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February Consumer Confidence Index surged to 14-month high: UTCC reports

Mar 10. 2017
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By THE NATION

FEBRUARY’S Consumer Confidence Index (CCI) reached its highest point in 14 months, given improvement in exports, tourism and crop prices, said the University of the Thai Chamber of Commerce’s Economic and Business Forecasting Centre.

Thanavath Phonvichai, director of the centre, said the CCI rose for the third consecutive month from 74.5 to 75.8 in February, while the confidence sub-index on the overall economy edged up from 63.1 to 64.3. All scores below 100, however, indicate low confidence.

The rises were attributed mainly to improved exports, tourism, and higher prices of crops, particularly rubber, oil palm and sugar cane.

However, consumers were still concerned over uncertainties for a global economic recovery as a result of US trade policy and Brexit, which could adversely affect Thai exports and the Thai economy.

“All indices improved. The confidence index about job opportunities inched up to 70.3 from 69.1, while that involving future income rose to 92.8 from 91.2. However, consumers remain cautious over their spending in the first half [of this year], given the unclear economic recovery,” Thanavath said.

He said there were expectations that state infrastructure projects in April and May could prompt private investment to follow suit.

The UTCC forecast that the gross domestic product would expand in a range of 3.5-4 per cent this year. The first half is expected to see GDP growth of 3.3 per cent, with estimated first-quarter growth at 3.3 per cent and second-quarter expansion at 3.2 per cent.

In the latter half of this year, economic growth is expected to improve to 4 per cent, with the projected third-quarter expansion at 3.6-3.8 per cent and fourth-quarter growth estimated at 4-4.2 per cent.

Export growth is forecast at 2-3 per cent for this year. Inflation is estimated at 1.5-2 per cent. The baht is expected to average 35.5 per US dollar.

Thanavath said it was proper for the government to maintain the value-added tax at 7 per cent for one more year until September 2018, while waiting for the economic recovery to be secure before raising the VAT rate.

“Increasing the tax rate might prompt society to be concerned about being burdened with higher expenses. If the tax rate is raised while the economy is [still] recovering, there may be adverse impacts. The government may have to consider [the necessity of a tax increase] and the appropriate period or wait for the Thai economy to grow by 4-5 per cent first, and then increase VAT,” he said.

 

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