Consumer Confidence Index hits 11-month high
A stabilised political situation under the military junta is translating into a more positive consumer outlook, with the automotive, property and tourism sectors benefiting and small and medium-sized enterprises investing again, according to the latest survey by the University of the Thai Chamber of Commerce.
The UTCC reported that the Consumer Confidence Index had improved continuously for three consecutive months, from 75.1 points in June to 78.2 points last month, the highest level in 11 months. Confidence to purchase a new car exceeded the 100-point baseline for the first time in eight months, reaching the highest rate in 10 months at 102.7 points.
Other confidence indices, particular those concerned with future outlooks, also rose, reflecting better consumer sentiment.
"Consumer confidence should continue to grow and help stimulate domestic spending, and [consequently] economic growth by 3-4 per cent in the third quarter of the year, and 5-6 per cent in the fourth quarter," said Thanavath Phonvichai, director of the UTCC's Economic and Business Forecasting Centre. "As a result, the economy should post 2.2-per-cent growth for the whole year."
However, he said the growth in gross domestic product would be mainly driven by rising domestic consumption, while exports would grow slowly because the outlook for a global economic recovery remains unclear. He predicted Thai export growth of only 1 per cent this year.
Expenditure on cars, houses, travel and start-up investments has improved to its highest rate in more than 10 months, the UTCC said.
The index on suitable timing for buying new homes surged from 70.4 points in June to 79.7 points in July. People also see this as a suitable time to travel, with that sub-index increasing from 75.3 to 78.4, while that measuring SMEs' confidence in starting new investment improved from 62.3 points in June to 64.6 in July.
The fact that these indices remained below the base of 100 means confidence in these areas remains weak, but they still show a big improvement from previous months.
Thanavath said that if politics remained stability after the unelected National Legislative Assembly begins functioning and a new prime minister is in place, consumers should gradually gain the confidence to spend more during the remaining months.
Based on the UTCC survey of 2,242 respondents, confidence in employment opportunity rose from 68.1 points to 71.7 points last month, while confidence in future incomes improved from 92 to 94.6 points.
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