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Consumer confidence hits 22-month low in November: poll

Consumer confidence plummeted again last month, hitting its lowest level in 22 months, mainly because of the political tensions.

"The lower confidence from the political mess could cause many losses in the economy from slowdowns in spending, investment and consumption as well as reduced travel by both Thais and foreigners," Thanavath Phonvichai, director of the Economic and Business Forecasting Centre at the University of the Thai Chamber of Commerce, said yesterday.

Based on 2,256 responses to the centre's survey, the Consumer Confidence Index slipped for the eighth straight month from 76.6 points in October to 75 points in November. That level has not been seen since February 2012.

Other related indices, including confidence in politics, also fell to their lowest level. Weaker confidence reduces consumers' propensity to spend on purchases, travel or new investment.

A score below 100 indicates negative confidence.

Thanavath said the economy was now quite fragile and sensitive to the political situation.

If the political conflict ends soon, economic growth will be only slightly shaved by 0.1-0.2 percentage point this year. But if violence breaks out or the unrest is prolonged to the end of the year, the trimming would be 0.3-0.5 percentage point and economic expansion next year would be milder.

Gross domestic product is at risk of increasing by less than 3 per cent this year if the political turmoil drags on and ruins people's moods. Consumer confidence is expected to continue trending down until next quarter, depending on how soon the political problems can be solved.

Last month, consumer sentiment was the victim of a string of negative factors, including the political deadlock and uncertainty, lower projections for GDP growth this year, the weakening baht, rising fuel prices, decelerating export growth, falling crop prices, a climbing cost of living and uncertainty over global economic growth.

In November, the survey also found that confidence in future employment opportunities dipped from 69.4 points in October to 68.2 points, while confidence in future incomes also slid from 93.7 to 91.8.

Confidence in the political situation dived from 58.6 to 55. The index for politics has declined to the lowest figure in 30 months since June 2012.

Confidence in travelling also sank to the lowest figure in 80 months. If the political turmoil runs to the end of the year, the tourism industry would lose between Bt20 billion and Bt40 billion in income. Travellers could disappear by 10-20 per cent or 200,000-400,000 a month. Losses in consumption and investment could reach Bt10 billion or even Bt20 billion.


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