The Thai Consumer Confidence Index (CCI) surged to 81.7 points in June, the highest in four and a half years, with consumers expecting the new government’s policies to result in better economic conditions.
The University of the Thai Chamber of Commerce (UTCC) survey showed consumer confidence increased from 80.4 points in May. Factors cited were lower fuel prices, increased export growth, stable agricultural commodity prices and higher interest rates.
Thanavath Phonvichai, director of the UTCC’s Economic and Forecasting Centre, said yesterday that the recovery in confidence could drive growth in gross domestic product higher than expected this year, from 4-4.5 per cent to 4.5-5 per cent.
Rising confidence is likely to result in higher spending on investments, new houses and cars and travel.
The economy is expected to grow 6 per cent year on year in the second half of the year.
However, Thanavath pointed out that confidence remained fragile because of concerns over the higher cost of living, political instability and the global economic recovery.
He said the government should carefully implement its policies to balance benefits for all involved. While the government should be concerned with implementing its promised policies, such as increasing the daily minimum wage to Bt300, it should also consider related factors, since it could push up the prices of consumer goods, he said.
Saowanee Thairungroj, vice president of the UTCC’s research division, said other indices related to consumer confidence also grew last month as campaigning for the July 3 general election went smoothly.
Based on a survey of 2,251 people, confidence in future income grew to nearly 100 points, from 98.5 points in May to 99.8 points in June, while the index on future employment opportunities rose from 71.7 to 72.9 points last month.
An index below 100 indicates less consumer confidence. In Thailand, consumer-confidence indices have always stayed below 100.
Last month, the GDP index also increased from 86.1 points in May to 88.8 points. The index on corruption rose from 66.1 to 69 points last month.
The UTCC also conducted a special CCI survey in early July, after the election. Based on a survey of 812 respondents, the index jumped to 83.8 points from 81.7 in June.
Hopes that the new government will boost incomes have encouraged confidence. If there are no serious negative factors such as political unrest or a global economic downturn, Thai consumer confidence should grow gradually in the remaining months of the year, Saowanee said.
Source: The Nation