Thailand's Industrial Confidence Hits 90.0 in July

The Federation of Thai Industries reported that the July 2025 industrial confidence index reached 90.0, up from 88.2 the previous month. The improvement was driven by the expanding electric vehicle market, with first-half 2025 sales up 93.07% year-on-year, supported by accelerated domestic EV production under local manufacturing conditions. Trade negotiations with major partners including the United States, European Union, and China have opened new market opportunities and reduced trade barriers for Thai goods. Industrial exports such as hard disk drives and automotive components are showing strong growth in key markets like the US and Japan.

Fuel price measures implemented through July 24 to August 15 reduced diesel and biodiesel prices by 2.40 baht per liter, helping ease the cost of living and transportation costs. The Thai Help Thai Plus stimulus program has also boosted sales for small and medium enterprises, particularly in consumer goods, food, and beverages. However, the sector faces significant headwinds including escalating US-Iran tensions that could push up oil prices and shipping costs, US tariffs of 12.5% on Thai goods under Section 301, delayed public construction projects, a 3.1% decline in tourist arrivals, and rising SME debt levels at 9.5%.

The industrial confidence index for the next three months is forecast at 96.1, up from 94.5 in June, supported by Thailand's hosting of the IMF-World Bank meetings, which is expected to boost economic activity and Thailand's international profile. However, risks remain from prolonged Middle East tensions that could increase inflationary pressure and reduce exports to the region, particularly impacting automotive, wood product, rubber, and air-conditioning industries. Electricity grid conditions and investment guarantees set at 4.5 million baht per megawatt may also influence private sector investment decisions.