Consumer confidence slips to new 7-year low

The index, derived by the University of the Thai Chamber of Commerce (UTCC), dropped to 74.2 points last month, from 75.8 points in October. Other indexes related to consumer confidence also fell to the lowest levels in 75 to 85 months, mainly due to concerns over the political turbulence.

"Thailand is reaching a critical period and could face a further decline in the consumer confidence index through next year in the absence of a positive signal to boost confidence," Thanavath Phonvichai, director of the university's Economic and Business Forecasting Centre, said yesterday.

He pointed out that low consumer confidence could bring down economic growth in the first half of next year to 1-2 per cent.

The UTCC index was arrived at through a poll of 2,238 respondents nationwide, who were asked about their feelings on the political turmoil, as well as their views on the closure of Bangkok's main airports.

Confidence in the overall economy decreased sharply, from 68.6 points in October to 67.1 last month. Confidence in future income fell sharply from 97.8 points in October to 89.5, while the index on future employment opportunities dropped from 69.2 points to 67.9.

Falling confidence has made people reluctant to spend money or invest. More than 50 per cent said it was not a suitable time to invest, travel, purchase a new car or buy a home.

Thanavath said the political chaos was damaging the economy and people's sentiment.

Consumers put their highest concern on the political situation rather than on the oil price, which was normally the highest concern for consumers over the past 10 years.

The index on political confidence sank to its lowest level since the coup in September 2006.

Saowanee Thairungroj, vice president of the university's Research Division, said the survey had also found that consumers were pessimistic about their living conditions due to higher expenses and the negative economic outlook.