On the sidelines of a seminar on "Benchmarking for higher competitiveness", Chakramon said the value should rise just 6 per cent from the Bt2.2 trillion at the end of last year. The value was originally forecast to rise 8 per cent.

"Soaring oil prices will drag down economic growth in the second half. Though the auto industry is doing fine, there are signs that export growth will not expand as much as the 17 per cent earlier expected," he said.

He said the higher interest rates would also affect the manufacturing sector, although not dramatically, as most manufacturers have anticipated the increase.

"Export-oriented manufacturers also have access to special interest rates from the Export-Import Bank of Thailand. Thus, the central bank's rate increase should not largely affect the sector, as interest rates are increasing worldwide."

The manufacturing sector is more troubled by the soaring costs of raw materials, wages and fuel. Chakramon said the next negative factor could be higher electricity bills and the appreciation of the baht against the US dollar. Adding to the burden would be competition among local players as well as free-trade agreements, which are opening the market to foreign traders.

"All these will affect Thai entrepreneurs' competitiveness," he said.

The ministry has planned to build comparative data of companies in three industries - rubber, wood and furniture, and textiles and garments - to find ways of increasing their competitiveness. Ultimately, the data would cover 14 industries including food, jewellery, plastics, chemicals, steel, petrochemicals, pharmaceuticals, and electrical appliances.

"This month the ministry will also propose special budgets with 76 provincial governors to finance our plans to create new entrepreneurs nationwide," Chakramon said.