Consumer confidence fell in November due mainly to farm prices plunging to a 40-year low while disbursement of the government's economic stimulus package was slow, keeping consumer spending weak.
The University of the Thai Chamber of Commerce yesterday reported the consumer confidence index fell to 79.4 points last month from 80.1 in October but compared with 79.2 in September, when it fell for the first time in five months.
"A drop in consumer confidence index is something surprising," said Thanavath Phonvichai, vice-president for research.
"As far as we've discussed with chambers of commerce nationwide, we've found the Thai economy remains sluggish due to falling prices of almost all farm products but particularly rice and rubber."
Consumption, which accounts for half of GDP, also remains weak due to high household debt.
The government's economic stimulus measures have also been delayed, while the 1,000-baht handout to farmers has been slowed by authorities taking time in verifying farmers' rights to their farmland.
"If the government fails to inject money from its economic stimulus measures in December, consumer spending in
December and over the New Year period is likely not to be very active," Mr Thanavath said.
He said the Thai economy had also yet to see signs of a recovery, with tourism recovering only along the Andaman Coast and exports growing at a snail's pace.
"The economy seems to be a tough nut for the government to crack now that myriad key engines have been switched off, be it exports, which are expected to see flat growth this year, tourism, which has not yet recovered, or farm prices, which are tumbling."
Mr Thanavath said slightly less than half the population or 30 million people who work in the areas of exports, tourism and agriculture now have lower incomes, leading to the consumption engine standing still.
"It's a must, therefore, for the government to accelerate the 1,000-baht handouts to farmers, invest in public infrastructure development and raise farm product prices," he said.
The cabinet in October approved a 364.5-billion-baht stimulus package including a cash injection of up to 15,000 baht each for more than 3 million rice farmers nationwide.
Under one scheme, 1.8 million households, each possessing a maximum 15 rai of farmland, would receive a one-time payment for cultivation costs at the rate of 1,000 baht a rai.
Another 1.6 million households, each owning more than 15 rai, would receive a flat 15,000 baht per household.
Other measures include expediting payment of 129 billion baht from the fiscal-2015 investment budget across all ministries.