Consumer confidence at five-month low
The New Year's Eve bombings prompted the country's consumer confidence to drop to its lowest level in five months, says a special survey by the University of the Thai Chamber of Commerce (UTCC).
It predicted a further decline through the first half of the year. Consumer confidence has been directly undermined by the blasts in Bangkok, Thanawat Polvichai, director of the university's Economic and Business Forecasting Centre, said yesterday. The index dropped to 80.1 this month from 82.4 points last month. Consumer reactions bore similarities to the sentiment in 2004 in the early stages of the floating oil price, he said. Even though the survey indicates the possibility of lower confidence over the next six months, Thanawat believes consumers will feel better and start spending more in the third quarter - provided there are no more bombings. The index level was determined from polling 842 respondents resident in Bangkok and the surrounding area this past Monday and Tuesday about their feelings regarding the blasts. Confidence in the overall economy decreased considerably, from 76.5 points last month to 74.3 points this month. Confidence in future income fell from 93.2 in December to 90.5 points now, while the index on future employment opportunities dropped from 80.9 last month to 78.2 this month. Thanawat said the results indicated fragile consumer confidence. "Consumers are concerned about the Kingdom's economic growth in light of the uncertain situation," he noted. In order to encourage economic growth and raise consumer confidence, Thanawat suggested the government accelerate budget disbursements to each province and investment in mega-projects. He said the government should consider decreasing the policy interest rate if inflation was under control. The UTCC also conducted its official Consumer Confidence Index (CCI) last month before the Bangkok bombings. Based on a survey of 2,226 respondents, it dropped to 82.4 points last month from 83.1 in November. The currency-control measure imposed by the Bank of Thailand last month was behind last month's drop in consumer confidence, said Wachira Khuntaweetep, a lecturer at the centre. Wachira said falling consumer confidence also caused people to feel unconfident about spending money or investing. More than 40 per cent of respondents said it was not a suitable time to invest, travel, purchase luxury cars or buy new homes. Petchanet Pratruangkrai The Nation
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