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Thailand: Consumer confidence falls for 2nd month on oil, crops, tariffs
Consumer confidence fell for the second straight month in October on concerns about the impact of higher oil prices, relatively low crop prices, an escalating international trade row, lower exports and the Chinese tourist plunge.
The latest survey by the University of the Thai Chamber of Commerce (UTCC) found the consumer confidence index in October dipped to 81.3 from 82.3 in September, and 83.2 in August. It was 82.2 in July and 81.3 in June.
Thanavath Phonvichai, vice-president for research of UTCC, said consumer sentiment was stymied by a myriad of negative factors that could lead consumers to be more cautious in their spending.
“If the index continues to fall in November, we may have to adjust our economic growth forecast for this year,” Mr Thanavath said.
The university projects the economy will grow 4.6% this year.
In September, the UTCC forecast an average of 4.7% growth during 2018-22, driven by the government’s hefty investment in high-speed railways, the nationwide double-track rail network and mass transit projects in Greater Bangkok.
The UTCC predicts GDP will grow 4.5% in 2019, 4.8% in 2020, 4.6% in 2021 and 5% in 2022.
“We’ll wait and see on sentiment in November,” he said. “But prospects are unlikely to worsen, as Chinese tourists are expected to return during the year-end while the US president and Chinese premier are expected to hold talks soon to address the trade dispute.”
Mr Thanavath said if the US-China trade row is addressed, Thai exports have a chance to grow more than 8% this year, and foreign tourist arrivals could reach 38 million.
“The economy is expected to get better in the second quarter of 2019, if the trade dispute eases,” he said. “Thai GDP growth is expected to stay in a range of 4.3-4.5% next year.”
Mr Thanavath said the Monetary Policy Committee is expected to keep the policy rate unchanged as inflation rates remain relatively low, despite higher oil prices.
The headline inflation rate, gauged by the increase in the consumer price index, rose for the 16th straight month in October but slowed from September as prices of raw food, vegetables and fruits dropped.
The Commerce Ministry’s report found consumer prices rose 1.23% year-on-year last month, easing from 1.33% in September and 1.62% in August, which was the highest since October 2014 on rising prices for energy and fresh food.
Source: https://www.bangkokpost.com/business/news/1570554/consumer-confidence-falls-for-2nd-month-on-oil-crops-tariffs