BoT: Consumption, private investment to slow for balance of '08

BANGKOK, Aug 12 (TNA) - The majority of business entrepreneurs in
Thailand expect that domestic consumption and private investment during the balance of 2008 will remain sluggish, according to the Bank of Thailand (BoT).

Demand of consumption is projected to retreat compared to the first half of the year due to falling confidence, while most manufacturers have already raised prices of their products, which will remain high through the year end, the central bank said.

Private investment during the second half of 2008 is expected to slow down due to rising costs of building materials and increased competition, making it difficult for the producers to pass on the higher costs to consumers, the BoT said.

As the costs of raw materials and oil prices continue to increase,
manufacturers are struggling to locate less expensive raw materials, boost production capacity and improve the quality of their products. But their attempts encounter difficulties because of price control imposed by the government and demand has also started to retreat.

Most entrepreneurs also said that rising inflation due to increasing oil and raw materials prices have depressed both goods prices and profits.

Local political trouble has also affected consumer and business confidence enormously.

Lack of skilled workers are also hurting some manufacturers, BoT said.