UTCC ups growth forecast

The University of the Thai Chamber of Commerce yesterday revised upward its economic growth projection for this year to between 2 and 2.5 per cent, thanks to the government's stimulus measures.

The UTCC's earlier estimate was for growth of 0-2 per cent, but the government's efforts to reduce people's living expenses should stimulate consumer spending in the second half of the year.

Thanavath Phonvichai, director of the university's Economic and Business Forecasting Centre, said the Bt115 billion being injected into the economy should give a boost to consumer spending.

Based on the centre's survey derived from 400 respondents, 17.6 per cent expect an effective outcome from the government's stimulus measures, while 42.3 per cent expect them to be moderately effective.

Of the remainder, 39.4 per cent expect the measures to be only very slightly effective and 0.7 per cent have no expectations at all about their effectiveness.

Saowanee Thairungroj, vice president of the university's research division, said almost 50 per cent of respondents were still uncertain as to whether the government was progressing on the right track to solve the country's economic problems, 30 per cent believed the government was on the right path, and the remainder said the government had chosen the wrong measures.

The survey also found that 60.2 per cent would not change their spending behaviour despite the measures, 30.6 per cent expected to spend more and 9.2 per cent would spend less than before.

Most people expressed satisfaction with the move to introduce free education for 15 years, followed - in order of preference - by satisfaction with help for pensioners, promotion of the food industry and small and medium-sized enterprises, and irrigation projects.

Additionally, the UTCC estimated that Chinese-Thai residents would spend up to Bt34.73 billion during the Chinese New Year celebrations, only 3.1 per cent higher than last year due to the sluggish economy.

This is the lowest expansion in four years, at a time when spending during this special occasion should be double that of the country's economic growth.

Last year, spending during Chinese New Year grew 5.74 per cent from 2007 to Bt33.69 billion.

Monday is the first day of the Year of the Ox.

Chuwicha, head of the university's Chamber Business Poll, said that based on a survey of 1,216 respondents, Lunar New Year spending this year would be slightly higher than in 2008 due to weak sentiment about the cost of living and people's incomes.

Consumers must spend more this year due to higher goods prices, even though they have lower incomes, Yajai said.

In the poll, 43 per cent of respondents said they would reduce their purchasing volume, 22.8 per cent said they would spend more and 34.3 per cent said their spending would be the same.

The survey found they would spend the bulk of their money on ceremonial items, followed by merit-making, buying consumer goods, giving 'lucky money' to relatives

(Ang Pao expenditure), travel and partying.