Uptrend in consumer confidence to continue
Sentiment to strengthen barring serious impact on current concerns
Consumer confidence can continue rising, propelled by the improving economic outlook, which will drive spending and spur investment.
"Consumers' sentiment should see stable strengthening if there's no serious impact on their concerns, focusing on political stability after March's election of the Bangkok governor and the rise in the baht's value," Thanavath Phonvichai, director of the Centre for Economic and Business Forecasting at the University of the Thai Chamber of Commerce, said yesterday.
The consumer confidence index in January climbed to its highest in 16 months since the serious flood of 2011 to 81.7 points from 80.2 in December. All confidence sub-indices also rose.
Spending should also grow steadily. The economy should expand by more than 5 per cent this year. The Bank of Thailand has revised its 2013 economic growth forecast from 5.7 per cent to 5.9 per cent Contributing to the upbeat mood are wealth gains from the spurt in the SET Index by more than 80 points last month, export expansion in December and higher minimum incomes mandated by the government.
The risks are mainly rising fuel prices, a rapidly appreciating baht and higher concerns over lay-offs from rising labour costs crippling businesses.
The nationwide increase in the daily minimum wage to Bt300 will create both opportunities for growth and challenges to business survival, Thanavath said.
"Although all indices related to confidence zoomed up, the index for employment opportunity edged up slightly compared with other indices, reflecting less confidence," he said.
Based on the survey of 2,240 respondents, the index on future employment opportunity inched up from 71.7 points to 72.9 last month, while the index for future income rose from 98.3 to 100, the first time in 16 months that it has reached the baseline.
An index over the 100 benchmark reflects positive confidence, while an index below 100 shows a negative outlook.
Wachara Kuntaweethep, assistant director of the centre, said consumer spending should also increase, benefiting mainly the automobile, housing and travel industries as well as investment, especially by small and medium-sized enterprises.
The confidence sub-index for purchasing a new car set a 91-month record at 114.1 points. The indices for purchasing a new house and travelling rose to their highest in 17 months at 83.6 and 106.3. The index for starting new investment by SMEs hit a 16-month high at 86.7. The gross domestic happiness index advanced from 88.5 to 92.