Thai industrial confidence climbs for second month on EV sales and state aid

Thailand's industrial sentiment improved for a second consecutive month in July, driven by robust electric vehicle sales and government support measures, according to the Federation of Thai Industries (FTI).

The federation's industrial sentiment index rose to 90.0 in July from 88.2 in June. The three-month outlook also strengthened, climbing to 96.1, on expectations of lower power costs and increased economic activity from Thailand's hosting of the IMF-World Bank meetings in October.

A surge in EV sales, stronger government spending, and higher exports of non-durable goods underpinned the improved confidence. The government's 176 billion baht ($5.3 billion) consumer subsidy scheme, launched in June under a broader 400 billion baht borrowing plan, has helped ease the cost of living and support domestic demand.

However, the FTI noted persistent headwinds, including U.S. tariffs, weaker tourism, and rising bad loans among small businesses. Manufacturers also flagged Middle East tensions and reduced exports to the region as potential risks to the outlook.

Thailand's economy grew 1.9% in the second quarter, and the state planning agency has revised its 2026 growth forecast to 2.0%–2.5% from 1.5%–2.5%. Separately, the government is developing a $700 million EV plan to replace up to 80,000 vehicles as part of its energy transition efforts.