The University of the Thai Chamber of Commerce (UTCC) reported on Wednesday that consumer confidence has been increasing for four consecutive months.
The consumer confidence index of August stood at 51.0, which increased from 50.1 in July.
Earlier, the number had fallen down to the deepest point at 31.3 in May due to the lack of economic activity during the lockdown months.
The overall economic confidence index was 43.6, an increase from the last month of 42.6. The job applicant confidence index rose to 49.1 from 48.4, and the future income confidence index was 60.4 from 59.3.
Positive factors are the central bank’s decision to hold the benchmark lending rate at a historic low of 0.5 per cent, government stimulus measures, and the decline in domestic diesel price.
Whereas the negative factors include the concern over the spread of COVID-19, the political uncertainty of the pro-democracy movement in Thailand, and the low agricultural crop prices and the appreciation of Thai baht.
The extension of the State of Emergency also played a part as negative factors to the consumer confidence index.
The office of the National Economic and Social Development Council (NESDC) has lowered the growth rate of the Thai economy in the year to -7.3 to -7.8 per cent from -5 -6 per cent.
The cabinet announced on Tuesday to launch job creation measures of 1 million positions (260,000 for new graduates), organised by the Ministry of Labor.
The Center for Economic Situation Administration (CESA) proposed a measure last week that would include handing out 3,000 baht to 15 million Thai citizens to buy goods at registered stores, including 7-Eleven and large department stores.
Thanavath Phonvichai, UTCC’s president, expected the consumer to delay spending at least until the fourth quarter of this year as confidence is still low despite the improvement in the index.
Thanavath said the government stimulus measures should be able to increase domestic spending by 90 billion baht, which could help with the expenses of middle to lower income earners. With that, the economy should be able to expand by 1 – 1.5 per cent in the fourth quarter.
However, the UTCC predicted that the Thai economy this year is heading to a recession of at least 7.5 per cent, compared to the previous prediction of between -8 and -10 per cent contraction.
The Thai economic growth is expected to be flat during the first quarter of 2021, with slight expansion in the second quarter from low base, they added.”