Index falls for a second month

Index falls for a second month

Consumer confidence fell for a second straight month in February on growing worries over low commodity prices, the shaky economic recovery and weak export prospects.

The University of the Thai Chamber of Commerce (UTCC) yesterday reported February's consumer confidence index fell to 79.1 points from 80.4 in January and 81.1 in December, which was the highest since June 2013, when it reached 81.6.

Last month's reading was the lowest since last July's 78.2 points.

While the drop in retail oil price from last year has given consumers more to spend, falling prices for rubber and rice have hurt demand upcountry.

"Consumers are worried about the recovery pace of the economy," said Thanavath Phonvichai, UTCC's vice-president for research.

"Although the political situation has become more stable, worries about high living costs and future income continue to dent consumer confidence."

Confidence could fall further as petrol prices increased recently, while commodity prices keep declining and export and tourism have yet to fully recover, he said.

The baht's appreciation is another area of concern.

However, he expects sentiment to bounce back after next month's Songkran holiday thanks to the government's accelerated spending and infrastructure investment.

The Joint Standing Committee on Commerce, Industry and Banking early this week voiced concern about the country's economic prospects.

It urged the government to rev up budget disbursement and infrastructure development.

State spending was too slow to stimulate the economy and consumption, the panel said.

According to a recent Budget Bureau report to the cabinet, as of Feb 13 just 1.01 trillion baht or 39.2% of the 2.575-trillion-baht budget had been disbursed.

Of the investment budget, just 65.7 billion baht or 15% had been disbursed. The figure was much lower than the 41.8% demanded by the government.

Disbursement of the regular budget fared better, with 950 billion baht or 44.8% disbursed, outstripping the government's target of 43.99%.

All state agencies are now required to improve their disbursement of investment budget to meet a target of 87% at the end of the fiscal year.

The budget for fiscal 2015, which began last Oct 1, calls for public spending of 2.575 trillion baht, up 2% from the fiscal-2014 budget.

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