Farming the only pessimistic sector amid recovery

Economy July 30, 2014 00:00

By Petchanet Pratruangkrai
The N

Every industry, except agriculture, expects stronger growth this quarter, driven by the economic recovery.

The agricultural sector is worried about sputtering upward momentum due to the rises in the baht and cost of production.
Based on the Commerce Ministry’s trade policy and the Strategy Office’s survey of 1,790 companies, the index for the business situation in the third quarter rose to 43 points in the second quarter from 38 points in the first quarter. 
The index on business circumstances for the next three months has also risen from 49.2 to 61.4 points. 
A reading above 50 reflects high confidence, but below 50 shows weak business circumstances.
Amparwon Pichalai, director of the office, said yesterday that most businesses were bullish because signs of recovery have become clearer since late last quarter.
The global economy has kept growing thanks to the supposed rebounds in the European Union and the United States, she claimed. 
However, the survey also found that enterprises still point to the rising cost of living and rising cost of production as possibly eroding consumer purchasing power in the long run.
Agricultural businesses are anxious about their future income and competitiveness because of droughts, lower output and the rising cost of raw materials. One of the biggest worriers is the shrimp industry, which still faces a disease outbreak in hatcheries and stiff competition in the global market.
In the service business, players are resigned to flat growth due to the expected drop in tourists this year, but more travellers are expected to come to Thailand during the peak season next quarter.
To boost confidence, they suggest that the government stabilise the exchange rate, control the cost of living and utilities, reduce the cost of production and find measures to stimulate domestic consumption.