Consumer and business sentiment rose in December, supported by the easing of Covid-19 restrictions, more tourism revenue and fresh government stimulus packages.
The University of the Thai Chamber of Commerce (UTCC) reported yesterday the consumer confidence index increased for the fourth straight month in December to 46.2, up from 44.9 in November, 43.9 in October, 41.4 in September and 39.6 in August, which was the lowest level in almost 23 years.
Thanavath Phonvichai, president of the UTCC, said people felt relieved after the government reopened the country to fully vaccinated foreign tourists on Nov 1 last year.
“Despite the government’s suspension of the Test & Go entry scheme and reinstatement of the quarantine requirement, roughly 100,000 foreign tourists arrived in December,” he said.
“In addition, the government’s diesel subsidy programme, which caps prices at less than 30 baht per litre, also boosted consumer sentiment.”
Mr Thanavath predicted the government’s fresh stimulus measures like the “Shop Dee Mee Khuen” (shop and payback) scheme and the fourth phase of the co-payment subsidy scheme are expected to help boost more than 100 billion baht worth of money circulation in the first quarter.
On Dec 21, the cabinet approved fresh stimulus packages dubbed "New Year presents" to stimulate spending during the festive season.
The packages include a tax deduction for individual taxpayers of up to 30,000 baht when purchasing goods or services, an extension of the existing co-payment subsidy scheme and a cut in property transfer and mortgage fees.
The tax deduction incentive for individual taxpayers will be offered for purchases between Jan 1 and Feb 15, applicable for the 2022 tax year.
The cabinet also approved in principle the fourth phase of the “Khon La Khrueng” co-payment subsidy scheme after the third phase expired at the end of last year.
The fourth phase is scheduled for March and April this year.
Mr Thanavath said the government may need to shift its spending focus more onto stimulating infrastructure investment once the Covid-19 outbreaks ease.
“The overall economy remains strong enough to cope with the new Omicron variant and is expected to get ready to recover in the second quarter,” he said.
The UTCC maintains its forecast on economic growth of 4% this year, with the inflation rate at 1.5%.
In a related development, the UTCC announced its TCC confidence index yesterday, which gauges the sentiment of chamber members in all provinces nationwide.
The index increased to 37.8 in December from 28.1 in November and 19.9 in October, driven by the easing of lockdown measures and the country’s reopening in early November last year.
A widened coverage of vaccinations in the country, robust expansion of exports, rising SET index as well as higher prices of agricultural products such as oil palm, rubber, tapioca and livestock products also boosted the sentiment.