduce the chance of supplying fishery products to enterprises in that country.

Yesterday, TMB Analytics unveiled its TMB-SME Sentiment Index for the second quarter and the next three months. SMEs’ worries over the domestic economy and competition in the second quarter surged to 60.2 per cent, the highest figure in the three years since the index was unveiled. The lower sentiment was due mainly to a plunge in purchasing power driven by the severe drought.

More than 60 per cent of surveyed SMEs showed concern over the economic situation and competition, up from 54.7 per cent in the first quarter. The first-quarter figure was down from 55.5 per cent at the end of last year, as the drought had not yet become a major factor.

The severe drought has had an impact on the purchasing power of farmers, who are key consumers in the North, the Northeast and the Central region. TMB Analytics estimated the drought would pull down the production of in-season rice in those three regions by 4.3 million tonnes to 21.5 million tonnes, costing farm households a total of around Bt33 billion.

"When those [households] have less money, it means the cash flowing into economy declines and SMEs in each locality are also affected," Benjarong said.

The TMB-SME Sentiment Index surveyed 1,240 businesses across the country on their confidence in the second quarter and for the next three months.

The drought was a major reason for SMEs’ concerns over their moneymaking ability in the second quarter, and the confidence index in the second quarter plunged to 38.7 points from 43.7 point in the previous quarter. Scores below 50 indicate poor sentiment.

The index in the first quarter increased to 43.7 points from 37.1 points at the end of last year.

The lower purchasing power in the country and the ongoing drought have hit the confidence of SMEs for the next three months, Benjarong saidm and noted that the confidence index for the next three months had dropped significantly to 53.8 points from 59.3 points in the previous quarter.

In addition, he said gross domestic product was likely to grow by less than 3 per cent this year if exports dropped by more than 1.7 per cent, as the research house predicted in June.

In the first half of this year, exports dropped by 4.8 per cent year on year, particularly in June, when they plunged by 7.9 per cent from June 2014.

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