Consumer confidence is showing signs of recovery following the coup, according to the University of the Thai Chamber of Commerce (UTCC).

The consumer confidence index has turned upward for the first time in eight months after showing what the university called "the first positive indicators" in the past five months.

The index rose from 79.1 points in August to 82.1 points in September and all related indexes followed the upward trend, the university said, because of a clearer political scene and decreasing oil prices.

Confidence in the overall economy rose from 73.2 points in August to 76.4 last month. Confidence in future income improved from August's 89.3 points to 92.7 last month, while the index on future employment opportunities rose from 74.8 to 77.3 points in September.

An index figure below 100 represents weak consumer confidence.

The university's September index was based on a survey of 2,243 respondents.

The director of the university's Economics Forecasting Centre, Thanawat Phonwichai, yesterday attributed the rising index to the coup and the actions of the Council for Democratic Reform (the forerunner of the Council for National Security) in September.

"People foresee a clearer political situation," he said. "It is the beginning of a recovery that should see a normal rate of consumer confidence by the second quarter of next year - if the new Cabinet's efforts to boost economic growth settle down."

Other positive factors contributing to increased consumer confidence were last month's drop in fuel prices, a 17-per-cent growth in exports in August and appreciation of the baht.

However, Thanawat said it was too early to say that increasing consumer confidence is here to stay.

The political situation should influence consumer confidence for only a short time, Thanawat said, while some negative factors are still weighing on consumer sentiment. These include the rising cost of living, flooding, high interest rates and the conflict in the deep South.

The dean of the university's Economics Faculty, Saowanee Thairungroj, said that despite rising consumer confidence, most people were still reserved in their spending habits.

Most respondents to the survey said they would hold plans to buy new cars or houses, to travel or to invest in small- or medium-sized businesses.

In addition, because the new prime minister announced that his government would focus more on "gross domestic happiness", most people felt happier in September than in previous months, Saowanee said.

The survey found that gross domestic happiness increased from 94.8 points in August to 98.6 last month.

Respondents also believe problems of corruption and narcotic use will decrease in the near future.

Petchanet Pratruangkrai

The Nation