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» The Business Confidence Index slightly decreased 1 point In the Third Quarter of 2022.

31st October 2022, Siam Ratings Agency Company Limited (SRA) announced the result of the survey about WVB Business Confidence Index in the Third quarter of 2022.

SRA Co., Ltd. conducts the survey quarterly. The main objects of the survey are companies which have the most well-known brand, the largest number of Total Assets, Total Revenues, and Employees. Being performed from the early of October 2022 to the late of October 2022, the survey attracted 150 Companies which active in many different fields in Thailand, such as Agriculture, Automotive, Construction, Technology, Energy, Electronics, Telecommunications, Services… In particular, large and medium enterprises accounted for over 97% of total enterprises participating in this quarter.

According to the survey, the Business Confidence Index (BCI) in the Third quarter of 2022 reached 129 points, slightly decreased by 1 point compared to the Second quarter of 2022 (130 points), This index shows that companies in Thailand have a slightly negative perspective on the current economic situation, which most companies also say they are still confident that the Thai economy will improve in the next phase. Besides, there are also many enterprises that believe the current economy has many fluctuations and it is difficult to predict due to the volatility of the global economy and especially the Covid-19 situation variable in 2022.

Summary of investigation results of 6 components building Business Confidence Index (BCI) in the Third quarter of 2022 as follows:

- On the general economic situation of Thailand today:

Only 34.67% of enterprises participating in the survey said that Thailand's overall economy is now better than 12 months ago, 49.33% of enterprises said that the economic conditions of Thailand remained the same. 16.00% of enterprises said that economic conditions were somewhat worse than 12 months ago.

According to the Shareholder Newsletter from Kasikorn Research Center (KResearch), Soaring inflation has prompted central banks around the world to raise their policy rates.

During 2Q2022, the global economy was reeling from hovering inflation. In the US, inflation kept rising during the quarter, with a 9.1 percent jump in June 2022. The figure was well above the 2 percent target set by the Federal Reserve (Fed), leading it to raise its policy rates higher than expected. The Fed raised its policy rate to 2.5 percent at the latest meeting in July 2022, against the 0.25 percent at the beginning of 2022. Other central banks, namely the European Central Bank, Bank of England and Reserve Bank of Australia followed suit as part of their efforts to stem runaway inflation. Steeper policy rate hikes than previously expected triggered concerns about a recession as economic activity began to exhibit growing signs of slowdown. The US economy experienced a “technical recession” in 2Q2022 as its GDP contracted for the second consecutive quarter at 0.9 percent QoQ. In spite of this, other economic indicators such as the labor market continued to post robust growth (as the unemployment rate remained low at 3.6 percent in June 2022). Looking ahead, it is expected that the Fed will continue its monetary tightening to curb soaring inflation. According to the CME Group, 69.5 percent of those polled on August 8, 2022 were of the view that the Fed Funds rate will stand at 3.00 - 3.25 percent at the end of 2022, up from the 31.4 percent of those polled on July 8, 2022, suggesting that the Fed will press ahead with its rate hikes during the remainder of 2022.

Concerns over inflation and recession will linger through 2H2022. The global economy could be heading for a slowdown amid a number of risks, including policy rate hikes undertaken by various central banks to combat rising inflation, and the fact that China is experiencing risks from its zero-COVID policy and the property sector. Additionally, product prices will continue to stay at elevated levels. Even though oil prices tend to decline from those seen in 2Q2022, but there is high uncertainty that prices will fall further because global oil supplies are projected to remain tight. The Russia-Ukraine war will not end in the near future. Geopolitical risks have recently emerged amid rising tensions between China and Taiwan. Beijing recently imposed a ban on key products imported from Taiwan such as largehead hairtail fish and citrus fruit from Taiwan. It also suspended sand exports to Taiwan. Meanwhile, Taiwan is one of the world’s important manufacturing bases for computer chips, meaning prices of related products could increase and the global supply chain may be under increased pressure if such tensions escalate. Although the conflict between China and Taiwan has not substantially hurt global trade yet, the impact might be seen more clearly over the medium to long term.

- Prediction of Thailand general economic situation in the next 12 months:

70.00% of enterprises believed that Thailand’s economy would be better in the next 12 months, 30.00% said that the economy would remain unchanged, and 0.00% of businesses are worried about Thailand’s economy in the future.

