Consumer confidence back on uptrend
Consumers are once again in the mood to spend on a new home and travel thanks to the government's economic stimulus packages, according to the University of the Thai Chamber of Commerce.
"With better confidence, consumers feel optimistic about spending their money on durable goods and travel, particularly for purchasing a new house following the government’s measure to lower the housing transfer tax and mortgage tax.
"Consumers will also decide to purchase more new cars in the final quarter of this year, as the excise tax for some vehicles will be increased next year," Thanavath Phonvichai, director of the university’s Economic and Business Forecasting Centre, said yesterday.
The consumer confidence index for October rose for the first time in 10 months to 73.4 points from 72.1 in September, echoing positive prospects for stronger economic growth late this year and next year.
Other confidence indices also firmed on positive feelings about the economy’s future growth potential.
The first uptick in consumer confidence in nearly a year shows that people now have a positive outlook on economic expansion for the near future, he said.
The economy has likely bottomed out and will head back up by late this year to next year.
However, consumer sentiment is quite fragile. If the government’s economic stimulus package continues to inject money into the economy and each industry, confidence and the economy should grow steadily next year, he said.
The university predicts the economy expanding 2.5-3 per cent this year and 3.5-4 per cent next year.
Next year’s economy should grow stronger as exports recover from shrinkage this year.
More foreign direct investment will flow to Thailand and Asean from the full implementation of the Asean Economic Community. The outlook for politics is stable.
The Cabinet has launched three fast-acting measures to stimulate the economy, focusing on increasing liquidity for low-income earners and villages.
The others are for promoting budget disbursement to small projects nationwide and for using tax incentives to boost spending.
The climbing SET Index and falling domestic retail oil prices have also helped whet spending appetite.
Risk factors for consumer confidence include low crop prices and low global oil prices. However, oil prices are expected to increase in the second quarter of next year, which should help boost the prices of commodities and farm crops.
Wachira Kuntaweethep, assistant director of the centre, said that based on the university’s survey with 2,244 respondents, confidence in employment opportunities improved from 67.3 points to 68.6 last month and in future income from 87.9 to 89.4.
