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Published on January 11, 2008

Its consumer confidence index rose from 76.2 points in November to 77.3 points last month. All related confidence indexes also headed upward because of the clearer political scene.

However, consumers are still worried about a higher cost of living, as many manufacturers are lining up to raise retail prices this year.

Thanawat Phonvichai, director of the university's Economic and Business Forecasting Centre, said consumer confidence had bottomed out two months ago.

"The consumer confidence index should increase gradually and return to normal next quarter, if no negative factors dampen consumer confidence," he said.

Increasing value-added tax this year is not a good idea, as the Kingdom's economy has not recovered yet, he said, adding that the proper period to consider raising VAT is the middle of next year.  The chamber also urged the incoming government to boost the budget deficit by Bt80 billion this year. The extra spending would help fuel economic growth.

Negative trends that would still hold consumer confidence back are political clouds, oil prices and the strong baht.

Petchanet Pratruangkrai

 The Nation