Consumer confidence fell to the lowest level in 16 months in April, as people were concerned about political instability and the slowing domestic economy.
According to the latest survey by the University of the Thai Chamber of Commerce (UTCC), the consumer confidence index fell to 79.2 points last month, the lowest level since January 2018, and dropped for a second straight month from 80.6 points in March.
“Consumers are fretting about political instability and possible protests if there is something inappropriate about the new government's formation,” said Thanavath Phonvichai, vice-president for research at the UTCC. “If a new government cannot be formed in June and July, consumer confidence will definitely drop further and affect the country’s overall economic growth.”
The ongoing trade row between China and the US may affect Chinese tourist arrivals, while a strong baht will reduce Thai exporters’ incomes in baht terms, he said.
Higher oil prices will also weaken consumers’ purchasing power, said Mr Thanavath.
The university forecast GDP could still manage to achieve growth of 3.8-4% this year if the election outcome is officially announced by the Election Commission this month.
The government’s new stimulus package will also help boost growth by 0.3 percentage points, he said.
The cabinet on Tuesday approved the new stimulus measures at a cost of 21.83 billion baht, the latest move to shore up a slowing economy and boost consumption to offset weaker exports.
The measures cover spending of 13.2 billion baht in public welfare benefits for low-income earners, plus tax measures costing 8.62 billion baht.
The measures will run for five months, from May to September this year.
Of the 13.2 billion baht for public welfare benefits, 1.16 billion will be handed out to 1.16 million disabled people (an additional 200 baht per person per month); 4.1 billion baht to 4.1 million farmers who have registered as low-income earners (1,000 baht per person); 1.35 billion baht to 2.7 million children for school uniforms and educational supplies during school terms (500 baht per child); and 6.6 billion baht to 14.6 million welfare smartcard holders (additional 200/300 baht per person per month).
The government will also allow a tax deduction of up to 20,000 baht for domestic travel.
Also in store is a tax deduction of up to 15,000 baht for parents’ spending on school uniforms, sports equipment and textbooks for students; and for buyers of books and e-books to promote reading.
Those who buy locally made goods such as One Tambon One Product items, up to 15,000 baht will be eligible for the tax deduction.
“We expect consumer confidence will gradually improve if there is no protest after the formation of a new government,” said Mr Thanavath.