By Petchanet Pratruangkrai
According to a nationwide survey by the University of the Thai Chamber of Commerce, the Consumer Confidence Index slid from 76.1 points in December to 75.5 points last month. A reading below 100 points reflects poor sentiment.
This is considered bad news for the retail sector, as consumers believe it is not a suitable time to spend money on many things including a new car or a new house, starting a new investment or travelling.
Spending during the upcoming Chinese New Year festival will grow by the smallest amount in four years at only 4.1 per cent to Bt52.56 billion, the UTCC poll found.
Last year, spending during the festival was up by 5.7 per cent to Bt50.47 billion.
"People are quite concerned about the global economy affecting the country’s growth, as there were no positive factors driving up their confidence during the past month. However, Thai consumer confidence could increase easily if the government urgently injects spending to spur economic growth through many investment projects," Thanavath Phonvichai, director of the university’s Economic and Business Forecasting Centre, said yesterday.
Last month, lower consumer confidence was attributed to many negative factors. Beside concerns over global economic growth and international conflicts, lower expectations for Thai GDP growth also hit people’s confidence. Other factors included the continued decline in export value in December, low crop prices, particularly rubber, a weaker baht, and a perceived high cost of living.
Despite declining fuel prices, consumers were also concerned about lower purchasing power.
Thanavath said the UTCC would maintain its forecast for GDP growth of 3.5-4 per cent this year, but it could end up at the lower end of that scale.
People are also quite concerned about the impact of drought and low crop prices, which could damage confidence in the following months, he added. Last month, with many negative factors, the UTCC survey also found that other indices related to consumer confidence declined for the first time in four months. The confidence in future employment opportunity dropped from 70.9 points in December to 70.3 in January, and confidence over future income decreased from 92.4 to 91.7. Confidence in the political situation was also lower, dropping from 94.2 to 91.7 points.