Thai consumer confidence rose for a third consecutive month in December as sentiment was bolstered by government stimulus measures and tourism, according to the University of the Thai Chamber of Commerce (UTCC).
Thanavath Phonvichai, president of the UTCC, said the consumer confidence index for December 2024 was 57.9, up from 56.9 in November.
This marks a third consecutive uptick, as consumers are increasingly optimistic about the government's stimulus measures, which eased economic pressures, while the tourism sector has gradually improved, he said.
Despite these positive trends, the index remains below 100, which is deemed a neutral level, attributed to ongoing concerns over domestic political instability, persistent high living costs, and global economic challenges, including potential slowdowns from future trade tensions.
These uncertainties could hinder Thailand's economic recovery and improvements in the job market, leading to increased uncertainty about future income prospects for consumers.
"Confidence has started to recover, as evidenced by increased spending during festive occasions such as Loy Krathong, New Year and Children's Day. We are now observing the upcoming Chinese New Year period to see if this positive trend persists," Mr Thanavath said.
He said there has been a notable change in consumer spending behaviour compared with earlier periods. The middle class and even high-income earners are more hesitant to spend, reflected by slower growth in purchases of durable goods such as houses and cars, said Mr Thanavath.
Lower-income groups are more willing to spend, possibly attributed to the government's 10,000-baht cash handouts.
Mr Thanavath said the Thai economy is charting on a reverse K-shape pattern, with increased spending among middle- and lower-income groups.
This could be attributed to higher minimum wages, the cash handouts, and the benefits of tourism growth reaching local communities.
The UTCC's Center for Economic and Business Forecasting predicts the Thai economy will grow gradually in the first quarter.
However, there are uncertainties arising from trade wars under the new US administration, sanctions on Russia impacting global energy costs and inflation, and concerns among Chinese tourists following a Chinese celebrity's kidnapping.
The upcoming Chinese New Year will be essential to assessing the return of Chinese tourists to Thailand, he said.
"Chinese tourists are vital to Thailand's tourism sector. Any hurdles could potentially slow down the economic momentum this quarter," Mr Thanavath warned.