Global woes expected to show impact on Thai sentiment in Jan

In spite of a spurt in consumer confidence in the aftermath of the floods last month, confidence is likely to decline again in January due to the impact of the euro-debt crisis, skyrocketing energy prices, and chaos caused by groups dissatisfied with the government.
The University of the Thai Chamber of Commerce (UTCC) reported yesterday that the consumer confidence index (CCI) climbed for the first time in five months in December in the aftermath of the severe floods, from 71 points in November to 73.1 points last month.
Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, said Thai consumer confidence will be easily hit by many negative factors in the first quarter of this year.
“The rising cost of fuel, higher cost of living, and low price of farm crops will destroy consumer confidence this month. The government’s budget for rehabilitation has not yet created a positive impact to boost confidence immediately,” said Thanavath.
He added that the impact from the financial crunch in the euro countries will hamper Thai export expansion. The US and EU sanctions on Iran could also see the oil price spike to US$105 (Bt3,100) per barrel and push up the domestic price soon. The flooding in the southern part of Thailand will also affect consumer sentiment.
Despite the recovery in confidence last month, the survey indicated that spending on durable goods, including cars and houses, as well as on travelling, is still low as people believe that it is not yet a suitable time for spending money.
Based on the UTCC survey of 2,242 respondents, the poll showed that other indicators related to consumer confidence also increased gradually last month. Confidence in employment opportunity was up from 62.5 in November to 64.2 points last month. Confidence in future incomes improved from 89.5 to 92.1 points.
Thanavath pointed out that consumers are optimistic about the future as they are hoping for more incomes after the government announced measures to inject Bt1 trillion-Bt1.5 trillion to stimulate economic growth this year.
He expected the consumer confidence index to go up in the second quarter of this year.
Vichai Assarasakorn, secretary-general of the Board of Trade of Thailand, said the private sector wants to see clear-cut measures for water management and flood prevention so that confidence can be restored.
 Moreover, he said that the government should increase efficiency to manage the cost of living, as the problem is one of the major concerns for consumers.