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Political risk worries 49% of executives
February 23, 2006, 1:52 pm
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Almost half of the local executives from 35 industries surveyed for a sentiment index said they were worried that current political tension would hurt their business over the next three months.
The survey of 527 members of the Federation of Thai Industries (FTI) was conducted alongside the monthly Thai Industries Sentiment Index (TISI).
It showed 49% of the respondents were concerned that the demand for the prime minister\'s resignation would endanger their businesses and 49.6% felt that domestic politics would harm their businesses through to the end of April.
However, 6.8% of TISI respondents said the political conflict was beneficial to their businesses and 11.3% were confident about the political situation over the next three months.
The remainder said politics would not affect their businesses.
Santi Vilassakdanont, vice-chairman for FTI, said Sondhi Limthongkul\'s Sunday rally would not shake foreign investors\' confidence in Thailand. However, it could have a negative impact on the confidence of new investors from abroad.
Mr Santi added that unlike investors in capital markets, Thai industrialists would not be affected by the rally or instability because they had a long-term perspective and knew the right time to expand their businesses.
A figure above 100 in the TISI indicates business confidence in the coming three months.
The TISI in January soared to 103.4 from 100.4 in December last year on increases in the indices for purchase orders, sales, production volumes and performances.
However, confidence in operational costs dropped to 63.3 in January from 68.5 the previous month.
According to Mr Santi, the index fell dramatically for garment and textiles, cement, rubber, footwear, aluminum and waste-management businesses because industrialists were worried about rising oil prices and interest rates.
A preferable price for diesel was agreed at 20.39 baht per litre in the survey, while the exchange rate was expected to be 39.93 baht to the US dollar, said Mr Santi.
The respondents said the government should stabilise oil prices and raw materials. In addition, they hoped the government would charge fairer fees for infrastructure to help lessen their production costs.
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