Thursday, August 13, 2020

Krungsri Research predicts economic growth of 4.1%, driven by domestic consumption

Jan 15. 2019
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By The Nation

The Thai economy will continue to expand this year, achieving growth of 4.1 per cent, with domestic consumption a major economic driver, Krungsri Research forecast in a release on Tuesday.

Private investment will enter the upcycle after the capacity utilisation rate of several industries hit multi-year highs, the research house added. 

The acceleration of public private partnership (PPP fast track) and the investment in mega-infrastructure projects will gather steam this year, while private consumption will continue its growth momentum, driven by a rise in both farm and non-farm incomes, and an increase in non-farm employment. 

Meanwhile, Krungsri (Bank of Ayudhya) on Tuesday also unveiled the results of its latest business sentiment survey among small and medium-sized enterprises. 

The overall Krungsri SME Index increased to 8.16 in the final quarter of last year, from 3.82 in the third quarter. 

The result reflected the positive view among SME entrepreneurs, especially those in the service sector which benefited from the tourism recovery, and the positive effect from the progress of the Eastern Economic Corridor (EEC). 

For the outlook for the next three months, the index edged down slightly, but was still in positive territory at 25.42, while SME entrepreneurs in all segments were quite optimistic about continued Thai economic growth.

Sayam Prasitsirigul, Krungsri’s head of SME Banking Group, said: “The latest results of the Krungsri SME Index survey in the fourth quarter clearly showed that entrepreneurs have more confidence in economic growth. 

“Both small and medium-sized enterprises from every industry in Bangkok and its vicinity, and in the provinces, share the view that the Thai economy is likely to expand further in the first quarter of this year, while the progress of EEC projects will be the main catalyst to build confidence of entrepreneurs in the eastern provinces of Rayong, Chon Buri and Chachoengsao. 

“Meanwhile, entrepreneurs in the trading sector still have a positive view on the economy, albeit at a lower rate than in the previous quarter.” 

The quarterly survey, conducted nationwide during November 1-23, showed 71 per cent of respondents were concerned about doing businesses in the next three months, due mainly to worries about the economy, followed by the political situation and operating costs.

In addition, Krungsri conducted a survey about how SME entrepreneurs enhance their competitive advantage through outsourcing. 

The survey found that more than half of SMEs, 56 per cent, do not hire outsourcing, especially those in the small business and trading sector. 

However, for those who do engage outsourcing, the most popular outsourced jobs were finance and accounting (52 per cent), followed by manufacturing (12 per cent), transportation (10 per cent) and human resources (6 per cent). 

The main reasons behind outsourcing were the need for specialists (53 per cent) and cost-saving (24 per cent), the bank’s survey found.

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