Thai industrial confidence at five-month low as costs rise

BANGKOK (Reuters) – Thailand’s industries sentiment index dropped to a five-month low in April, hit by higher production costs as Russia’s invasion of Ukraine pushed up the price of energy and raw materials, an industries group said on Wednesday.

The Federation of Thai Industries (FTI) said its industries sentiment index fell to 86.2 last month after a rise to 89.2 in March.

“The conflict between Russia and Ukraine has impacted global trade and growth, as well as the price of certain imported products,” FTI chairman, Kriengkrai Thiennukul, told a news conference.

Sentiment was also dented by declining domestic demand and household spending, he said.

On Tuesday, the government approved cutting the excise tax on diesel to reduce high prices after a 30 baht per litre cap on diesel prices expires on May 20.

The FTI is urging the government to bring in another cap on diesel prices at 35 baht per litre to help manufacturers.

While a weak baht has boosted exports, it has increased the cost of imports, particularly oil, Kriengkrai said.

The baht has hovered around its weakest level in five years against the greenback.

Exports will remain a key growth driver along with tourism, Kriengkrai said, adding the group expected 6 million foreign tourists this year, versus nearly 40 million in 2019.

(Reporting by Satawasin Staporncharnchai; Editing by Ed Davies)