The Industrial Confidence Index for June 2019 stands at 94.5, down from 95.9 in May 2019. This decline is attributed to a decrease in overall order volumes, total sales, production levels, operational costs, and business performance. As a result, the Federation of Thai Industries (FTI) is concerned and has suggested that the new government promptly implement economic stimulus policies.

          Mr. Suphan Montree, President of the Federation of Thai Industries (FTI) stated that the Industrial Confidence Index in June has decreased from the previous month due to concerns among operators regarding the delay in government formation. This has led to a slowdown in government policy implementation and budget spending, adversely affecting domestic investment and consumption. Additionally, the Thai baht has appreciated more than other countries in the region, negatively impacting the price competitiveness of exports, especially for products that primarily use domestic raw materials, leading importing countries to request price reductions.

Moreover, the risks stemming from the slowdown of the global economy, the protracted trade war, and international political conflicts have not only diminished business confidence but have also prompted various economic agencies to revise down their GDP growth forecasts for 2019. The private sector has suggested that the government should implement measures to manage the baht's appreciation relative to trading partners to enhance the competitiveness of Thai exports and consider lowering the policy interest rate to slow down capital inflows from abroad.

        The index is expected to decrease over the next three months, projected at 101.3, down from 102.9 in May, as operators are concerned about domestic purchasing power, particularly in the regions. The new government should expedite economic stimulus measures to boost domestic consumption and spending, as well as accelerate budget disbursement to drive the economy in the second half of the year.


Regarding this, Mr. Montree Mahapruetpong, Vice President of FTI mentioned that the factors affecting the Industrial Confidence Index in June 2019 stem from concerns over the trade war between the U.S. and China, as well as the ongoing international political conflicts that are expanding beyond just the U.S. and China. This conflict is now beginning to extend into ASEAN, which accounts for 24% of Thailand's total exports. If the Bank of Thailand (BOT) decides to lower interest rates, it is expected to help slow the influx of foreign capital, and it should be considered whether it is necessary to adjust the policy interest rate without waiting for the outcome of the U.S. Federal Reserve's meeting.