Thailand's March Business Confidence Index Falls to Seven-Month Low, Dragged Down by Middle East Conflict

⑴ Thailand's Business Confidence Index for March fell from the previous value of 49.6 to 47.7, marking the lowest level in seven months, mainly due to the impact of the Middle East conflict. The Total Orders Index dropped from 52.2 to 47.9, the Export Conditions Index decreased from 48.2 to 45.5, and the Output Price Index rose from 49.7 to 50.6. ⑵ The hotel and restaurant industries were particularly affected, with their Business Confidence Index dropping to an eight-month low. This was attributed to Middle Eastern tourists canceling flight and hotel bookings, as well as Middle Eastern airlines suspending direct flights to Thailand. ⑶ The manufacturing index also weakened, especially in the plastic pellets and packaging sectors. The closure of the Strait of Hormuz pushed up energy prices, affecting transportation costs and the imported raw materials required for plastic manufacturing (such as crude oil and naphtha). ⑷ In addition, the expected Business Confidence Index for the next three months fell to 44.2, reflecting market concerns that the situation may persist for an extended period.