Consumer confidence dips to lowest level
Consumer confidence has shrunk to its lowest level in nine months, mainly from a dimmer economic outlook and protests following a drop in certain crop prices, according to a survey.
Reduced consumer spending amid this sagging confidence has prompted the University of the Thai Chamber of Commerce to lower its economic-growth target for this year from 4-4.5 per cent to 3.5-4 per cent.
The UTCC also predicted that growth could drop by another 0.1 percentage point, a loss equivalent to Bt10 billion, if the protests against the falling price of rubber are prolonged for another month.
"The government needs to control the situation and calm down the protest soon. Otherwise, economic growth this year will fall greatly because many roads and railways have been blocked, causing difficulty for the transport and shipment of foods and goods," said Thanavath Phonvichai, director to the UTCC’s Economic and Business Forecasting Centre.
A survey of 2,246 respondents found that the Consumer Confidence Index (CCI) declined from 80.3 points in July to 79.3 points last month. The index has dropped for five consecutive months. Any score below the 100 benchmark indicates negative confidence.
Negative factors included the National Economic and Social Development Board’s decision to cut its economic-growth forecast from 4.2-5.2 per cent to 3.8-4.3 per cent for this year, delays to the government’s investment projects, and concern over political instability arising from protests against the falling prices of farm goods.
The lower confidence has led to consumers slowing down their spending, delaying new investments, and borrowing more money from banks as well as loan sharks, the centre claims.
Last month, a CCI sub-index monitoring new investment by small and medium-sized enterprises dropped to its lowest level in 20 months, suggesting that investors lacked confidence amid slowing economic growth.
The confidence sub-indices on travelling and purchasing a new home also fell to their lowest levels in 10 months, while that on purchasing a new car dropped to the lowest point in half a year.
Additionally, the survey by the centre found that almost 75 per cent of consumer respondents disagreed with the government’s decision to raise the price of cooking gas.
