Consumer confidence rose for the third month in July, hitting an 11-month high as people gained more confidence in political stability and an economic recovery in the foreseeable future.
The University of the Thai Chamber of Commerce (UTCC) yesterday reported the country's consumer confidence index rose to 78.2 points from 75.1 in June and 70.7 in May, when the index advanced for the first time in 14 months.
The army seized power on May 22. Since then, the military government has made delayed payments to rice farmers and is working to fast-track dormant spending plans.
It has approved urgent infrastructure projects and accelerated the approval process of major investment projects.
"Consumer confidence hit its highest level since August 2013, boosted mainly by the 2.4-trillion-baht infrastructure investment plan recently approved by the National Council for Peace and Order (NCPO) and the Fiscal Policy Office's growth forecast of 5% next year," said Thanavath Phonvichai, UTCC's vice-president for research.
Other key contributing factors include export growth of 3.9% in June and the baht's gains.
Mr Thanavath said confidence was expected to improve steadily, with consumption the key driver in the second half of this year.
"Improving signs will become clearer, particularly from September, as more money will be injected into the economy after the NCPO has endorsed the infrastructure development plan," he said.
"With greater political stability, people's spending will recover, which will help to drive economic growth to 3-4% in the third quarter and 5-6% in the fourth quarter."
For the full year, growth of 2% to 2.5% is achievable, said Mr Thanavath.
In the first quarter, the economy contracted by 2.1% quarter-on-quarter and 0.6% year-on-year. Second-quarter and first-half GDP data will be released on Aug 18.
"The economy has more positive signs," said Mr Thanavath.
"Consumption is recovering well, particularly after the central bank's Monetary Policy Committee agreed to hold the policy rate at 2%, which will help to support the purchase of new houses and cars.''