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ECONOMY
PHUSADEE ARUNMAS
Consumer confidence fell to its lowest level this year in June as anti-government protests intensified and high oil prices continued to add to inflation woes.
The Consumer Confidence Index (CCI), based on a survey of 2,240 respondents nationwide, fell for the third consecutive month to 78.0 in June, down from 78.8 in May and 79.9 in April, and compared with 80.7 in March, 79.5 in February, and 78.1 in January, according to the University of Thai Chamber of Commerce survey.
According to Thanavath Phonvichai, director of the Center for Economic and Business Forecasting of the university, 95.7% of respondents expressed more concern with runaway oil prices and more expensive goods and their future financial stability because of the poor economic outlook.
The level of consumer confidence in the country's economy also fell to the lowest this year: 70.8 in June compared with 71.8 in May, 73.0 in March and 71.2 in January.
The indices for job opportunities and future income also fell to 71.1 and 92.0 in June compared with 71.8 and 92.8 respectively in May.
''Consumer confidence is expected to slow down steadily in the third and fourth quarter because of political instability and Thai economic prospects,'' said Mr Thanavath.
''Consumption may recover in the beginning of next year. It is actually a hard time for the entrepreneurs. The Thai economy will depend on exports and government spending this year, not private investment.''
According to Mr Thanavath, the centre would revise its growth projection soon after the rate-setting meeting of the Bank of Thailand's Monetary Policy Committee tomorrow.
Asst Prof Sauwanee Thairungroj, vice-president for Research Affairs of the university, said an increase in interest rates was not an appropriate approach to curb inflationary pressure in this period as higher rates might put the overall economy into jeopardy and affect consumers' spending.
The government is being urged instead to stimulate the economy through accelerating government investment projects in order to create more jobs and generate income for the people.
If rates need to rise, the increase should be made on a gradual and cautious basis, recommended Dusit Nontanakorn, vice-chairman of the Thai Chamber of Commerce.
He added the government should also call an urgent meeting of the Joint Private and Public Consultative Committee to seek co-operation to address the country's economic problems.
''The problem is reaching a crisis level right now,'' he said. ''If we leave it further without proper and urgent action, consumer confidence will definitely fall to an extent that is hard to address.''
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