Consumer confidence picked up for a fourth straight month in September, hitting an eight-month high, helped by a reduction in the Covid-19 infection rate and improved business activity following the relaxation of pandemic-era restrictions.
The University of the Thai Chamber of Commerce (UTCC) on Wednesday reported that the consumer confidence index rose to 44.6 in September from 43.7 in August. It stood at 42.4 in July, 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 below 100 points reflects weak purchasing power based on a slow economic recovery.
Thanavath Phonvichai, president of the UTCC, said consumers feel the country's economy is starting to recover as Covid-19 has been downgraded to an epidemic and business activities have resumed since the relaxation of Covid-19-related curbs.
"Consumer sentiment still requires monitoring to see if it will continue improving, as there are a spate of concerns, particularly about rising oil prices and a global economic slowdown as a result of the prolonged Russia-Ukraine war," said Mr Thanavath. "Still, we remain confident the Thai economy will see a clearer recovery in the fourth quarter, driven largely by growing exports and a tourism rebound.
Export expansion, a 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.
The university expects the economy to grow at a rate of 3.0-3.5% this year, with an inflation rate of 6-6.5% and export growth of 6-8%.
Regarding the impact of ongoing floods in several of the country's provinces, Mr Thanavath said it has been estimated that the floods would cause around 12-20 billion baht's worth of damage to the country's economy. Of the total, it is expected that the farm sector will suffer damage of around 6-8 billion baht, while the manufacturing sectors is expected to suffer damage of around 6-12 billion.
Damage from the floods is likely to trim the country's economic growth by 0.15 percentage points, said Mr Thanavath.
In a related development, the UTCC announced on Wednesday the TCC Confidence Index, which gauges the sentiment of the business sector and members of the Thai Chamber of Commerce in all provinces nationwide. The index increased to 42.5 in September from 40 in August.
The increase was largely attributed to a resumption in business activity, improved consumption and recovering tourism.
"What businesses are concerned about the most right now and need the government sector to help oversee is the domestic interest rate, as they are afraid that any fast and furious hike of the [Thai] interest rate in line with the global market may affect their business recovery and profit margins," he said.
"In addition, the business sector calls on the government to help prevent frenetic volatility of the baht and control production costs, such as a diesel price cap at 35 baht per litre."