You are here

Thai April consumer sentiment at 10-month low on economic woes

[BANGKOK] Thai consumer confidence slipped for a fourth straight month in April, a university survey showed on Thursday, as low commodity prices and worries over the sputtering economy hurt spending.

The consumer confidence index of the University of the Thai Chamber of Commerce fell to 76.6 in April from 77.7 in March.

The April reading is the lowest since June last year, when confidence was rising in the hope of a rebound in the economy after an army coup last May ended months of political protests.

But the junta has still been unable to get Southeast Asia's second-largest economy going as demand at home and abroad has been stubbornly sluggish.

Low commodity prices have hit exports, an economic pillar, and cut farmers' incomes. The economy grew just 0.7 per cent last year, the lowest since flood-hit 2011.

Consumer confidence shows no signs of recovery and it needs to be lifted urgently or consumption will remain subdued, Thanavath Phonvichai, an economics professor at the university, told a briefing. "The best way to boost confidence is the central bank has to cut rates again to weaken the baht further, which will help tourism and exports," he said.

The university said the economy could grow around 3.2 per cent this year if exports do not contract.

The baht stood at 33.36 per dollar on Thursday, its lowest in more than five years following a surprise interest rate cut last week and the Bank of Thailand's (BOT) measures to rein in the currency to help exports.

On Thursday, BOT Governor Prasarn Trairatvorakul said he was happy with the weakening baht as it will help the recovery. The government aims for 4 per cent growth this year, aided by public spending, although that has been slow to take off so far.

The central bank projected 2015 growth would come in below its 3.8 per cent forecast and the economy would post a quarterly contraction in January-March. GDP data is due on May 18.

Private consumption, which accounts for half of the economy, has been dampened by record high household debt, at 85.9 per cent of GDP at the end of 2014.

Last week, the BOT surprised with the second cut in its policy rate in less than two months to support growth. It next meets on June 10 and economists expect no change after the aggressive back-to-back rate cuts.

REUTERS