Thailand’s industrial output contracted by 5.11% in 2023 due to slow recovery of the domestic economy, slowdown of trade partner economies, high household debt, cautious consumer spending, rising interest rates, and increased debt burden for consumers and businesses.
- Manufacturing production index (MPI) contracted by 5.11%.
- Capacity utilization rate in 2023 was at 59.06%.
- Slow recovery of the domestic economy, slowdown of trade partner economies, and high household debt caused cautious consumer spending.
- Rising interest rates impacted financial costs and increased the debt burden for consumers and businesses.
But Thailand’s industrial output expanded for the third consecutive month in December, which is expected to have a positive impact on the future Manufacturing Production Index (MPI).
- Industrial goods excluding gold, weapons, tanks, and combat aircraft saw a growth of 3.22% in December.
- The overall industrial economy of Thailand in January 2024 showed signs of recovery influenced by domestic factors and an increase in the volume of imports.
- To boost the export value of Thai products, it is suggested that the Thai manufacturing sector focus on products in global demand, such as agricultural and processed food products.
The contraction in industrial output had a negative impact on the Thai economy, leading to slower economic growth and job losses. The government implemented various measures to mitigate the impact, including stimulus packages and support for affected industries. However, the full recovery of Thailand’s industrial sector will depend on the global economic recovery and the resolution of domestic challenges.