Consumer confidence increases again
Consumer confidence rose for a second straight month in November, driven by the government’s stimulus measures, higher economic growth prospects and low interest rates.
A survey by the University of the Thai chamber of Commerce (UTCC) yesterday showed the consumer confidence index rose to 74.6 points last month from 73.4 in October
In increase from 72.1 points in September, the lowest reading since May2014, after which confidence began rising based on the hopes of an economic rebound after the coup ended months of unrest.
Rising consumer confidence for two consecutive months suggests the economy Has bottomed out and is starting to show signs of recovery said Thnavath Phonvichai the UTCC’s vice-president for research. “Consumer confidence is on an uptrend, but we don’t know how long it will be sustained’ as people remain cautious about their spending”.
Mr.Thnavath said lingering concerns about falling exports, Low farm product prices, the higher cost of living and consumer product prices as well as effects from last month’ Paris terrorist attacks, are still putting pressure on consumer confidence,
The UTCC expects the economy to expand by 3.3% to3.6% in the fourth quarter, boosted by the government’s capital injection of 50 billion baht to support local communities. For the full year, it projects 3% to 3.1% growth.
The National Economic and Social Development Board [NESDB], the government’s planning agency, on Nov 16 revised up its economic forecast to 2.9% growth this year from a range of 2.7% to 3.2% forecast in August. Last year, Thailand reported 0.9%growth,
The higher-than-expected number of inbound tourists, forecast to surpass 30 million, and the government’s stimulus pack ages will help to offset negative effects from falling export and agricultural production, which are likely to decline more than anticipated for the full year.
The NESDB predicts export value will contract by 5% this year, with private consumption and total investment growing by 2% and 4.6%, respectively. Headline inflation is expected to be -0.8%.
It is expected there will be a surplus in the current account balance of 6.3% of GDP.
Next year, the government’s planning unit projects the economy will grow by 3-4%, supported by an execration of government expenditure an investment, positive contributions from stimulus packages and a gradual recovery in the global economy and export prices.
The depreciation of the local currency will help to improve export value in baht terms an enhance revenue and liquidity for exporter and gradual recovery in farm prices, in line with the recovery of the global economy.
Low oil prices will provide room for an accommodative monetary policy, while growing tourism will also be a positive factor for next year’s prospects.