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Business confidence index dropped in Dec due to new Covid wave: UTCC

A survey of 369 Thai Chamber of Commerce members found that the confidence index at the end of 2020 had dropped from 33.7 to 31.8 – the lowest since July – due to the new wave of Covid-19 infections, the University of the Thai Chamber of Commerce (UTCC) said.

The new wave directly affected the economy as events were cancelled and people could not celebrate the arrival of the new year.

The confidence index for the next six months is expected to remain below 50 because the business sector is unsure about the current situation, said Thanawat Phonwichai, director of UTCC’s Centre for Economic and Business Forecasting.

Confidence dropped last month due to fears of widespread infections affecting people’s lives, business and economy, concern of a lockdown and the strengthening of the currency.

However, the index was propped up by the Monetary Policy Committee’s resolution to maintain the policy rate at 0.5 per cent to support recovery and the second phase of stimuli like the government’s “Khon La Khrueng” co-paying campaign, “Rao Tiew Duay Kan” travel campaign and “Shop Dee Mee Kuen” (Shop and Payback) campaign.

“If the virus cannot be contained in the next three months, it will have an adverse impact on the employment sector. The unemployment rate is currently 2 per cent, but if it rises, the economy will be affected,” Thanawat said.

UTCC’s Centre for Economic and Business Forecasting expects Thailand’s gross domestic product (GDP) to rise only 2.2 per cent from the previously expected 2.8 per cent due to a number of uncontrollable factors.

The business sector, meanwhile, is urging the government to offer financial reprieve by reducing interest rate, delaying tax payment and helping support employment. They also want the government to bring the outbreak under control quickly to stimulate investment and inject money into the economy before it collapses.

Published : January 11, 2021

By : The Nation