Consumer confidence picked up for the third straight month in August, helped by growing exports, recovering tourism, and improved business activities following the relaxation of pandemic restrictions.
The University of the Thai Chamber of Commerce (UTCC) on Tuesday reported that the consumer confidence index rose to 43.7 in August, from 42.4 in July. It stood at 41.6 in June, 40.2 in May, 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 the ongoing increase in consumer confidence indicated a clear economic recovery.
"A rise in consumer sentiment in August stems from several factors, including consumers' positive feeling that the economy is recovering, and business activities becoming more active following relaxation of the Covid-19 curbs, while international tourists are being offered more convenience to enter Thailand following the country's reopening," said Mr Thanavath.
He said consumer confidence is improving, driven by increased exports and a rebound in the tourism sector, with an increase in the domestic daily minimum wage in early October expected to boost sentiment in the fourth quarter.
According to the UTCC's estimates, based on 10 million workers eligible for the wage hike and an average of 450 baht earned per month per person, there will be about 4.5 billion baht injected into the economy.
However, consumers are still concerned about domestic retail oil prices remaining high, the rising cost of living, the impact of the ongoing Russia-Ukraine war, and rising interest rates around the world, said Mr Thanavath.
He said the Thai economy is expected to start a clearer recovery in the fourth quarter of this year.
"Export expansion, tourism recovery and increases in the domestic daily minimum wage are expected to help propel the country's economic growth by 3.5-4% in the fourth quarter," said Mr Thanavath.
The university expects the economy to grow 3.0-3.5% this year, with an inflation rate of 6-6.5% and export growth of 6-8%.
The number of foreign arrivals could reach as many as 12 million this year, with 1.5 to 2 million tourists expected in each month of the final quarter, Mr Thanavath said. Last year there were only 428,000 foreign arrivals, while in 2019, before the pandemic, the tally was nearly 40 million.
According to Mr Thanavath, the ongoing floods are expected to cause about 5-10 billion baht worth of economic damage. However, he said the impact has not yet affected the country's industrial and agricultural sectors.
"We expect such damage from floods to be offset by higher income from the entry of international tourists in the fourth quarter," he said.