Thailand: Consumer confidence growing amid recovery

Consumer confidence picked up for the second straight month in October, hitting a five-month high, while business sentiment rose for the first time in seven months, boosted by a drop in new Covid-19 infections, the easing of the lockdown restrictions, and the country’s reopening to fully vaccinated foreign tourists this week.

The University of the Thai Chamber of Commerce (UTCC) reported yesterday that its consumer confidence index rose to 43.9 in October, from 41.4 in September and 39.6 in August, which was the lowest level in almost 23 years.

Thanavath Phonvichai, UTCC’s president, said people felt less concerned about the spread of Covid-19 because of the rising rate of vaccinations, the relaxation of lockdown restrictions and, in particular, the country’s reopening to fully vaccinated foreign tourists on Nov 1.

However, he said the index remained lower than 100 points, reflecting fragile purchasing power.

“Consumers are hopeful that the Thai economy will recover in the foreseeable future after the government announced the relaxation of its tightened lockdown measures from Sept 1, and the lifting of curfew measures and the country’s reopening, starting from Nov 1,” said Mr Thanavath, adding that sentiment was also lifted by government stimulus measures and the election campaigns of tambon administrative organisations (TAO).

In the fourth quarter of this year, the university estimated that the government’s 100-billion-baht co-payment subsidy scheme would generate around 300-500 billion baht worth of money circulation in the economic system, with 10-15 billion baht worth of revenue coming from foreign tourists projected at around 200,000 in November and 300,000-400,000 in December.

Earlier, the university expected the TAO election campaigns to help generate about 20-30 billion baht worth of spending, stimulating the economy during October and November.

The Election Commission scheduled the election of TAO members for Nov 28, with the registration of candidates open from Oct 11-15.

Mr Thanavath said the Thai economy should expand by at least 4-5% in the last quarter of this year to help the overall economy grow by 1-1.5% for 2021.

The Thai economy grew by 0-1% in the first half, with the figures expected to contract by 3% to 4% in the third quarter due to the government’s restrictive measures to contain Covid-19 infections. Last year the economy shrank 6.1%.

Mr Thanavath also suggested the government needs to inject at least 500 billion baht through more economic stimulus measures in the first half of next year to produce economic growth of 3-4% in 2022.

In a related development, the UTTC yesterday announced that the TCC Confidence Index, which gauges the sentiment of the business sector and members of the Thai Chamber of Commerce in all provinces nationwide, rose for the first time in seven months to 19.9 in October, up from 19.4 in September, the lowest level in 33 months.