The University of the Thai Chamber of Commerce's Economic and Business Forecast Centre, which conducts the survey, predicts that the overall index will continue to drop this quarter.

Also, the centre conducted a special CCI survey after caretaker Prime Minister Thaksin Shinawatra announced last week he would step down and found the index had increased slightly, to 84.9 points, but overall confidence remained low, due to the continuing political impasse.

Lower vehicle sales last month reflected depleted confidence. Toyota Motor Thailand said national vehicle sales dropped 2.15 per cent last month to 66,101 units, from 67,554 units during the same period last year. Among last month's sales were 18,012 passenger cars, up from 15,095 for the same period last year. However, commercial-vehicle sales reached only 48,089 units, down from 52,459.

Contributing to the lower sales were higher interest rates and higher oil prices, both of which ate into consumers' purchasing power, the company said in its release.

The university told a press conference yesterday the overall CCI plunged to its lowest point last month since May 2002.

Overall confidence in economic conditions fell to 77.9 points, from 79.6 in February. Confidence in the possibility of obtaining new employment dropped to 78.2, from 79.3 in February. And confidence about future income was down to 94.9, from 96.5 the month before. Normally, the index dropping below 100 suggests a degree of pessimism about economic prospects. The survey questioned 2,242 respondents around the country.

Saowanee Thairungrote, dean of the Faculty of Economics, attributed the decreasing index to several factors. These include uncertainty during the political crisis last month, the retail diesel price increasing by Bt1.20 per litre and the National Economic and Social Development Board's recent revision of GDP growth during last year's fourth quarter, from 5.4 per cent to 4.7 per cent.

Consumer confidence was also dampened by increases in prices of other consumer products, February's 10.8-point decline in the Stock Exchange of Thailand Index and the worsening situation in the three troubled southernmost provinces.

The only positive factors at the moment are the appreciation of the Thai baht and February's 23.3-per-cent expansion in Thai export growth. Centre director Thanawat Phonvichai said consumers were concerned about political problems and rising fuel prices. He said the index should recover in the third quarter if there were signs that the political turmoil would soon end.

Of those surveyed, 31.8 per cent said the economy would slump, 61.1 per cent believed economic prospects would remain the same and the other 7.1 per cent foresee a better economic situation in the next six months.

The report said more than 50 per cent of the respondents believed this was not a suitable time for new investments.

"Consumers will slow their travel, investments and purchases of luxury goods and real estate, because of lower confidence in the country's economic growth," he said.

Petchanet Pratruangkrai

The Nation