Thailand's industry sentiment index rose to a 25-month high in March amid optimism for an economic recovery, a survey showed Thursday.

The index, based on a survey of 1,303 entrepreneurs in 45 industry groups, reached 89.2 in March, up from the previous month's 86.7, according to data from the Federation of Thai Industries (FTI).

This has been primarily attributed to the relaxation of COVID-19 control measures in Thailand and other countries that led to a gradual increase in economic activities and demand for industrial products.

Seasonal effects such as higher productivity before the Songkran holidays and a weaker Thai Baht supporting export activities also contributed positively to the economic performance.

The three-month forecast for the industry sentiment index climbed to 99.6 from 97.1 in February, as entrepreneurs expect a promising trend of domestic demand and a continued export expansion.

However, the FTI warned of a potential challenge brought by the increasing cost of energy and raw materials.

The FTI suggested the government fully lift COVID-19 specific border policies and release measures to help small and medium businesses which are still fighting for survival during the pandemic.

On Thursday, Thailand reported 26,081 new COVID-19 cases and 91 deaths, taking the total number of infections to more than 3.8 million and the death toll to 25,788, according to the country's health ministry.