In spite of the downgrade of Thailand's status by the United States on labour concerns and the European Union's shunning of the military government, Thai consumer confidence grew significantly last month, thanks to tangible economic stimulus measures la
The University of the Thai Chamber of Commerce (UTCC) reported that the Consumer Confidence Index (CCI) improved strongly to 75.1 points last month from 70.7 in May. Other indices reflecting consumer confidence also increased significantly.
The CCI grew for the second consecutive month after the coup, and reached the highest score in eight months.
“With stabilising policies by the NCPO, consumer confidence is expected to increase continuously, and there is high possibility of [the index] reaching 100 points next year, reflecting brighter economic growth,” said Thanavath Phonvichai, director to the UTCC’s Economic and Business Forecasting Centre.
Indices above 100 reflect positive confidence.
Positive sentiment could translate into consumers spending their money to purchase new cars or houses and to travel, and for small and medium-sized enterprises to start new investments.
More spending on durable goods and banks approving more loans would also result from higher spending confidence, he said.
Thanavath said there was a good possibility that gross domestic product would grow strongly by 5 per cent next year, thanks to higher consumer confidence. For this year, the economy is projected to grow by 2-3 per cent.
However, so far this year the economy has not expanded as much as it should because farmers and other consumers are waiting for more economic stimulus measures.
To promote strong economic growth this year, Thanavath suggested that the junta accelerate state budget disbursement, help small and medium enterprises win construction contracts with the government, and launch measures to reduce the cost of farm production as well as increase farm crop prices. The government should also continue to manage the cost of living.
He pointed out that spending and GDP could grow faster than it is currently but for now consumers still need to watch their wallets, as the prices of farm commodities are fluctuating, and some farmers have to spend much of their income to pay down previous liabilities.