Thailand
Thailand: Consumer confidence dips for second month in a row
The Thai consumer confidence index (CCI) fell for the second straight month in June, weighed down by poor farm product prices and concerns about a slower-than-expected economic recovery, according to a survey by the University of the Thai Chamber of Commerce (UTCC).
The UTCC survey showed that consumer confidence index declined to 74.9 points in June, down from 76.0 in May and 77 in April.
President of the Thai Chamber of Commerce University Sauwanee Thairungroj said the drop in the index was largely due to concerns that the Thai economy remains fragile and yet to fully recover.
She said people’s feelings about a slower-than-expected recovery were a reflection of poor farm prices over the past few months such as rubber, tapioca, maize, palm oil and pineapples.
That resulted in falling purchasing power nationwide as most farmers in remote areas earn their living from those farm products and falling agricultural products prices made them feel insecure about their incomes in the near future.
Thanavath Phonvichai, vice-president for research at the UTCC, said the drop in the CCI was also due partly to concerns that the implementation of a new law to crack down on illegal migrant workers could worsen the fragile economy.
However, the index for the overall economic outlook in the second half of this year is better than in the first half, reflecting most consumers’ expectations of an improved economy during the rest of the year.
Mr Thanavath said the better economic prospects in the second half were largely due to expectations of rising farm prices, and that the drop in the CCI over the past few months is only a short-term phenomenon.
That matches the prediction of Kalin Sarasin, the chairman of the Thai Chamber of Commerce (TCC), who also expects the Thai economy to recover well in the second half.
Mr Kalin said farm product prices should move slightly higher during the second half and recovering prices should help increase purchasing power, while better exports and a robust tourism industry should lend further support to the economy.
Meanwhile, the government’s full backing to accelerate the Eastern Economic Corridor (EEC) scheme by revving up several infrastructure projects to link the EEC to other regions such as via motorways and a high-speed train should also boost the economy in the second half, he said.
Besides, exports are also expected to grow by 5% as forecast earlier and this should boost the CCI too, Mr Kalin said.
However, he warned that some negative factors such as uncertainty about US trade policies and volatile currency exchange rates would still weigh on and prevent the CCI rising significantly.
He said the TCC also plans to propose that the government implement measures to support and facilitate private firms to run their businesses smoothly to help increase confidence among consumers in general.
Source: http://www.bangkokpost.com/business/news/1282423/consumer-confidence-dips-for-second-month-in-a-row