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Thailand: Confidence improved in June
Consumer sentiment rose to its highest in six months in June, as Thais became less concerned about oil prices.
Sentiments were also boosted by higher exports and growing tourism and recovering farm product prices.
According to the latest survey by the University of the Thai Chamber of Commerce (UTCC), the consumer confidence index in June rose to 81.3 after slipping to 80.1 in May and against 80.9 in April.
Thanavath Phonvichai, vice-president for research at the UTCC, said consumers, in particular, felt at ease about the oil prices after the government agreed to cap the diesel price at 30 baht per litre until the year-end.
In Thailand, diesel is the main fuel for the transport and manufacturing sectors. The higher fuel price will push services and production costs higher.
“Consumers also expect to see clearer signs of the country’s economic recovery late in the year,” he said. “In addition, there are positive factors in export and tourism, both of which remained on course to solid growth. The prices of many cash crops such as rice, tapioca and maize are increasing, accordingly improving the purchasing power of 5 million households of farmers or about 15-20 million people.”
Mr Thanavath said higher pork, chicken and egg prices also helped raise farm incomes.
Nonetheless, consumers remained worried about local and international political situations, international trade disputes and farm prices.
He said the UTCC also expects the escalating trade row between the US and China to stay limited.
“We foresee as long as the US has not unveiled new additional trade measures, Thailand’s exports are unlikely to be affected,” he said. “And although many experts have warned the impact may transpire clearly in the fourth quarter or early next year, we still see myriad positive factors such as higher farm product prices, growing exports and tourism, as well as the government’s accelerated budget disbursement and speedy investment in megaprojects, will help offset the negative impact from the international trade spat.”
Thailand’s exports may also benefit from the import replacement of products that are subject to higher tariffs levied by the two economic giants, said Mr Thanavath.
Given positive prospects, he believes the UTCC is set to raise its economic growth forecast to 4.5-5% this year.
Source: https://www.bangkokpost.com/business/news/1498210/confidence-improved-in-june