Bangkok--14 Nov--Dhurakij Pundit University
Krungthep Turakij in collaboration with Dhurakij Pundit University Research Center (DPURC) conducted a survey of 429 CEOs. The survey asked these CEOs about their views on the Thai economic outlook, business performance as well as important factors affecting their business in September-October. The survey was carried out from 28th October to 5th November 2013.
The economic index has remained negative for three consecutive months. The October’s index falls to -16, a 9-point fall from September; the index is expected to remain negative in November, with the value being -15. The fall of this index has been driven by prospect of political instability caused by the Amnesty Bill, weakening Thai economy, as well as declining purchasing power due to rising cost of living and slower growth of global economy.
Four business performance sentiment indices- revenue, cost, liquidity and employment point to a more pessimistic time ahead. October’s revenue index is -17; the index is expected to decline even further to -20 in November. Cost index fall to 43 in October and is expected to fall to 35 in November. While the fall represents an improvement, the fact that the cost index remained positive implies that the cost would continue to rise, albeit at a slower pace than September. Pessimistic outlooks for revenue and cost indices have caused the liquidity index to fall further to -10 October; the index is expected to fall further to -14 in November. The fall of liquidity index for six consecutive months since May makes businesses more vulnerable to an unexpected shock. Employment index remains at -3, similar in value to September’s index.
The five most important factors affecting business performances in October-November are as follows: political instability overall (4.7 points on a scale of 5); condition of the Thai economy (4.5 points); reduced demand (4.2 points); costs of raw materials (4.0 points); and exchange rate volatility (4.0 points).
Concerns about the impact of the Amnesty Bill have aggravated CEOs’ trepidation about the prospect of the Thai economy. If the government decides to use force to deal with protesters, there will be a lot of political repercussions to the government. If, however, the Bill goes through, the Bill itself will send a signal to international clients, investors, and tourists about the country being lack of rule of law. Either way, there is no win to the country. When taken into account continued decline in the nationa’s economic performance, the prospect for the last quarter of the year remain gloomy.