Thailand: Consumer sentiment takes a spill

Consumer confidence plunged to the lowest level in almost 23 years in August thanks to the government’s tight restrictions to contain Covid-19 spread in 29 provinces.

The University of the Thai Chamber of Commerce (UTCC) reported on Thursday the consumer confidence index fell to 39.6 in August from 40.9 in July, 43.1 in June, 44.7 in May, 46 in April, 48.5 in March, 49.4 in February and 47.8 in January.

“Consumer confidence fell for the sixth straight month in August, dipping to the lowest level since October 1998 as people remain concerned about the rapid spread of the Delta variant that led the government to impose tougher lockdown and curfew measures in 29 dark red provinces. The measures harshly affected people’s lives and businesses, worsening the country’s economy,” said UTCC president Thanavath Phonvichai.

“There is also much uncertainty over the government’s vaccine distribution plan, political instability and poor economic prospects.”

A lockdown has been imposed in Bangkok, Nonthaburi, Samut Prakan, Samut Sakhon, Pathum Thani, Nakhon Pathom and four southern provinces since July 12.

Chon Buri, Chachoengsao and Ayutthaya were added to the restrictions on July 20.

On Aug 1, the government extended lockdown and curfew measures to an additional 16 provinces categorised as strict control zones, meaning areas hit the hardest.

The 16 additional provinces are Kanchanaburi, Samut Songkhram, Suphan Buri, Phetchaburi, Prachuap Khiri Khan, Ratchaburi, Ang Thong, Nakhon Nayok, Prachin Buri, Lop Buri, Rayong, Sing Buri, Saraburi, Nakhon Ratchasima, Phetchabun and Tak.

The government has late last month eased lockdown measures, allowing some businesses to resume operations starting early this month.

“The tougher lockdown measures directly affected the country’s economy and employment,” said Mr Thanavath.

“However, consumers feel hopeful the Thai economy can recover after the Centre for Covid-19 Situation Administration announced an easing of lockdown measures on Sept 1. This should help the Thai economy to grow by 0-2% this year, improving from -2% to 0% in the previous forecast in August.”

In a related development, the UTCC announced its Thai Chamber Confidence Index, which gauges the sentiment of the business sector and members of the chamber in all provinces nationwide, dropped to 19.8 in August from 20.7 in July, 22.5 in June, 24.7 in May, 27.6 in April, 30.7 in March, 29.6 in February and 29.8 in January.

The tally is the lowest since January 2019.

He said the business sector wants the government to come up with clearer and more concrete plans to reopen the country so that enterprises can prepare.

In addition, the business sector wants the government to procure and distribute vaccines as fast as possible and come up with effective surveillance measures to prevent the spread of new variants from abroad, said Mr Thanavath.

Assistance measures to help small businesses that cannot access loans need to be continued, he said.

The government should create a more effective plan to attract foreign direct investment, supporting the recovery of the Thai economy, said Mr Thanavath.