According to the Shareholder Newsletter from Kasikorn Research Center (KResearch), Tourism is Thailand’s key economic driver during the remainder of 2022, but there are several risks that must be closely monitored.

After the Thai government eased several restrictions in a bid to open the country to foreign visitors, including the cancellation of the Thailand Pass system, there was a substantial increase in the number of international tourist arrivals in Thailand. In July 2022, that figure reached 1,210,000 (exceeding one million for the first time since the emergence of COVID-19), bringing the total to 3.3 million during 7M2022 (January - July). KResearch expects that the number of international tourist arrivals in Thailand will reach 7.2 million in 2022. We are of the view that tourism will be a key economic
driver during the remainder of 2022. The export sector will also help bolster the Thai economy during 2022.

In 1H2022, Thailand’s outward trade grew 12.72 percent although it may slow down during 2H2022. Despite an anticipated increase in prices of various Thai exports, the gloomy global economic outlook may affect the export volume.

KResearch expects that the Thai economy will post higher growth than the prior estimate during the remainder of 2022. It may expand 3.7 percent in 3Q2022, supported by tourism and exports despite the key risk stemming from persistently high product prices.

- Plans to use employees:

In the survey: 30.67% of enterprises expected to raise human resources; 63.33% of enterprises planned to remain and 6.00% of enterprises will reduce the number of employees in the future.

According to The National Economic and Social Development Council of Thailand (NESDC), Labor in the Social Security System: The total number of insured persons in social security system continued to rise for the fifth consecutive quarter. The unemployment rate among insured persons under article 33 was decreased from the previous quarter and lower than the same quarter of the previous year.

The total number of social security beneficiaries continued to increase for the fifth consecutive quarter by 44.7 percent. This was mainly attributed to (i) an increase of voluntary insured persons under article 40 by 199.4 percent (partly due to COVID-19 relief measures for labours and entrepreneurs as required under article 9 of the Emergency Decree on Public Administration in Emergency Situation BE 2548 (No. 27) according to the cabinet resolution on July 13th, 2021), (ii) a rise of voluntarily insured persons under article 39 by 0.2 percent, (iii) an increase of compulsory insured person under article 33 by 1.9 percent accelerating from 1.3 percent in the previous quarter. The unemployment rate among insured person under article 33 in this quarter was 2.2 percent, lower than 2.7 percent in the previous quarter and 2.8 percent in the same quarter last year. The average number of unemployed was 2.45 hundred thousand people, lower than the number of 3.06 hundred thousand people in the previous quarter and the number of 3.08 hundred thousand people in the same quarter of the previous year.

- Investment plans for fixed assets:

67.33% of surveyed businesses planned to invest more costs for fixed assets, 32.00% of these still have no plan and 0.67% planned to reduce the cost for fixed assets in the next 12 months.

- The belief in revenue growth:

80.00% of participating enterprises were confident of an increase in sales, 20.00% of enterprises said that the revenue would remain and 0.00% business is concerned about the number of sales going down in the next 12 months.

- The belief in profit growth:
80.00% of enterprises believed that profit would rise in the following year, 20.00% of enterprises believed that profit would remain and 0.00% business is concerned about the number of Profit going down in the next 12 months.

According to The National Economic and Social Development Council of Thailand (NESDC), Thai Economic Outlook for 2022.

The Thai economy in the second half of 2022 is likely to improve from the first half of the year. The main supporting factors are: (i) the acceleration in private consumption; (ii) the recovery of the tourism sector; and (iii) the expansion of the agricultural sector. Nonetheless, the Thai economy may be affected by several key risk factors, which could result in slower-than-expected growth and needed to be closely monitored, including: (i) the volatility of the global economy and financial market; (ii) the flood situation; and (iii) the uncertain situation of COVID-19 and monkey pox outbreaks.

The acceleration in private consumption, the economic activities and domestic consumption tends to improve and return to pre-pandemic level after the continual relaxation of COVID-19 containment measures and progress in vaccination.34 Furthermore, household and business income bases are also strengthened, specifically in agriculture and tourism-related sectors. Moreover, the labor market has steadily recovered. The unemployment rate gradually decreased to 1.37 percent in the second quarter, compared to 1.53 percent in the previous quarter, while the number of employees utilizing unemployment benefits under section 33 in June 2022 was 245,000 people, declining from 307,833 people and 395,693 people in June 2021 and 2020, respectively.

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