Confidence index in August hits highest level in a year, as mood on economy improves
The Thai Chamber of Commerce Confidence Index for August saw its first rise in 12 month, moving up to 32.6, from 31.8 in July, said Thanawat Polvichai, the director of the University of the Thai Chamber of Commerce's Centre for Economic and Business Forecasting.
“The centre surveyed 364 presidents and vice presidents of chambers of commerce nationwide,” he said. “The positive factor contributing to increasing confidence index is the rising prices of agricultural produce such as oil palm, rubber, rice and corn, which have resulted in increasing investment in agricultural tools by farmers, such as pickup trucks and electrical appliances.”
“The majority of the respondents believed that the Thai economy had already passed its lowest point -- in the second quarter of 2020 -- and will start to slowly recover, thanks to the government’s easing of lockdown measures during the Covid-19 situation,” he added.
Thanawat added that the negative factors that affected the chambers of commerce’s confidence are the National Economic and Social Development Council’s forecast of a 12.2 per cent contraction in GDP in second quarter, as well as the worry about the second wave of Covid-19, and the political protests by the young generation. “However, the private sector is still hopeful that the government’s stimulus package would help improve several industries, especially tourism. That’s why some have agreed to hold off on laying off employees until the first quarter of 2021, as they believe the economic situation would be better by then.”
Thanawat said the survey respondents wanted the government to focus on promoting cross-border trading, especially with Cambodia and Laos, that have been hit by the outbreak and affected other related industries such as agriculture and tourism.
The chambers of commerce also expect that the government’s “Let’s Go Halves” campaign, which aims to promote the purchase of consumer products by subsidising 50 per cent of product prices, with a budget of Bt30 billion, and the handing out of an additional Bt1,500 to holders of state welfare cards, with a budget of Bt21 billion, would help inject up to Bt150-Bt200 billion into the economy in the next three months. “These two measures should help lessen the contraction of fourth quarter GDP by 2-3 per cent,” he said. “We estimate that 2020 GDP should be at minus 7.5 to minus 8.5 per cent and will improve by 0-2 per cent by the end of the first quarter of 2021.”
“As for the protest scheduled for September 19, it should pose no serious impact to the economy if the protest does not drag on for more than one day,” he added.