April consumer confidence hits 16-month low
Consumer confidence fell to the lowest level in 16 months in April as the public fretted over political instability and the slowing domestic economy.
According to the latest survey by the University of the Thai Chamber of Commerce (UTCC), the consumer confidence index fell to 79.2 points last month, the lowest level since January 2018, and dropped for a second straight month from 80.6 points in March.
"Consumers are fretting about political instability and possible protests if there is something inappropriate about the new government formation," said Thanavath Phonvichai, vice-president for research at the UTCC. "If a new government cannot be formed in June and July, consumer confidence will drop further and affect the country's overall economic growth."
The ongoing trade row between China and the US may affect the arrivals of Chinese tourists, while a strong baht will lessen Thai exporters' income in baht terms, he said.
Higher oil prices will also weaken consumers' purchasing power, Mr Thanavath said.
The university forecasts GDP to manage growth of 3.8-4% this year if the election outcome is officially announced by the Election Commission this month.
The government's stimulus package worth 21.8 billion baht will also help boost growth by 0.3 percentage points, Mr Thanavath said.
The cabinet on Tuesday approved new stimulus measures worth 21.83 billion baht, the latest move to shore up a slowing economy and boost consumption to offset weaker exports.
The measures cover spending of 13.2 billion baht in public welfare benefits for low-income earners, plus tax measures worth 8.62 billion baht.
The measures will run for five months, from May to September.
Of the 13.2 billion baht for public welfare benefits, 1.16 billion baht will be handed out to 1.16 million disabled people (an additional 200 baht per person per month); 4.1 billion baht will go to 4.1 million farmers who have registered as low-income earners (1,000 baht per person); 1.35 billion baht will provide 2.7 million children with school uniforms and educational supplies during school terms (500 baht per child); and 6.6 billion baht will aid 14.6 million welfare smartcard holders (additional 200/300 baht per person per month).
In addition, the government will allow a tax deduction of up to 20,000 baht for domestic travel.
Also in store is a tax deduction of up to 15,000 baht for parents' spending on school uniforms, sports equipment and textbooks for students, as well as for buyers of books and e-books.
Those who buy locally made products such as One Tambon One Product items worth up to 15,000 baht will be eligible for a tax deduction as well.
"We expect consumer confidence to gradually improve if there is no protest after the formation of a new government," Mr Thanavath said.