Consumer confidence index continues downward trend in Feb

According to Thanawat Polvichai, director of the University of the Thai Chamber of Commerce’s Economic and Business Forecasting Centre, the CCI stood at 74.7 points last month, down from 75.5 in January, the second consecutive month of decline.
Index scores below 100 indicate negative confidence.
The CCI pertaining to the current situation was 54.7, down from 55.3 in January. The index pertaining to future prospects was 82.7, down from 83.5 in January.
The overall CCI, which reflects views on the economy, stood at 63.5, down from 64.4, while the job-opportunities sub-index was at 69.7, down from 70.3, and the future-income sub-index was 90.7 in February, down from 91.7.
Consumers are concerned about the slow economic recovery, while drought could result in significantly less money in circulation, prompting calls for urgent government stimulus measures.
Negative factors contributing to the declining CCI included the National Economic and Social Development Board cutting its growth forecast for Thai gross domestic product to 2.8-3.8 per cent from 3-4 per cent, sluggish exports, weak prices of agricultural goods and rubber, a hazy global economic outlook, domestic political uncertainty, rising motor-fuel prices, a weak baht and a rising cost of living.
There were also positive factors, but they were not enough to overcome the negatives. They included the decision of the Bank of Thailand’s Monetary Policy Committee to maintain its key interest rate at 1.50 per cent and GDP growth in the fourth quarter of 2015 at 2.8 per cent, the same as for the full year, thanks to the government’s economic stimulus measures, and the rise of the SET Index.
Thanawat said severe drought this year was expected to result in Bt70 billion to Bt100 million less money in circulation, of which Bt50 billion to Bt70 billion would affect the agricultural sector. Drought has reduced off-season rice production and may also affect in-season production.
Meanwhile, the adverse impacts on trade and tourism are estimated at Bt10 billion to Bt30 billion, including to agricultural processing plants, farm machinery, fertiliser factories, seed producers, and visits to waterfalls and water parks.
The government has allocated Bt87 billion to help farmers cope with this year’s drought. However, it is necessary to get this financial assistance to the farmers before Songkran to coincide with the second-quarter economic stimulus measures in order to attain at least the 3-per-cent GDP growth target, and growth of 3-3.5 per cent for the full year.
The UTCC’s Economic and Business Forecasting Centre will again evaluate the country’s economic growth outlook on March 24.