The consumer confidence index in April fell to a new low in four years, blamed on the skyrocketing price of oil, political turmoil, the baht appreciation and the interest-rate hike.

Consumer confidence was surely undermined by these four factors, said Thanavath Phonvichai, director of the Centre of Economic and Business Poll of the University of Thai Chamber of Commerce.

The index dropped to 76.7 in April, well below its threshold mark of 100, suggesting people's concerns over economic growth in the present circumstances. Their reactions bore similarities to the sentiment in 2003, in the early stages of recovery after the 1997 economic crisis, he said.

Consumers are worried about employment opportunities and future incomes, said Thanavath, adding that they were less confident of the economy over the next six months.

According to the survey, 67 per cent of respondents to the survey felt the economy remains unchanged, 26.9 per cent said it is getting worse and 6.1 per cent believed it has improved. However, 62.2 per cent believed the economy would remain unchanged over the next six months, 31.8 per cent thought it would get worse and 6 per cent believed it would improve further.

Even though the survey indicates the possibility of lower confidence over the next six months, he believed that consumers would feel better and start spending more in the fourth quarter of this year.

His optimism was based on the assumption that a new government would be formed in the third quarter.

On Monday, the Constitution Court nullified the April 2 general election and ordered fresh elections.

Manufacturers also expressed their concern about the high oil prices, political uncertainties, the baht's appreciation and higher interest rates, according to the poll.

As many as 99.21 per cent of them said the oil prices had adversely affected their businesses by increasing their production and operating costs, and reducing their sales and profits.

Most correspondents felt the oil prices would keep rising beyond this year. But they expected the retail oil price to stabilise at around Bt30.89 a litre.

A majority of them had yet to increase their product prices for fear of lower sales, said Thanavath.

Producers said they could refrain from raising their prices for another five months. They also said the appropriate retail price of oil should be Bt21.05 a litre.

Eighty nine per cent said they were yet to prepare themselves for rising oil prices and 11 per cent said they had already implemented measures to cut production costs.

Businessmen also spoke of their worries over the political uncertainty but the survey was conducted early in May, before the Constitution Court's ruling.

Thanavath said 61.4 per cent of them had put new investments on hold. He predicted more  private investments in the fourth quarter.

Regarding the baht's appreciation, 45.1 per cent of them, most of them exporters, said their businesses had been hit and 14 per cent of them, most of whom are importers, said they had benefited.

He said 50.9 per cent had fine-tuned their businesses to lessen the impact of the stronger baht. Many  believed the baht might strengthen to 36.74 to the dollar though they wanted it to be at 40.23.

The rising interest rate too makes manufacturers uncomfortable, with 33 per cent deferring  business expansions, 31.8 per cent looking for new lending sources, 21 per cent raising prices and 13.6 per cent reducing their production.

Wichit Chaitrong

The Nation