The Consumer Confidence Index (CCI) hit an eight-month high in January, driven by government economic stimulus efforts, according to a survey conducted by the University of Thai Chamber of Commerce (UTCC).
Thanavath Phonvichai, president of the UTCC, said this marked the fourth consecutive month of improvement, reaching a level not seen since June 2024.
The CCI increased to 59.0 in January from 57.9 in December 2024.
After a long period of stagnation, the economy has started to recover as consumers perceive that the government's economic stimulus has bolstered the economy while domestic tourism continues to improve, Mr Thanavath said.
Even though the CCI had reached an eight-month peak, it was still lower than the crucial benchmark of 100, indicating that many consumers feel the economic recovery is progressing slowly, he added.
Factors such as the high cost of living and ongoing global conflicts, particularly tensions stemming from the Russia-Ukraine and Israel-Hamas conflicts, continue to weigh on domestic purchasing power, tourism, exports, and overall business, raising concerns about future employment.
These may undermine consumer confidence both in the present and the foreseeable future, he said.
Despite these challenges, there is optimism among consumers regarding the potential for further recovery as the government continues to bolster domestic economic growth and avoid additional risk factors, both domestic and international.
Mr Thanavath said consumer confidence is expected to gradually improve, assuming there are no major disruptions such as significant conflicts or trade disagreements.
On the political front, the Bhumjaithai Party's reluctance to back constitutional amendments could create instability if the issue reaches parliament, but for now, there are no pressing negative factors looming, he said.
Mr Thanavath noted that since the end of last year, the Thai economy has shown signs of improvement, reflected in the CCI for December 2024, with gains seen in housing, car purchases, and tourism.
The survey results showed no negative trends, though ongoing recovery over the next six months would require close observation.
The UTCC anticipates Thai economic growth of 3.5-3.7% for the fourth quarter of 2024.
The official figures will be officially released by the National Economic and Social Development Council on Feb 17.
This improvement is expected to lift overall growth for 2024 to approximately 2.6%.
The UTCC forecasts growth of around 3% this year, which aligns closely with the Ministry of Finance's prediction of 3-3.5%.