Business operators should brace for an increase in operating cost in the second quarter, as wage, fuel costs and borrowing fee stay at a higher level, according to Siam Commercial Bank's chief economist.
Chief Economist and Executive Vice President Sutapa Amornvivat said at a press briefing today that the higher minimum wage should increase the average cost of Thai business by 3.3 per cent and inflation by 0.7 percentage point. Meanwhile, fuel prices tend to stay at a high level. Due to the two factors, headline inflation in the quarter should stay at 3.5-4 per cent.
"On the financial cost, though the policy rate would stay at 3 per cent this year, the borrowing cost could be higher as commercial banks face higher funding premiums. It is also possible that dollar-denominated fund mobilisation would be more difficult, due to the eurozone crisis," she said.
The bank's economic intelligence centre expected the baht to move in the range of 30-31 per US dollar.
It revised up this year's economic growth to 5.6-5.8 per cent. In the second quarter, the manufacturing sector should show 8.6 per cent growth rate this year, while private investment should expand 12 per cent.