Krungsri SME Index survey shows entrepreneurs upbeat on economy in 2Q/2019

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Mr. Sayam Prasitsirigul

Krungsri (Bank of Ayudhya PCL) disclosed the latest result of Krungsri SME Index survey conducted in the first quarter, showing the business confidence index for the next three months was in positive zone at 20.23. The result reflected their optimistic view that second-quarter economic growth will be better than the first quarter. For the overall picture, however, most entrepreneurs expressed concerns related to economic conditions, politics and cost management.

Mr. Sayam Prasitsirigul, Krungsri Head of SME Banking Group, said, “The result of Krungsri SME Index survey showed that SME entrepreneurs expect the economic growth in the second quarter will be better than the first quarter. Although the positive view declined from the previous survey, the SME Index for the next three months was still positive at 20.23 from 25.42 in the previous quarter. The result is in line with Krungsri Research forecast that the Thai economy will grow moderately in the second quarter, mainly due to weaker external demand of trading partner economies, while the slowdown in global trade could affect exports. However, trade dispute between U.S. and China is close to be concluded, which should ease the global trade uncertainty, and have positive effect on global trade in the second half of this year. Meanwhile, domestic consumption will be a main catalyst to drive the economic growth, while the tourism sector will expand further, along with the continued growth of private consumption and private investments. However, public investment may rise gradually, partly due to delays in some state enterprises’ infrastructure projects after recent revision in some Public Private Partnership projects to facilitate private companies.”

Meanwhile, SME entrepreneurs expressed view that the economic growth was slower in the first quarter, especially those in the manufacturing sector, with the index falling to -25.16. Considering the size of their businesses, small-sized entrepreneurs have more negative view than medium-sized companies. The result was in line with March economic data, which showed a sluggish private consumption from the previous month, including the weakness in exports and tourism revenues. Krungsri Research expects first-quarter GDP to grow below 3% from year earlier, which should drag GDP growth to be below an earlier target of 3.8%.

The quarterly survey conducted nationwide during 1-28 March 2019 also asked about payment system used by SME entrepreneurs. The survey showed 53% of respondents used cheque payment, followed by internet banking (19%), cash (15%) and mobile banking (8%). Cheque payment was the most popular because their trading partners have no electronic payment system, and they are not confident in security of electronic system and data. Considering the location, mobile banking was more popular in the provinces than in Bangkok and vicinity, especially for small-sized entrepreneurs. The main reasons for electronic payment adoption were 1) convenience, speed and flexibility 2) most trading partners have electronic systems, and 3) no fees. In addition, more than half of respondents expect electronic payments will become more popular over in the next three years.


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