Gradual increase in CCI raises hopes of economic recovery
Tourism continues to contribute to the Thai economy and is credited with pushing the Consumer Confidence Index (CCI) to its highest level in 39 months.
The CCI in May reached a level of 55.70, marking the 12th consecutive month of continuous improvement and the highest level in more than 3 years. Tourism has been a strong driver of economic recovery, according to University of the Thai Chamber of Commerce (UTCC) president Thanawat Phonwichai, who added that the recent general election has led to increased circulation of money within the country and a positive adjustment in economic activities in various regions. The decline in oil prices has also helped as it has resulted in a slight easing of the cost of living.
Although there are concerns about high inflation rates and rising interest rates in Thailand and globally, especially the uncertainties about unstable US financial institutions, the upward trend in the CCI is balancing out the negative psychological effects on domestic purchasing power.
Consumer confidence should be sustained both in the present and the near future, despite concerns about the formation and stability of the government post-election, the slow growth of the world economy, and the Russia-Ukraine war.
However, the adjustment of interest rates to tackle the inflationary problems in various countries could increase pressure on the global economic recovery, potentially leading to an economic downturn. This negative impact is reflected in the decline of Thai exports during this period and the negative effect on people's purchasing power in all regions.
The overall consumer confidence index for May stood at 50.2, up from 49.4 in April. The index for employment opportunities stood at 52.8, up from 52 in April while that for future income also showed a gain, going from 63.6 in April to 64.2.
However, the index remains below the normal level (100), indicating that consumers are still uncertain about the overall economic situation, job prospects, and future income, as well as the Covid19 situation both in Thailand and globally.