Yoshihiro Otsuji

Expected slight gains in foreign direct investment and exports in the second half would also help the economy, said Yoshihiro Otsuji, chairman of the economic research committee of JCC.The Bank of Thailand earlier this week raised its estimate for growth this year to 3-4%, up one-half point from previous forecasts.

The Sydney Morning Herald - News onlinePublished in The Sydney Morning Herald - Indexed on Aug 1, 2002Japan-style deflation is looming in the United States, with markets and the US Federal Reserve anxious that falling shareholder wealth will seriously dent consumer spending and force consumer prices backwards.

Companies see the business environment as improving in the first half of 2003 but at a slower pace than previous surveys have revealed, said Yoshihiro Otsuji, head of the JCC's economic research team, on the subject of a survey carried out at the end of last year.

However, the percentage of companies that felt the business environment was improving fell to 48 per cent from a previous 56 per cent compared to the last JCC survey, which was undertaken earlier last year.

Responding companies identified their top three problems as competitive market conditions, human-resource shortages and currency fluctuations.

Yoshihiro noted that human-resource shortages ranked second, up from third in the last survey, among the problems Japanese companies reported they faced in Thailand, with job-hopping advancing to seventh, up from ninth, and labour-related problems moving to ninth, up from 10th.

On a more positive note, the percentage of companies that felt the business environment was deteriorating fell to 16 per cent from 19 per cent, while the percentage that saw no change rose to 37 per cent from 25 per cent, the survey showed.

Questionnaires were sent to 1,140 Japanese companies, and 28 per cent of them responded.

Most said they believed that Thailand's economic recovery would continue in the first half of this year, responding that exports and domestic consumption would boost growth, Yoshihiro said.

The survey also revealed that 70 per cent of the responding companies expected their total sales would increase in the coming year, a figure unchanged from the last survey, he said.

The percentage of companies that expected to turn a net profit rose seven percentage points to 93 per cent, Yoshihiro added.

Planned capital investment is down 1.8 per cent, according to the survey, which also revealed that, while investment in the auto and textile sectors would increase, in the electronics and chemical sectors it would decrease, said Yoshihiro.

According to the survey, Japanese companies are bullish on Asean and Chinese economic growth but feel that the US and European markets will remain flat and that the sluggish Japanese economic outlook will continue to prevail, Yoshihiro said.

Wichit Chaitrong

THE NATION