Consumer confidence rises again

Consumer confidence rises again

Consumer confidence rose for a fourth straight month in January, hitting a 16-month high, as concerns about global and domestic economic prospects eased and people's incomes rose thanks in part to the nationwide daily minimum wage hike, says a local economist.

Thanavath Phonvichai, vice-president for research and director of the University of the Thai Chamber of Commerce, attributed the rise to purchasing power jumping following the wage hike and the government's rice pledging scheme.

The consumer confidence index climbed to 81.7 points last month from 80.2 in December, 79.1 in November and 77.8 in October. The overall economic index came in at 72.1 points, up from 70.6 in December, while the index for job opportunities registered at 72.9 points, up from 71.7.

The index on future income increased to 100 points for the first time in 16 months from 98.3 last December.

A score of less than 100 points indicates consumers are more pessimistic than optimistic about export prospects, the high cost of living, domestic political uncertainty and the global economic outlook. A reading above 100 indicates they expect conditions to improve.

Better economic prospects and a relatively low interest rate have also boosted consumer confidence, as have the government's populist schemes, he said.

The Bank of Thailand recently unveiled a more positive growth forecast for this year, expecting the tax rebates on cars, income tax reduction and wage hike to boost consumption and investment.

The central bank raised its economic growth forecast to 4.9% from 4.6% and maintained its inflation forecast at 2.8%. Economic growth for 2014 is estimated at 4.8%, with inflation at 2.6%.

The improved growth outlook is driven mainly by private investment expansion _ supported by unfinished flood rehabilitation _ to serve higher consumption, investment in machinery to offset the daily minimum wage hike and labour shortage, and growing demand from neighbouring countries.

However, Mr Thanavath noted consumers remain concerned about ongoing political conflict, particularly the March 3 Bangkok governor election, the Preah Vihear border dispute and the row over constitutional amendment.

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