Consumer confidence increased for the ninth straight month in February, boosted by recovering tourism, government stimulus measures, and the baht's weakness.
The University of the Thai Chamber of Commerce (UTCC) reported yesterday the consumer confidence index rose to 52.6 in February, up from 51.7 in January, reaching the highest level in three years since Thailand began to face the outbreak of the Covid-19 pandemic in early 2020.
The index is below 100 points because of weak purchasing power, the continued impact of Covid-19, high inflation and the Russia-Ukraine war, according to the university.
UTCC president Thanavath Phonvichai said key positive factors include state stimulus measures such as the "Shop Dee Mee Khuen" tax rebate scheme, reductions in the land and building tax and property transaction fees, as well as a decrease in mortgage registration fees.
Other key supporting factors were a sharp increase in the number of foreign tourists, and higher prices of many agricultural products, which have led to increased income for farmers and improved purchasing power in other provinces. The retail price of gasoline in the country has started to decrease, and the baht has become relatively weak.
Nevertheless, Mr Thanavath cautioned that a spate of negative factors could affect consumer confidence, such as a slower pace of economic recovery in the country, a higher cost of living, falling exports and existing concerns about the Russia-Ukraine war which may affect global oil and energy prices, which in turn would affect the production costs of goods.
The National Economic and Social Development Council (NESDC), the government's planning unit, reported on Feb 17 that the economy expanded by 1.4% year-on-year in the fourth quarter of 2022, decelerating from 4.6% growth recorded in the previous quarter.
After seasonal adjustment, the economy decreased by 1.5% from the third quarter.
NESDC also downgraded its economic growth forecast to 2.7-3.7% for 2023 from its estimate of 3-4% in November 2022, largely attributed to the global slowdown and declining exports.
"Nevertheless, the Thai economy has shown signs of continuous recovery, as evidenced by sales of personal cars and motorcycles. However, it is surprising that consumer confidence has not improved significantly and is still below 60, as there is still concern that the signs of economic recovery are decreasing from the lower-than-expected export figures and the latest GDP figures," said Mr Thanavath.
Mr Thanavath also said that following a recent remark by the chair of the Federal Reserve, who made it clear that the US central bank is prepared to react to recent signs of economic strength by raising interest rates higher than previously expected, concerns are also growing that this may cause the US economy to slip further, making the ambience in Thailand's economy seem bleak.