Consumer confidence hits post-coup high

The economy is expected to grow by not less than 5 per cent this year, propelled by a continuous improvement in consumer confidence, which will spur spending growth of 4-5 per cent, according to the University of the Thai Chamber of Commerce.

A UTCC poll showed that Thai consumer confidence in March hit its highest point since the 2006 coup, buoyed largely by the passage of the Bt2-trillion borrowing bill. 

The Consumer Confidence Index was at 84.8 points, up from 84 in the previous month. It has risen continuously for six consecutive months. 

A score above 100 reflects a positive outlook, while an index below 100 shows a negative outlook.

Meanwhile, with a positive outlook for economic growth, spending on the upcoming Songkran Festival is expected to reach Bt114.11 billion – its highest level in nine years and an increase of 10.42 per cent over the same period last year.

Thanavath Phonvichai, director of the UTCC’s Economic and Forecasting Centre, pointed out that aside from the borrowing bill to finance infrastructure projects, consumer confidence was boosted by a recent spike in the SET Index, the stronger baht and decreasing domestic oil prices.

“The continued rise in consumer confidence will ensure the country’s strong economic expansion this year because consumption will be a major factor driving economic growth. Domestic consumption should grow by 4-5 per cent this year, while tourism expansion will also help spur the domestic economy throughout the year,” Thanavath said.

However, some negative factors persist, posing a risk that consumer confidence could deteriorate in the future, including uncertainty about the political situation because of rumours of a change in prime minister and the drive to amend the Constitution. Slowing exports in February because of uncertain global economic growth and the economic crunch in the euro zone and Cyprus; as well as the strengthening baht could also dent consumer confidence, Thanavath said.

Confidence in the political situation grew slightly in March to 76 points compared with the February figure of 75.6 points. Nevertheless, confidence in the future political situation dropped from 73.8 points in February to 72.5.

Based on a survey of 2,253 respondents, the index on future employment opportunity inched up from 75.5 points in February to 76.4 last month, while the index for future income rose from 102.2 to 102.9.

Additionally, another survey by the UTCC derived from 1,183 respondents showed that Thais were more confident about spending money and travelling during the five-day Songkran Festival.

More Thais expect to travel abroad because of the baht’s appreciation. 

Spending during Songkran will go mainly on celebrations and parties, making merit, travelling and purchases of consumer goods, alcohol and luxury goods.

The poll showed that 81.1 per cent of respondents would travel in the Kingdom, while 18.9 per cent would go overseas. 

This compares with last year’s festival, when 85.5 per cent of respondents travelled inside Thailand, while 14.5 per cent travelled abroad.