Confidence dips in May on bombing, weak crop prices

Confidence dips in May on bombing, weak crop prices

Thanavath: Calls for agricultural aid
Thanavath: Calls for agricultural aid

Consumer confidence dropped for the first time in six months in May because of the bomb blast at a Bangkok hospital and low crop prices reining in provincial purchasing power.

The University of the Thai Chamber of Commerce (UTCC) reported yesterday the consumer confidence index fell to 76 points last month from 77 in April. It was 76.8 in March, 75.8 in February, 74.5 in January and 73.7 in December.

The figure in June 2016 was 71.6, which was a 25-month low.

Thanavath Phonvichai, vice-president for research at UTCC, said the bombing at army-run Phramongkutklao Hospital in Bangkok that injured 25 people, including retired officials, ravaged consumer confidence as people feared it could reignite political instability.

Other negative factors included sluggish farm prices for rubber, oil, maize, tapioca, pineapples and paddy, lowering rural purchasing power, he said.

Mr Thanavath said the government should come up with new measures to buoy crop prices to prevent negative effects to the Thai economy.

"As consumer confidence remains fragile, the government should speed up spending on mega-investment projects, particularly the Eastern Economic Corridor and infrastructure projects under the local economy development programme, to raise rural purchasing power," he said.

Mr Thanavath said people are concerned about the government's new tax policy, including the house and buildings tax and land windfall tax, as well as a new tax on cross-border e-commerce transactions.

The Qatar crisis is of little concern to Thai consumers, he said, given relatively low exports to Qatar and the number of tourists from the country.

The Commerce Ministry reported that exports to Qatar totalled US$287 million in 2016, up 34% from $214 million in 2015.

The ministry is closely monitoring the impact of the Qatar crisis, particularly on automobiles, air conditioners and refrigerators, as it fears export performance may suffer unless the row is resolved quickly.

Malee Choklumlerd, director-general of the International Trade Promotion Department, on Wednesday said the department's Dubai office had reported that cargo transport by road from Dubai to Qatar was no longer possible.

She said air transport via Qatar Airways' direct flights from Bangkok to Doha remain unaffected.

If the crisis is prolonged, Thailand's exports to Qatar must go directly to Doha port instead of via Dubai, Ms Malee said.

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