Consumer confidence hits lowest point in 14 months
Consumer confidence has continued its downward trend, dropping for seven consecutive months and hitting its lowest point in 14 months in July, according to the University of the Thai Chamber of Commerce (UTCC).
Most respondents to the university’s survey felt the economy was now in its worst shape since the great flood of 2011.
Meanwhile, spending for the upcoming Mother’s Day is projected to grow only slightly, by 1.61 per cent year on year, to Bt12.24 billion, held back by a rising cost of living and higher prices.
The Consumer Confidence Index slipped to 73.4 points in July from 74.4 in June. A score below 100 indicates low confidence.
"Many negative factors have hit consumer confidence in economic expansion, both internal and external, as most feel the Thai economy in July was the weakest in 43 months, since the heavy floods, because of the impact from the drought and falling crop prices and incomes.
That is why consumers feel they have to shoulder a higher cost of living and have weak sentiment to spend money, despite retail businesses planning many promotions," Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, said yesterday.
However, he believes consumer confidence has nearly hit its lowest level and should bottom out soon, thanks to the government’s recent announcement of six measures to inject about Bt100 billion into the economy. He believes these stimulation measures could boost economic growth beyond 3 per cent this year, up from a previous projection of 2.5-2.9 per cent.
Last month, factors hitting consumer confidence included the drought and low crop prices, a sluggish global economy resulting in Thai export contraction, expectations of weaker economic expansion than forecast earlier, and a weaker baht value reflected by outflows of foreign capital.
Wachira Kuntaweethep, assistant director of the centre, said consumer confidence had been in free-fall for seven months.
Last month, other indices reflecting consumer confidence also continued dropping, including future incomes from 90 to 88.8 points and employment opportunities from 69.4 in June to 68.6 points in July.
Based on the nationwide survey with 2,245 respondents, people also had reservations about spending money on a new car, a house or travel, or to starting a new investment.
Confidence in buying a new car was the weakest in 61 months, and in purchasing a home the lowest in 14 months. Confidence for travelling dropped to the lowest level in more than seven years (93 months) as people have little hope of seeing any improvement in their incomes while they are also coping with high debt burdens.
For next week’s Mother’s Day, spending will increase only slightly. Most spending will be for dining out, and taking Mum to make merit.
More than 70 per cent of the survey respondents also showed high interest in joining the "Bike for Mum" activity as part of the Mother’s Day celebration.
