Consumer confidence up strongly in December
Despite oft-stated worries by the University of the Thai Chamber of Commerce that the improved minimum wage will eventually undermine consumer confidence, there was no sign of that happening in December.
The UTCC yesterday admitted that the Consumer Confidence Index last month posted the highest growth in 15 months, to 80.2 points from 79.1 points in November. All sub-indices related to confidence also increased at a rate 1-1.5 points higher than in previous months, except the index on employment opportunity, which was up only 0.5 point, from 71.2 in November to 71.7 in December.
Even so, the main CCI was below the baseline of 100. Scores higher than that indicate strong confidence.
Based on the survey of 2,243 respondents, the sub-index on confidence on future income rose from 96.8 points to 98.3 points.
Many positive factors attributed to the rising confidence, the UTCC said. These included a better outlook on the country's economic growth, the high number of travellers to the Kingdom that exceeded expectations last year, improved export expansion in December, and higher incomes fuelled by the government's minimum-wage policy.
"However, confidence could be hurt in the first or second half of the year on worries over the wage measure. Labourers have concerns about business closures and lay-offs as well as a higher cost of living," said Thanavath Phonvichai, director to the UTCC's Economic and Business Forecasting Centre.
He warned that the Bt300 daily minimum wage, which was imposed nationwide at the beginning of the year, was a two-edged sword that the government should closely monitor and come out with effective measures to prevent rising unemployment.
However, if there are no serious unexpected circumstances, Thanavath admitted that consumer confidence could increase continuously this year, which should result in economic growth of more than 5 per cent.
One possible fly in the ointment is a return to political instability, and the poll reflected this concern. Although the confidence sub-index on the political situation was up last month from 69.2 to 70.6 points, confidence in the situation in the next three months dropped from 69.9 to 66.6 points.
However, with the election for the Bangkok governor coming up in March, the political situation should not seriously harm consumer confidence, as the election should create a competitive atmosphere rather than conflict, Thanavath added.
The December survey also showed that confidence on new-car purchases jumped to the highest level in seven and a half years, thanks to the first-car tax-incentive scheme.
Wachira Kuntaweethep, a lecturer at the UTCC, said the confidence sub-index for purchasing a new car had gone up for three consecutive months, hitting 111.2 points in December.