Thai consumer confidence hits six-month high as economic test looms

Thailand’s consumer confidence strengthened for a third consecutive month in August, reaching its highest level in six months as purchasing power and economic activity showed early signs of improvement, according to the University of the Thai Chamber of Commerce (UTCC).

Thanavath Phonvichai, president of UTCC and chief adviser of its Centre for Economic and Business Forecasting, reported that the Consumer Confidence Index rose to 53.2 in August 2026, the highest reading since March.

The improvement reflected an easing of public concern over war and the global economy, helping sentiment recover after several months of uncertainty.

Other confidence indicators also increased for a third consecutive month. Confidence in Thailand’s overall economy stood at 46.6, confidence in employment opportunities at 50.9 and confidence in future income at 62.1.

One of the main factors supporting sentiment was the easing of the conflict involving the United States, Israel and Iran, which helped prevent sharp increases in global and domestic oil prices.

 

The government’s Thai Helps Thai Plus co-payment scheme also continued to support spending for a third month, while prices of several major agricultural products remained above their levels a year earlier, helping strengthen household purchasing power and improve the economic mood.

Tourism also showed a clearer recovery in July and August after slowing in June, while exports continued to expand by nearly 20%. Private investment remained active, particularly foreign investment in technology and general industries.

Public investment during the first half of the year totalled about 500 billion baht, while more than 140 billion baht circulated through the economy under Thai Helps Thai Plus over the previous three months. These factors helped sustain purchasing power and provide momentum for economic activity.

Risks remain despite improving consumer sentiment

Despite the improvement, Thanavath noted that most confidence indicators remained relatively low, suggesting that consumers did not yet regard Thailand’s economic recovery as firmly established.

Nevertheless, sentiment was moving in a more positive direction. Consumers had become more optimistic about buying cars and homes, travelling and taking holidays, while small and medium-sized enterprises (SMEs) were also seeing better business prospects.

Political developments and oil prices remained among the main risks requiring close attention. Confidence in the political situation fell in August in assessments of both current and future conditions, amid concerns about a possible realignment of the governing coalition, the dissolution of the House and legal cases that could affect the main governing party and its coalition partners.

Such developments could have consequences for political stability and the continuity of government economic policies.

Global oil prices, meanwhile, had moved closer to US$100 a barrel, with the latest price at about US$95 amid renewed tensions in the Middle East. Domestic fuel prices had also reached around 40 baht per litre.

If tensions persist, oil prices could remain elevated or increase further, putting additional pressure on business costs, household purchasing power and the Oil Fuel Fund.

“September and October will be a crucial turning point for the Thai economy, determining whether the recovery continues or loses momentum again,” Thanavath explained.

“The key factors to watch are the direction of the war, oil prices, negotiations on the Agreement on Reciprocal Trade with the United States and Thailand’s domestic political situation.”

Businesses have yet to feel the recovery

The Thai Chamber of Commerce Confidence Index also improved. The overall index rose for a second consecutive month, while the current situation index increased for the first time in six months and the future expectations index advanced for a second consecutive month.

Business confidence, however, remained below its March 2026 levels. The current situation index stood at 36, compared with 38 in March, while the future index was 47 against 48 and the overall index was 41.8 compared with 43.3.

The figures indicated that businesses had yet to feel the recovery as clearly as consumers, who had received more direct support from the Thai Helps Thai Plus programme.

“The economy as a whole has not yet recovered significantly, but both consumers and businesses are beginning to see grounds for optimism,” Thanavath noted. “Investment and tourism in particular will be important drivers in the next stage, while employment could begin improving in the first quarter of next year.”

He added that economic momentum could be sustained if the government provided clear direction on its energy restructuring policies, including the 400-billion-baht emergency borrowing decree and particularly the 200-billion-baht portion linked to energy measures.

Continued stimulus would also be important after the Half-Half and Thai Helps Thai Plus programmes end in February, alongside accelerated disbursement of the fiscal 2027 budget.

Thai economic growth could reach 2.5% or higher

Thailand’s economy grew by an average of 2.4% in the first half of 2026, expanding by 2.8% in the first quarter and 1.9% in the second.

Several institutions continue to forecast full-year gross domestic product (GDP) growth of between 2.2% and 2.5%. The Centre for Economic and Business Forecasting believes growth could reach 2.5% or higher if supportive factors continue, compared with its current midpoint estimate of about 2.3%.

UTCC is due to announce its formal revision to the economic forecast on September 10.

September and October seen as decisive for recovery

Thanavath viewed the consumer and business confidence readings as pointing in the same direction, suggesting that Thailand was entering a recovery phase that could become clearer in the fourth quarter and continue into the first quarter of 2027.

The decisive period, however, will be September and October. The outcome will depend heavily on developments in the war and oil prices, the outcome of Thailand’s Agreement on Reciprocal Trade negotiations with the United States and the country’s ability to maintain its export competitiveness, as well as on domestic political stability and its effect on confidence and the continuity of economic policy.

“If political risks, oil prices and global trade conditions do not disrupt the momentum that is beginning to return, the upside potential for the Thai economy remains greater than the downside,” Thanavath concluded. “That could bring full-year growth closer to the upper end of the forecast range.”