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Business sentiment improves over three months, says central bank

Aug 04. 2020
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By The Nation

In July, the Business Sentiment Index (BSI) had risen for three consecutive months to 42.9 in almost all sectors, with the exception of electrical appliances, though the overall index and sector sub-indices were still below the 50-threshold, reflecting low confidence even with signs of recovery, according to Bank of Thailand.  

The three-month expected BSI rose from 47 last month to 48.6 due to improved outlook in almost all sectors, especially the automotive sector, whose index floated above the 50 threshold for two months running.

Confidence in the manufacturing sector grew mainly from optimism in machinery and automotive sectors, partly due to the launch of new models at the recent motor show event. Confidence in the non-manufacturing sector also improved, partly due to improved confidence in transportation and construction sectors. 

However, the BSI in all sector sub-indices was below the 50-threshold, reflecting that most respondents were still concerned about fragile business conditions from both sluggish demand and a higher chance of a second-wave of Covid-19 infections. 

The three-month expected BSI rose to 48.6 due mainly to improved outlook in almost all sectors, especially positive views of respondents in the automotive sector reflected by the above 50-threshold for a second month running. This is possibly because the motor show helped stimulate domestic bookings. 

Similarly, the sub-indices of hotel and restaurant and transportation sectors improved significantly due to domestic tourism stimulus packages. However, the index of hotel and restaurant sector was still below the 50-threshold, showing that most respondents did not expect healthy business conditions, as revenue from domestic tourist spending cannot offset revenue lost from foreign tourists.

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