Consumer confidence rose for a third straight month in October, hitting the highest level in 44 months, driven largely by the government's policies to control the cost of living, higher foreign arrival numbers and recovering exports.
The University of the Thai Chamber of Commerce (UTCC) reported on Thursday the consumer confidence index rose to 60.2 in October, up from 58.7 in September, 56.9 in August and 55.6 in July.
"The consecutive improvement in consumer confidence can be attributed to regained trust following the formation of a new government and its policies to reduce the cost of living, including cutting electricity and fuel prices, along with various stimulus packages," said Thanavath Phonvichai, president of the UTCC.
"Consumers see increased stability in domestic politics over the longer term after the formation of the new coalition government, which successfully dissolved opposing political factions."
However, Mr Thanavath said consumers remain concerned about the fragile global economy because of conflicts in the Middle East and higher interest rates in many countries to address inflationary pressure.
This scenario could hinder a recovery of the global economy, potentially leading to an economic downturn, he said.
A global downturn would affect Thai exports, causing a contraction in shipments and limiting the purchasing power of people in every region, said Mr Thanavath.
In a related development, the university also released the TCC Confidence Index, which gauges the sentiment of the business sector and chamber members in every province.
The index dropped for the first time since June 2022 to 55.4 in October, down from 56.0 in both September and August.
He attributed the decline to growing concerns among entrepreneurs about the Mideast war, fearing prolonged fighting will affect the future economic direction.
Mr Thanavath said there is also anxiety about drought affecting farming activities in regions across the country, as well as a minimum wage hike that might add to business costs amid elevated interest rates.
The business sector views the government's stimulus policies as insufficient, leading to an unclear stimulus picture, he said. Various factors might result in relatively poor prospects, according to respondents.
Mr Thanavath said businesses still view the provincial-level economy as showing signs of recovery.