Consumer confidence on the rise

Consumer confidence on the rise

Customers started returning to Sukhumvit Soi Nana in June 2022. (Photo: Arnun Chonmahatrakool)
Customers started returning to Sukhumvit Soi Nana in June 2022. (Photo: Arnun Chonmahatrakool)

Consumer confidence picked up for the first time in six months in June, boosted by emerging signs of an economic recovery following the continued easing of Covid-19 control measures and improved business activities.

The University of the Thai Chamber of Commerce (UTCC) reported on Thursday the consumer confidence index rose to 41.6 in June from 40.2 in May. It stood at 40.7 in April, 42 in March, 43.3 in February and 44.8 in January.

An index lower than 100 points reflects weak purchasing power based on a slow economic recovery.

Thanavath Phonvichai, president of the UTCC, said there are emerging signs of economic recovery after the government ended the mandatory pre-travel registration for foreigners and extended the service hours of bars and pubs early this month.

"The university expects consumer purchasing power to improve at the end of the third quarter as a result of economic recovery boosted by night businesses and tourism," said Mr Thanavath.

"The baht's weakness will also benefit exports and tourism in the remaining months of this year."

The university forecast growth of 5-7% this year, while the number of foreign tourists is likely to increase to 6-8 million in the second half, helping stimulate the economy to grow by 3.5-4.5% this year or averaged 3.1%.

The National Economic and Social Development Council (NESDC) expects international tourist arrivals to reach 7 million this year, generating 570 billion baht income.

The university estimated the baht's value would stay at about 36-36.5 baht per US dollar over the next 1-3 months, with the value expected to improve to 35-36 baht per US dollar in the fourth quarter.

According to Mr Thanavath, the university also expects the Bank of Thailand to raise its benchmark interest rate three times this year by a combined 75 basis points.

He said the inflation rate is expected to move in a range of 5.5-6.5%, averaging 6.2% this year.

In a related development, the UTCC announced on Thursday the TCC Confidence Index, which gauges the sentiment of the business sector and members of the Thai Chamber of Commerce in all provinces nationwide, increased to 36.3 in June from 35.2 in May. It stood at 35.4 in April, 35.5 in March, 36.1 in February and 37.2 in January.

The drop was attributed to ongoing concerns about higher raw materials and operation costs, as well as rising energy prices.

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