BANGKOK :Thailand's industrial sentiment index fell to its lowest level in three years in August on worries about domestic political uncertainty, a strong baht currency and U.S. tariffs, the Federation of Thai Industries said on Wednesday.

After falling for the past six months, the FTI said sentiment may pick up on the formation of a new government after a period of political chaos.

The FTI said its industrial sentiment index dropped to 86.4 in August from 86.6 in July, the lowest reading in 37 months. The survey was conducted before parliament elected Anutin Charnvirakul as prime minister earlier this month.

"The good point we believe is that this cabinet has a short tenure, which will make the government focus on working diligently," FTI Vice Chairman Nava Chantanasurakon, told a news conference.

"If it can prioritise and implement the private sector's proposals effectively, the index should be better than in August."

Anutin has said he wants to boost the struggling economy, and on Monday said he would tackle the baht's appreciation.

The baht's rise to a four-year high against the dollar has raised concerns about competitiveness among businesses, including rice exporters. The baht is up 8 per cent against the dollar this year, the second-largest rise amongst Asian currencies.

The central bank has said it is considering measures, including a tax on gold trading, to counter the gains.

The state planning agency has forecast Southeast Asia's second-largest economy will grow by 1.8 per cent to 2.3 per cent this year, below last year's 2.5 per cent growth which lagged regional peers.

The United States has imposed a 19 per cent tariff on goods imported from Thailand, and there are still uncertainties relating to tariffs on transshipments via Thailand from third countries. A special task force will be set up in October to manage millions of certificates of origin expected to be required under new trade rules.

Thai industrial sentiment hits 3-year low in August on politics, strong baht