Consumer confidence rose for a third straight month in December and hit the highest level in eight months, boosted by better economic prospects and a temporary tax break to stimulate year-end shopping.
A survey by the University of the Thai Chamber of Commerce (UTCC) released yesterday showed the consumer confidence index rose to 76.1 points from 74.6 in November and 73.4 in October.
The December index was at its highest point since April 2015, when it hit 76.6.
Thanavath Phonvichai, the UTCC's vice-president for research, said most consumers believed the economy was edging up and would recover in the long term thanks to myriad stimulus measures including the government's special tax break to boost spending over the festive season.
The programme allowed taxpayers to deduct up to 15,000 baht spent on certain goods and services from Dec 15-31 from their personal income tax.
The UTCC estimates the programme helped to stimulate spending over the festive season to 140 billion baht compared with 125 billion expected.
The Finance Ministry said the scheme would boost economic growth by an estimated 0.1 to 0.2 percentage points.
"Consumer confidence is expected to start recovering from the first quarter, with clearer signs of recovery anticipated in the middle of the second quarter when the government's economic stimulus measures have yielded fruit," Mr Thanavath said.
The UTCC projects the economy will grow by 3.5% to 4% this year, supported by the acceleration of government expenditure and investment in megaprojects, a positive contribution from the stimulus packages, a gradual recovery in the global economy and last week's implementation of the Asean Economic Community.
It predicts 3% economic growth for 2015 thanks to the spate of government stimulus measures, not only for low-income earners, homebuyers and small and medium-sized enterprises but also those aimed at boosting private investment.
However, Mr Thanavath warned of negative factors that could impede growth including China's economic slowdown, the weaker baht, international political conflicts and uncertainty facing the Thai and global economies.
"The Thai economy will be driven by tourism in the first quarter, with the second quarter driven by a spate of stimulus measures such as lending by Village Funds and funding of tambon projects worth 5 million baht each," he said.
"The third quarter will be driven by government investment and the fourth quarter by the Thai and global economic recoveries."