Business prospects for local small and medium-sized enterprises (SMEs) are likely to remain very limited in the second half, attributed to domestic and global economic challenges, notably the impact of the Israel-Iran conflict, says the Federation of Thai SMEs.
Oil prices are rising since Israel launched air strikes on Tehran, targeting areas where nuclear weapon programmes are allegedly operated. The attacks caused Iran to retaliate, which has lead to concerns over fuel transport in the oil-rich region, according to media reports.
The situation, along with other geopolitical conflicts as well as the trade war affecting other countries, is not good for the global economy, which will eventually affect the Thai economy, said Sangchai Theerakulwanich, president of the Federation of Thai SMEs.
SMEs, which are struggling to recover from the impact of the Covid-19 pandemic, will again bear a heavy brunt, he noted.
"We hope the government will come up with new measures to boost the economy and stimulate consumer purchasing power," said Mr Sangchai.
Thailand currently has a total of 3 million SMEs generating up to 2.76 million jobs. Some 500,000 of these SMEs are in the manufacturing sector, which are facing tougher competition due to the influx of low-cost products from China.
Failing to compete with Chinese rivals may cause many SMEs to exit the business, said Mr Sangchai.
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) earlier called on the government to enforce legal measures against the flood of Chinese imports into the country, which is expected to intensify this year.
The JSCCIB suggested the government add more measures, using the 1999 Anti-Dumping Act and the 2007 Safeguard Measures on Increased Imports Act, to better deal with the problem.
Mr Sangchai also asked the government to launch new measures to boost the tourism industry, following a drop in the number of Chinese tourist arrivals.
In March, the number of Chinese arrivals plunged by more than 48% to 297,113, down from 573,216 in the same month last year.