Consumer and business sentiment continued to plunge in July based on rising Covid-19 infections and deaths, as well as a poor economic outlook.
The University of the Thai Chamber of Commerce (UTCC) reported on Thursday the consumer confidence index fell to 40.9 in July from 43.1 in June, 44.7 in May, 46 in April, 48.5 in March, 49.4 in February and 47.8 in January.
"Consumer confidence slumped in July to the lowest level since October 1998, as people are worried about a fourth wave of Covid-19 infections in the country and the new, more contagious Delta variant," said UTCC president Thanavath Phonvichai. "There is also much uncertainty over the government's vaccine distribution plan, while political instability and anti-government rallies are gathering pace and oil prices are rising."
People are worried about the country's overall economic prospects after the Fiscal Policy Office downgraded its 2021 growth forecast to 1.3%, a dip from a projection in April of 2.3%, on the assumption new infections will peak in the middle of August.
"What people are worried about the most right now is the government extending lockdown measures to 29 high-risk provinces including Bangkok, which represent up to 80% of GDP," he said. "Those provinces account for 90% of the country's industrial sector, 80% of logistics and are highly connected to tourism. We estimate the lockdown measures in those provinces will heavily affect the economy, with losses estimated at 500-700 billion baht between July and August."
Mr Thanavath said there are a handful of positive factors such as the recovering export sector, the government's stimulus measures through myriad relief schemes, and the pace of global and domestic inoculations. The UTCC projected the Thai economy would tally -2% to zero growth this year, a slight change from an earlier forecast of zero to 1% growth.
In a related development, the UTCC announced on Thursday the TCC confidence index, which gauges the sentiment of chamber members in all provinces nationwide, dropped to 20.7 in July following readings of 22.5 in June, 24.7 in May, 27.6 in April, 30.7 in March and 29.6 in February.