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Thailand: Consumer faith hits two-year high

Consumer confidence rose for a fourth straight month in March to the highest level in two years, driven by improving exports, higher prices for crops and commodities, and growing tourism.
The University of the Thai Chamber of Commerce (UTCC) reported yesterday that the consumer confidence index rose to 76.8 points last month from 75.8 in February, 74.5 in January and 73.7 in December.
The figure was 72.3 in November and 73.1 in October. The index rose to 74.2 points in September, up from 73.2 in August, 72.5 in July and 71.6 in June — a 25-month low.
Thanavath Phonvichai, vice-president for research at the UTCC, said consumer sentiment improved in almost all facets, including overall confidence in the economy, job opportunities, future income and purchases of new cars and houses.
Consumers gained confidence on improved exports, tourism and crop prices, particularly those of rubber and palm oil, Mr Thanavath said.
“We expect people’s consumption to improve gradually in the first half of this year, notably during May or late in the second quarter if the government manages to inject its additional 190 billion baht in mid-year budget for fiscal 2017 to finance local development of 18 clusters of provinces as planned,” he said.
Mr Thanavath said consumers are likely to stay cautious about spending, as they are concerned about global economic prospects that could be negatively affected by US trade policy and Brexit.
People are also worried about Thailand’s economic outlook, higher cost of living, rising consumer goods prices and relatively low prices for certain crops, especially rice.
Mr Thanavath said signs of Thailand’s economic recovery remain mild, citing the latest data of the National Statistical Office, which showed that the country’s unemployment rate stood at 1.3% in March, marking a seven-year high.
He said Thailand’s economy will show clearer signs of recovery in the second half, propelled by the government’s large-scale infrastructure projects and the much-touted Eastern Economic Corridor (EEC) scheme, both scheduled to start construction during that period.
The EEC is intended to be a special zone accommodating investment in 10 targeted industries promoted as clusters by the government. The 10 industries are next- generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services. The location spans a combined 30,000 rai in three provinces: Chon Buri, Rayong and Chachoengsao. The EEC is an enhancement of the Eastern Seaboard that has been the region’s powerhouse for manufacturing and trade.
The UTCC is maintaining its economic growth forecast of 3.6% this year, with export growth of 2-3% and an inflation rate of 1.6-2.1%.
Mr Thanavath said the new constitution, once promulgated, is expected to benefit the Thai economy, as foreign investors will be reassured that the military government will move ahead with the political roadmap.
His Majesty the King on Thursday officially endorsed the promulgation of the country’s 20th constitution, setting the stage for a general election to be held by late 2018.
Meanwhile, the UTCC predicted that spending during the forthcoming Songkran holiday would rise by 2.5% this year to 127 billion baht.

Source: http://www.bangkokpost.com/business/tourism-and-transport/1229056/consumer-faith-hits-two-year-high