Bangkok: The private sector has highlighted multiple factors contributing to the contraction of the industrial confidence index in April and has urged the government to rigorously inspect counterfeit products. Mr. Apichit Prasoprat, Vice Chairman of the Federation of Thai Industries (FTI), disclosed the survey results showing the Industrial Confidence Index at 89.9 in April 2025, a drop from 91.8 in March. The decline is attributed to a slowdown in industrial production due to extended holidays during the Songkran Festival, reduced working days, and the impact of U.S. import tariffs, including a 25% sectoral tariff on auto parts and accessories, steel, and aluminum, as well as a 375% anti-dumping and countervailing duty on solar panels, as of April 21, 2025. Additionally, an earthquake has delayed decisions on vertical real estate purchases, affecting confidence in the real estate sector.
According to Thai News Agency, imports from China and issues with claiming the origin of Thai products have escalated, with imports from China increasing by 20.07% year-on-year from January to March 2025, impacting the domestic manufacturing sector. The downward trend in automobile exports, which fell by 9.36% year-on-year in March 2025 due to increased automobile taxes, also contributed to the index's decline.
However, some positive factors emerged in April. The enforcement of the Reciprocal Tariff was postponed for 90 days, ending in early July 2025, while the Baseline Tariff of 10% continued for all countries, prompting accelerated imports from the U.S. to prevent supply chain disruptions. The Maha Songkran World Water Festival 2025 attracted 666,180 tourists to Thailand from April 6-12, 2025, a 10.73% increase from the previous week, boosting domestic spending and tourism income. Additionally, earthquake relief measures and reduced transfer and mortgage fees positively impacted the construction material sector by promoting spending on building repairs.
The FTI's survey of 1,359 entrepreneurs across 47 industrial groups in April 2025 revealed heightened concerns about the domestic economy (58.4%), the global economy (58.0%), domestic political situations (44.0%), and exchange rates (36.2%). In contrast, entrepreneurs were less worried about oil prices (25.0%) and loan interest rates (14.9%).
The index forecast for the next three months also decreased to 93.3 from 95.7 in March 2025, as entrepreneurs remain concerned about uncertainty in international trade policies and the global economic slowdown, causing continued contraction in the industrial production sector and potential delays in investment. Risks from the slowing U.S. economy, as indicated by a first-quarter GDP figure of -0.3%, and volatile weather leading to floods, especially in the southern region, also contribute to concerns.
Despite these challenges, expectations are buoyed by a reduction in the policy interest rate by 0.25% to 1.75% per year, which is anticipated to reduce financial costs for entrepreneurs and enhance cash flow for businesses.
In response, the private sector has proposed that the government strictly inspect foreign goods that exploit Thailand's exporting rights, such as issuing certificates of origin, scrutinizing the manufacturing process, and monitoring trading behavior of entrepreneurs exporting to the United States.