11 July 2024

Thailand’s consumer confidence index for the month of September increased for the first time in seven months, thanks to the easing of lockdown restrictions, while the confidence index for the business sector for the same period continued its steady slide, because of concerns over floods, oil price rises and political instability.

Thanawat Pholvichai, rector of the Thai Chamber of Commerce University and advisory chief of its economic and business forecast centre, admitted that the contrast in confidence between consumers and entrepreneurs in the report is not normal and is due to the adjustments in the structures of the economic system.

He explained that consumers are more sensitive and responsive to the easing of lockdown restrictions, as reflected in their increased spending, whereas business operators are more cautious, because of liquidity problems and shrinking consumer purchasing power.

According to the survey, consumer confidence concerning the economy was registered at 35.5 points, compared to 33.8 points in August, regarding job opportunities it is 37.6 points, compared to 36.3 points a month ago, and confidence regarding future revenue is 50.8 points, compared to 48.6 points.

Thanawat pointed out that the consumer confidence index would have been higher without the flooding, oil price increase and political instability, warning that these risk factors will dampen consumer confidence and the index may not bounce back quickly.

On the contrary, the confidence index for entrepreneurs in September continued its fall, to 19.4 points, from last month’s 19.8 points, which were the lowest in 33 months, adding that the confidence index for all business sectors has steadily dropped for seven months in a row.

Regarding the COVID-19 pandemic, Thanawat said consumers and businesses concur, that the situation is improving, while the businesses are concerned that the current flooding in many parts of the country, if prolonged, will render more damage, estimated at between 15 and 25 billion baht, which may bring down the fourth quarter’s growth rate by 0.5-0.7%.

Although the government has promised to peg the retail price of diesel to 30 baht/litre, business operators are still worried because the price increase will push up their production costs.

He said that entrepreneurs want the government to ease lockdown restrictions further, to allow more businesses to resume operations, to encourage more foreign arrivals, and to increase economic stimulus packages.

Thailand’s growth rate for the whole year may register 1-1.5%, he said, but warned that the growth rate may shrink to 0 to% if flooding is prolonged and the plan to reopen the country to foreign arrivals is disrupted.