Election campaigns are expected to stimulate the economy briefly amid global economic uncertainties that are blamed for causing the Manufacturing Production Index (MPI) to dip by 4.56% year-on-year in March to 104.6 points, says the Office of Industrial Economics (OIE).
International trade remained sluggish in March as high inflation and interest rates as well as banking concerns in the US and Europe weighed on Thailand's trading partners, said OIE director-general Warawan Chitaroon.
"Prolonged low production in the hard disk drive, plastic bead, steel and iron, garment and textile and medical glove industries decreased the March MPI," she said.
Capacity utilisation increased slightly to 66% in March from 62.7% in February. The industry slowdown prompted the OIE to schedule talks with factory operators on May 10 to find ways to solve problems and support the manufacturing sector.
The domestic economy is being driven by the recovering tourism sector and huge amounts spent on election campaigns.
"The number of foreign tourist arrivals continues to increase, following the full reopening of the country," said Mrs Warawan.
"Up to 6.4 million foreign tourists visited Thailand thus far, bringing benefits to the industrial sector."
The OIE expects election-related activities before the May 14 general election to contribute to GDP in the industrial sector by between 0.3-0.5 percentage points, increasing the MPI by 0.4-0.6%.
"The booster comes from the state budget of 5.9 billion baht and spending by political parties to publicise their candidates," she said.
Each candidate vying for a House seat is allowed to spend 1.9 million baht, while each party can spend 44 million baht to campaign for votes in the party-list system.
Total spending in the lead-up to the election is estimated to reach 30.3 billion baht. Audio systems, garments, fuel and printing businesses are forecast to benefit from the campaigns.
According to the OIE, industries that increased their MPI in March included the automotive, which expanded by 8.18% year-on-year as demand for passenger cars and pickups grew.
Automakers could also produce more car models as they received more semiconductors.
Air conditioner manufacturing expanded by 7% year-on-year, thanks to increased exports to Vietnam, the Philippines and India.
