CONSUMER CONFIDENCE
Index lowest since 1997 crash
Hurt by global volatility and local political turmoil, Thailand's Consumer Confidence Index (CCI) for the first half of the year dropped to its lowest level since the 1997 economic crisis, MasterCard's MasterIndex revealed yesterday.
The index declined steeply to 28.6 points in a continuous drop from 60.4 in last year's second quarter and 47.9 in the fourth quarter. The twice-yearly survey recorded an average score of 25.6 during the fourth quarters of both 1997 and 1998. Yuwa Hedrick Wong, an economic adviser to the company's Asia-Pacific unit, said the global environment, including higher interest rates and rising oil prices, plus the ongoing domestic political crisis were the key factors shaking consumer confidence. With optimism buoyant on the back of the government's populist policies in 2003, the CCI for the Thai market enjoyed a ride to its peak of 95.1 for that year's second half. However, Wong pointed out that the 1997 crisis and the current situation facing Thais were different. "Back then, it was external factors affecting the Thai economy, but today it's more about domestic issues. Thais are in greater control of their own destiny," said Wong. He forecast 3-per-cent growth in gross domestic product for the Kingdom this year, far below the Bank of Thailand's forecast of 4.25-5.25 per cent. Apart from Thailand, South Korea and Taiwan were also suffering from low consumer confidence. Wong said all three countries shared similar domestic problems. The MasterIndex showed that consumer confidence in the Asia-Pacific fell to 57.4 points, compared with 61.4 for the same period last year and a historical average of 59.7. Of the 13 markets surveyed, Hong Kong, Singapore and China maintained stable consumer confidence, while Japan showed signs of strong economic recovery, as indicated by falling unemployment and rising household incomes. The survey was conducted through interviews with 500-600 correspondents in each country from mid-May to mid-June, with a 5-per-cent margin of error. Early this month, the local CCI conducted by the University of the Thai Chamber of Commerce's Economic and Business Forecast Centre revealed a score of 80, the lowest in 50 months and a continuous drop for 24 consecutive months from June 2004.
Piyarat Setthasiriphaiboon The Nation
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