The consumer confidence index declined for the third straight month to 81.6 points in June from 82.5 in May, the Economic and Business Forecasting Centre at the University of the Thai Chamber of Commerce reported on Thursday.
Consumer confidence in the overall economy for June also dropped, from 72.8 in May to 71.8 in June. Confidence in job opportunities was down to 73.5 from 74.4 and confidence in future income dropped to 99.3 from 100.4 reported in May, it said.
The centre attributed the decline in all consumer confidence indices to the Fiscal Policy Office slashing its growth projection for 2013 to 4.5% from the previous forecast of 5.3%, the court's order that public hearings be held on the government’s water and flood management projects, and the announcement of the rice pledging price being cut to 12,000 baht from 15,000 baht a tonne by the National Rice Policy Committee.
Shoppers look at shoes at a department store in Bangkok. (Bloomberg photo)
Concerns over the uncertainty in a global economic recovery, low prices for agricultural products, ongoing political conflict and the continued violence in the far South have also eroded consumers' confidence.
Positive factors included the weakening of the baht and the price of diesel being kept unchanged at 29.99 baht per litre in Bangkok and its immediate vicinity.
Meanwhile, a survey shows that senior managers from the top firms listed on the the Stock Exchange of Thailand (SET) believe economic growth will be lower than 4.5% during 2013.
The poll, conducted by the Thai Listed Companies Association, questioned senior managers from 75 listed firms covering nine industrial groups.
It found that 57% of respondents believe the country’s economic expansion rate will stay below 4.5% this year, while 25% predict growth ranging between 4.5% and 5%.
Managers cited several negative factors that could derail economic growth this year including the global economic situation, internal political uncertainty, the populist policies of the government, the baht's fluctuation, and declining exports and domestic purchasing power.
The survey also found business leaders were more concerned about the value of the baht and dwindling domestic purchasing power than the problem of labour shortages.
Chao Kengchon, managing director at Kasikorn Research Centre, said the survey showed that the current slowdown in the Thai economy is raising challenges for business managers.
Mr Chao said his centre is keeping a close eye on the slowdown in China's economy, which might grow at less than the previous projection of 7.5%, because this would affect the global economy and Thailand.
The survey results are in line with the centre's earlier decision to lower its economic growth projection for the year from 4.8% to 4%. The export expansion projection has also been slashed from 7% to 4%.