The Thailand Industry Sentiment Index (TISI) rose to 93.9 points in January, the highest level in 43 months, up from 92.6 points in December last year as entrepreneurs benefited from the state "Shop Dee Mee Khuen" tax rebate, the tourism recovery and China's reopening.
Shop Dee Mee Khuen allowed customers to claim up to 40,000 baht in tax deductions for goods and services purchased between Jan 1 and Feb 15 this year.
This scheme helped increase demand for goods, said Suchart Chantaranakaracha, vice-chairman of the Federation of Thai Industries (FTI).
"The economy is also expected to grow thanks to more tourist arrivals," he said.
However, one major challenge in the tourism and service sectors is a labour shortage. The FTI anticipates around 350,000-500,000 workers are required following Thailand's full reopening last year.
"The FTI asked the Labour Ministry to bring in more workers from Myanmar by signing a new memorandum of understanding with the country," said Mr Suchart.
The January TISI is based on a survey of 1,321 enterprises across 45 industry clubs under the FTI.
The respondents selected global economic conditions (73%) as their leading concern, followed by oil prices (58.5%), loan interest rates (50.2%) and foreign exchange rates (48.6%).
According to the FTI, the global economy is likely to weaken because of sluggish economies in the US and European markets.
This slowdown would affect Thailand's export sector, said the group.
The federation wants the government to deal with the fluctuations in foreign exchange rates.
"The baht's value should stand at 34 per US dollar, but its value has fluctuated greatly from 38.08 in October last year to 32.88 this month," said Mr Suchart.
The FTI is also worried about a drop in foreign direct investment to 15% of GDP, down from 30-35%, as this would deal a blow to economic growth.
The government needs to find ways to increase the country's competitiveness in order to attract more foreign investors.
One measure is to sign more free trade agreements, including one with the EU, said the FTI.
"This will enable Thailand to benefit from many trade pacts, similar to Vietnam," he said.
