Consumer confidence surged for a fifth straight month in April to the highest level in 25 months, driven by stronger exports, rising farm prices and growing tourism.
The University of the Thai Chamber of Commerce (UTCC) reported yesterday that the consumer confidence index rose to 77 points last month from 76.8 points in March and against 75.8 in February, 74.5 in January and 73.7 in December.
The figure was 72.3 in November and 73.1 in October. The index rose to 74.2 points in September, up from 73.2 in August, 72.5 in July and 71.6 in June, which was a 25-month low.
Thanavath Phonvichai, vice-president for research at the UTCC, said consumer sentiment improved in almost all facets, including overall confidence in the economy, job opportunities and future income.
Consumers gained confidence on improved exports, tourism and crop prices, particularly those of rubber, palm oil and sugar, with the baht seeing a slight gain, Mr Thanavath said.
"We expect consumer consumption to clearly recover late in the second half of the year," he said, "if the government is successful in injecting the additional 190 billion baht in the mid-year budget for fiscal 2017 to finance local development of 18 clusters of provinces as planned, and if global economic volatility eases and exports and commodity prices continue to rise."
But Mr Thanavath said consumers remain cautious about spending, as they are concerned about global economic prospects that could be negatively affected by US trade policy and intensifying international conflicts.
People are also worried about Thailand's economic recovery outlook, higher cost of living, rising consumer goods prices and domestic oil prices, as well as relatively low prices for certain crops, especially rice.
The government is being urged to speed up disbursement of the state investment budget and state procurements, as well as develop the much-touted Eastern Economic Corridor (EEC) to stimulate the economy as quickly as possible.
The EEC is intended to be a special zone accommodating investment in 10 targeted industries promoted as clusters by the government. The 10 industries are next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.
The corridor spans a combined 30,000 rai in three provinces: Chon Buri, Rayong and Chachoengsao. The EEC is an enhancement of the Eastern Seaboard that has been the region's powerhouse for manufacturing and trade.
The government has also been advised to apply more crop insurance in the event that farm prices fall.
The UTCC predicts economic growth of 3.5-4% this year.
Wichayayuth Boonchit, the senior adviser to the National Economic and Social Development Board (NESDB), said the Thai economy is expected to grow by 3.5% this year, boosted by an expansion of the export sector, which will help manufacturing and private investment recover; an acceleration of agricultural production and farm income, which will support the expansion of household consumption; quicker public investment; and a tourism boom.
The NESDB projected in February that export value would grow by 2.9% this year, with private consumption and total investment up 2.8% and 5.3%, respectively.
Headline inflation is seen in a range of 1.2-2.2% for 2017.
Government investment is projected to grow by 14.4% this year, considered relatively high, up from 11.2% in the previous projection, mainly driven by hefty investment from state agencies of 546 billion baht and an additional 580 billion baht from state enterprises.
The NESDB is scheduled to announce the results for the first quarter of the year on May 22.