Thai Business Confidence Hits 3-Year Low as Spending Weakens
Thai business confidence hit a 3-year low in July at 41.5 points as weak consumer spending, high household debt, and rising production costs squeeze the economy, though consumer confidence showed modest improvement from government relief me
Thanavorn Pholwithai, rector and chair of the University of the Thai Chamber of Commerce's Economic and Business Forecasting Center, announced that the Thai Chamber of Commerce business confidence index for July 2025 stands at 41.5 points, up 0.1 points from the previous month but marking the lowest reading in 35 months—or three years. The business sector attributes the decline to a stalled Thai economy, sluggish tourism growth, and fragile purchasing power stemming from flat incomes and high household debt levels. Businesses also face unfair competition from foreign goods and services, particularly in retail and food service sectors, driving down commercial sales. Rising production costs for electricity and fuel continue to erode profit margins and strain liquidity, while access to credit remains problematic.
Looking ahead six months, most business operators expect economic conditions to worsen across all sectors except services, with no significant recovery expected until year-end. Consumer confidence, however, showed its second consecutive monthly improvement in July, rising from 50.7 to 51.8 points, buoyed by government relief measures and easing oil prices. Agricultural commodity prices such as rice have also begun to stabilize, though the index remains below 100, reflecting lingering concerns about slow economic recovery and persistently high living costs. Uncertainty around ongoing Middle Eastern tensions poses a further risk to consumer sentiment.
Despite the uptick in consumer confidence, which is expected to accelerate in the third and fourth quarters through ongoing government stimulus and budget disbursements, Thai businesses remain vulnerable to production cost pressures, fuel volatility, liquidity shortages, and aggressive dumping of cheap foreign goods. Officials called on the government to quickly implement protective measures for local businesses against unfair foreign competition, manage fuel costs more effectively, improve access to low-interest credit, and support debt restructuring for small and medium enterprises.
