Oil prices fall lift spending

The University of the Thai Chamber of Commerce's Consumer Confidence Index advanced from 78 points in June to 78.9 last month. All related indexes also moved up after a series of declines since March.

However, based on a survey of 2,244 respondents, consumers were still worried about the higher cost of living and political uncertainty. Other factors of concern included the drop in the SET Index last month, the slight weakening of the baht, and the rising policy interest rate.

The main UTCC index has now remained below 100 points for 52 consecutive months, representing continuous weak consumer confidence.

Thanavath Phonvichai, director of the university's Economic and Business Forecasting Centre, said consumers were more confident than the previous month because of the government's six measures to assist lowincome earners and lower oil prices.

The political uncertainty could still affect confidence in the long run. Though the index on political worries was at its lowest in eight months, consumers were still concerned about the political situation in the country. The July index was formulated prior to exprime minister Thaksin Shinawatra's fleeing to the United Kingdom instead of appearing in court on corruption charges.

"July's confidence index does not guarantee a sustainable increase in future confidence. Other negative factors, in particular the political situation, still play a role in dampening sentiment," said Thanavath.

He added that if democratic principles were maintained, the confidence index could advance further in the next few months as oil prices are expected to ease to US$100$120 (Bt3,370Bt4,050) a barrel in the second half.

Confidence in the overall economic situation rose from 70.8 points in June to 71.8 in July. Confidence in future income improved from 92 to 93 points, while the index on future employment opportunities edged up from 71.1 to 72.

Saowanee Thairungroj, vice president of the university's Research Division, said consumers were more confident about purchasing durable goods such as houses and cars. They also had more confidence in starting up small and mediumsized business, as well as travelling.

However, most respondents still highlighted the need to save for the future.

The university reported that the Gross Domestic Happiness Index had fallen to 96.8 points, from 97.5 in June. The index on daily living costs fell from 46.6 to 46.