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Bank of Thailand warns of labor fragility amid business closures

Bank of Thailand warns of labor fragility amid business closures

Prachachat•Economy•1h ago

Reader Briefing

The Bank of Thailand warns of labor market fragility due to a rise in temporary business closures and business liquidations in the trade and real estate sectors.

  • •The Bank of Thailand reports a surge in businesses requesting temporary closures under Section 75 of the Labor Protection Act.
  • •Business liquidations are increasing specifically within the trade and real estate sectors.
  • •Private investment decreased by 0.3% from the previous month, driven by declines in machinery, telecommunications, and electrical equipment.

Overview

  • •Pranee Sutthisri of the Bank of Thailand stated that employment in the social security system remains stable compared to the previous month, but other labor market indicators show fragility.
  • •The Bank of Thailand identified a rise in temporary business closures under Section 75 of the Labor Protection Act, particularly in auto parts, garments, and rubber and plastic products due to intense competition.
  • •The Bank of Thailand noted a decrease in net new business establishments because of increased liquidations in the trade and real estate sectors.
  • •The Bank of Thailand expressed concern that current business closures and liquidations will affect employment in the future.
  • •Private investment decreased by 0.3% from the previous month, with declines in machinery, telecommunications, and electrical equipment, while industrial factory construction increased.
  • •Industrial production improved by 0.8% compared to the previous month, supported by electrical appliances, air conditioners, and petroleum.

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Key Quotes

Pranee Sutthisri
"The overall direction of future investment tends to expand, reflected by the increase in the capital goods import index; the non-production group remains high following capital goods imports of transport businesses, while the production group decreased slightly from previous acceleration, but imports remain high."
ภาพรวมทิศทางการลงทุนในอนาคต มีแนวโน้มที่ขยายตัวได้ สะท้อนจากดัชนีการนำเข้าสินค้าทุนเพิ่ม กลุ่มไม่ใช้การผลิตทรงตัวระดับสูงตามการนำเข้าสินค้าทุนของธุรกิจขนส่ง กลุ่มผลิตปรับลดลงบ้างจากการเร่งไปก่อนหน้า แต่การนำเข้าระดับสูง

Key Entities

Person

Pranee Sutthisri(ปราณี สุทธศรี)
Senior Director of the Macroeconomic Department at the Bank of Thailand.

Organization

Bank of Thailand(ธนาคารแห่งประเทศไทย)ℹ️
The central bank of Thailand that monitors labor market indicators and private investment.

Law

Labor Protection Act(พ.ร.บ.คุ้มครองแรงงาน)
The law under which businesses request temporary closures via Section 75.