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Thailand: Consumer confidence index plunges to new low
Consumer and business sentiment fell to record lows in June as sectors fret about rising Covid-19 infections and fatalities.
The University of the Thai Chamber of Commerce (UTCC) reported on Thursday the consumer confidence index fell to 43.1 in June from 44.7 in May, 46 in April, 48.5 in March, 49.4 in February and 47.8 in January.
“Consumer confidence slumped in June to the lowest level in 22 years and nine months — October 1998 — as people are worried about the impact of the third wave. There are daily reports about rising infections and death tolls, increased political instability and a delay in the government’s vaccine distribution plan,” said UTCC president Thanavath Phonvichai.
“People are concerned about the country’s poor economic prospects, with most believing the damage will be worse than the 1997 financial crisis.”
Mr Thanavath said people are baulking at buying durable goods such as new homes and cars.
He predicted people’s fragile consumption will become aggravated if the government rolls out tighter restrictions to curb the spread of the virus.
In a related development, the UTCC announced yesterday the TCC confidence index, which gauges the sentiment of chamber members in all provinces nationwide, dropped to 22.5 in June, following readings of 24.7 in May, 27.6 in April, 30.7 in March, 29.6 in February and 29.8 in January.
The sentiment was at a record low since the survey started in June 2019.
Mr Thanavath said the continued spread of Covid has taken a heavy toll on the country’s economy, with the provincial areas expected to see a surge of unemployment and rising household debts.
Businesses are expected to face a lack of financial liquidity, he said.
Regarding fresh travel curbs and tighter lockdown plans to contain the spread of infections, Mr Thanavath said the business sector favours a partial lockdown, especially in severely infected areas to reduce the economic impact.
“The government needs to prepare a compensation measure such as soft loans to help offset the economic impact on business operators,” he said.
“If necessary, the government may have to increase its public debt ceiling to 65% of GDP from the current 60%.”
The university forecasts the country’s economy to post -1% to 0% growth this year, down from 0.6-1.2% growth made in a previous forecast.
Source: https://www.bangkokpost.com/business/2145763/consumer-confidence-index-plunges-to-new-low