Thai consumer sentiment at its lowest in six months, says UTCC
Consumer sentiment in March dipped to 42.0, the lowest in six months, because of Omicron worries and the Russia-Ukraine war fallout, the University of the Thai Chamber of Commerce (UTCC) announced on Friday.
UTCC rector Thanawat Polwichai announced at a press conference the results of the survey on sentiment indices compiled by his university’s economy and businesses forecast centre.
Thanawat said the consumer confidence index in March was 1.3 points lower than February’s 43.3, and the confidence index has fallen for three months in a row.
The university explained that an index lower than 100 points showed weak purchasing power because of slow economic recovery.
Thanawat said the key factors that prompted consumer sentiment to fall were people’s worries about the Omicron situation and the fallout from the Russia-Ukraine war.
He said the high infection rates affected the tourism and service sectors, which have not recovered yet. The situation was aggravated by the fallout from the war that had caused oil prices to rise sharply, affecting the cost of goods manufacturing.
Thanawat said the rising oil prices and manufacturing costs had stepped up pressure on the recovery of the global and Thai economies and Thai exports, as a result consumer sentiment had dropped because people’s incomes could not match the rising cost of living.
He said the UTCC expects consumer sentiment to improve in May when the government’s measures to mitigate the people’s cost of living would take effect.
He said the UTCC still maintained its economic growth forecast at 3.5 per cent.
Thanawat said there were good signs that consumer sentiment would rise in the late second quarter because the Centre for Covid-19 Situation Administration has eased travelling restrictions on foreign arrivals since April 1. The CCSA lifted the requirement of an RT-PCR test before departure to Thailand. The relaxation of measures would help the tourism sector to start recovering and becoming a boon to the economy.
He said if the government continues the co-payment subsidy scheme for consumers in June, it would help the economy recover in the late second quarter.
The rector said it is expected that the number of Covid infections would rise to about 50,000 or 100,000 a day after the Songkran holidays, but the UTCC believes the government would not lock down the country again as it would hurt the economy.
He called on the government to relegate Covid-19 to an endemic in June instead of July since most people have already received booster jabs. He said the announcement a month ahead of schedule would help quicker recovery of the Thai economy and it would add about 0.1 or 0.2 per cent to the growth.
But if the government fails to announce Covid-19 as an endemic soon, Thailand’s economic growth would fall by 0.5 per cent, or about Bt70 billion to Bt100 billion.
Thanawat added that the UTCC also found the Thai Chamber of Commerce's confidence index had dropped to 35.5, the lowest in four months. The index gauges the sentiment of the business sector and chamber members in all provinces.